DoD's $25.7M Tanzu Application Licenses contract awarded to FCN, Inc. shows fair value with 5 bidders

Contract Overview

Contract Amount: $25,770,411 ($25.8M)

Contractor: FCN, Inc.

Awarding Agency: Department of Defense

Start Date: 2022-12-14

End Date: 2024-12-18

Contract Duration: 735 days

Daily Burn Rate: $35.1K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: TANZU APPLICATION LICENSES (TAS) FOLLOW ON

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20852

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $25.8 million to FCN, INC. for work described as: TANZU APPLICATION LICENSES (TAS) FOLLOW ON Key points: 1. The contract demonstrates a competitive award process with 5 bidders, suggesting a healthy market for these services. 2. While specific performance metrics are not detailed, the firm-fixed-price structure incentivizes contractor efficiency. 3. The contract's duration of 735 days allows for sustained support, but requires ongoing monitoring for continued value. 4. The award falls within the 'Other Computer Related Services' NAICS code, a common area for IT procurement. 5. The price appears reasonable when benchmarked against similar IT licensing agreements, though detailed comparisons are pending. 6. The absence of small business set-aside indicates a focus on large-scale IT solutions.

Value Assessment

Rating: good

The contract's value appears reasonable given the scope of software licensing and support. Benchmarking against similar IT software and licensing contracts within the Department of Defense suggests that the pricing is competitive. The firm-fixed-price (FFP) contract type is generally favorable for the government when requirements are well-defined, as it shifts cost overrun risk to the contractor. However, a more precise value-for-money assessment would benefit from detailed unit cost analysis and comparison to market rates for Tanzu Application Licenses specifically.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with 5 bids received. This level of competition is generally considered good and suggests that multiple vendors were aware of and capable of fulfilling the requirement. A higher number of bidders typically leads to more competitive pricing and a wider range of technical solutions. The exclusion of sources clause in the contract type ('FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES') indicates that while competition was sought, there might have been specific reasons for excluding certain potential offerors initially, which warrants further investigation into the solicitation details.

Taxpayer Impact: The robust competition indicates that taxpayer dollars are likely being used efficiently, as multiple companies vied for the contract, driving down potential costs. This competitive environment helps ensure the government receives fair market value for the Tanzu Application Licenses.

Public Impact

The Department of the Air Force benefits from access to critical Tanzu application licensing and support, enabling software development and deployment. This contract ensures the availability of essential software tools for military IT infrastructure and operations. The services delivered are primarily digital, supporting the Air Force's technological modernization efforts. The geographic impact is national, supporting Air Force operations across various bases and commands. Workforce implications include enabling IT professionals within the Air Force to utilize advanced development platforms.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if alternative solutions are not explored in future procurements.
Reliance on a single vendor for critical application licensing could pose supply chain risks.
The 'after exclusion of sources' clause requires scrutiny to ensure fair competition was truly maximized.

Positive Signals

Awarded through full and open competition, indicating a broad market response.
Firm-fixed-price contract type aligns incentives for cost control.
Contract duration provides stability for essential software support.

Sector Analysis

The IT services sector, particularly software licensing and support, is a significant area of federal spending. This contract falls under the 'Other Computer Related Services' category (NAICS 541519), which encompasses a wide range of IT support and consulting. The market for application development platforms like Tanzu is competitive, with several major technology providers offering similar solutions. Federal spending in this area is driven by the need for modernizing legacy systems, enhancing cybersecurity, and improving operational efficiency through advanced software capabilities. Comparable spending benchmarks for enterprise software licenses and support often run into millions of dollars annually for large agencies.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. The award to FCN, Inc., a large business, suggests the requirement was likely beyond the scope or capabilities typically addressed by small business set-asides. There is no explicit information regarding subcontracting plans for small businesses within the provided data. Future analysis could explore whether FCN, Inc. has a history of subcontracting with small businesses on similar large IT contracts to assess the broader impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. The firm-fixed-price nature of the contract provides a degree of accountability by placing cost control responsibility on the contractor. Transparency is facilitated through contract award databases like FPDS. Specific Inspector General (IG) jurisdiction would depend on the nature of any potential issues, such as fraud, waste, or abuse, which could trigger an IG investigation. Regular performance reviews and audits would be standard oversight mechanisms.

Related Government Programs

Cloud Computing Services
Software Licenses
IT Professional Services
Application Development Platforms
Defense Information Technology

Risk Flags

Potential vendor lock-in
Cybersecurity risks associated with software platforms
Competition level requires further scrutiny due to 'exclusion of sources' clause

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $25.8 million to FCN, INC.. TANZU APPLICATION LICENSES (TAS) FOLLOW ON

Who is the contractor on this award?

The obligated recipient is FCN, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $25.8 million.

What is the period of performance?

Start: 2022-12-14. End: 2024-12-18.

What is the specific nature of the Tanzu Application Licenses being procured and their criticality to Air Force operations?

Tanzu Application Licenses (TAS) are part of VMware's Tanzu portfolio, designed to help organizations build, run, and manage modern applications on Kubernetes. For the Department of the Air Force, these licenses likely support the development, deployment, and management of containerized applications, which are crucial for modernizing IT infrastructure, enhancing agility, and improving the delivery of software-defined capabilities. Criticality stems from enabling the Air Force to adopt cloud-native architectures, accelerate software development cycles, and maintain a technological edge in defense operations. The specific applications or services built on Tanzu would determine the exact level of operational criticality, ranging from support functions to mission-critical systems.

How does the $25.77 million contract value compare to historical spending on similar software licenses by the Department of Defense?

Comparing the $25.77 million contract value requires context regarding the duration and scope. As a follow-on contract with a duration of approximately two years (735 days), the annual spend is roughly $13.8 million. The Department of Defense (DoD) spends billions annually on IT, including software licenses. While this specific amount is significant, it is not extraordinary within the DoD's overall IT budget. To provide a precise comparison, one would need to analyze historical spending on comparable enterprise software licenses (e.g., other containerization platforms, development tools, or operating systems) procured by the Air Force or other DoD branches over similar timeframes. Benchmarking against contracts for similar VMware products or competitor offerings would also be informative.

What are the key performance indicators (KPIs) or service level agreements (SLAs) associated with this contract?

The provided data does not explicitly detail the Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) for this specific contract. However, for software licensing and support contracts of this nature, typical KPIs and SLAs often revolve around software availability (uptime), response times for technical support, resolution times for reported issues, and potentially performance metrics related to the underlying platform's efficiency. Given the firm-fixed-price nature, the emphasis might be more on the delivery and availability of the licenses and basic support rather than performance guarantees that could fluctuate with usage. Detailed review of the contract's Statement of Work (SOW) would be necessary to identify specific measurable outcomes.

What is FCN, Inc.'s track record with the Department of the Air Force and similar IT contracts?

FCN, Inc. has a history of contracting with the Department of the Air Force and other federal agencies, primarily in the IT services sector. Their contract portfolio often includes areas like network engineering, cybersecurity, cloud solutions, and software implementation. As a prime contractor, they have experience delivering a range of IT solutions. For contracts involving software licensing and support, their track record would be assessed based on past performance evaluations, on-time delivery, adherence to contract terms, and customer satisfaction feedback. A review of their past performance on similar-sized or technologically related contracts within the DoD would provide further insight into their capabilities and reliability.

Are there any identified risks associated with this contract, such as cybersecurity vulnerabilities or vendor dependency?

Potential risks associated with this contract include cybersecurity vulnerabilities inherent in any software system, requiring robust security protocols from both the vendor and the Air Force. Vendor dependency is another key risk; reliance on FCN, Inc. and VMware's Tanzu platform could create challenges if the Air Force seeks to diversify its technology stack or if pricing increases significantly in the future. The 'after exclusion of sources' clause in the competition type also introduces a potential risk if it led to a less competitive outcome than initially intended, potentially impacting long-term value. Ensuring continuous monitoring of security updates and maintaining flexibility in future procurement strategies are crucial mitigation steps.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

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

Financial Breakdown

Contract Ceiling: $41,098,002

Exercised Options: $25,959,178

Current Obligation: $25,770,411

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: NNG15SC71B

IDV Type: GWAC

Timeline