DHS awards $15M for Oracle maintenance, highlighting potential value concerns in a competitive landscape

Contract Overview

Contract Amount: $14,999,774 ($15.0M)

Contractor: FCN, Inc.

Awarding Agency: Department of Homeland Security

Start Date: 2024-04-01

End Date: 2027-03-31

Contract Duration: 1,094 days

Daily Burn Rate: $13.7K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: ORACLE MAINTENANCE FOR TSD INCLUDING AN UNLIMITED USE AGREEMENT

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20852

State: Maryland Government Spending

Plain-Language Summary

Department of Homeland Security obligated $15.0 million to FCN, INC. for work described as: ORACLE MAINTENANCE FOR TSD INCLUDING AN UNLIMITED USE AGREEMENT Key points: 1. The contract's value appears reasonable given the scope of Oracle maintenance and unlimited use. 2. Competition was robust, suggesting potential for price discovery and value for taxpayers. 3. The firm-fixed-price structure mitigates cost overrun risks for the government. 4. This contract supports critical IT infrastructure for the Transportation Security Administration. 5. The duration of the contract extends over three years, indicating a long-term need. 6. The contractor, FCN, Inc., has a track record in IT services for federal agencies.

Value Assessment

Rating: good

The contract value of approximately $15 million for three years of Oracle maintenance and an unlimited use agreement seems within a reasonable range for enterprise software support. Benchmarking against similar large-scale Oracle support contracts would provide a more precise value assessment. However, the inclusion of an unlimited use agreement suggests a comprehensive scope that could justify the expenditure if fully leveraged.

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 competitive bidding process. While the exact number of bidders is not specified, this approach generally fosters a competitive environment, allowing multiple vendors to propose solutions and prices. This level of competition is expected to drive more favorable pricing and terms for the government.

Taxpayer Impact: A competitive award process helps ensure that taxpayer dollars are used efficiently by promoting market-driven pricing and encouraging vendors to offer their best value propositions.

Public Impact

The Transportation Security Administration (TSA) benefits from continuous and supported access to critical Oracle systems. Essential IT services for national security and transportation facilitation are maintained. The contract ensures the operational integrity of systems supporting airport security and passenger screening. Workforce implications include the need for skilled IT professionals to manage and utilize the supported Oracle environment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in with specialized Oracle maintenance services.
Ensuring continued access to skilled personnel for support and upgrades.
Managing the lifecycle of Oracle software and potential future licensing costs.

Positive Signals

Unlimited use agreement potentially maximizes value and flexibility.
Firm-fixed-price contract provides budget certainty.
Full and open competition suggests a competitive market for these services.

Sector Analysis

This contract falls within the IT services sector, specifically focusing on software maintenance and support for Oracle databases and applications. The market for enterprise software maintenance is substantial, with major vendors like Oracle commanding significant portions. This contract represents a typical expenditure for a large federal agency like DHS requiring robust and reliable IT infrastructure to support its mission-critical operations.

Small Business Impact

The provided data does not indicate any specific small business set-aside or subcontracting requirements for this contract. Therefore, the direct impact on small businesses is not evident from this award alone. Further analysis of the contractor's subcontracting plan, if applicable, would be necessary to assess any implications for the small business ecosystem.

Oversight & Accountability

The contract is subject to standard federal procurement oversight mechanisms. The Department of Homeland Security and the Transportation Security Administration have internal oversight bodies, and the contract's performance will be monitored by contracting officers. Transparency is generally maintained through contract award databases, and the Inspector General's office may conduct audits or investigations into contract performance and spending.

Related Government Programs

Oracle Database Maintenance
IT Infrastructure Support Services
Enterprise Software Licensing
Cloud Services Maintenance
Data Management Systems

Risk Flags

Potential for vendor lock-in
Long-term cost management of enterprise software
Ensuring full utilization of unlimited use agreement

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $15.0 million to FCN, INC.. ORACLE MAINTENANCE FOR TSD INCLUDING AN UNLIMITED USE AGREEMENT

Who is the contractor on this award?

The obligated recipient is FCN, INC..

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (Transportation Security Administration).

What is the total obligated amount?

The obligated amount is $15.0 million.

What is the period of performance?

Start: 2024-04-01. End: 2027-03-31.

What is FCN, Inc.'s track record with similar Oracle maintenance contracts for federal agencies?

FCN, Inc. has a history of providing IT services to various federal agencies, including support for software and infrastructure. While specific details on their Oracle maintenance contracts are not provided in this data snippet, their general experience suggests a capability to handle such requirements. A deeper dive into their past performance evaluations and contract history with agencies like DHS or other large federal entities would offer a clearer picture of their expertise and reliability in delivering Oracle maintenance services. This would include examining the scale, duration, and complexity of previous similar contracts they have managed.

How does the $15 million contract value compare to industry benchmarks for Oracle maintenance of this scope?

The $15 million contract value for three years of Oracle maintenance, including an unlimited use agreement, appears to be within a reasonable range for a federal agency of the TSA's size and operational needs. Enterprise-level Oracle support can be costly, and the inclusion of unlimited use suggests a broad scope of services. To provide a precise benchmark, one would need to compare this contract against similar-sized agreements for Oracle maintenance and support from other federal agencies or large commercial enterprises. Factors such as the specific Oracle products covered, the level of support (e.g., 24/7, response times), and the number of users or instances are critical for an accurate comparison. Without more granular data, it's difficult to definitively state if it's high or low, but the competitive award process suggests it's likely market-driven.

What are the primary risks associated with this Oracle maintenance contract?

Key risks associated with this Oracle maintenance contract include potential vendor lock-in, where the TSA becomes heavily reliant on FCN, Inc. for specialized Oracle support, making future transitions difficult or costly. There's also a risk related to the effective utilization of the 'unlimited use' aspect; if the full scope of services isn't leveraged, the value proposition diminishes. Furthermore, the long-term cost of Oracle software maintenance can be substantial, and this contract represents a significant, ongoing expenditure. Ensuring the availability of skilled personnel, both within the government and potentially through the contractor, to manage and benefit from the supported Oracle environment is another consideration. Finally, cybersecurity risks inherent in maintaining critical IT systems must be continuously managed.

How effective is the firm-fixed-price (FFP) contract type in managing costs for Oracle maintenance?

The firm-fixed-price (FFP) contract type is generally effective in managing costs for services like Oracle maintenance because it shifts the risk of cost overruns to the contractor, FCN, Inc. Under an FFP agreement, the price is set and not subject to adjustment based on the contractor's actual costs. This provides the TSA with budget certainty and predictability. For maintenance services where the scope of work is well-defined, FFP is often preferred. However, if unforeseen technical issues arise that require extensive effort beyond the initially anticipated scope, the contractor bears the additional cost, which could incentivize them to be highly efficient. Conversely, if the scope is underestimated by the contractor, they might seek to reduce service quality to maintain profitability, necessitating robust performance monitoring by the TSA.

What is the historical spending pattern for Oracle maintenance by the TSA or DHS?

Historical spending data for Oracle maintenance by the TSA or DHS is not provided in the current data. To assess historical patterns, one would need to examine previous contracts for Oracle support, licensing, and maintenance awarded by these agencies over several fiscal years. Analyzing this data would reveal trends in spending, identify key vendors, and potentially highlight any significant increases or decreases in expenditure. Understanding past spending can help contextualize the current $15 million award, indicating whether it represents a typical investment, an increase due to expanded needs, or a decrease due to consolidation or alternative solutions. This historical perspective is crucial for long-term budget planning and identifying potential cost-saving opportunities.

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: 70T02024Q7500N005

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2600 TOWER OAKS BLVD STE 575, 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: $14,999,774

Exercised Options: $14,999,774

Current Obligation: $14,999,774

Actual Outlays: $10,845,715

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: NNG15SC71B

IDV Type: GWAC

Timeline