Treasury's $25M cloud solution contract awarded to FCN, Inc. for IT services

Contract Overview

Contract Amount: $25,077,887 ($25.1M)

Contractor: FCN, Inc.

Awarding Agency: Department of the Treasury

Start Date: 2021-09-27

End Date: 2026-09-29

Contract Duration: 1,828 days

Daily Burn Rate: $13.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: PALO ALTO CLOUD SOLUTION

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20222

State: District of Columbia Government Spending

Plain-Language Summary

Department of the Treasury obligated $25.1 million to FCN, INC. for work described as: PALO ALTO CLOUD SOLUTION Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. Firm Fixed Price contract type indicates predictable costs for the government. 3. Long duration of 1828 days (approx. 5 years) suggests a significant, ongoing need. 4. Awarded as a Delivery Order, likely part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract. 5. The contract is for Computer Systems Design Services, a common IT support category. 6. The contractor, FCN, Inc., has secured this award, indicating their capability in this service area.

Value Assessment

Rating: fair

Benchmarking the value of this $25 million contract requires more context on the specific cloud solution and services provided. Without detailed service level agreements or performance metrics, it's difficult to definitively assess value for money. However, the firm fixed price structure offers cost certainty. Comparing this to similar large-scale cloud solution contracts within the federal government would provide a better understanding of its pricing competitiveness.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit offers. The fact that it's a delivery order suggests it might be under an existing IDIQ vehicle, which itself would have undergone a competitive process. The number of bidders for this specific delivery order is not provided, but the 'full and open' designation implies a robust initial competition.

Taxpayer Impact: Full and open competition generally leads to better price discovery and potentially lower costs for taxpayers by encouraging multiple vendors to offer competitive bids.

Public Impact

Benefits federal agencies, specifically the Internal Revenue Service, by providing essential cloud computing solutions. Supports the delivery of critical IT infrastructure and services necessary for government operations. The primary geographic impact is in the District of Columbia, where the contract is managed. Likely involves a workforce of IT professionals and cloud specialists to deliver the contracted services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific performance metrics makes it hard to gauge effectiveness.
Potential for vendor lock-in with long-term cloud solution contracts.
Dependence on a single contractor for critical IT infrastructure.

Positive Signals

Firm Fixed Price contract provides cost predictability.
Awarded through full and open competition, indicating market vetting.
Long contract duration suggests a stable, ongoing need being met.

Sector Analysis

The federal IT services sector is a vast and continuously growing market, with significant spending on cloud solutions, cybersecurity, and systems integration. This contract for computer systems design services, specifically a cloud solution, fits within the broader trend of federal agencies modernizing their IT infrastructure and migrating to cloud-based platforms. Comparable spending benchmarks for similar cloud solution contracts can vary widely based on scope, but agencies often allocate tens to hundreds of millions of dollars for such services over several years.

Small Business Impact

This contract does not indicate any specific small business set-aside. As it was awarded under full and open competition, there is no explicit requirement for subcontracting to small businesses unless stipulated in the prime contract's terms, which are not detailed here. The impact on the small business ecosystem would depend on whether FCN, Inc. chooses to engage small businesses as subcontractors for specialized services.

Oversight & Accountability

Oversight for this contract would typically fall under the contracting officer and the Department of the Treasury's procurement and IT oversight bodies. The firm fixed price nature of the contract simplifies some aspects of financial oversight. Transparency is generally maintained through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

General Services Administration (GSA) IT Schedule Contracts
Cloud Computing Services Contracts
IT Systems Integration Services
Department of the Treasury IT Modernization Initiatives

Risk Flags

Potential for vendor lock-in
Risk of technological obsolescence over contract duration
Need for clear performance metrics and SLAs

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $25.1 million to FCN, INC.. PALO ALTO CLOUD SOLUTION

Who is the contractor on this award?

The obligated recipient is FCN, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $25.1 million.

What is the period of performance?

Start: 2021-09-27. End: 2026-09-29.

What is the specific nature of the 'PALO ALTO CLOUD SOLUTION' being provided?

The data provided identifies the product or service as 'PALO ALTO CLOUD SOLUTION' and the North American Industry Classification System (NAICS) code as 541512, 'Computer Systems Design Services'. This suggests the contract likely involves the design, integration, and management of cloud computing infrastructure and services, potentially leveraging Palo Alto Networks' technology. However, the exact scope of services—whether it includes infrastructure-as-a-service (IaaS), platform-as-a-service (PaaS), software-as-a-service (SaaS), migration support, ongoing management, or security services—is not detailed in the provided data. Further information would be needed to understand the specific functionalities and benefits derived from this cloud solution.

How does the $25 million contract value compare to similar cloud solution contracts for federal agencies?

The $25 million value for a five-year cloud solution contract is within a common range for federal IT procurements. Many agencies invest similar amounts, or significantly more, in cloud services to support their operations. For instance, large-scale cloud migrations or comprehensive managed cloud services can easily reach tens or hundreds of millions of dollars over their lifecycle. The specific comparison depends heavily on the scope of services, the number of users or agencies supported, and the level of customization required. Without more granular details on the service offerings and performance metrics, a precise benchmark is challenging, but the award appears to be a substantial, yet not extraordinary, investment in IT infrastructure.

What are the key performance indicators (KPIs) or service level agreements (SLAs) associated with this contract?

The provided data does not include specific Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) for this contract. These are crucial elements that define the expected performance, availability, security, and responsiveness of the cloud solution. Typically, such agreements would outline metrics like uptime percentages, data recovery times, security incident response times, and support availability. The absence of this information in the summary data makes it difficult to objectively assess the contractor's performance and the overall value delivered to the IRS. These details would usually be found within the full contract documentation.

What is FCN, Inc.'s track record with similar large-scale cloud solution contracts?

FCN, Inc. is a federal IT solutions provider that has secured numerous government contracts. While the provided data confirms they were awarded this $25 million contract for a cloud solution, a comprehensive assessment of their track record would require reviewing their past performance on similar large-scale cloud projects. This includes examining contract history, past performance evaluations, and any reported issues or successes in delivering cloud services to other federal agencies. Their ability to win this contract suggests they have demonstrated relevant capabilities and experience to the Department of the Treasury, but a deeper dive into their portfolio would provide a more complete picture of their expertise in this domain.

What are the potential risks associated with a five-year firm-fixed-price cloud solution contract?

A significant risk with a five-year firm-fixed-price cloud solution contract is the potential for scope creep or unforeseen technological changes that could make the contracted solution outdated or less cost-effective over time. While the fixed price offers budget certainty, it might limit flexibility if requirements evolve significantly. Another risk is vendor lock-in, where the agency becomes heavily reliant on the specific provider's ecosystem, making future transitions costly and complex. Additionally, if the initial pricing was not accurately benchmarked against evolving market rates, the government might end up overpaying if market prices decrease substantially during the contract term. Ensuring robust change management processes and regular market reviews is crucial to mitigate these risks.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 12501 ARDENNES AVE STE 101, ROCKVILLE, MD, 20852

Business Categories: Category Business, Small Business, Special Designations, U.S.-Owned Business, Woman Owned Business

Financial Breakdown

Contract Ceiling: $54,242,324

Exercised Options: $25,156,835

Current Obligation: $25,077,887

Actual Outlays: $24,500,760

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: GS35F0612L

IDV Type: FSS

Timeline