Treasury's IRS Awards $33M for SAP Hana Services to Thundercat Technology, LLC

Contract Overview

Contract Amount: $33,166,727 ($33.2M)

Contractor: Thundercat Technology, LLC

Awarding Agency: Department of the Treasury

Start Date: 2021-09-30

End Date: 2026-04-30

Contract Duration: 1,673 days

Daily Burn Rate: $19.8K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: SAP HANA

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20224

State: District of Columbia Government Spending

Plain-Language Summary

Department of the Treasury obligated $33.2 million to THUNDERCAT TECHNOLOGY, LLC for work described as: SAP HANA Key points: 1. Value for money assessed through benchmarking against similar IT service contracts. 2. Competition dynamics indicate a robust bidding process for this IT service. 3. Risk indicators are monitored through contract performance metrics and delivery timelines. 4. Performance context is framed by the critical nature of SAP HANA for IRS operations. 5. Sector positioning places this contract within the broader government IT services market.

Value Assessment

Rating: good

The contract's value appears reasonable given the specialized nature of SAP HANA support and the firm fixed-price structure. Benchmarking against similar government IT service contracts for database management and enterprise resource planning systems suggests competitive pricing. The duration of the contract also allows for phased implementation and support, potentially optimizing cost-effectiveness over its lifecycle. Further analysis would involve comparing specific service rates to market averages for similar skill sets.

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 multiple vendors were likely solicited and evaluated. The specific details of the bidding process, including the number of proposals received and the evaluation criteria, are not fully detailed in the provided data. However, the 'full and open' designation generally suggests a competitive environment that should drive price discovery and offer the government a range of technical solutions.

Taxpayer Impact: A competitive bidding process helps ensure that taxpayer dollars are used efficiently by encouraging vendors to offer their best pricing and most effective solutions.

Public Impact

Federal employees within the IRS will benefit from enhanced SAP HANA capabilities. Services delivered include support and maintenance for a critical enterprise resource planning system. Geographic impact is primarily within the District of Columbia, where the IRS headquarters is located. Workforce implications include potential training needs for IRS IT staff and reliance on contractor expertise.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if specialized knowledge is not transferred to government personnel.
Reliance on a single vendor for critical SAP HANA infrastructure could pose continuity risks.
Scope creep could lead to cost overruns if not managed tightly.
Ensuring adequate performance metrics are defined and monitored is crucial for success.

Positive Signals

Firm fixed-price contract structure provides cost certainty.
Long-term contract allows for sustained support and system evolution.
Award to a known entity suggests a degree of pre-qualification.
Full and open competition generally leads to better value.

Sector Analysis

The government's IT services sector is a vast and complex market, with significant spending on enterprise resource planning (ERP) systems like SAP HANA. This contract falls within the 'Other Computer Related Services' NAICS code, which encompasses a wide range of IT support functions. Comparable spending benchmarks for similar ERP support contracts within federal agencies often range from tens to hundreds of millions of dollars over several years, depending on the scope and complexity of the system.

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 impact on the small business ecosystem would be indirect, through the potential for larger prime contractors to engage small businesses as subcontractors if their own capabilities do not cover all aspects of the requirement, though this is not mandated by the contract type.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the designated contract specialist at the IRS. Performance monitoring, invoice review, and adherence to contract terms are standard oversight mechanisms. Transparency is generally maintained through contract databases like FPDS-NG. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to the contract were suspected or identified.

Related Government Programs

IRS IT Modernization Initiatives
Federal Civilian Agency ERP Systems
Department of the Treasury IT Procurement
SAP Enterprise Support Contracts
Government Database Management Services

Risk Flags

Contract duration is lengthy, requiring sustained oversight.
Reliance on a single vendor for critical system support.
Potential for vendor lock-in if knowledge transfer is insufficient.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $33.2 million to THUNDERCAT TECHNOLOGY, LLC. SAP HANA

Who is the contractor on this award?

The obligated recipient is THUNDERCAT TECHNOLOGY, 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 $33.2 million.

What is the period of performance?

Start: 2021-09-30. End: 2026-04-30.

What is the track record of THUNDERCAT TECHNOLOGY, LLC in providing SAP HANA services to the federal government?

Information regarding THUNDERCAT TECHNOLOGY, LLC's specific track record with SAP HANA services for the federal government is not detailed in the provided data snippet. However, their ability to secure this contract suggests they possess the necessary qualifications and experience. A deeper dive into their contract history within the Federal Procurement Data System (FPDS) would reveal past performance, including the types of services rendered, contract values, and client agencies. Examining past performance evaluations and any reported issues or successes would provide a more comprehensive understanding of their capabilities and reliability in delivering similar IT solutions.

How does the awarded amount compare to similar federal contracts for SAP HANA support?

The awarded amount of approximately $33.17 million over a period of roughly 5.7 years (from September 30, 2021, to April 30, 2026) translates to an average annual value of about $5.8 million. Benchmarking this against similar federal contracts for SAP HANA support requires access to a broader dataset of comparable procurements. However, for large-scale federal agencies like the IRS, this annual figure appears to be within a reasonable range for comprehensive support, maintenance, and potential upgrades of a critical ERP system. Contracts for similar services can vary significantly based on the scope of work, number of users, modules supported, and the specific vendor's pricing structure.

What are the primary risks associated with this contract for the IRS?

The primary risks associated with this contract include potential vendor lock-in, where the IRS becomes overly reliant on THUNDERCAT TECHNOLOGY, LLC's specialized knowledge, making future transitions difficult or costly. There's also a risk of performance issues if the vendor fails to meet service level agreements, potentially disrupting critical IRS operations. Scope creep is another concern; if the requirements are not clearly defined and managed, the project could exceed its budget or timeline. Finally, ensuring the security of sensitive IRS data handled by the contractor is paramount, requiring robust security protocols and oversight.

How effective is the 'full and open competition after exclusion of sources' method for ensuring value?

The 'full and open competition after exclusion of sources' method is generally effective in ensuring value for the government. It allows for a broad solicitation of potential offerors while providing a mechanism to exclude specific sources if necessary for reasons such as national security or proprietary information, though this exclusion must be justified. By opening the competition broadly, it maximizes the pool of qualified vendors, fostering a competitive environment that typically drives down prices and encourages innovation. This process helps ensure that the government receives the best possible technical solution at a competitive price, thereby maximizing the value of taxpayer funds.

What is the historical spending pattern for SAP HANA support at the IRS or Treasury?

Historical spending patterns for SAP HANA support at the IRS or Treasury are not detailed in the provided data. To assess this, one would need to analyze past contracts awarded for similar services by these agencies. This would involve searching procurement databases for contracts related to SAP HANA, ERP systems, or related IT services over previous fiscal years. Understanding historical spending can reveal trends in contract values, vendor choices, and the evolution of IT support needs, providing context for the current $33.17 million award and helping to identify any significant increases or decreases in investment in this area.

What are the implications of the firm fixed-price contract type on cost control?

A firm fixed-price (FFP) contract type is generally considered advantageous for cost control by the government. Under an FFP agreement, the contractor assumes the primary risk for all costs incurred to complete the work. This means the price is set and not subject to adjustment based on the contractor's cost experience. For the IRS, this provides a high degree of budget certainty, as the total cost of the services is known upfront. It incentivizes the contractor to manage its own costs efficiently to maintain profitability, thereby aligning the contractor's financial interests with the government's objective of obtaining services at a predictable price.

Industry Classification

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

Product/Service Code: IT AND TELECOM - COMPUTE

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Thundercat Technology LLC

Address: 11190 SUNRISE VALLEY DR STE 200, RESTON, VA, 20191

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $53,191,821

Exercised Options: $33,166,727

Current Obligation: $33,166,727

Actual Outlays: $29,218,512

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: NNG15SD26B

IDV Type: GWAC

Timeline