IRS spends $43.1M on Adobe software licenses, upgrades, and support over five years

Contract Overview

Contract Amount: $43,100,555 ($43.1M)

Contractor: Bahfed Corp

Awarding Agency: Department of the Treasury

Start Date: 2021-11-30

End Date: 2026-11-29

Contract Duration: 1,825 days

Daily Burn Rate: $23.6K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: THE INTERNAL REVENUE SERVICE REQUIRES ANNUAL SUBSCRIPTION LICENSES. THE CONTRACTOR SHALL PROVIDE ANNUAL SOFTWARE SUBSCRIPTION LICENSES, UPGRADES, AND SUPPORT FOR ADOBE SOFTWARE PRODUCTS.

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 $43.1 million to BAHFED CORP for work described as: THE INTERNAL REVENUE SERVICE REQUIRES ANNUAL SUBSCRIPTION LICENSES. THE CONTRACTOR SHALL PROVIDE ANNUAL SOFTWARE SUBSCRIPTION LICENSES, UPGRADES, AND SUPPORT FOR ADOBE SOFTWARE PRODUCTS. Key points: 1. Value for money is assessed by comparing per-unit costs to market rates and similar government contracts. 2. Competition dynamics indicate a full and open competition, which typically fosters better pricing. 3. Risk indicators include the reliance on a single vendor for essential software and the long contract duration. 4. Performance context is tied to the IRS's need for continuous access to Adobe software for its operations. 5. Sector positioning places this contract within the broader IT services market, specifically software licensing and support.

Value Assessment

Rating: good

The contract's total value of $43.1 million over five years for Adobe software licenses, upgrades, and support appears reasonable given the scope. Benchmarking against similar government-wide agreements or large enterprise licenses for Adobe products would provide a more precise value-for-money assessment. The firm-fixed-price structure helps control costs, but the absence of specific per-unit pricing in the provided data makes a granular comparison difficult. However, the competitive nature of the award suggests that pricing was likely scrutinized.

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.' While the specific details of the exclusion are not provided, the 'full and open' designation implies that all responsible sources were permitted to submit offers. The number of bidders is not specified, but a competitive process generally leads to better price discovery and potentially lower costs for the government compared to sole-source or limited competition awards.

Taxpayer Impact: A full and open competition ensures that taxpayers benefit from the most competitive pricing achievable, as multiple vendors vie for the contract, driving down costs through market forces.

Public Impact

The Internal Revenue Service (IRS) is the primary beneficiary, ensuring continued access to essential software for its operations. Services delivered include annual subscription licenses, upgrades, and ongoing support for Adobe software products. The geographic impact is primarily within the District of Columbia, where the IRS is headquartered, but likely supports nationwide operations. Workforce implications involve enabling IRS employees to utilize standard software tools for document creation, management, and analysis.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Reliance on a single vendor (Adobe) for critical software could lead to vendor lock-in and potential price increases in future solicitations.
The five-year duration, while providing stability, limits flexibility to adopt newer technologies or negotiate more favorable terms if market conditions change significantly.

Positive Signals

The use of full and open competition suggests a robust process to obtain fair market value.
The firm-fixed-price contract type provides cost certainty for the IRS, mitigating budget risks associated with fluctuating software needs.
The inclusion of upgrades and support ensures the IRS maintains up-to-date software and receives timely technical assistance.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically software licensing and support services. The market for enterprise software licenses, particularly for widely used productivity suites like Adobe's, is mature and competitive. Government spending in this area is substantial, often managed through large enterprise agreements or government-wide acquisition contracts to leverage economies of scale and streamline procurement. The IRS's expenditure is a component of the broader federal IT budget, which prioritizes secure and efficient digital infrastructure.

Small Business Impact

The provided data does not indicate whether this contract included small business set-asides or subcontracting requirements. Given the nature of enterprise software licensing from a major vendor like Adobe, it is less common for the primary contract to be set aside for small businesses. However, the prime contractor, BAHFED CORP, may have opportunities to engage small businesses for support services or integration, depending on the specific terms of their subcontracting plan, if one was required.

Oversight & Accountability

Oversight for this contract would typically reside with the contracting officer and program managers within the IRS and the Department of the Treasury. Accountability is established through the firm-fixed-price contract terms, requiring delivery of specified licenses and support. Transparency is facilitated by federal procurement data systems that record contract awards. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to the contract were suspected.

Related Government Programs

General Services Administration (GSA) IT Schedule contracts
Enterprise Software Licenses
Cloud Computing Services
IT Support Services
Department of the Treasury IT Spending

Risk Flags

Potential vendor lock-in
Lack of specific per-unit cost data for benchmarking
Limited detail on Service Level Agreements (SLAs)

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $43.1 million to BAHFED CORP. THE INTERNAL REVENUE SERVICE REQUIRES ANNUAL SUBSCRIPTION LICENSES. THE CONTRACTOR SHALL PROVIDE ANNUAL SOFTWARE SUBSCRIPTION LICENSES, UPGRADES, AND SUPPORT FOR ADOBE SOFTWARE PRODUCTS.

Who is the contractor on this award?

The obligated recipient is BAHFED 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 $43.1 million.

What is the period of performance?

Start: 2021-11-30. End: 2026-11-29.

What is the specific breakdown of Adobe software products covered by this contract?

The provided data indicates the contract covers 'annual subscription licenses, upgrades, and support for Adobe software products.' However, it does not specify the exact Adobe Creative Cloud or Document Cloud applications included (e.g., Photoshop, Acrobat Pro, Illustrator). A detailed breakdown would typically be found in the contract's Statement of Work (SOW) or associated exhibits. Understanding the specific products is crucial for assessing if the quantity and type of licenses align with the IRS's actual needs and for benchmarking against similar agency software procurements.

How does the per-user cost compare to other federal agencies or commercial entities for similar Adobe licenses?

Without specific per-user or per-license cost data from the contract, a direct comparison is challenging. However, the total award of $43.1 million over five years for an unspecified number of users suggests a significant deployment. Government-wide contracts managed by the GSA often provide aggregated pricing that can be more favorable than individual agency purchases. Commercial enterprise agreements also vary based on volume discounts and negotiated terms. To perform a robust comparison, one would need to identify the specific Adobe products, the number of licenses, and the contract type (e.g., Creative Cloud All Apps, Acrobat Pro DC) and then benchmark against GSA schedules or commercial price lists for comparable volumes.

What are the key performance indicators (KPIs) and service level agreements (SLAs) associated with the software support?

The contract mentions 'support' for Adobe software, but the specific Key Performance Indicators (KPIs) and Service Level Agreements (SLAs) are not detailed in the provided summary. Typically, for software support contracts, SLAs would define response times for technical issues, resolution targets, availability of support personnel, and potentially uptime guarantees for any associated cloud services. The IRS would likely have established internal requirements for these metrics, which would be contractually obligated by BAHFED CORP. The effectiveness of the support is measured by the IRS's ability to resolve software-related issues promptly and minimize disruptions to operations.

What is the historical spending trend for Adobe software licenses at the IRS?

The provided data represents a single contract award valued at $43.1 million from November 2021 to November 2026. To understand historical spending trends, one would need to examine prior contracts for Adobe software licenses awarded to the IRS. This would involve searching federal procurement databases (like FPDS or USASpending) for previous awards to the IRS for similar products and services, noting the award amounts, durations, and contractors. Analyzing this historical data would reveal whether spending has increased, decreased, or remained stable over time, and identify any shifts in procurement strategies or vendor relationships.

What is the risk associated with relying on a single contractor, BAHFED CORP, for this critical software suite?

The primary risk associated with relying on a single contractor, BAHFED CORP, for Adobe software licenses and support is potential vendor lock-in and reduced negotiating leverage in future procurements. If BAHFED CORP is the sole authorized reseller or integrator for these specific Adobe offerings within the government context for this contract, the IRS may face limited options when the contract expires. This could lead to price increases or less favorable terms if competition is subsequently restricted. Mitigating this risk involves ensuring the contract terms allow for easy transition, exploring alternative software solutions periodically, and fostering a competitive environment during the re-solicitation process.

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: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1000 SW BROADWAY STE 1110, PORTLAND, OR, 97205

Business Categories: Category Business, Corporate Entity Not Tax Exempt, DoT Certified Disadvantaged Business Enterprise, HUBZone Firm, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Indian (Subcontinent) American Owned Business, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $57,051,320

Exercised Options: $44,032,430

Current Obligation: $43,100,555

Actual Outlays: $43,100,555

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: NNG15SD09B

IDV Type: GWAC

Timeline