Treasury's IRS awards $32.5M for Z16 Hardware Refresh and Maintenance to Science Applications International Corp
Contract Overview
Contract Amount: $32,500,889 ($32.5M)
Contractor: Science Applications International Corp
Awarding Agency: Department of the Treasury
Start Date: 2023-05-01
End Date: 2025-04-30
Contract Duration: 730 days
Daily Burn Rate: $44.5K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: Z16 HARDWARE REFRESH AND MAINTENANCE
Place of Performance
Location: RESTON, FAIRFAX County, VIRGINIA, 20190
State: Virginia Government Spending
Plain-Language Summary
Department of the Treasury obligated $32.5 million to SCIENCE APPLICATIONS INTERNATIONAL CORP for work described as: Z16 HARDWARE REFRESH AND MAINTENANCE Key points: 1. Contract value of $32.5M over two years for hardware refresh and maintenance. 2. Awarded under full and open competition, suggesting a competitive bidding process. 3. The contract type is Firm Fixed Price, which shifts cost risk to the contractor. 4. The North American Industry Classification System (NAICS) code 541519 indicates 'Other Computer Related Services'. 5. The contract is a Delivery Order, implying it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract. 6. The contractor, Science Applications International Corp (SAIC), is a large, established federal contractor. 7. The contract duration is 730 days, aligning with the two-year period. 8. The base contract value is $44,522, with the delivery order representing the bulk of the spending.
Value Assessment
Rating: good
The contract value of $32.5 million over two years for hardware refresh and maintenance appears reasonable given the scope. Without specific details on the hardware being refreshed or the maintenance services provided, a direct comparison is challenging. However, the firm fixed-price nature of the contract suggests that the government has negotiated a set price, which can be advantageous for budget predictability. The relatively small base contract value ($44,522) compared to the delivery order value ($32.5M) indicates this is a significant task order under a potentially larger IDIQ vehicle.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The specific number of bidders is not provided, but this method of procurement generally fosters a competitive environment, which can lead to better pricing and terms for the government. The IRS likely issued a solicitation that outlined detailed requirements, allowing multiple companies to propose solutions.
Taxpayer Impact: Full and open competition is the most advantageous for taxpayers as it maximizes the potential for cost savings through a robust bidding process and encourages a wider range of innovative solutions.
Public Impact
Benefits the Internal Revenue Service (IRS) by ensuring the continued operation and maintenance of critical Z16 hardware. Supports the IRS's mission to administer and enforce tax laws by providing reliable IT infrastructure. The services are delivered within the Department of the Treasury, primarily impacting operations in Virginia. The contract likely supports IT professionals and technicians involved in hardware maintenance and refresh activities.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for vendor lock-in if the refresh involves proprietary hardware or software.
- Dependence on a single contractor for critical hardware maintenance could pose a risk if performance issues arise.
- The scope of 'maintenance' needs to be clearly defined to avoid scope creep or unexpected costs.
Positive Signals
- Firm Fixed Price contract structure shifts cost overrun risk to the contractor.
- Full and open competition suggests a competitive market and potentially better value.
- Award to a large, experienced contractor like SAIC may indicate a lower risk of performance issues.
- The two-year duration provides a stable period for hardware refresh and maintenance.
Sector Analysis
This contract falls within the IT services sector, specifically focusing on computer hardware maintenance and refresh. The market for IT services supporting government agencies is substantial, with significant spending allocated to maintaining and upgrading aging infrastructure. Comparable spending benchmarks would typically involve analyzing other large federal contracts for similar hardware support and refresh services across agencies like the Department of Defense or other large civilian agencies.
Small Business Impact
The data indicates that this contract was not set aside for small businesses (sb: false) and the contractor is not a small business. Therefore, there are no direct subcontracting implications for small businesses arising from a small business set-aside. However, large prime contractors like SAIC often engage small businesses as subcontractors for specialized services or to meet broader socioeconomic goals, though this is not explicitly stated here.
Oversight & Accountability
Oversight for this contract would typically be managed by the contracting officer and the contract administration team within the IRS or the Department of the Treasury. Performance monitoring, adherence to the firm fixed-price terms, and delivery schedules would be key oversight areas. Transparency is generally maintained through contract databases like FPDS-NG, where award details are publicly reported. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.
Related Government Programs
- IT Hardware Maintenance Services
- Computer Systems Design Services
- Federal IT Infrastructure Modernization
- IRS IT Modernization Programs
- Department of the Treasury IT Contracts
Risk Flags
- Potential for scope creep due to broad NAICS code.
- Dependence on contractor for critical hardware functionality.
- Lack of specific performance metrics in provided data.
Tags
it-services, hardware-maintenance, hardware-refresh, science-applications-international-corp, department-of-the-treasury, internal-revenue-service, firm-fixed-price, full-and-open-competition, delivery-order, virginia, naics-541519, large-business
Frequently Asked Questions
What is this federal contract paying for?
Department of the Treasury awarded $32.5 million to SCIENCE APPLICATIONS INTERNATIONAL CORP. Z16 HARDWARE REFRESH AND MAINTENANCE
Who is the contractor on this award?
The obligated recipient is SCIENCE APPLICATIONS INTERNATIONAL 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 $32.5 million.
What is the period of performance?
Start: 2023-05-01. End: 2025-04-30.
What specific Z16 hardware is being refreshed or maintained under this contract?
The provided data does not specify the exact 'Z16 hardware' being addressed. In the context of federal IT, 'Z16' could refer to a specific model of mainframe or server hardware, potentially from IBM's zEnterprise series or a similar high-end computing system. A hardware refresh typically involves replacing older components or entire systems with newer, more capable ones, while maintenance ensures the ongoing operational integrity of existing hardware through repairs, updates, and technical support. Understanding the specific hardware would be crucial for assessing the technical scope and value of the contract.
How does the $32.5 million contract value compare to historical spending on similar hardware refresh and maintenance for the IRS?
Without access to historical IRS spending data specifically for Z16 hardware refresh and maintenance, a direct comparison is not possible. However, $32.5 million over two years represents an average annual spend of $16.25 million. This figure should be benchmarked against previous contracts for similar systems, considering factors like inflation, technological advancements, and the scale of the IRS's IT infrastructure. If the IRS has been using older Z16 systems for an extended period, a refresh of this magnitude might be expected as part of a lifecycle management strategy. Further analysis would require examining past contract awards for comparable IT hardware support.
What are the key performance indicators (KPIs) and service level agreements (SLAs) associated with this contract?
The provided data does not detail the specific Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) for this contract. Typically, for hardware maintenance and refresh contracts, KPIs and SLAs would focus on metrics such as system uptime, response times for technical support, hardware failure rates, and the successful completion of refresh tasks within defined timelines. These agreements are crucial for ensuring the contractor meets the IRS's operational requirements and for holding them accountable for performance. The firm fixed-price nature suggests that meeting these SLAs is tied to the contractor's profitability.
What is the track record of Science Applications International Corp (SAIC) in delivering similar IT hardware refresh and maintenance services to federal agencies?
Science Applications International Corp (SAIC) is a large and established federal contractor with extensive experience in providing a wide range of IT services, including hardware maintenance, infrastructure support, and system modernization, to various government agencies. They have a significant portfolio of contracts across defense, civilian, and intelligence sectors. While specific performance details for this particular 'Z16' contract are not available in the provided data, SAIC's general track record suggests they possess the resources, expertise, and established processes to handle complex IT projects. A deeper dive into their past performance evaluations and contract history would provide more granular insights.
What is the potential risk associated with the 'Other Computer Related Services' NAICS code (541519) in terms of scope definition and service delivery?
The NAICS code 541519, 'Other Computer Related Services,' is broad and can encompass a wide array of IT services beyond just hardware. While it covers hardware maintenance and refresh, it could also include consulting, integration, or custom software development. The primary risk associated with such a broad code is potential scope creep if the contract's statement of work is not precisely defined. For this specific contract, the focus on 'Z16 Hardware Refresh and Maintenance' narrows the scope considerably. However, ensuring clear delineation of services, deliverables, and acceptance criteria is paramount to mitigate risks of misinterpretation or unmet expectations during service delivery.
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
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Science Applications International Corporation
Address: 11720 PLAZA AMERICA DR, 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: $32,500,895
Exercised Options: $32,500,895
Current Obligation: $32,500,889
Actual Outlays: $32,500,889
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: TIRNO13D00001
IDV Type: IDC
Timeline
Start Date: 2023-05-01
Current End Date: 2025-04-30
Potential End Date: 2025-04-30 00:00:00
Last Modified: 2025-09-24
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