Treasury's IRS awards $24.6M for IT services, with a high per-unit cost for data warehousing

Contract Overview

Contract Amount: $24,644,715 ($24.6M)

Contractor: FCN, Inc.

Awarding Agency: Department of the Treasury

Start Date: 2023-05-05

End Date: 2024-11-04

Contract Duration: 549 days

Daily Burn Rate: $44.9K/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: COMPLIANCE DATA WAREHOUSE (CDW) DOME SOLUTION

Place of Performance

Location: LANHAM, PRINCE GEORGES County, MARYLAND, 20706

State: Maryland Government Spending

Plain-Language Summary

Department of the Treasury obligated $24.6 million to FCN, INC. for work described as: COMPLIANCE DATA WAREHOUSE (CDW) DOME SOLUTION Key points: 1. The contract value of $24.6 million for IT services represents a significant investment in data management. 2. Competition was robust, indicating potential for good pricing, but the per-unit cost warrants scrutiny. 3. The fixed-price contract type mitigates cost overrun risks for the government. 4. This contract supports critical IRS operations related to tax administration and data compliance. 5. The vendor, FCN, Inc., is positioned to deliver specialized IT services within the federal sector. 6. The duration of 549 days suggests a medium-term project with ongoing service requirements.

Value Assessment

Rating: fair

The total contract value of $24.6 million for IT services appears substantial. Benchmarking against similar data warehousing solutions is crucial to assess value. The per-unit cost of $4,489, while potentially influenced by the specific nature of the 'DOME SOLUTION,' seems high when compared to general IT service contracts. Further analysis of the scope of work and deliverables is needed to determine if this pricing is competitive and reflects true value for money.

Cost Per Unit: $4,489 per unit (estimated based on total award and number of orders)

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' suggesting a competitive process was initiated. However, the specific exclusion of sources implies that not all potential bidders may have been considered, which could limit the breadth of competition. The presence of multiple bidders is generally positive for price discovery, but the details of the exclusion need to be understood to fully assess the competitive landscape.

Taxpayer Impact: A full and open competition, even with exclusions, generally benefits taxpayers by encouraging multiple vendors to bid, which can drive down prices. However, the exclusion of certain sources might have limited the most competitive offers from reaching the government.

Public Impact

Taxpayers benefit from improved data management and compliance systems at the IRS. The contract delivers essential IT services for the Internal Revenue Service's operational needs. The primary geographic impact is within the federal government's IT infrastructure, supporting national tax administration. The contract supports a specialized IT workforce, likely requiring expertise in data warehousing and computer services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The per-unit cost appears high and requires further justification against market benchmarks.
The 'exclusion of sources' in the competition type warrants a deeper look into potential limitations on bidding.
The specific nature of the 'DOME SOLUTION' is not fully detailed, making a precise value assessment challenging.

Positive Signals

Awarded under full and open competition, indicating a structured procurement process.
The firm fixed-price contract type provides cost certainty for the government.
FCN, Inc. is a known entity in the federal IT services space.

Sector Analysis

This contract falls within the broader IT services sector, specifically focusing on computer-related services and data warehousing solutions. The federal IT market is substantial, with significant spending allocated to maintaining and upgrading systems for various agencies. Comparable spending benchmarks for large-scale data management solutions within government agencies would be useful for a more precise valuation. The 'DOME SOLUTION' likely represents a niche but critical component of the IRS's IT infrastructure.

Small Business Impact

The contract data indicates that small business participation (ss: false, sb: false) was not a primary set-aside consideration for this award. This suggests that the primary focus was on securing the best technical solution and price from a qualified vendor, likely a larger firm. There is no explicit information on subcontracting plans for small businesses, which could be an area for further inquiry to understand the broader impact on the small business ecosystem.

Oversight & Accountability

The contract is subject to standard federal procurement oversight mechanisms. As a delivery order under a larger contract vehicle, its execution will be monitored by the IRS contracting officers. Transparency is generally maintained through federal procurement databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected in the performance or award of this contract.

Related Government Programs

IRS IT Modernization Programs
Federal Data Management Services
Cloud Computing Services for Government
Cybersecurity Solutions for Federal Agencies
IT Professional Services Contracts

Risk Flags

High per-unit cost requires justification.
Potential for limited competition due to source exclusion.
Scope of 'DOME SOLUTION' not fully detailed.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $24.6 million to FCN, INC.. COMPLIANCE DATA WAREHOUSE (CDW) DOME 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 $24.6 million.

What is the period of performance?

Start: 2023-05-05. End: 2024-11-04.

What is the specific nature of the 'COMPLIANCE DATA WAREHOUSE (CDW) DOME SOLUTION' and how does it justify the per-unit cost?

The 'COMPLIANCE DATA WAREHOUSE (CDW) DOME SOLUTION' likely refers to a specialized system designed by FCN, Inc. for the IRS to manage and analyze compliance-related data. The 'DOME SOLUTION' could be proprietary technology or a tailored integration of existing platforms. The high per-unit cost of $4,489 may stem from the complexity of integrating diverse data streams, ensuring data integrity for compliance purposes, advanced analytics capabilities, and potentially the specific software licenses or proprietary components involved. Without more detailed technical specifications or a breakdown of the solution's components, it is difficult to definitively benchmark this cost. However, it suggests a highly specialized and potentially unique service offering rather than a commodity IT service.

How did the 'exclusion of sources' impact the competitive bidding process for this contract?

The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' indicates that while the competition was intended to be broad, certain potential bidders were explicitly excluded from participating. The reasons for such exclusions can vary, including specific technical requirements, past performance issues with certain vendors, or strategic sourcing decisions. This exclusion could have limited the number of viable proposals received, potentially reducing the downward pressure on pricing that a fully open competition might achieve. Understanding the rationale behind the exclusion is key to assessing whether it was justified and if it ultimately served the government's best interest in securing the most competitive offer.

What is FCN, Inc.'s track record with similar large-scale IT service contracts for the federal government?

FCN, Inc. has a history of performing IT service contracts for various federal agencies. Their portfolio often includes network infrastructure, cybersecurity, cloud solutions, and IT support. While specific details on their past performance for large-scale data warehousing solutions comparable to the 'CDW DOME SOLUTION' are not immediately available from the provided data, their presence as a contractor suggests they possess the necessary clearances and capabilities. A deeper dive into their contract history, including past performance reviews and any reported issues, would provide a more comprehensive understanding of their reliability and expertise in delivering complex IT solutions.

How does the $24.6 million award compare to historical IRS spending on data warehousing and IT services?

The $24.6 million award for the CDW DOME SOLUTION represents a significant, but not necessarily outlier, investment for the IRS. Federal agencies, particularly those dealing with vast amounts of sensitive data like the IRS, continuously invest in modernizing their IT infrastructure, including data warehousing capabilities. Historical spending patterns for the IRS show consistent, multi-million dollar investments in IT modernization and data management. This specific contract's value should be assessed within the context of the IRS's overall IT budget and its strategic goals for data analytics and compliance. Without access to historical IRS IT spending data broken down by specific service categories, a precise comparison is challenging, but the amount is consistent with the scale of IT projects undertaken by large federal agencies.

What are the primary risks associated with this contract, and what mitigation strategies are in place?

Primary risks include potential cost overruns if the 'DOME SOLUTION' proves more complex than anticipated (though mitigated by firm fixed-price), performance issues leading to delays in critical IRS operations, and data security vulnerabilities. Mitigation strategies are inherent in the contract type (firm fixed-price limits cost risk), the competitive award process (selecting a vendor based on qualifications), and standard government oversight. The IRS will likely have performance metrics and quality assurance surveillance plans in place to monitor vendor performance and ensure deliverables meet requirements. Data security protocols mandated by federal regulations will also be a key risk mitigation factor.

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

Address: 2600 TOWER OAKS BLVD STE 575, 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: $24,644,715

Exercised Options: $24,644,715

Current Obligation: $24,644,715

Actual Outlays: $24,644,715

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: NNG15SC71B

IDV Type: GWAC

Timeline