DHS awards $61.6M for IBM/HCL software licenses and maintenance, spanning three years

Contract Overview

Contract Amount: $61,589,482 ($61.6M)

Contractor: Merlin International, Inc.

Awarding Agency: Department of Homeland Security

Start Date: 2020-03-31

End Date: 2023-03-31

Contract Duration: 1,095 days

Daily Burn Rate: $56.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: ESTABLISH NEW MULTI-YEAR IBM/HCL SOFTWARE LICENSES AND MAINTENANCE CONTRACT. RENEWALS AND NEW LICENSES AND MAINTENANCE. BASE PLUS TWO (2) OPTION YEARS. POP: 3/31/2020 TO 3/31/2023 COR: KAY ZACHMANN

Place of Performance

Location: VIENNA, FAIRFAX County, VIRGINIA, 22182

State: Virginia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $61.6 million to MERLIN INTERNATIONAL, INC. for work described as: ESTABLISH NEW MULTI-YEAR IBM/HCL SOFTWARE LICENSES AND MAINTENANCE CONTRACT. RENEWALS AND NEW LICENSES AND MAINTENANCE. BASE PLUS TWO (2) OPTION YEARS. POP: 3/31/2020 TO 3/31/2023 COR: KAY ZACHMANN Key points: 1. Contract provides essential software licenses and maintenance, ensuring operational continuity for TSA. 2. The contract structure includes a base period and two option years, allowing for flexibility. 3. Pricing appears to be firm-fixed-price, which shifts cost risk to the contractor. 4. The award was made under full and open competition, suggesting a competitive bidding process. 5. Merlin International, Inc. is the contractor, with a track record to be further analyzed. 6. The contract's duration of 1095 days aligns with typical software maintenance cycles.

Value Assessment

Rating: good

The contract value of $61.6 million over three years for software licenses and maintenance appears reasonable given the scope. Benchmarking against similar multi-year software agreements for federal agencies would provide a more precise value-for-money assessment. The firm-fixed-price structure is a positive indicator for cost control, as it locks in prices and transfers risk to the contractor. However, without specific details on the software suite and user base, a definitive comparison to market rates is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The solicitation likely attracted multiple bidders, fostering price discovery and potentially leading to more competitive pricing for the government. The specific number of bids received is not detailed, but the competition type suggests a robust market engagement.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down prices through market forces and ensuring the government receives the best value available.

Public Impact

The Transportation Security Administration (TSA) is the primary beneficiary, receiving critical software licenses and maintenance. This contract ensures the continued operation of essential IT systems supporting TSA's mission. The services delivered are software-related, encompassing licensing and ongoing technical support. The geographic impact is primarily within the TSA's operational footprint, likely nationwide. Workforce implications include the need for IT personnel to manage and utilize the software.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if alternative software solutions are not considered in the future.
Reliance on a single contractor for critical software maintenance could pose a risk if the contractor faces financial instability or operational issues.

Positive Signals

Firm-fixed-price contract structure mitigates cost overrun risks for the government.
Full and open competition suggests a competitive environment that should yield favorable pricing.
The contract's three-year term provides stability for essential software operations.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on software licensing and maintenance. The market for enterprise software licenses and support is substantial, with major players like IBM and HCL dominating significant portions. Federal agencies are consistent buyers in this space, often consolidating licenses and maintenance agreements to achieve economies of scale. Comparable spending benchmarks would involve analyzing other large federal software procurements for similar enterprise solutions.

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 arising from a set-aside provision. The primary contractor, Merlin International, Inc., may engage small businesses as subcontractors at its discretion, but this is not mandated by the contract's structure.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program office within the Department of Homeland Security (DHS), specifically the Transportation Security Administration (TSA). Accountability measures are embedded in the firm-fixed-price contract terms, requiring the contractor to deliver specified software licenses and maintenance. Transparency is generally maintained through contract award databases and public reporting, though specific performance metrics may not always be publicly disclosed.

Related Government Programs

General Services Administration (GSA) Schedules for IT Software
Department of Defense (DoD) Enterprise Software Agreements
NASA Solutions for Enterprise-Wide Procurement (SEWP)

Risk Flags

Potential for cost creep if option years are exercised without re-evaluation of market rates.
Dependence on specific vendor software may limit future flexibility and increase switching costs.
Ensuring adequate technical expertise within TSA to manage and leverage the licensed software effectively.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $61.6 million to MERLIN INTERNATIONAL, INC.. ESTABLISH NEW MULTI-YEAR IBM/HCL SOFTWARE LICENSES AND MAINTENANCE CONTRACT. RENEWALS AND NEW LICENSES AND MAINTENANCE. BASE PLUS TWO (2) OPTION YEARS. POP: 3/31/2020 TO 3/31/2023 COR: KAY ZACHMANN

Who is the contractor on this award?

The obligated recipient is MERLIN INTERNATIONAL, 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 $61.6 million.

What is the period of performance?

Start: 2020-03-31. End: 2023-03-31.

What is the specific suite of IBM/HCL software being licensed and maintained under this contract?

The provided data does not specify the exact IBM/HCL software suite covered by this contract. It broadly refers to 'IBM/HCL Software Licenses and Maintenance.' To fully assess the value and necessity of this contract, understanding the specific software products (e.g., operating systems, database software, middleware, security tools, productivity applications) and their criticality to TSA operations is essential. Without this detail, it's difficult to benchmark pricing or evaluate the strategic fit of these software assets within TSA's IT infrastructure.

How does the per-unit cost of these software licenses and maintenance compare to commercial market rates or other federal agency agreements?

The data does not provide per-unit cost breakdowns for the software licenses and maintenance. The total award amount of $61.6 million over three years is a consolidated figure. To perform a robust comparison, one would need to identify the number of licenses for each specific software product, the maintenance tiers, and compare these against publicly available commercial pricing or data from similar federal contracts. Given the firm-fixed-price nature, the government has likely negotiated these rates, but a detailed benchmark is needed to confirm optimal value. The absence of specific unit costs prevents a direct per-unit comparison.

What is Merlin International, Inc.'s track record with similar large-scale federal software licensing and maintenance contracts?

Merlin International, Inc. has a history of providing IT hardware, software, and services to the federal government. While this specific contract is for IBM/HCL software, Merlin often acts as a reseller and integrator for various technology vendors. Assessing their track record would involve reviewing past performance evaluations on similar contracts, particularly those involving large software license renewals and multi-year maintenance agreements with agencies of similar size and complexity to DHS. Their experience with federal procurement processes and ability to manage complex software portfolios are key factors.

What are the key performance indicators (KPIs) used to measure the contractor's performance in delivering software maintenance and support?

The provided data does not detail the specific Key Performance Indicators (KPIs) for this contract. Typically, for software maintenance and support contracts, KPIs might include response times for technical support requests, resolution times for critical issues, availability of software updates and patches, and adherence to service level agreements (SLAs). The contracting officer's representative (COR) would be responsible for monitoring these metrics to ensure the contractor is meeting its obligations. Without explicit KPIs, assessing performance effectiveness is challenging.

What is the historical spending pattern for IBM/HCL software licenses and maintenance at the TSA or DHS?

The provided data focuses on a single contract award from March 31, 2020, to March 31, 2023, valued at $61.6 million. It does not offer historical spending data prior to this period or details on whether this represents a continuation of previous agreements for the same software. To understand historical spending patterns, one would need to examine contract databases for previous awards related to IBM/HCL software at TSA/DHS, looking at contract values, durations, and the number of renewals or re-competitions over time. This would help identify trends in software utilization and investment.

Industry Classification

NAICS: Manufacturing › Computer and Peripheral Equipment Manufacturing › Electronic Computer Manufacturing

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 8330 BOONE BLVD 8TH FL, VIENNA, VA, 22182

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Hispanic American Owned Business, Minority Owned Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $123,439,795

Exercised Options: $81,260,898

Current Obligation: $61,589,482

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: NNG15SC17B

IDV Type: GWAC

Timeline