Treasury's IRS awards $24.1M for Cisco hardware, utilizing full and open competition

Contract Overview

Contract Amount: $24,098,752 ($24.1M)

Contractor: FCN, Inc.

Awarding Agency: Department of the Treasury

Start Date: 2024-09-13

End Date: 2025-09-12

Contract Duration: 364 days

Daily Burn Rate: $66.2K/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: THIS IS A DELIVERY ORDER TO PURCHASE CISCO HARDWARE

Place of Performance

Location: LANHAM, PRINCE GEORGES County, MARYLAND, 20706

State: Maryland Government Spending

Plain-Language Summary

Department of the Treasury obligated $24.1 million to FCN, INC. for work described as: THIS IS A DELIVERY ORDER TO PURCHASE CISCO HARDWARE Key points: 1. The contract value represents a significant investment in IT infrastructure for the IRS. 2. Full and open competition was utilized, suggesting a potentially competitive pricing environment. 3. The contract duration of one year with a firm fixed price structure provides cost certainty. 4. The primary contractor, FCN, Inc., is positioned to deliver essential networking equipment. 5. This award falls under IT services, specifically computer-related services, aligning with IRS operational needs. 6. The single award indicates a focused approach to fulfilling a specific hardware requirement.

Value Assessment

Rating: good

Benchmarking the $24.1 million award for Cisco hardware requires specific market data for comparable configurations and quantities. However, the firm fixed-price nature of the contract provides a clear cost ceiling for the IRS. The single delivery order against a larger contract vehicle (implied by 'delivery order') suggests that pricing was likely established during a prior, potentially competitive, procurement. Without knowing the exact specifications and volume, a precise value-for-money assessment is challenging, but the competitive award mechanism is a positive indicator.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that the solicitation was broadly advertised and all responsible sources were permitted to submit offers. This approach is generally expected to yield the best value and pricing for the government by maximizing the pool of potential bidders. The specific details of how many bids were received are not provided, but the chosen method suggests a robust competitive process.

Taxpayer Impact: A full and open competition process is favorable for taxpayers as it promotes a competitive environment, which typically drives down prices and encourages innovation from a wider range of vendors.

Public Impact

The Internal Revenue Service (IRS) will benefit from upgraded or maintained IT infrastructure, crucial for tax processing and taxpayer services. Essential Cisco hardware will be procured, supporting the agency's network operations and data management. The geographic impact is primarily within the IRS's operational centers, likely across the United States. This contract supports the IT workforce involved in managing and maintaining the agency's network infrastructure.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if this hardware becomes a de facto standard without ongoing competitive refresh.
Dependence on a single vendor for specific hardware components could lead to supply chain risks.
The effectiveness of the hardware in meeting evolving IRS cybersecurity needs requires continuous monitoring.

Positive Signals

The use of full and open competition mitigates risks associated with limited vendor choice.
A firm fixed-price contract provides budget certainty for this specific acquisition.
The award to FCN, Inc. suggests a potentially established relationship and understanding of government procurement processes.

Sector Analysis

This contract falls within the broader Information Technology (IT) sector, specifically focusing on computer hardware procurement. The IT services market, including hardware, is a substantial segment of federal spending, with agencies constantly needing to update and maintain their infrastructure. Comparable spending benchmarks would involve analyzing other federal awards for similar networking equipment from major vendors like Cisco, Juniper, or Dell, often procured through large IT schedule contracts or specific agency-led competitions.

Small Business Impact

The provided data indicates that this contract was not specifically set aside for small businesses (ss: false, sb: false). Therefore, the primary focus is on large business participation. While there's no direct small business set-aside, FCN, Inc. may engage small businesses as subcontractors, depending on their own subcontracting plans and the nature of the hardware delivery and support. The impact on the small business ecosystem would be indirect, primarily through potential subcontracting opportunities if FCN, Inc. utilizes them.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the IRS's IT program management office. Accountability measures are embedded in the firm fixed-price contract terms, requiring delivery of specified hardware. Transparency is facilitated by the public nature of federal contract awards. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to this contract were suspected.

Related Government Programs

General Services Administration (GSA) Schedules
IT Modernization Initiatives
Network Infrastructure Procurement
IRS Technology Modernization Program

Risk Flags

Potential for hardware obsolescence within the contract period.
Supply chain risks for specific Cisco components.
Ensuring compatibility with future IRS cybersecurity requirements.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $24.1 million to FCN, INC.. THIS IS A DELIVERY ORDER TO PURCHASE CISCO HARDWARE

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 $24.1 million.

What is the period of performance?

Start: 2024-09-13. End: 2025-09-12.

What is the track record of FCN, Inc. in delivering IT hardware to federal agencies, particularly the IRS?

FCN, Inc. has a history of securing federal contracts, including those for IT hardware and services. Analyzing their past performance with agencies like the IRS would involve reviewing contract databases for similar awards, on-time delivery rates, and any reported performance issues or successes. Their experience with Cisco products specifically would be a key factor. A review of their contract history would reveal their capacity to manage large-scale hardware procurements and their adherence to government regulations and delivery schedules. Without specific performance metrics from prior contracts, a definitive assessment of their track record is limited to their general presence in the federal IT contracting space.

How does the pricing of this Cisco hardware award compare to market rates for similar configurations?

A precise comparison of this $24.1 million award to market rates for Cisco hardware is challenging without detailed specifications of the equipment, quantities, and any associated support or maintenance agreements. Federal agencies often leverage large purchasing vehicles (like GSA Schedules) or conduct extensive market research to ensure competitive pricing. The 'full and open competition' aspect suggests an effort to achieve market-competitive pricing. However, specific unit costs, volume discounts, and the inclusion of value-added services would need to be analyzed against current Cisco price lists, reseller quotes, and benchmark data from similar government or commercial procurements to determine if the pricing is advantageous.

What are the primary risks associated with this contract, and how are they being mitigated?

Key risks for this contract include potential hardware obsolescence, supply chain disruptions for Cisco products, and the possibility of the procured hardware not fully meeting future IRS operational or cybersecurity demands. Mitigation strategies likely include the firm fixed-price structure, which caps cost overruns, and the competitive award process, which should have selected a vendor capable of reliable delivery. The one-year duration also limits long-term commitment to potentially aging technology. Further mitigation might involve specific warranty terms, service level agreements, and contingency planning for hardware failures or end-of-life.

How does this contract contribute to the IRS's broader IT modernization goals?

This contract for Cisco hardware is likely a component of the IRS's ongoing efforts to modernize its IT infrastructure. Upgrading or replacing network hardware is fundamental to improving system performance, enhancing cybersecurity, and supporting new digital services for taxpayers. The specific type and quantity of Cisco hardware procured would indicate its role, whether it's for core network backbone upgrades, data center expansion, or enhancing connectivity across IRS facilities. This award signifies continued investment in the foundational elements necessary for the IRS to achieve its modernization objectives.

What has been the historical spending pattern for similar IT hardware procurements by the IRS or Treasury?

Analyzing historical spending patterns for IT hardware by the IRS and Treasury would reveal trends in technology adoption, vendor relationships, and overall investment levels. This typically involves examining annual IT budgets, specific contract awards for networking equipment, and the evolution of technology standards over time. Understanding past spending can help contextualize the $24.1 million award, indicating whether it represents an increase, decrease, or steady investment compared to previous years. It also highlights which types of hardware and which vendors have been historically favored, providing insights into the agency's long-term IT strategy and procurement practices.

Industry Classification

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

Product/Service Code: IT AND TELECOM - NETWORK

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: 12501 ARDENNES AVE STE 101, 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: $24,098,752

Exercised Options: $24,098,752

Current Obligation: $24,098,752

Actual Outlays: $24,087,695

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: NNG15SC71B

IDV Type: GWAC

Timeline