Treasury's IRS awards $32M contract for NUTUNIX software to FCN, INC. amid COVID-19 response

Contract Overview

Contract Amount: $32,062,681 ($32.1M)

Contractor: FCN, Inc.

Awarding Agency: Department of the Treasury

Start Date: 2021-09-30

End Date: 2026-09-29

Contract Duration: 1,825 days

Daily Burn Rate: $17.6K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: NUTUNIX "SOFWARE" COVID-19

Place of Performance

Location: LANHAM, PRINCE GEORGES County, MARYLAND, 20706

State: Maryland Government Spending

Plain-Language Summary

Department of the Treasury obligated $32.1 million to FCN, INC. for work described as: NUTUNIX "SOFWARE" COVID-19 Key points: 1. Contract value of $32.1M over 5 years suggests a significant investment in IT infrastructure. 2. The contract was awarded under full and open competition, indicating a competitive bidding process. 3. The fixed-price contract type aims to control costs and provide predictable spending. 4. The duration of 1825 days (5 years) allows for long-term planning and integration of the software. 5. The North American Industry Classification System (NAICS) code 541519 points to a broad range of computer-related services. 6. The contract's focus on software suggests a need for enhanced data management or operational capabilities. 7. The award date in late 2021 aligns with ongoing digital transformation efforts within government agencies.

Value Assessment

Rating: good

The contract value of $32.1 million over five years for NUTUNIX software appears reasonable given the scope of IT services typically required by the IRS. Benchmarking against similar large-scale software procurements for federal agencies suggests that this price point is within expected ranges for comprehensive IT solutions. The firm fixed-price structure further supports value by capping potential cost overruns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating that the solicitation was broadly advertised, and multiple bids were likely considered. While the specific number of bidders is not provided, this procurement method generally fosters a competitive environment, which is beneficial for price discovery and ensuring the government receives competitive offers.

Taxpayer Impact: A full and open competition process is favorable for taxpayers as it increases the likelihood of obtaining the best value and competitive pricing by allowing all qualified vendors to participate.

Public Impact

The primary beneficiaries are the IRS and its employees, who will gain access to the NUTUNIX software. The software is expected to support critical IRS operations, potentially including tax processing, data management, or internal IT functions. The geographic impact is likely nationwide, supporting IRS operations across all its service areas. Workforce implications may include training for IRS IT staff on the new software and potential integration with existing systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific details on the software's functionality and performance metrics makes it difficult to fully assess its impact.
The 'COVID-19' designation in the data might imply a connection to pandemic response efforts, but the exact nature of this link is unclear.
The exclusion of sources in the competition type, even if followed by full and open competition, warrants a closer look at the initial exclusion rationale.

Positive Signals

The use of a firm fixed-price contract provides cost certainty for the government.
Awarding under full and open competition suggests a robust process aimed at achieving best value.
The five-year contract duration allows for sustained support and potential for deeper integration of the software solution.

Sector Analysis

The IT services sector, particularly within government procurement, is characterized by significant spending on software development, maintenance, and licensing. This contract for NUTUNIX software falls within the broader category of computer-related services. Comparable spending benchmarks for similar enterprise software solutions procured by large federal agencies often range from tens to hundreds of millions of dollars over several years, depending on the complexity and scale of the deployment.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a small business set-aside. The primary contractor, FCN, INC., is responsible for fulfilling the contract requirements, and any subcontracting would be at their discretion, not mandated by a set-aside provision.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the IRS's contracting officers and program managers. The Department of the Treasury's Office of Inspector General (OIG) may also conduct audits or investigations related to IT spending and contract performance to ensure accountability and prevent fraud. Transparency is generally maintained through contract award databases and public reporting mechanisms.

Related Government Programs

IRS IT Modernization Programs
Federal Civilian Agency Software Procurement
Department of the Treasury IT Contracts
COVID-19 Related Technology Investments

Risk Flags

Ambiguity of 'COVID-19' designation
Lack of specific performance metrics
Limited detail on competition dynamics (number of bidders)
Unclear rationale for 'exclusion of sources' prior to full competition

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $32.1 million to FCN, INC.. NUTUNIX "SOFWARE" COVID-19

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 $32.1 million.

What is the period of performance?

Start: 2021-09-30. End: 2026-09-29.

What specific functionalities does the NUTUNIX software provide to the IRS, and how does it align with the agency's mission?

The provided data does not specify the exact functionalities of the NUTUNIX software. However, given the NAICS code 541519 (Other Computer Related Services) and the awarding agency (IRS), it is likely related to data processing, tax administration, internal IT infrastructure support, or cybersecurity. The software could be used for managing taxpayer data, improving internal workflows, enhancing system security, or facilitating digital tax services. Without further details, its precise alignment with the IRS mission remains speculative but is presumed to support operational efficiency and service delivery.

How does the $32.1 million contract value compare to similar software procurements by the IRS or other federal agencies?

The $32.1 million contract value over five years, averaging approximately $6.4 million annually, is a substantial but not extraordinary amount for enterprise software solutions within large federal agencies like the IRS. Similar procurements for core IT systems, data analytics platforms, or large-scale software licenses can range from tens to hundreds of millions of dollars. For instance, major system overhauls or the implementation of new citizen-facing portals often exceed this figure. The firm fixed-price nature and the five-year term suggest a focus on predictable costs for a defined scope of services or software provision.

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. Typically, for IT software contracts, such metrics would relate to software uptime, system response times, data accuracy, security compliance, and user support response times. The IRS would have established these metrics to ensure the contractor, FCN, INC., meets performance expectations and delivers the agreed-upon value. The absence of this information in the summary data highlights a need for deeper contract review to assess performance risks and accountability.

What is FCN, INC.'s track record with federal IT contracts, particularly with the IRS or Treasury?

FCN, INC. is a federal IT solutions provider that has secured numerous contracts across various government agencies. While specific details of their past performance with the IRS or the Department of the Treasury are not provided in this summary, their ability to win a $32.1 million contract under full and open competition suggests a demonstrated capability and competitive standing. A thorough review of their contract history, past performance evaluations, and any reported issues would be necessary to fully assess their track record for this specific type of software procurement.

What is the potential risk associated with the 'COVID-19' designation in the contract data?

The 'COVID-19' designation in the contract data is ambiguous and presents a potential risk of misinterpretation or lack of clarity regarding the contract's purpose. It could indicate that the software is intended to support the IRS's response to the pandemic, such as managing relief programs, processing related filings, or enabling remote work capabilities. Alternatively, it might be an artifact of data categorization or a legacy tag. Understanding the precise role of the software in relation to COVID-19 is crucial for assessing its necessity, effectiveness, and long-term relevance.

How does the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' procurement method impact cost and innovation?

The procurement method 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' is a complex designation. It implies that initially, certain sources might have been excluded for specific reasons (e.g., prior performance issues, specific technical requirements not met), but then the remaining opportunity was opened to all qualified sources. This approach can potentially limit the pool of bidders compared to pure full and open competition, which might slightly reduce price competition. However, if the exclusion criteria were valid and well-defined, it could also ensure that only capable vendors participate, potentially leading to better-suited solutions and reducing risks associated with unqualified bidders. The impact on innovation is less direct but depends on whether the competition encouraged novel approaches within the defined scope.

Industry Classification

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

Product/Service Code: IT AND TELECOM - END USER

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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

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

Financial Breakdown

Contract Ceiling: $32,062,681

Exercised Options: $32,062,681

Current Obligation: $32,062,681

Actual Outlays: $32,062,681

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: NNG15SC71B

IDV Type: GWAC

Timeline