Treasury's $86M ID.ME software contract awarded to V3GATE, LLC for COVID-19 response

Contract Overview

Contract Amount: $86,073,160 ($86.1M)

Contractor: V3gate, LLC

Awarding Agency: Department of the Treasury

Start Date: 2021-06-11

End Date: 2023-06-10

Contract Duration: 729 days

Daily Burn Rate: $118.1K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: ID.ME SOFTWARE AND SOFTWARE MAINTENANCE COVID-19

Place of Performance

Location: LANHAM, PRINCE GEORGES County, MARYLAND, 20706

State: Maryland Government Spending

Plain-Language Summary

Department of the Treasury obligated $86.1 million to V3GATE, LLC for work described as: ID.ME SOFTWARE AND SOFTWARE MAINTENANCE COVID-19 Key points: 1. The contract's value of $86 million over two years suggests a significant investment in digital identity solutions. 2. Awarded under full and open competition, the contract indicates a competitive bidding process. 3. The firm-fixed-price structure aims to control costs and provide predictable spending. 4. The duration of 729 days allows for sustained support and development of the software. 5. The contract's focus on COVID-19 response highlights its role in addressing urgent public health needs. 6. The North American Industry Classification System (NAICS) code 334111 points to the manufacturing of electronic computers, which may be a proxy for the underlying technology infrastructure.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance metrics or comparable software maintenance agreements. The $86 million price tag over two years is substantial, suggesting a complex or widely deployed solution. However, without details on the scope of services, user base, or specific software functionalities, a definitive value-for-money assessment is difficult. The firm-fixed-price nature provides cost certainty, but the overall efficiency relative to market alternatives remains unclear.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit bids. The specific number of bidders is not provided, but this procurement method generally fosters a competitive environment, which can lead to better pricing and innovation. The agency's decision to use full and open competition suggests confidence in the market's ability to provide suitable solutions.

Taxpayer Impact: A competitive award process is generally favorable for taxpayers as it encourages multiple vendors to offer their best pricing and terms, potentially leading to cost savings for the government.

Public Impact

The primary beneficiaries are likely federal agencies and potentially the public who utilize services requiring secure digital identity verification, especially in the context of COVID-19 relief or health programs. The services delivered include software and software maintenance, crucial for the ongoing operation and security of digital platforms. The geographic impact is likely nationwide, supporting federal operations across the United States. Workforce implications could involve IT professionals responsible for managing, maintaining, and potentially developing the ID.ME software.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific performance metrics makes it difficult to assess the true value and effectiveness of the software.
The broad NAICS code (334111) for 'Electronic Computer Manufacturing' is unusual for a software and maintenance contract, raising questions about the underlying technology or classification accuracy.
The contract duration of two years, while providing stability, might not be optimal for rapidly evolving software needs without clear re-evaluation points.
Limited information on the specific functionalities and user base makes it hard to gauge the scale of the investment.
The absence of small business subcontracting details could mean missed opportunities for smaller firms in this technology sector.

Positive Signals

Awarded under full and open competition, suggesting a robust and fair bidding process.
Firm-fixed-price contract type provides cost predictability for the government.
The contract directly supports critical functions related to the COVID-19 pandemic response.
The vendor, V3GATE, LLC, is a known entity in the government contracting space.
The contract duration allows for sustained operational support and potential system enhancements.

Sector Analysis

The IT services sector, particularly focusing on identity management and software maintenance, is a critical component of modern government operations. This contract falls within the broader IT services market, which is characterized by rapid technological advancements and a diverse range of specialized providers. The government's spending on such solutions is substantial, driven by the need for secure, efficient, and scalable digital infrastructure. Comparable spending benchmarks would typically involve analyzing other large-scale software licensing and maintenance agreements for identity solutions across federal agencies.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the procurement was open to all eligible offerors, including large businesses. While there's no explicit mention of subcontracting requirements for small businesses, the scale of this contract could present opportunities for smaller IT firms to participate as subcontractors to the prime contractor, V3GATE, LLC. Further investigation into the subcontracting plan would be necessary to determine the specific impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Treasury and the Internal Revenue Service. As a firm-fixed-price contract, the focus of oversight would be on deliverables, adherence to the contract terms, and performance against the defined scope. Transparency is facilitated by the contract award being publicly available. The specific mechanisms for monitoring performance, such as regular reporting requirements or quality assurance surveillance plans, are not detailed in the provided data. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Federal Civilian IT Modernization Programs
COVID-19 Relief and Response Technology Contracts
Digital Identity Management Solutions
Software Licensing and Maintenance Agreements
IRS Technology Modernization Initiatives

Risk Flags

Potential for vendor lock-in
Cybersecurity risks inherent in identity management software
Dependence on a single vendor for critical infrastructure
Unclear performance metrics for value assessment
Unusual NAICS code classification

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $86.1 million to V3GATE, LLC. ID.ME SOFTWARE AND SOFTWARE MAINTENANCE COVID-19

Who is the contractor on this award?

The obligated recipient is V3GATE, LLC.

Which agency awarded this contract?

Awarding agency: Department of the Treasury (Internal Revenue Service).

What is the total obligated amount?

The obligated amount is $86.1 million.

What is the period of performance?

Start: 2021-06-11. End: 2023-06-10.

What specific functionalities does the ID.ME software provide under this contract, and how are they critical for the IRS's COVID-19 response efforts?

The provided data does not detail the specific functionalities of the ID.ME software. However, ID.ME is a widely recognized platform for digital identity verification, often used for secure login and authentication. In the context of the IRS and COVID-19, it likely facilitated secure access to taxpayer portals, distribution of relief funds, or verification of eligibility for various government programs. Its critical role would be in ensuring that only authorized individuals could access sensitive information or receive benefits, thereby preventing fraud and maintaining data security during a period of high demand and rapid program deployment.

How does the $86 million contract value compare to typical spending on similar software and maintenance contracts within the federal government?

Assessing the $86 million value requires context regarding the scope and duration. For a two-year contract covering software and maintenance for a potentially large-scale identity verification system, this figure is significant but not necessarily outside the norm for major federal IT procurements. Comparable contracts might include enterprise-wide identity and access management solutions, large database maintenance, or core system software licenses for agencies like the Social Security Administration or Department of Defense. Without knowing the number of users, the complexity of integrations, or the specific service level agreements, a precise comparison is difficult. However, it suggests a substantial investment in a critical IT infrastructure component.

What are the key performance indicators (KPIs) used to measure the success and value of this contract for V3GATE, LLC?

The provided data does not specify the Key Performance Indicators (KPIs) for this contract. Typically, for software and maintenance contracts, KPIs would focus on system availability (uptime), response times for support requests, patch and update deployment success rates, security vulnerability remediation timelines, and user satisfaction. Given the firm-fixed-price nature, the government's primary concern would be ensuring the software functions as specified and is reliably maintained. The IRS would likely have internal metrics and quality assurance processes to monitor V3GATE's performance against the contract's statement of work.

What is the track record of V3GATE, LLC in delivering similar IT solutions to federal agencies, particularly concerning software maintenance and identity management?

Information on V3GATE, LLC's specific track record with similar IT solutions is not detailed in the provided data. As a government contractor, V3GATE would have a performance history documented in federal procurement databases. To assess their track record, one would typically look at past contracts, their value, duration, and performance ratings (if available). Experience with identity management solutions and large-scale software maintenance for agencies like the IRS would be key indicators of their capability. A review of their past performance on contracts of similar size and complexity would be necessary for a thorough assessment.

Are there any identified risks associated with this contract, such as vendor lock-in, cybersecurity vulnerabilities, or potential cost overruns despite the fixed-price structure?

Potential risks exist even with fixed-price contracts. Vendor lock-in is a common concern in software contracts, where switching providers can be costly and complex. Cybersecurity vulnerabilities are an inherent risk with any IT system, requiring continuous monitoring and mitigation by both the vendor and the agency. While the firm-fixed-price structure aims to prevent cost overruns related to the vendor's scope, scope creep or unforeseen technical challenges could still pose risks if not managed properly through contract modifications or change orders. The reliance on a single vendor for critical identity software also presents a concentration risk.

How has federal spending on digital identity solutions evolved over the past five years, and where does this contract fit within that trend?

Federal spending on digital identity solutions has been on a significant upward trend over the past five years, driven by increasing digitization of services, heightened cybersecurity threats, and mandates like the Trusted Identities Group (TIG) initiatives. Agencies are investing heavily in modernizing identity and access management (IAM) systems to improve security, streamline user experiences, and comply with federal regulations. This $86 million contract for ID.ME software and maintenance fits within this trend, representing a substantial investment by the IRS in a critical component of its digital infrastructure, likely accelerated or necessitated by the demands of the COVID-19 pandemic.

Industry Classification

NAICS: Manufacturing › Computer and Peripheral Equipment Manufacturing › Electronic Computer Manufacturing

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - END USER

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 555 MIDDLE CREEK PKWY UNIT 120, COLORADO SPRINGS, CO, 80921

Business Categories: Category Business, Hispanic American Owned Business, Limited Liability Corporation, Minority Owned Business, Partnership or Limited Liability Partnership, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $86,073,160

Exercised Options: $86,073,160

Current Obligation: $86,073,160

Actual Outlays: $86,073,160

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Parent Contract

Parent Award PIID: 2032H520A00009

IDV Type: BPA

Timeline