Treasury Renews Red Hat Subscriptions for $3M, Boosting IT Infrastructure
Contract Overview
Contract Amount: $3,023,085 ($3.0M)
Contractor: Better Direct, LLC
Awarding Agency: Department of the Treasury
Start Date: 2024-10-17
End Date: 2026-10-16
Contract Duration: 729 days
Daily Burn Rate: $4.1K/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: RENEWAL MAINTENANCE ON CURRENT REDHAT SUBSCRIPTIONS.
Place of Performance
Location: TEMPE, MARICOPA County, ARIZONA, 85281
State: Arizona Government Spending
Plain-Language Summary
Department of the Treasury obligated $3.0 million to BETTER DIRECT, LLC for work described as: RENEWAL MAINTENANCE ON CURRENT REDHAT SUBSCRIPTIONS. Key points: 1. Spending focuses on essential IT maintenance for the Bureau of the Fiscal Service. 2. Competition was full and open after source exclusion, suggesting a competitive process. 3. Risk is moderate, tied to reliance on a single vendor for critical software. 4. The IT sector sees significant spending on software subscriptions and maintenance.
Value Assessment
Rating: good
The contract value of $3.02M for two years of Red Hat subscriptions appears reasonable given the critical nature of the services. Benchmarking against similar enterprise software maintenance contracts would provide a more precise assessment.
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 a deliberate effort to ensure a competitive marketplace. This method generally promotes price discovery and value for the government.
Taxpayer Impact: Taxpayer funds are being used to ensure the continued operation and security of essential IT systems within the Department of the Treasury.
Public Impact
Ensures continuity of critical IT services for the Bureau of the Fiscal Service. Supports the operational integrity of financial systems managed by the Treasury. Maintains access to essential software updates and security patches for Red Hat products.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Vendor lock-in risk with proprietary software.
- Potential for price increases in future renewals.
- Dependence on a single vendor for critical IT infrastructure.
Positive Signals
- Ensures access to up-to-date software and security patches.
- Supports critical government IT operations.
- Awarded through a competitive process.
Sector Analysis
This spending falls within the IT services sector, specifically focusing on software maintenance and support. Benchmarks for similar enterprise software renewals vary widely but are typically a significant portion of the initial software cost.
Small Business Impact
This contract does not appear to directly benefit small businesses, as it is a renewal of existing subscriptions likely held by a large software vendor. Future solicitations should explore opportunities for small business participation in related IT services.
Oversight & Accountability
The contract was awarded under full and open competition, suggesting a degree of oversight in the procurement process. Continued monitoring of vendor performance and pricing is essential for accountability.
Related Government Programs
- Other Computer Related Services
- Department of the Treasury Contracting
- Bureau of the Fiscal Service Programs
Risk Flags
- Reliance on a single vendor for critical software.
- Potential for price escalation in future renewals.
- Limited visibility into alternative solutions.
- Complexity of managing enterprise software licenses.
Tags
other-computer-related-services, department-of-the-treasury, az, delivery-order, 1m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of the Treasury awarded $3.0 million to BETTER DIRECT, LLC. RENEWAL MAINTENANCE ON CURRENT REDHAT SUBSCRIPTIONS.
Who is the contractor on this award?
The obligated recipient is BETTER DIRECT, 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 $3.0 million.
What is the period of performance?
Start: 2024-10-17. End: 2026-10-16.
What is the long-term strategy for managing Red Hat subscription costs and exploring alternative solutions?
The long-term strategy should involve a comprehensive review of the agency's reliance on Red Hat. This includes evaluating the total cost of ownership over several years, exploring potential cost-saving measures with the current vendor, and assessing the feasibility and benefits of migrating to open-source alternatives or different commercial solutions. A phased approach to diversification could mitigate vendor lock-in and enhance future negotiation leverage.
How does the exclusion of sources in the 'full and open competition' impact the potential for cost savings?
Excluding specific sources after initially opening the competition can sometimes limit the breadth of competitive offers received. While it might be done for valid technical or security reasons, it could inadvertently reduce the number of potential bidders. This might impact the government's ability to secure the most aggressive pricing, as a smaller pool of competitors may lead to less downward pressure on bids.
What specific performance metrics are tracked to ensure the value derived from these Red Hat subscriptions?
Performance metrics should focus on the availability and reliability of the supported systems, the timeliness of critical security patch deployment, and the effectiveness of technical support provided by Red Hat. Tracking uptime, response times for support requests, and the number of security vulnerabilities addressed promptly would demonstrate the value and effectiveness of the subscription investment.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services
Product/Service Code: IT AND TELECOM - APLLICATIONS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Solicitation ID: 2033H625Q00006
Offers Received: 3
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 2425 E UNIVERSITY DR, TEMPE, AZ, 85288
Business Categories: Category Business, Corporate Entity Not Tax Exempt, HUBZone Firm, Limited Liability Corporation, Self-Certified Small Disadvantaged Business, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business
Financial Breakdown
Contract Ceiling: $3,779,195
Exercised Options: $3,023,085
Current Obligation: $3,023,085
Actual Outlays: $2,851,307
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Parent Contract
Parent Award PIID: NNG15SD65B
IDV Type: GWAC
Timeline
Start Date: 2024-10-17
Current End Date: 2026-10-16
Potential End Date: 2026-10-16 00:00:00
Last Modified: 2026-03-20
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