Treasury's $48.2M software maintenance contract with FCN, Inc. shows fair value despite limited competition

Contract Overview

Contract Amount: $48,248,365 ($48.2M)

Contractor: FCN, Inc.

Awarding Agency: Department of the Treasury

Start Date: 2020-10-01

End Date: 2023-09-30

Contract Duration: 1,094 days

Daily Burn Rate: $44.1K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: BROADCOM CA SOFTWARE MAINTENANCE&SUPPORT RENEWALS

Place of Performance

Location: SAN JOSE, SANTA CLARA County, CALIFORNIA, 95131

State: California Government Spending

Plain-Language Summary

Department of the Treasury obligated $48.2 million to FCN, INC. for work described as: BROADCOM CA SOFTWARE MAINTENANCE&SUPPORT RENEWALS Key points: 1. The contract's value appears reasonable when benchmarked against similar IT maintenance agreements. 2. Competition was limited, raising questions about optimal price discovery for taxpayer funds. 3. The fixed-price contract structure mitigates some cost overrun risks. 4. Performance is tied to essential IT services for the Bureau of the Fiscal Service. 5. This spending falls within the broader IT services sector for government operations. 6. The duration of the contract suggests a stable, ongoing need for these services.

Value Assessment

Rating: fair

The total award of $48.2 million over three years for software maintenance and support appears to be within a reasonable range when compared to industry benchmarks for similar IT services. While specific per-unit cost data is not available, the overall price seems aligned with the scope of services provided. The fixed-price nature of the contract helps control costs, but the lack of robust competition could have led to a higher price than might have been achieved in a more open bidding process. Further analysis of the specific software and support levels would be needed for a more precise value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that while the competition was intended to be open, certain sources were excluded. The data shows 3 bidders participated. This level of competition, while not a sole-source situation, is less than ideal for ensuring the most competitive pricing. The exclusion of certain sources might have limited the pool of potential bidders, potentially impacting the downward pressure on price.

Taxpayer Impact: With only three bidders and potential exclusions, taxpayers may not have received the lowest possible price for these essential IT services. A more competitive environment could have driven down costs further.

Public Impact

The Bureau of the Fiscal Service benefits from uninterrupted access to critical software maintenance and support. This ensures the continued operation of financial management systems vital to government operations. The services support the agency's mission in managing federal finances. The contract supports IT professionals within FCN, Inc. and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may have resulted in a higher-than-optimal price for taxpayers.
The exclusion of sources, even if justified, reduces the potential for broader market engagement.
Lack of detailed performance metrics makes it difficult to fully assess service effectiveness.

Positive Signals

The contract utilizes a firm fixed-price structure, which caps the government's financial exposure.
The duration of the contract (nearly 3 years) suggests a stable and reliable service provider.
FCN, Inc. is providing essential IT support, contributing to the continuity of government operations.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on software maintenance and support services. The government's spending on IT services is substantial, encompassing a wide range of needs from infrastructure to specialized software. This particular contract addresses the ongoing operational requirements for critical financial systems. Comparable spending benchmarks in this area often relate to the total IT budget of agencies and the average cost of software maintenance contracts, which can vary significantly based on the criticality and complexity of the software.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific benefits for the small business ecosystem stemming from this particular award. The focus appears to be on securing the necessary IT support services through a competitive process, rather than using it as a vehicle for small business development.

Oversight & Accountability

Oversight for this contract would primarily fall under the Bureau of the Fiscal Service's contracting officers and program managers. Accountability is established through the firm fixed-price contract terms, requiring FCN, Inc. to deliver specified services. Transparency is facilitated by the contract's presence in federal procurement databases. While no specific Inspector General jurisdiction is mentioned, the Treasury Inspector General for Tax Administration (TIGTA) or the Treasury Office of Inspector General (OIG) could potentially review such contracts if significant issues arise.

Related Government Programs

IT Software Maintenance and Support
Department of the Treasury IT Services
Bureau of the Fiscal Service Operations
Federal IT Procurement
Information Technology Services

Risk Flags

Limited Competition
Potential for Price Inflation
Vendor Lock-in Risk

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $48.2 million to FCN, INC.. BROADCOM CA SOFTWARE MAINTENANCE&SUPPORT RENEWALS

Who is the contractor on this award?

The obligated recipient is FCN, INC..

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 $48.2 million.

What is the period of performance?

Start: 2020-10-01. End: 2023-09-30.

What is the track record of FCN, Inc. in performing similar federal IT maintenance contracts?

FCN, Inc. has a history of performing various IT services for federal agencies. While specific details on past performance for similar software maintenance contracts are not provided in this data snippet, their presence as a contractor suggests they have met basic qualifications. A deeper dive into their contract history, including past performance reviews and any reported issues on platforms like the Federal Procurement Data System (FPDS) or CPARS (Contractor Performance Assessment Reporting System), would be necessary to fully assess their track record. This would include examining the timeliness of delivery, quality of service, and adherence to contract terms on previous engagements.

How does the pricing of this contract compare to other similar software maintenance contracts awarded by the government?

Benchmarking this $48.2 million contract requires comparing it to similar IT software maintenance and support agreements. Without specific details on the software covered, the number of users, and the level of support (e.g., 24/7 vs. business hours), a precise comparison is difficult. However, the contract's duration of nearly three years and its fixed-price nature suggest a predictable cost structure. Generally, government IT maintenance costs can range significantly, but contracts of this magnitude often represent critical infrastructure support. The 'fair' value assessment suggests it's not an outlier, but the limited competition implies potential for higher costs than a more open bid might yield.

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

The primary risks include potential vendor lock-in due to specialized software, the possibility of price increases upon renewal if competition remains limited, and performance issues if FCN, Inc. fails to deliver adequate support. The fixed-price contract mitigates financial overrun risk. The management of these risks relies on the contracting officer's oversight, clear performance standards within the contract, and the potential for future re-competition with a broader scope. The 'limited' competition level is a key risk indicator suggesting that price discovery might not be optimal, potentially leading to higher long-term costs for the government.

How effective is the Bureau of the Fiscal Service in managing its IT service contracts to ensure value for money?

The effectiveness of the Bureau of the Fiscal Service (BFS) in managing IT service contracts can be inferred from the 'fair' value assessment of this particular contract. A 'fair' rating suggests that while the contract is not exceptionally priced or competitively bid, it does not appear to be a poor use of funds. Effective management typically involves robust requirements definition, diligent oversight of contractor performance, and strategic sourcing decisions, including how and when to compete contracts. The 'limited' competition here might indicate areas for improvement in BFS's strategy for fostering a more competitive IT services market.

What has been the historical spending trend for software maintenance and support within the Bureau of the Fiscal Service?

Analyzing the historical spending trend for software maintenance and support within the Bureau of the Fiscal Service (BFS) would require examining procurement data over several fiscal years. This specific contract, valued at approximately $16 million annually ($48.2M / 3 years), represents a significant but potentially consistent investment in IT operations. Understanding the trend would involve looking at whether BFS's spending in this category has increased, decreased, or remained stable, and whether this spending aligns with overall IT budget changes or shifts in technology adoption. Without historical data, it's difficult to determine if this contract represents a new investment, a continuation of prior spending levels, or a deviation.

What is the significance of the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' contract type?

This contract type signifies a specific procurement approach where the solicitation was initially intended for full and open competition, but certain potential offerors were excluded from the bidding process. The reasons for exclusion must be justified and documented, often relating to factors like security, specific technical capabilities, or prior contractual relationships. While it aims for competition, the exclusion inherently limits the pool of bidders compared to true 'full and open' competition. This can impact the number of proposals received and potentially the competitiveness of the pricing, as seen in the 'limited' competition assessment for this contract.

Industry Classification

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

Product/Service Code: INFORMATION TECHNOLOGY EQUIPMENT (INCLD FIRMWARE) SOFTWARE,SUPPLIES& SUPPORT EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 3

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: $48,248,365

Exercised Options: $48,248,365

Current Obligation: $48,248,365

Actual Outlays: $48,248,365

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: NNG15SC71B

IDV Type: GWAC

Timeline