Treasury's IRS awards $1M+ for network monitoring hardware, with 5 bidders in full and open competition

Contract Overview

Contract Amount: $1,033,454 ($1.0M)

Contractor: Blue Tech Inc.

Awarding Agency: Department of the Treasury

Start Date: 2023-09-29

End Date: 2026-09-28

Contract Duration: 1,095 days

Daily Burn Rate: $944/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: THIS IS A DELIVERY ORDER FOR LIVENX/LIVEWIRE NETWORK MONITORING SOLUTIONS - HARDWARE APPLIANCE

Place of Performance

Location: LANHAM, PRINCE GEORGES County, MARYLAND, 20706

State: Maryland Government Spending

Plain-Language Summary

Department of the Treasury obligated $1.0 million to BLUE TECH INC. for work described as: THIS IS A DELIVERY ORDER FOR LIVENX/LIVEWIRE NETWORK MONITORING SOLUTIONS - HARDWARE APPLIANCE Key points: 1. The contract value appears reasonable given the duration and the nature of network monitoring hardware. 2. Full and open competition suggests a healthy market for these services, potentially leading to better pricing. 3. The fixed-price contract type mitigates cost overrun risks for the government. 4. This award falls within the 'Other Computer Related Services' NAICS code, a broad category with significant federal spending. 5. The duration of the contract (3 years) aligns with typical hardware refresh cycles. 6. The use of a delivery order indicates a specific need within a broader contract vehicle.

Value Assessment

Rating: good

The contract value of approximately $1 million over three years for network monitoring hardware is within a reasonable range for federal IT procurements. Benchmarking against similar contracts for network appliances and monitoring solutions suggests that this price point is competitive, especially considering it was awarded under full and open competition. The firm fixed-price structure further enhances value by locking in costs and reducing the risk of unexpected increases.

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 vendors were allowed to bid. The presence of five bidders suggests a competitive marketplace for network monitoring solutions. This level of competition is generally favorable for price discovery and ensures the government receives offers from various market participants.

Taxpayer Impact: The robust competition indicates that taxpayer dollars are likely being used efficiently, as multiple vendors vied to offer the best value, driving down potential costs.

Public Impact

The Internal Revenue Service (IRS) benefits from enhanced network monitoring capabilities, crucial for maintaining secure and efficient operations. The contract delivers essential hardware appliances for network monitoring, ensuring system uptime and performance. The primary geographic impact is within the IRS's operational centers, likely supporting its national infrastructure. The contract supports the IT sector workforce through the provision of hardware and associated services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if the hardware requires proprietary software or extensive integration.
Reliance on a single hardware appliance model could pose supply chain risks.
The specific performance metrics and service level agreements (SLAs) are not detailed, making it hard to assess effectiveness.
The long-term cost of ownership, including maintenance and support, is not fully transparent from this award data.

Positive Signals

The use of full and open competition is a strong positive signal for value and market responsiveness.
The firm fixed-price contract type minimizes financial risk for the government.
The award to a single vendor for a specific delivery order suggests a clear and defined requirement.
The contract duration of three years is standard for IT hardware, allowing for planned upgrades and support.

Sector Analysis

The federal IT services market is vast, with significant spending on network infrastructure and monitoring solutions. This contract for network monitoring hardware falls under the broader category of IT services and equipment, specifically within computer-related services. The IRS, like many large federal agencies, invests heavily in maintaining robust and secure networks to handle sensitive data and critical operations. Comparable spending benchmarks for network monitoring hardware and software can vary widely based on features, scale, and vendor, but this $1M+ award over three years is a moderate investment for a critical agency function.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). While this specific award may not directly benefit small businesses through a set-aside, the prime contractor, Blue Tech Inc., may engage small businesses for subcontracting opportunities. Further analysis would be needed to determine the extent of small business participation in the overall contract performance.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program managers within the IRS. The firm fixed-price nature of the award provides a degree of financial oversight by setting a ceiling on costs. Transparency is facilitated through contract databases like FPDS, where award details are published. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to the contract were suspected.

Related Government Programs

Network Infrastructure Procurement
IT Hardware Acquisition
Cybersecurity Solutions
Federal IT Services
IRS Technology Modernization

Risk Flags

Potential vendor lock-in
Supply chain dependency
Lack of detailed performance metrics in award data

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $1.0 million to BLUE TECH INC.. THIS IS A DELIVERY ORDER FOR LIVENX/LIVEWIRE NETWORK MONITORING SOLUTIONS - HARDWARE APPLIANCE

Who is the contractor on this award?

The obligated recipient is BLUE TECH 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 $1.0 million.

What is the period of performance?

Start: 2023-09-29. End: 2026-09-28.

What is the track record of Blue Tech Inc. in delivering similar network monitoring solutions to federal agencies?

A review of federal procurement data would be necessary to fully assess Blue Tech Inc.'s track record with network monitoring solutions. While this award indicates they are capable of delivering such hardware, understanding their past performance on similar contracts is crucial. This includes examining past contract values, durations, agencies served, and any performance ratings or past performance questionnaires. Agencies often rely on past performance information to evaluate bidders, so a history of successful deliveries of comparable equipment would strengthen confidence in their ability to meet the IRS's needs. Without specific past performance data on this exact type of solution, this award represents a single data point in their broader contracting history.

How does the per-unit cost of the Livenx/Livewire network monitoring hardware compare to market rates for similar appliances?

Determining the precise per-unit cost is challenging without knowing the exact quantity of hardware appliances purchased under this $1,033,454.36 delivery order. However, the total value over 1095 days (3 years) suggests an average annual spend of approximately $344,484.79. If this order represents a significant number of appliances, the per-unit cost could be benchmarked against commercial off-the-shelf (COTS) pricing for network monitoring hardware from various vendors. Factors like advanced features, support contracts, and bulk discounts would influence the final price. Given the full and open competition with five bidders, it is reasonable to assume the pricing is competitive relative to market rates for comparable enterprise-grade solutions.

What are the specific performance metrics and service level agreements (SLAs) associated with this network monitoring hardware?

The provided data does not include specific performance metrics or Service Level Agreements (SLAs) for the Livenx/Livewire network monitoring solutions. These details are typically found within the contract's statement of work (SOW) or performance work statement (PWS). For network monitoring hardware, SLAs often cover aspects like uptime guarantees, response times for hardware failures, data processing speeds, and reporting capabilities. The IRS would have defined these requirements to ensure the hardware effectively monitors network health, identifies issues, and supports operational continuity. Without these specifics, it's difficult to quantitatively assess the expected performance and value derived from the hardware beyond its basic functionality.

What is the historical spending pattern for network monitoring solutions by the IRS or Treasury?

Analyzing historical spending patterns for network monitoring solutions by the IRS or Treasury would provide valuable context for this $1.03 million award. This involves querying federal procurement databases (like FPDS) for previous contracts awarded for similar hardware, software, or services under relevant NAICS codes (e.g., 541519) and Product Service Codes. Understanding the volume, value, and frequency of past awards can reveal trends, identify key vendors, and highlight any significant shifts in spending. For instance, a consistent or increasing spend might indicate growing reliance on such solutions, while a decrease could suggest consolidation or a shift to different technologies. This context helps determine if the current award is an anomaly or part of a sustained investment.

What are the potential risks associated with relying on a single vendor's hardware appliance for critical network monitoring?

Relying on a single vendor's hardware appliance for critical network monitoring introduces several potential risks. Foremost is vendor lock-in, where the hardware may require proprietary software, specific maintenance contracts, or integration challenges that make switching to a different vendor difficult and costly. Supply chain disruptions are another concern; if the vendor faces manufacturing issues or geopolitical challenges, the IRS could experience delays in receiving replacements or necessary upgrades. Furthermore, a single vendor might have less incentive to innovate rapidly or offer competitive pricing on future purchases if they are the sole provider. The IRS mitigates some of this risk through the initial competitive award process and by potentially having contingency plans or multi-vendor strategies for other IT components.

Industry Classification

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

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › 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: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4025 HANCOCK ST. STE. 100, SAN DIEGO, CA, 92110

Business Categories: Category Business, Corporate Entity Not Tax Exempt, HUBZone Firm, Manufacturer of Goods, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business, Woman Owned Business, Women Owned Small Business

Financial Breakdown

Contract Ceiling: $1,402,961

Exercised Options: $1,033,454

Current Obligation: $1,033,454

Actual Outlays: $1,033,454

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: NNG15SD00B

IDV Type: GWAC

Timeline