IRS Spends $34.3M on Splunk Licenses and Support via BPA Call with Carahsoft

Contract Overview

Contract Amount: $34,339,381 ($34.3M)

Contractor: Carahsoft Technology Corp

Awarding Agency: Department of the Treasury

Start Date: 2021-07-21

End Date: 2026-01-20

Contract Duration: 1,644 days

Daily Burn Rate: $20.9K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: THIS IS A DELIVERY ORDER FOR THE PURCHASE OF SPLUNK ENTERPRISE LICENSES, SOFTWARE, MAINTENANCE, SUPPORT, AND RELATED SERVICES AGAINST BLANKET PURCHASE AGREEMENT (BPA) 2032H5-21-A-00025

Place of Performance

Location: RESTON, FAIRFAX County, VIRGINIA, 20190

State: Virginia Government Spending

Plain-Language Summary

Department of the Treasury obligated $34.3 million to CARAHSOFT TECHNOLOGY CORP for work described as: THIS IS A DELIVERY ORDER FOR THE PURCHASE OF SPLUNK ENTERPRISE LICENSES, SOFTWARE, MAINTENANCE, SUPPORT, AND RELATED SERVICES AGAINST BLANKET PURCHASE AGREEMENT (BPA) 2032H5-21-A-00025 Key points: 1. Significant investment in essential software for data analytics and security. 2. Carahsoft Technology Corp. is a major reseller, indicating a potential reliance on intermediaries. 3. The contract is a Blanket Purchase Agreement (BPA) Call, suggesting it's part of a larger framework. 4. The sector is Software Publishers, a critical area for government IT infrastructure.

Value Assessment

Rating: fair

The $34.3M price tag for Splunk licenses, maintenance, and support appears substantial. Benchmarking against similar government contracts for Splunk would be necessary to determine if this represents fair market value, especially considering the duration and scope.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which is positive for price discovery. However, as a BPA Call, the underlying competition for the BPA itself is key. Carahsoft is a reseller, so the ultimate source of the software and its pricing is important.

Taxpayer Impact: Taxpayer funds are being used for critical software infrastructure. The effectiveness of the competition and the pricing negotiated will determine the overall taxpayer impact.

Public Impact

Enhances IRS data management and cybersecurity capabilities. Supports critical tax administration and enforcement functions. Potential for cost savings through efficient software utilization. Ensures continuity of essential IT services for the IRS.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Reliance on a reseller (Carahsoft) may add cost.
Long-term commitment (over 4 years) requires ongoing value assessment.
Potential for vendor lock-in with specialized software.

Positive Signals

Awarded under full and open competition.
Supports critical government functions.
Firm Fixed Price contract provides cost certainty.

Sector Analysis

The Software Publishers sector is vital for government operations, providing tools for data analysis, cybersecurity, and general IT functions. Spending benchmarks for similar software licenses and support contracts are essential for evaluating this $34.3M award.

Small Business Impact

The data indicates this contract was awarded to Carahsoft Technology Corp., a known reseller. Analysis is needed to determine if small businesses were involved in the supply chain or if opportunities were missed.

Oversight & Accountability

The use of a BPA Call suggests that the initial BPA underwent a competitive process. However, ongoing oversight is needed to ensure the continued justification of this delivery order and the pricing within the BPA framework.

Related Government Programs

Software Publishers
Department of the Treasury Contracting
Internal Revenue Service Programs

Risk Flags

Potential for inflated costs due to reseller involvement.
Long contract duration may not reflect current market pricing.
Lack of detail on specific Splunk products and features.
Dependence on a single software vendor for critical functions.
Need to verify competition effectiveness for the underlying BPA.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $34.3 million to CARAHSOFT TECHNOLOGY CORP. THIS IS A DELIVERY ORDER FOR THE PURCHASE OF SPLUNK ENTERPRISE LICENSES, SOFTWARE, MAINTENANCE, SUPPORT, AND RELATED SERVICES AGAINST BLANKET PURCHASE AGREEMENT (BPA) 2032H5-21-A-00025

Who is the contractor on this award?

The obligated recipient is CARAHSOFT TECHNOLOGY CORP.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $34.3 million.

What is the period of performance?

Start: 2021-07-21. End: 2026-01-20.

What is the specific Splunk product suite being procured and how does its functionality align with the IRS's stated needs?

The contract specifies Splunk Enterprise licenses, software, maintenance, and support. This suite typically provides capabilities for log collection, analysis, security monitoring, and operational intelligence. The IRS likely utilizes these for cybersecurity threat detection, compliance monitoring, and operational efficiency in managing vast amounts of data related to tax administration.

How does the per-unit cost of Splunk licenses and maintenance compare to industry benchmarks and other federal agencies?

Benchmarking the per-unit cost is crucial. Given Splunk's market position, direct comparisons with other federal agencies procuring similar quantities and support levels are essential. Variations could indicate differences in negotiated discounts, support tiers, or the specific modules included, impacting overall value for money.

What is the long-term strategy for Splunk utilization and potential cost optimization beyond this contract period?

Understanding the IRS's long-term roadmap for data analytics and security is key. This includes assessing if current usage is optimized, exploring potential consolidation of licenses, or evaluating alternative solutions in the future. Proactive planning can mitigate risks of escalating costs and ensure continued alignment with evolving technological needs.

Industry Classification

NAICS: Information › Software Publishers › Software Publishers

Product/Service Code: IT AND TELECOM - COMPUTE

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: NONE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 11493 SUNSET HILLS RD, RESTON, VA, 20190

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $34,339,392

Exercised Options: $34,339,392

Current Obligation: $34,339,381

Actual Outlays: $34,339,381

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 2032H521A00025

IDV Type: BPA

Timeline