SEC awards $27.3M for Red Hat products, with 5 bidders competing under full and open competition

Contract Overview

Contract Amount: $27,310,641 ($27.3M)

Contractor: FCN, Inc.

Awarding Agency: Securities and Exchange Commission

Start Date: 2021-05-28

End Date: 2026-05-31

Contract Duration: 1,829 days

Daily Burn Rate: $14.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: REDHAT PRODUCTS

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20549

State: District of Columbia Government Spending

Plain-Language Summary

Securities and Exchange Commission obligated $27.3 million to FCN, INC. for work described as: REDHAT PRODUCTS Key points: 1. Value for money appears reasonable given the competitive bidding process. 2. Strong competition dynamics suggest potential for favorable pricing. 3. Risk indicators are low due to a firm-fixed-price contract type. 4. Performance context is a multi-year delivery order for essential IT products. 5. Sector positioning is within IT services, specifically software and related support.

Value Assessment

Rating: good

The contract value of $27.3 million over approximately five years suggests a moderate annual spend. Benchmarking against similar federal contracts for Red Hat products is challenging without specific product details, but the competitive nature of this award implies a fair market price was likely achieved. The firm-fixed-price structure also provides cost certainty.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with five bidders participating. The presence of multiple bidders indicates a healthy level of market interest and competition for this requirement. This suggests that the Securities and Exchange Commission (SEC) was able to solicit a range of offers, likely leading to a more competitive price.

Taxpayer Impact: The robust competition ensures that taxpayer dollars are being used efficiently, as multiple vendors vied to provide the best value, driving down costs and improving service offerings.

Public Impact

The Securities and Exchange Commission benefits from access to Red Hat products and services. Essential IT infrastructure and operational capabilities are supported. The primary geographic impact is within the District of Columbia, where the SEC is headquartered. Workforce implications include enabling SEC employees with necessary software tools.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if specific Red Hat expertise is required for future support.
Reliance on a single software vendor could pose long-term strategic risks.
The duration of the contract may not align with rapidly evolving IT needs.

Positive Signals

Firm-fixed-price contract provides budget predictability.
Competitive award process suggests good value for money.
Multi-year award allows for consistent access to critical software.

Sector Analysis

This contract falls within the broader IT services sector, specifically focusing on operating systems and related software solutions. The market for enterprise Linux distributions like Red Hat is mature and competitive, with several major players. Federal spending in this area is substantial, supporting agency IT modernization and operational continuity. This award represents a typical procurement for essential software licenses and support within a government agency.

Small Business Impact

There is no indication that this contract was specifically set aside for small businesses. Given the nature of enterprise software procurement and the competitive landscape, it is likely that larger, established vendors participated. Subcontracting opportunities for small businesses are not explicitly detailed but could arise if the primary contractor engages them for specific support services.

Oversight & Accountability

The contract is subject to standard federal procurement oversight. The firm-fixed-price nature simplifies financial oversight. Accountability rests with the SEC's contracting officers and program managers to ensure delivery of Red Hat products and services aligns with the contract terms. Transparency is maintained through federal contract databases like FPDS.

Related Government Programs

General IT Services
Software Licensing and Support
Operating Systems Procurement
Cloud Computing Services (if applicable to Red Hat products)

Risk Flags

Potential vendor lock-in
Long-term software strategy alignment

Frequently Asked Questions

What is this federal contract paying for?

Securities and Exchange Commission awarded $27.3 million to FCN, INC.. REDHAT PRODUCTS

Who is the contractor on this award?

The obligated recipient is FCN, INC..

Which agency awarded this contract?

Awarding agency: Securities and Exchange Commission (Securities and Exchange Commission).

What is the total obligated amount?

The obligated amount is $27.3 million.

What is the period of performance?

Start: 2021-05-28. End: 2026-05-31.

What specific Red Hat products are being procured under this contract?

The provided data does not specify the exact Red Hat products being procured. This contract likely covers Red Hat Enterprise Linux (RHEL) subscriptions, associated support services, and potentially other Red Hat middleware or containerization technologies. Understanding the specific products is crucial for assessing their criticality to SEC operations and for comparing pricing against market benchmarks for those particular offerings. Without this detail, the analysis remains at a general level for Red Hat software.

How does the $27.3 million total contract value compare to previous Red Hat procurements by the SEC or similar agencies?

Direct comparison to previous SEC Red Hat procurements is not possible with the given data. However, a $27.3 million spend over five years averages approximately $5.46 million annually. This figure is within a reasonable range for a federal agency of the SEC's size requiring enterprise-level operating system and support solutions. Similar agencies like the IRS or SSA might have comparable or larger annual spends depending on their IT infrastructure scale and specific software needs. A detailed historical analysis would require access to past contract databases.

What are the key performance indicators (KPIs) for this contract, and how is performance being measured?

The provided data does not detail the specific Key Performance Indicators (KPIs) for this contract. Typically, for software and support contracts, KPIs would focus on aspects like software availability, response times for support incidents, patch delivery timeliness, and adherence to service level agreements (SLAs). The SEC's contracting officers would be responsible for monitoring these KPIs and ensuring FCN, Inc. meets the contractual obligations. Performance is generally assessed through regular reporting and service reviews.

What is the risk associated with relying on a single vendor like Red Hat for such a significant portion of the SEC's IT infrastructure?

The primary risk associated with relying on a single vendor like Red Hat is potential vendor lock-in, which can limit future flexibility and potentially lead to higher costs over time if competitive alternatives are not considered. There's also a risk if Red Hat experiences significant business disruptions or changes its product strategy unfavorably. However, Red Hat is a well-established market leader, and its products are widely adopted, mitigating some of these risks. The SEC likely has strategies in place to manage these risks, such as maintaining multi-vendor capabilities where feasible and carefully negotiating contract terms.

How does the 'Other Computer Related Services' NAICS code (541519) align with the procurement of Red Hat products?

The NAICS code 541519, 'Other Computer Related Services,' is a broad category that can encompass a wide range of IT services beyond just software sales. While Red Hat products are software, the contract likely includes associated support, maintenance, and potentially integration or consulting services, which fall under this code. This code is often used when the primary focus is on the service aspect of IT solutions rather than just the resale of hardware or off-the-shelf software. It suggests the SEC is procuring a solution that includes services alongside the software licenses.

Industry Classification

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

Product/Service Code: IT AND TELECOM - IT MANAGEMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 50310221Q0025

Offers Received: 5

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, Manufacturer of Goods, Small Business, Special Designations, U.S.-Owned Business, Woman Owned Business, Women Owned Small Business

Financial Breakdown

Contract Ceiling: $27,310,641

Exercised Options: $27,310,641

Current Obligation: $27,310,641

Actual Outlays: $27,310,641

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 50310221G0006

IDV Type: BOA

Timeline