Treasury's $35.8M Oracle cloud contract awarded to Emergent, LLC for remote hosting services

Contract Overview

Contract Amount: $35,776,259 ($35.8M)

Contractor: Emergent, LLC

Awarding Agency: Department of the Treasury

Start Date: 2018-04-24

End Date: 2023-03-31

Contract Duration: 1,802 days

Daily Burn Rate: $19.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: REMOTE HOSTING SERVICES AND RELATED INFRASTRUCTURE SUPPORT - ORACLE MANAGED CLOUD SERVICES (OMCS) SOLUTION

Place of Performance

Location: PARKERSBURG, WOOD County, WEST VIRGINIA, 26106

State: West Virginia Government Spending

Plain-Language Summary

Department of the Treasury obligated $35.8 million to EMERGENT, LLC for work described as: REMOTE HOSTING SERVICES AND RELATED INFRASTRUCTURE SUPPORT - ORACLE MANAGED CLOUD SERVICES (OMCS) SOLUTION Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract's duration of 1802 days indicates a long-term need for these services. 3. Firm Fixed Price contract type helps manage cost certainty for the government. 4. The award was a Delivery Order, implying it was part of a larger contract vehicle. 5. The North American Industry Classification System (NAICS) code 334111 points to electronic computer manufacturing, though the service is cloud hosting. 6. The contract was awarded to a single entity, Emergent, LLC. 7. The contract was not set aside for small businesses.

Value Assessment

Rating: fair

Benchmarking the value of this specific $35.8 million contract for Oracle Managed Cloud Services (OMCS) is challenging without direct comparisons to similar, recently awarded cloud hosting contracts with identical service scopes. The firm-fixed-price structure provides cost predictability. However, the total value over nearly five years suggests a significant investment, and a detailed cost-benefit analysis would be needed to fully assess value for money, especially considering potential long-term cloud migration costs and the specific pricing of Oracle's OMCS solution.

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 presence of two bidders suggests a moderate level of competition for this specific award. While full and open competition is generally preferred for maximizing price discovery and ensuring fair market access, the limited number of bidders could still allow for some price negotiation advantages for the government.

Taxpayer Impact: Full and open competition, even with a limited number of bidders, generally benefits taxpayers by encouraging competitive pricing and potentially leading to better service offerings compared to sole-source or limited competition scenarios.

Public Impact

The Bureau of the Fiscal Service benefits from reliable remote hosting and infrastructure support. Essential government financial operations and data management are supported by these services. The contract's geographic impact is primarily within West Virginia, where the contractor is located. The contract supports the IT infrastructure necessary for federal financial services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in with a specific cloud provider (Oracle).
Reliance on a single contractor for critical infrastructure support.
The NAICS code (334111) seems misaligned with the service provided (cloud hosting).

Positive Signals

Awarded through full and open competition, promoting fairness.
Firm Fixed Price contract type offers cost certainty.
Long contract duration suggests a stable, ongoing need met.

Sector Analysis

The federal IT services market is vast and highly competitive, with significant spending on cloud computing, infrastructure, and managed services. This contract for Oracle Managed Cloud Services (OMCS) fits within the broader category of IT infrastructure and managed services, a sector experiencing continuous growth as agencies migrate to cloud-based solutions. Comparable spending benchmarks would typically involve analyzing other large-scale cloud hosting or managed service contracts awarded by federal agencies, considering factors like service scope, provider, and contract duration.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses within the provided data. Therefore, this award does not directly contribute to the federal small business contracting goals through set-asides or mandated subcontracting opportunities. The impact on the small business ecosystem is neutral in this specific instance, as it did not prioritize or involve small business participation.

Oversight & Accountability

Oversight for this contract would typically fall under the Bureau of the Fiscal Service's contracting officers and program managers. Accountability measures are inherent in the firm-fixed-price structure, which obligates the contractor to deliver specified services. Transparency is generally facilitated through contract award databases like FPDS. The Inspector General for the Department of the Treasury would have jurisdiction for audits and investigations if any concerns regarding performance, fraud, or waste arise.

Related Government Programs

Cloud Computing Services
IT Infrastructure Support
Managed Services Contracts
Oracle Cloud Services
Federal IT Modernization

Risk Flags

Potential NAICS code misalignment.
Limited number of bidders in a full and open competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $35.8 million to EMERGENT, LLC. REMOTE HOSTING SERVICES AND RELATED INFRASTRUCTURE SUPPORT - ORACLE MANAGED CLOUD SERVICES (OMCS) SOLUTION

Who is the contractor on this award?

The obligated recipient is EMERGENT, LLC.

Which agency awarded this contract?

Awarding agency: Department of the Treasury (Bureau of the Fiscal Service).

What is the total obligated amount?

The obligated amount is $35.8 million.

What is the period of performance?

Start: 2018-04-24. End: 2023-03-31.

What is the track record of Emergent, LLC in performing federal IT contracts, particularly those involving cloud services?

Assessing Emergent, LLC's track record requires a deeper dive into their contract history beyond this single award. While this contract for Oracle Managed Cloud Services (OMCS) represents a significant award, understanding their performance on previous federal contracts, especially those of similar scope and complexity, is crucial. Information on past performance evaluations, any contract disputes, or successful project completions would provide a clearer picture of their capabilities and reliability. Without this historical data, it's difficult to definitively assess their experience and suitability for critical infrastructure support.

How does the pricing of Oracle Managed Cloud Services (OMCS) in this contract compare to market rates for similar cloud hosting solutions?

Directly comparing the pricing of this $35.8 million Oracle Managed Cloud Services (OMCS) contract to market rates is challenging without detailed service level agreements and specific usage metrics. Oracle's OMCS is a proprietary solution, and its pricing structure may differ significantly from generic cloud hosting providers or other specialized managed cloud services. A thorough benchmark would involve analyzing the per-unit costs for compute, storage, networking, and managed services against comparable offerings from major cloud providers (AWS, Azure, GCP) and other managed service providers, adjusted for the specific features and support levels included in this contract.

What are the primary risks associated with relying on Emergent, LLC for remote hosting and infrastructure support for the Bureau of the Fiscal Service?

The primary risks associated with this contract include potential vendor lock-in with Oracle's OMCS, which could limit future flexibility and potentially increase long-term costs if migration to another platform is desired. There's also the inherent risk of relying on a single contractor for critical infrastructure; any performance issues, security breaches, or financial instability on Emergent, LLC's part could directly impact the Bureau of the Fiscal Service's operations. Furthermore, the potential misalignment of the NAICS code with the service provided raises a minor flag regarding the accuracy of contract categorization, which could indicate a lack of precise understanding or reporting.

How effective has the Bureau of the Fiscal Service been in managing its cloud service contracts to ensure optimal performance and value?

Evaluating the effectiveness of the Bureau of the Fiscal Service's management of cloud service contracts requires analyzing their internal processes, oversight mechanisms, and historical performance data across multiple contracts. This specific contract's firm-fixed-price nature and full and open competition award suggest a structured approach. However, effectiveness would be better assessed by examining metrics such as contract modifications, on-time delivery rates, user satisfaction, and whether the services consistently meet evolving federal IT requirements and security standards. Without broader data on their contract management practices, a definitive assessment of effectiveness is not possible.

What are the historical spending patterns for remote hosting and cloud services within the Department of the Treasury, and how does this contract fit?

Historical spending patterns for remote hosting and cloud services within the Department of the Treasury would reveal trends in adoption, technology choices (e.g., specific vendors like Oracle), and overall investment levels. This $35.8 million contract for Oracle Managed Cloud Services (OMCS) represents a significant, multi-year investment in a specific managed cloud solution. Understanding if this aligns with or deviates from previous spending patterns—whether the Treasury is increasing its reliance on managed cloud services, diversifying vendors, or consolidating platforms—is key. Analyzing prior years' spending on similar services would provide context on whether this contract represents a typical expenditure or a notable shift in strategy.

Industry Classification

NAICS: Manufacturing › Computer and Peripheral Equipment Manufacturing › Electronic Computer Manufacturing

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 2033H618Q00006

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Mythics, LLC

Address: 4525 MAIN ST STE 1500, VIRGINIA BEACH, VA, 23462

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $49,961,881

Exercised Options: $35,776,259

Current Obligation: $35,776,259

Actual Outlays: $27,695,587

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: NNG15SC10B

IDV Type: GWAC

Timeline