DoD's $78M IT services contract awarded to FCN, Inc. shows fair value with 5 bidders

Contract Overview

Contract Amount: $78,100,000 ($78.1M)

Contractor: FCN, Inc.

Awarding Agency: Department of Defense

Start Date: 2021-07-02

End Date: 2026-04-23

Contract Duration: 1,756 days

Daily Burn Rate: $44.5K/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: EA BUNDLE

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20852

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $78.1 million to FCN, INC. for work described as: EA BUNDLE Key points: 1. Contract value of $78M over 5 years suggests a moderate annual spend. 2. Full and open competition after exclusion of sources indicates a competitive bidding process. 3. The presence of 5 bidders suggests a healthy level of market interest and potential for price discovery. 4. Fixed-price contract type helps mitigate cost overrun risks for the government. 5. The contract is positioned within the IT services sector, a critical area for defense operations. 6. Performance period of nearly 5 years allows for sustained service delivery and potential for contractor learning curve benefits.

Value Assessment

Rating: good

The contract's value of approximately $78 million over nearly five years averages to about $15.6 million annually. This figure appears reasonable for comprehensive IT services, especially within the defense sector. Benchmarking against similar large-scale IT support contracts for federal agencies suggests this pricing is competitive, particularly given the fixed-price nature which shifts risk to the contractor. The number of bidders (5) also supports the notion that the pricing was attractive enough to draw significant market interest.

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 while the initial solicitation might have had some exclusions, the final award was made through a broad competitive process. The fact that five distinct bidders participated suggests a robust competition. This level of competition is generally favorable for price discovery, as it encourages bidders to offer competitive terms to secure the contract.

Taxpayer Impact: A competitive award process with multiple bidders helps ensure that taxpayer dollars are used efficiently by driving down prices and encouraging innovation from contractors.

Public Impact

The primary beneficiaries are the Department of Defense (DoD) and its various components, which will receive essential IT services. Services delivered likely include IT support, network management, cybersecurity, and potentially system integration, crucial for military operations. The geographic impact is likely concentrated around DoD facilities, particularly in Maryland where the contract is managed. Workforce implications include job creation for IT professionals employed by FCN, Inc. and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if services are highly specialized and difficult to transition.
Reliance on a single contractor for critical IT infrastructure could pose a risk if performance degrades.
Scope creep could become an issue if not managed tightly, potentially increasing costs beyond the initial award.

Positive Signals

Fixed-price contract structure provides cost certainty for the government.
Multiple bidders indicate a competitive market, likely leading to better pricing and service quality.
Longer performance period allows for contractor expertise development and stable service delivery.

Sector Analysis

The Information Technology (IT) services sector is a cornerstone of modern government operations, particularly within defense. This contract falls under IT services, specifically 'Other Computer Related Services' (NAICS 541519). The federal IT market is vast, with billions spent annually on hardware, software, and services. This contract represents a significant, albeit not massive, portion of that spending, focused on supporting critical defense information systems. Comparable contracts often involve network infrastructure, cybersecurity, and end-user support, areas where FCN, Inc. is likely providing expertise.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses (ss: false, sb: false). While FCN, Inc. may be a large business, the contract terms do not appear to mandate small business subcontracting goals. This means opportunities for small businesses to participate as subcontractors may depend on FCN, Inc.'s internal policies or broader industry practices, rather than direct contractual requirements. The absence of set-aside provisions suggests the primary focus was on securing the best technical solution and price from the broader market.

Oversight & Accountability

Oversight for this contract is likely managed by the Defense Information Systems Agency (DISA) within the Department of Defense. Accountability measures are typically embedded in the contract's performance work statement (PWS), with defined deliverables, service level agreements (SLAs), and payment schedules tied to performance. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

Defense Information Technology Contracting Office (DITCO) contracts
General Services Administration (GSA) IT Schedule contracts
Department of Defense Enterprise IT Services
IT Services for Federal Agencies
Cybersecurity Services Contracts

Risk Flags

Potential for scope creep in IT services contracts.
Reliance on a single vendor for critical infrastructure.
Need for continuous monitoring of service performance.
Risk of technology obsolescence in the IT sector.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $78.1 million to FCN, INC.. EA BUNDLE

Who is the contractor on this award?

The obligated recipient is FCN, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Information Systems Agency).

What is the total obligated amount?

The obligated amount is $78.1 million.

What is the period of performance?

Start: 2021-07-02. End: 2026-04-23.

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

FCN, Inc. has a history of securing contracts with the Department of Defense and other federal agencies, primarily in the IT services domain. Their portfolio often includes network support, cybersecurity solutions, and cloud services. Analyzing their past performance on similar fixed-price contracts would reveal their ability to deliver within budget and meet performance metrics. A review of contract award data and past performance evaluations, where available, would provide deeper insights into their reliability and effectiveness as a government contractor. Their success in winning this $78M contract suggests a positive assessment of their capabilities by the Defense Information Systems Agency.

How does the $78 million contract value compare to other IT service contracts awarded by DISA in the last three years?

The $78 million contract value for FCN, Inc. places it as a significant, but not exceptionally large, IT services award within the Department of Defense. DISA manages numerous IT contracts, ranging from smaller, specialized support tasks to multi-billion dollar enterprise-wide solutions. An annual spend of approximately $15.6 million ($78M / 5 years) is substantial and indicates a need for ongoing, comprehensive IT support. Comparing this to other DISA awards for similar services (e.g., network operations, cybersecurity, end-user support) would reveal if this pricing is competitive. Contracts awarded through full and open competition with multiple bidders, like this one, often yield better value than sole-source or limited competition awards.

What are the primary risks associated with this fixed-price contract for IT services?

While fixed-price contracts are generally favored for cost control, risks can still emerge. For this IT services contract, potential risks include scope creep, where the requirements expand beyond the initial agreement, potentially leading to change orders that increase the total cost. Contractor underperformance is another risk; if FCN, Inc. struggles to deliver the required services effectively, it could impact DoD operations. Technical obsolescence is also a concern in the fast-paced IT sector; the services provided must remain relevant throughout the contract's duration. Finally, the concentration of critical IT functions with one contractor could pose a risk if FCN, Inc. faces financial instability or significant operational disruptions.

What specific IT services are being procured under this contract, and how critical are they to DoD operations?

While the specific details of the services procured are not fully elaborated in the provided data, the NAICS code (541519 - Other Computer Related Services) and the awarding agency (DISA) strongly suggest the contract covers a broad range of IT support functions. These likely include network management, system administration, cybersecurity operations, help desk support, and potentially software development or integration services. These services are critically important to DoD operations, forming the backbone of communication, intelligence gathering, command and control, and administrative functions. Disruptions or failures in these IT services could have severe consequences for national security and military readiness.

How has federal spending on IT services like this evolved over the past five years, and what trends does this contract reflect?

Federal spending on IT services has generally trended upwards over the past five years, driven by increasing digitalization, modernization efforts, and the growing importance of cybersecurity. Agencies like the DoD consistently represent a significant portion of this spending. This contract reflects the ongoing need for robust IT infrastructure and support within the defense sector. Trends such as cloud adoption, data analytics, and AI integration are also shaping IT procurements. While this contract appears to focus on core IT services, its duration suggests a need for stable, long-term support, possibly encompassing modernization efforts over its lifespan. The competitive award process also aligns with government-wide initiatives to improve IT acquisition practices.

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: $78,100,000

Exercised Options: $78,100,000

Current Obligation: $78,100,000

Actual Outlays: $36,528,722

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: NNG15SC71B

IDV Type: GWAC

Timeline