VA Renews ServiceNow License for $30.7M with Thundercat Technology, LLC
Contract Overview
Contract Amount: $30,737,985 ($30.7M)
Contractor: Thundercat Technology, LLC
Awarding Agency: Department of Veterans Affairs
Start Date: 2019-09-22
End Date: 2020-09-21
Contract Duration: 365 days
Daily Burn Rate: $84.2K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 2
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: SERVICENOW LICENSE RENEWAL
Place of Performance
Location: RESTON, FAIRFAX County, VIRGINIA, 20190
State: Virginia Government Spending
Plain-Language Summary
Department of Veterans Affairs obligated $30.7 million to THUNDERCAT TECHNOLOGY, LLC for work described as: SERVICENOW LICENSE RENEWAL Key points: 1. Significant spending on a critical IT platform for VA operations. 2. Thundercat Technology, LLC is the incumbent provider. 3. Potential risk of vendor lock-in and price escalation. 4. IT services sector, specifically software licensing and support.
Value Assessment
Rating: fair
The $30.7M price for a one-year ServiceNow license renewal appears high compared to industry benchmarks for similar enterprise software agreements. Without detailed usage metrics and feature comparisons, it's difficult to definitively assess value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating a limited competition scenario. This method may have restricted the number of potential bidders, potentially impacting price discovery and leading to a less competitive outcome.
Taxpayer Impact: Taxpayer funds are being used for this significant software license renewal. The limited competition raises concerns about whether the best possible price was secured for the government.
Public Impact
Veterans' access to VA services may rely on the functionality provided by ServiceNow. A high renewal cost could divert funds from other critical VA programs. Ensuring the continued availability and performance of essential IT systems.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition raises price concerns.
- Potential for vendor lock-in.
- High contract value for a single year.
Positive Signals
- ServiceNow is a widely used and critical platform.
- Contract awarded to a known entity.
Sector Analysis
This spending falls within the IT services sector, specifically software licensing and support. Benchmarks for enterprise software renewals vary widely, but significant annual costs like this warrant scrutiny, especially for single-year terms.
Small Business Impact
The data does not indicate any specific benefit or set-aside for small businesses in this contract. The award to Thundercat Technology, LLC, a company not typically identified as a small business, suggests limited small business participation.
Oversight & Accountability
The 'Exclusion of Sources' clause warrants further investigation to understand the justification for limiting competition. Robust oversight is needed to ensure fair pricing and prevent future sole-source awards without proper justification.
Related Government Programs
- Other Computer Related Services
- Department of Veterans Affairs Contracting
- Department of Veterans Affairs Programs
Risk Flags
- Limited competition may lead to inflated prices.
- Lack of transparency in source exclusion.
- Potential for vendor lock-in.
- High annual cost for a single-year term.
Tags
other-computer-related-services, department-of-veterans-affairs, va, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Veterans Affairs awarded $30.7 million to THUNDERCAT TECHNOLOGY, LLC. SERVICENOW LICENSE RENEWAL
Who is the contractor on this award?
The obligated recipient is THUNDERCAT TECHNOLOGY, LLC.
Which agency awarded this contract?
Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).
What is the total obligated amount?
The obligated amount is $30.7 million.
What is the period of performance?
Start: 2019-09-22. End: 2020-09-21.
What was the specific justification for excluding other sources, and was a thorough market research conducted to ensure full and open competition was not feasible?
The justification for excluding other sources is critical for understanding the procurement's integrity. A comprehensive market research report should have been conducted to identify all potential capable sources. If only one source was deemed capable, the rationale must be clearly documented and justified to ensure taxpayer funds are used efficiently and competitively.
How does the $30.7M annual cost compare to the value and utility ServiceNow provides to the VA, considering potential alternatives or cost-saving measures?
Assessing the value requires a detailed analysis of ServiceNow's contribution to VA operations, including efficiency gains and service improvements. Benchmarking against similar government or enterprise contracts, considering user base size and module utilization, is essential. Exploring alternative platforms or negotiating more favorable terms for multi-year agreements could reveal cost-saving opportunities.
What measures are in place to ensure the VA is not overpaying for this license renewal and to encourage future competitive bidding?
To ensure fair pricing, the VA should conduct regular price analyses against market data and similar contracts. Implementing strategies to break down the monolithic license into smaller, more manageable components could foster competition. Developing a clear roadmap for future procurements that actively seeks and encourages new entrants is crucial for long-term cost control and innovation.
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 › ADP AND TELECOMMUNICATIONS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 2
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 1925 ISAAC NEWTON SQ STE 180, RESTON, VA, 20190
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business
Financial Breakdown
Contract Ceiling: $89,329,361
Exercised Options: $30,737,985
Current Obligation: $30,737,985
Contract Characteristics
Commercial Item: COMMERCIAL ITEM
Parent Contract
Parent Award PIID: NNG15SD26B
IDV Type: GWAC
Timeline
Start Date: 2019-09-22
Current End Date: 2020-09-21
Potential End Date: 2020-09-21 00:00:00
Last Modified: 2019-12-27
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