DHS awards $25.5M for ServiceNow licenses to Thundercat Technology, LLC, under full and open competition

Contract Overview

Contract Amount: $25,505,153 ($25.5M)

Contractor: Thundercat Technology, LLC

Awarding Agency: Department of Homeland Security

Start Date: 2023-07-31

End Date: 2026-07-30

Contract Duration: 1,095 days

Daily Burn Rate: $23.3K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: SERVICE NOW SOFTWARE LICENSES

Place of Performance

Location: ASHBURN, LOUDOUN County, VIRGINIA, 20147

State: Virginia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $25.5 million to THUNDERCAT TECHNOLOGY, LLC for work described as: SERVICE NOW SOFTWARE LICENSES Key points: 1. Contract value of $25.5 million over three years represents a significant investment in IT infrastructure. 2. The use of a firm-fixed-price contract type suggests a clear scope and predictable costs. 3. Awarded under full and open competition, indicating a robust bidding process. 4. The contract is for ServiceNow software licenses, a widely used platform for IT service management. 5. The duration of 1095 days (3 years) provides a stable period for service delivery. 6. The agency's selection of a specific software platform implies a need for standardized IT service management capabilities.

Value Assessment

Rating: good

The contract value of $25.5 million for ServiceNow licenses over three years appears reasonable given the platform's capabilities and market demand. Benchmarking against similar large-scale software license procurements for federal agencies suggests this pricing is within expected ranges. The firm-fixed-price structure helps control costs, but a detailed breakdown of per-unit license costs would be needed for a more precise value assessment. The absence of specific performance metrics in the provided data makes a definitive value-for-money judgment challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition after exclusion of sources, indicating that multiple vendors were allowed to bid. This competitive process is designed to ensure the government receives the best possible pricing and value by leveraging market forces. The fact that it was 'after exclusion of sources' suggests that while open, there might have been specific requirements or prior considerations that led to this particular phrasing, but the core principle of broad competition was maintained.

Taxpayer Impact: A full and open competition generally benefits taxpayers by driving down prices through vendor rivalry, leading to more cost-effective procurement of essential software licenses.

Public Impact

Federal employees within the Department of Homeland Security, particularly U.S. Customs and Border Protection, will benefit from enhanced IT service management capabilities. The contract delivers essential ServiceNow software licenses, crucial for streamlining IT operations, incident management, and service delivery. The geographic impact is primarily within the operational areas of U.S. Customs and Border Protection, supporting their mission-critical functions. Workforce implications include enabling IT support staff to utilize advanced tools for better service provision and potentially improving efficiency.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if ServiceNow becomes deeply integrated without viable alternatives.
Reliance on a single software vendor could expose the agency to future price increases.
The effectiveness of the software is dependent on proper implementation and user adoption.
Cybersecurity risks associated with any software platform require continuous monitoring and mitigation.

Positive Signals

Awarded through full and open competition, suggesting competitive pricing and value.
Firm-fixed-price contract type provides cost certainty for the duration of the award.
ServiceNow is a widely recognized and mature platform, implying a lower risk of technical failure.
The contract duration of three years allows for stable IT service management operations.

Sector Analysis

The IT services sector, particularly software licensing and IT service management (ITSM) platforms, is a significant area of federal spending. The market for ITSM solutions like ServiceNow is robust, with numerous vendors competing. Federal agencies increasingly rely on such platforms to manage complex IT infrastructures, improve efficiency, and enhance cybersecurity. Spending benchmarks for similar enterprise software licenses can range from millions to hundreds of millions of dollars annually, depending on the scope and number of users.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a small business set-aside. The primary contractor, Thundercat Technology, LLC, is a large business. While large businesses may engage small businesses as subcontractors on their own initiative, this contract does not mandate it. The impact on the small business ecosystem is neutral in terms of direct set-aside opportunities.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the U.S. Customs and Border Protection's contracting officers and program managers within the Department of Homeland Security. Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of specified software licenses. Transparency is generally maintained through federal procurement databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

IT Software Licenses
IT Service Management Software
Department of Homeland Security IT Procurement
Customs and Border Protection IT Services
Enterprise Software Solutions

Risk Flags

Potential for cost overruns if scope creep occurs.
Risk of underutilization of software features.
Dependency on a single vendor for critical IT services.
Cybersecurity vulnerabilities associated with third-party software.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $25.5 million to THUNDERCAT TECHNOLOGY, LLC. SERVICE NOW SOFTWARE LICENSES

Who is the contractor on this award?

The obligated recipient is THUNDERCAT TECHNOLOGY, LLC.

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (U.S. Customs and Border Protection).

What is the total obligated amount?

The obligated amount is $25.5 million.

What is the period of performance?

Start: 2023-07-31. End: 2026-07-30.

What is the track record of Thundercat Technology, LLC in delivering similar IT solutions to federal agencies?

Thundercat Technology, LLC has a history of federal contracting, often focusing on IT solutions and services. While specific details on past ServiceNow implementations for agencies of similar size and scope to DHS are not provided here, their presence in the federal market suggests experience. A deeper dive into their contract history, past performance evaluations, and any reported issues or successes on similar awards would be necessary for a comprehensive assessment. Agencies typically review a contractor's past performance as a key factor in the source selection process, especially for significant IT investments.

How does the $25.5 million contract value compare to other federal ServiceNow license procurements?

The $25.5 million contract value for three years of ServiceNow licenses is substantial and aligns with the typical scale of enterprise software deployments within large federal agencies. ServiceNow is a premium ITSM platform, and its licensing costs can be significant. Comparing this to other federal procurements, this figure is not unusual for an agency like DHS, which has extensive IT needs. However, without knowing the exact number of users, modules licensed, and specific support levels included, a precise benchmark is difficult. Generally, larger agencies with more complex requirements and user bases will incur higher costs.

What are the primary risks associated with this ServiceNow software license contract?

Key risks include potential vendor lock-in, where the agency becomes heavily reliant on ServiceNow, making future transitions difficult or costly. There's also the risk of cost escalation in future contract renewals if not managed proactively. Performance risk exists if the software is not effectively implemented or adopted by users, failing to deliver the expected efficiencies. Cybersecurity vulnerabilities inherent in any software platform require ongoing vigilance and mitigation efforts. Finally, the risk of the software not fully meeting evolving agency needs over the three-year period is also present.

How effective is ServiceNow in meeting the IT service management needs of large federal agencies like DHS?

ServiceNow is widely regarded as a leading platform for IT Service Management (ITSM) and is utilized by numerous large federal agencies, including DHS components. Its effectiveness stems from its ability to centralize IT operations, automate workflows, improve incident and problem management, and provide self-service portals for users. Agencies often report improved IT efficiency, better service delivery, and enhanced visibility into IT performance after implementing ServiceNow. However, its effectiveness is highly dependent on proper configuration, integration with existing systems, and robust change management processes.

What has been the historical spending pattern for ServiceNow licenses within DHS or similar agencies?

Historical spending on ServiceNow within DHS and similar large federal agencies has generally trended upwards as agencies adopt more comprehensive ITSM solutions. Initial deployments might be smaller, focusing on core ITIL processes, but often expand to include IT asset management, security operations, and even HR service delivery modules. This $25.5 million award suggests a significant, potentially agency-wide or large component-wide deployment. Tracking previous awards for ServiceNow or comparable ITSM platforms within DHS would reveal trends in contract size, duration, and scope, indicating the agency's increasing reliance on such solutions.

What are the implications of awarding this contract under 'full and open competition after exclusion of sources'?

This specific award phrasing, 'full and open competition after exclusion of sources,' suggests that while the competition was open to all responsible sources, there might have been a prior decision or circumstance that excluded certain potential bidders or approaches. This could stem from a previous sole-source justification that was later rescinded, or perhaps a specific requirement that naturally limited the pool of qualified bidders. Regardless, the 'full and open' aspect implies that multiple vendors had the opportunity to compete, which is generally favorable for price discovery and taxpayer value, even if the initial pool was narrowed.

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 AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Thundercat Technology LLC

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: $32,139,637

Exercised Options: $25,505,153

Current Obligation: $25,505,153

Actual Outlays: $25,505,153

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: NNG15SC92B

IDV Type: GWAC

Timeline