Treasury's $139M seat management contract with BAE Systems awarded competitively, raising value questions

Contract Overview

Contract Amount: $139,180,119 ($139.2M)

Contractor: BAE Systems Technology Solutions & Services Inc.

Awarding Agency: Department of the Treasury

Start Date: 2005-12-14

End Date: 2009-09-30

Contract Duration: 1,386 days

Daily Burn Rate: $100.4K/day

Competition Type: COMPETITIVE DELIVERY ORDER

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: SEAT MANAGEMENT SERVICES

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20220

State: District of Columbia Government Spending

Plain-Language Summary

Department of the Treasury obligated $139.2 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC. for work described as: SEAT MANAGEMENT SERVICES Key points: 1. The contract's value appears reasonable given the duration and scope of IT seat management. 2. Competition was robust, with 5 bidders indicating a healthy market for these services. 3. The fixed-price nature of the contract offers some cost certainty, but requires careful performance monitoring. 4. This contract represents a significant portion of IT infrastructure spending within Treasury's Departmental Offices. 5. Long-term IT service contracts can present risks if not managed proactively for evolving technology needs.

Value Assessment

Rating: fair

The contract's total value of $139 million over approximately four years suggests an average annual spend of around $35 million. Benchmarking this against similar large-scale IT seat management contracts is challenging without more granular data on the number of seats managed and the specific services included. However, the fixed-price structure implies that the contractor assumed the risk for cost overruns, which can be a positive indicator of value if performance targets are met. Further analysis would require comparing the per-seat cost to industry averages for comparable services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through a competitive process, with five bids received. The 'full-and-open' competition suggests that multiple vendors had the opportunity to bid, which typically fosters price discovery and can lead to more favorable pricing for the government. The presence of five bidders indicates a competitive market for IT seat management services, providing the agency with a good selection of qualified contractors.

Taxpayer Impact: A competitive award process for this significant contract likely resulted in a better price for taxpayers compared to a sole-source or limited competition scenario.

Public Impact

Federal employees within the Department of the Treasury benefit from reliable and managed IT workstations. The contract ensures the provision and maintenance of essential IT hardware and software for government operations. Services are delivered primarily within the Washington D.C. metropolitan area, supporting federal agency functions. The contract supports IT professionals employed by BAE Systems and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if contract terms are not flexible for future technology upgrades.
Risk of service degradation if performance metrics are not rigorously monitored and enforced.
Dependency on a single contractor for critical IT infrastructure could pose operational risks.

Positive Signals

Competitive award process suggests a fair market price was likely achieved.
Fixed-price contract provides cost predictability for the agency.
Long-term contract allows for stable IT support and planning.

Sector Analysis

IT seat management services are a critical component of modern government operations, encompassing the procurement, deployment, maintenance, and disposal of end-user computing devices. The market for these services is substantial, with numerous large and small businesses offering specialized solutions. This contract fits within the broader IT services sector, specifically focusing on the operational aspects of managing a large fleet of computer workstations. Comparable spending benchmarks would typically be assessed on a per-seat, per-year basis, factoring in the level of service and hardware refresh cycles.

Small Business Impact

There is no indication that this contract included specific small business set-asides. Given the scale and nature of IT seat management services, it is common for prime contractors to utilize a network of subcontractors, which could include small businesses. However, without specific subcontracting plans or goals mandated within the contract, the direct impact on the small business ecosystem is uncertain. Further investigation into subcontracting reports would be necessary to assess the extent of small business participation.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Treasury's contracting officers and program managers. Performance metrics and service level agreements (SLAs) outlined in the contract would serve as key accountability measures. Transparency is generally facilitated through contract award databases and reporting requirements. The Inspector General's office for the Department of the Treasury would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

IT Infrastructure Management
End-User Computing Services
IT Hardware Procurement
IT Service Desk Operations

Risk Flags

Potential for cost overruns if fixed-price contract terms are not managed effectively.
Risk of service disruption if contractor performance falters.
Dependency on a single vendor for critical IT infrastructure.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $139.2 million to BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC.. SEAT MANAGEMENT SERVICES

Who is the contractor on this award?

The obligated recipient is BAE SYSTEMS TECHNOLOGY SOLUTIONS & SERVICES INC..

Which agency awarded this contract?

Awarding agency: Department of the Treasury (Departmental Offices).

What is the total obligated amount?

The obligated amount is $139.2 million.

What is the period of performance?

Start: 2005-12-14. End: 2009-09-30.

What was the specific scope of 'seat management services' covered under this contract?

The 'seat management services' under this contract likely encompassed a comprehensive suite of IT support functions related to end-user computing devices. This typically includes the procurement and provisioning of hardware (desktops, laptops, peripherals), software installation and licensing, ongoing maintenance and repair, help desk support, asset management, and eventual disposal of equipment. The exact services would be detailed in the contract's Statement of Work (SOW). Given the $139 million value over nearly four years, it suggests management of a substantial number of user seats, potentially involving multiple agencies or departments within the Treasury.

How did the final contract price compare to the initial estimated cost or other bids received?

While the data indicates the contract was competitively awarded with 5 bids, it does not provide the specific pricing details of each bid or the initial estimate. The final award amount of $139,180,118.56 represents the total value obligated. To assess value for money, a comparison of this final price against the other four bids is crucial. If BAE Systems' bid was significantly lower than others, it suggests good price discovery. Conversely, if it was the highest bid accepted, it might warrant further scrutiny regarding the justification for selecting that offer, assuming it wasn't solely based on the lowest price.

What were the key performance indicators (KPIs) and service level agreements (SLAs) for this contract?

Key performance indicators (KPIs) and service level agreements (SLAs) are critical for ensuring the successful delivery of IT seat management services. For this contract, typical KPIs might have included metrics such as hardware deployment time, incident resolution time (e.g., average time to fix a computer issue), user satisfaction ratings, system uptime percentages, and adherence to security protocols. SLAs would define the acceptable thresholds for these KPIs, with potential penalties for non-compliance and incentives for exceeding targets. The specific KPIs and SLAs would have been detailed in the contract's Statement of Work (SOW).

What is BAE Systems' track record with similar large-scale IT service contracts for federal agencies?

BAE Systems Technology Solutions & Services Inc. has a significant track record of providing a wide range of IT and technical services to various U.S. federal agencies. They have historically secured and performed on numerous large-value contracts involving IT infrastructure, cybersecurity, systems integration, and support services. Their experience often includes managing complex IT environments and large user bases. A review of their past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS) for similar contracts would provide deeper insights into their reliability, quality of service, and ability to meet contractual obligations.

Were there any significant contract modifications or change orders during the contract period?

The provided data does not detail any contract modifications or change orders. However, for a contract spanning nearly four years (1386 days duration) with a value of $139 million, it is common to have modifications. These could arise due to changes in agency requirements, technological advancements, or adjustments in the scope of services. Analyzing the number, value, and nature of any modifications would be important to understand if the contract scope significantly deviated from the original intent and how these changes impacted the overall cost and performance.

How does the annual spending on this contract compare to overall IT spending within the Department of the Treasury during the same period?

The annual spending on this seat management contract averaged approximately $35 million ($139M / ~4 years). To contextualize this, one would need to compare it against the Department of the Treasury's total IT budget for the fiscal years 2005 through 2009 (approximately). If this $35 million represented a substantial portion (e.g., 10-20% or more) of the Treasury's annual IT expenditure, it indicates the critical nature and significant investment in end-user computing infrastructure. Conversely, if it was a smaller fraction, it suggests IT spending was more diversified across various other technology initiatives.

Competition & Pricing

Extent Competed: COMPETITIVE DELIVERY ORDER

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: BAE Systems PLC (UEI: 217304393)

Address: 2525 NETWORK PL, HERNDON, VA, 11

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $139,180,120

Exercised Options: $139,180,120

Current Obligation: $139,180,119

Parent Contract

Parent Award PIID: GS00T98ALD0011

IDV Type: GWAC

Timeline