IRS Spends $82.7M on AWS and Brand-Name Software via Four Points Technology, LLC
Contract Overview
Contract Amount: $82,701,008 ($82.7M)
Contractor: Four Points Technology, L.L.C.
Awarding Agency: Department of the Treasury
Start Date: 2020-12-04
End Date: 2024-12-03
Contract Duration: 1,460 days
Daily Burn Rate: $56.6K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 3
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: WC2 AMAZON WEB SERVICES (AWS) AND BRAND-NAME SOFTWARE COMMERCIAL BUY
Place of Performance
Location: CHANTILLY, FAIRFAX County, VIRGINIA, 20151
State: Virginia Government Spending
Plain-Language Summary
Department of the Treasury obligated $82.7 million to FOUR POINTS TECHNOLOGY, L.L.C. for work described as: WC2 AMAZON WEB SERVICES (AWS) AND BRAND-NAME SOFTWARE COMMERCIAL BUY Key points: 1. Significant investment in cloud services and branded software, indicating reliance on established vendors. 2. Competition was full and open after source exclusion, suggesting a structured procurement process. 3. Potential risk of vendor lock-in and high costs associated with brand-name software. 4. IT sector spending, specifically on cloud infrastructure and software services.
Value Assessment
Rating: fair
The contract value of $82.7M over four years is substantial. Benchmarking against similar AWS and brand-name software contracts is difficult without specific service details, but the price appears within a reasonable range for large-scale enterprise solutions.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The procurement utilized full and open competition after excluding sources, indicating a deliberate effort to ensure a competitive process. This method aims to achieve fair market prices by allowing all qualified vendors to bid.
Taxpayer Impact: Taxpayers benefit from a competitive process designed to secure the best value for the government's IT needs.
Public Impact
Ensures IRS has access to critical cloud infrastructure and software for operations. Supports digital transformation initiatives within the Internal Revenue Service. Potential for cost savings through competitive bidding on essential technology services.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Reliance on specific brand-name software may limit future flexibility and increase costs.
- Vendor lock-in with AWS could lead to higher prices in subsequent contracts.
- Complexity of managing cloud services and software licenses.
Positive Signals
- Utilized full and open competition to ensure fair pricing.
- Contract duration provides stability for IRS IT operations.
- Procurement process included source exclusion, suggesting careful consideration of requirements.
Sector Analysis
This contract falls within the Information Technology sector, specifically focusing on cloud computing (AWS) and commercial off-the-shelf (COTS) software. Spending benchmarks for similar large-scale cloud and software procurements vary widely based on scope and vendor, but $82.7M represents a significant investment.
Small Business Impact
The contract does not indicate any specific set-asides for small businesses. The prime contractor, Four Points Technology, LLC, is a small business, which is a positive signal for small business participation in federal contracting.
Oversight & Accountability
The contract was awarded under a Delivery Order (DO) mechanism, likely against a larger indefinite-delivery, indefinite-quantity (IDIQ) contract. Oversight would typically involve monitoring performance, adherence to terms, and financial expenditures by the IRS.
Related Government Programs
- Other Computer Related Services
- Department of the Treasury Contracting
- Internal Revenue Service Programs
Risk Flags
- Potential for vendor lock-in with AWS.
- Risk of high costs associated with brand-name software.
- Lack of specific service details makes precise value assessment difficult.
- Dependence on a single prime contractor for critical IT services.
Tags
other-computer-related-services, department-of-the-treasury, va, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of the Treasury awarded $82.7 million to FOUR POINTS TECHNOLOGY, L.L.C.. WC2 AMAZON WEB SERVICES (AWS) AND BRAND-NAME SOFTWARE COMMERCIAL BUY
Who is the contractor on this award?
The obligated recipient is FOUR POINTS TECHNOLOGY, L.L.C..
Which agency awarded this contract?
Awarding agency: Department of the Treasury (Internal Revenue Service).
What is the total obligated amount?
The obligated amount is $82.7 million.
What is the period of performance?
Start: 2020-12-04. End: 2024-12-03.
What specific AWS services and brand-name software are included in this contract, and how do their costs compare to market rates?
The provided data does not specify the exact AWS services or brand-name software procured. A detailed analysis would require access to the contract's statement of work and associated pricing schedules. Without this, it's challenging to definitively assess if the $82.7M represents optimal value or if specific components are overpriced compared to market benchmarks or alternative solutions.
What were the specific reasons for excluding other sources prior to the full and open competition, and did this exclusion impact the final price?
The exclusion of sources prior to full and open competition suggests that certain requirements or capabilities were deemed unique to specific vendors, or that a prior limited competition identified a preferred solution. The rationale for exclusion is critical for understanding potential price impacts, as it could limit the competitive landscape and potentially lead to higher prices if not carefully managed and justified.
How effectively does this contract support the IRS's long-term IT modernization goals and ensure data security and privacy?
The contract's effectiveness in supporting IT modernization and ensuring data security hinges on the specific services and software procured and their alignment with IRS strategic objectives. While AWS offers robust cloud capabilities, the reliance on brand-name software might introduce integration challenges or limit future adaptability. Comprehensive oversight and regular performance reviews are crucial to ensure these goals are met.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - STORAGE
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 3
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 13221 WOODLAND PARK RD, HERNDON, VA, 20171
Business Categories: Category Business, Limited Liability Corporation, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business
Financial Breakdown
Contract Ceiling: $285,956,811
Exercised Options: $255,574,966
Current Obligation: $82,701,008
Actual Outlays: $82,543,108
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: NNG15SC74B
IDV Type: GWAC
Timeline
Start Date: 2020-12-04
Current End Date: 2024-12-03
Potential End Date: 2025-02-16 00:00:00
Last Modified: 2025-04-26
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