SEC's $151M IT support contract to MAXIMUS FEDERAL CONSULTING, LLC shows fair value with 12 bidders

Contract Overview

Contract Amount: $150,879,899 ($150.9M)

Contractor: Maximus Federal Consulting, LLC

Awarding Agency: Securities and Exchange Commission

Start Date: 2013-12-19

End Date: 2022-10-26

Contract Duration: 3,233 days

Daily Burn Rate: $46.7K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 12

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::OT::IGF FOR OTHER FUNCTIONS OPERATIONS AND MAINTENANCE SUPPORT FOR SOFTWARE APPLICATIONS.

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20549

State: District of Columbia Government Spending

Plain-Language Summary

Securities and Exchange Commission obligated $150.9 million to MAXIMUS FEDERAL CONSULTING, LLC for work described as: IGF::OT::IGF FOR OTHER FUNCTIONS OPERATIONS AND MAINTENANCE SUPPORT FOR SOFTWARE APPLICATIONS. Key points: 1. Contract value appears reasonable given the long duration and scope of IT support services. 2. Strong competition with 12 bidders suggests a healthy market for these services. 3. Risk indicators are moderate, with a long performance period potentially increasing scope creep. 4. Performance context is a long-term IT operations and maintenance support for critical SEC applications. 5. Sector positioning is within IT services, specifically computer systems design and integration.

Value Assessment

Rating: good

The contract's total value of approximately $151 million over nearly nine years suggests a fair price for comprehensive IT support. Benchmarking against similar large-scale IT operations and maintenance contracts for federal agencies indicates that the average annual cost per year is within a reasonable range. The firm-fixed-price structure also provides cost certainty for the SEC, although it may limit flexibility if requirements change significantly.

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 a robust bidding process. The presence of 12 bidders signifies a competitive market for these specialized IT services, which generally leads to better pricing and innovation. The exclusion of sources clause suggests that while the competition was broad, specific circumstances may have led to the exclusion of certain potential bidders, which warrants further review.

Taxpayer Impact: The high level of competition is beneficial for taxpayers as it likely drove down costs and ensured the SEC received competitive pricing for essential IT support services.

Public Impact

The Securities and Exchange Commission (SEC) benefits directly through the continuous operation and maintenance of its critical software applications. Services delivered include computer systems design and support, ensuring the functionality of vital financial regulatory systems. The geographic impact is primarily within the District of Columbia, where the SEC's headquarters are located. Workforce implications include the employment of IT professionals by MAXIMUS FEDERAL CONSULTING, LLC to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 9 years) increases the risk of scope creep and potential cost overruns if not managed effectively.
Reliance on a single contractor for critical IT infrastructure support could pose a risk if the contractor experiences performance issues or financial instability.
The 'exclusion of sources' clause, while part of a full and open competition, warrants scrutiny to ensure no undue restrictions were placed on potential bidders.

Positive Signals

Awarded under full and open competition, indicating a broad market engagement and likely competitive pricing.
Firm-fixed-price contract type provides cost certainty for the government.
Long-term nature of the contract suggests a stable and ongoing need for these services, indicating successful past performance.

Sector Analysis

This contract falls within the IT services sector, specifically focusing on computer systems design and related services. The market for such services is large and highly competitive, with numerous federal and commercial entities seeking IT support. The SEC's spending on this contract is a significant investment in maintaining its operational infrastructure, aligning with broader government trends towards modernizing IT systems. Comparable spending benchmarks for similar IT support contracts often range from tens to hundreds of millions of dollars, depending on the scope and duration.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. The prime contractor, MAXIMUS FEDERAL CONSULTING, LLC, is a large business. There is no explicit information provided regarding subcontracting plans for small businesses. Without this information, it is difficult to assess the direct impact on the small business ecosystem, though large prime contracts often include subcontracting opportunities.

Oversight & Accountability

Oversight for this contract would typically be managed by the Securities and Exchange Commission's contracting officers and program managers. The firm-fixed-price nature of the contract provides a degree of accountability. Transparency is facilitated by public contract databases. While no specific Inspector General (IG) is mentioned for this particular contract, the SEC has its own Office of Inspector General, which could potentially review contract performance if performance issues or allegations of misconduct arise.

Related Government Programs

IT Operations and Maintenance Support
Computer Systems Design Services
Federal IT Infrastructure Modernization
Software Application Support Contracts
Securities and Exchange Commission IT Procurement

Risk Flags

Long contract duration
Potential for scope creep
Technological obsolescence risk
Reliance on single contractor
Exclusion of sources clause justification

Frequently Asked Questions

What is this federal contract paying for?

Securities and Exchange Commission awarded $150.9 million to MAXIMUS FEDERAL CONSULTING, LLC. IGF::OT::IGF FOR OTHER FUNCTIONS OPERATIONS AND MAINTENANCE SUPPORT FOR SOFTWARE APPLICATIONS.

Who is the contractor on this award?

The obligated recipient is MAXIMUS FEDERAL CONSULTING, LLC.

Which agency awarded this contract?

Awarding agency: Securities and Exchange Commission (Securities and Exchange Commission).

What is the total obligated amount?

The obligated amount is $150.9 million.

What is the period of performance?

Start: 2013-12-19. End: 2022-10-26.

What is the track record of MAXIMUS FEDERAL CONSULTING, LLC with the SEC on similar contracts?

MAXIMUS FEDERAL CONSULTING, LLC has a history of performing IT services for the federal government, including the SEC. Analyzing their past performance on contracts of similar size and scope is crucial. This includes reviewing past performance evaluations, any documented disputes or contract modifications, and their ability to meet delivery schedules and technical requirements. A review of their financial stability and capacity to handle large, long-term contracts is also important. While this specific contract is for IT support, MAXIMUS also has experience in other areas like health and human services IT, suggesting a broad capability. Understanding their specific performance metrics on prior SEC IT contracts would provide a clearer picture of their reliability and effectiveness in this context.

How does the value of this contract compare to similar IT support contracts awarded by other federal agencies?

The total contract value of approximately $151 million over nearly nine years, averaging around $17 million per year, places it in the mid-to-large range for federal IT support contracts. To benchmark effectively, comparisons should be made with contracts for similar services (e.g., operations and maintenance, systems design, application support) awarded to large IT service providers by agencies of comparable size and complexity to the SEC. Factors like the specific technologies supported, the criticality of the systems, and the geographic location of services can influence pricing. Generally, contracts with firm-fixed-price structures and long durations for comprehensive IT support tend to fall within this value range, assuming the scope is well-defined and the market is competitive, as indicated by the 12 bidders in this case.

What are the primary risks associated with a contract of this duration and scope?

The primary risks associated with a contract spanning over nine years include scope creep, technological obsolescence, and contractor performance degradation. Scope creep occurs when the requirements of the contract expand beyond the original agreement without corresponding adjustments in price or schedule, potentially leading to cost overruns. Technological obsolescence is a significant risk in the IT sector, as systems and software can become outdated quickly; the contract must have mechanisms to adapt to new technologies. Contractor performance can degrade over long periods due to changes in personnel, management, or motivation. Additionally, the long duration might make it harder to attract competitive bids if market conditions change significantly. Effective contract management, regular performance reviews, and clear change control processes are essential to mitigate these risks.

How effective are the oversight mechanisms for this contract in ensuring value for money?

The effectiveness of oversight for this contract hinges on the diligence of the SEC's contracting officers and program managers. The firm-fixed-price (FFP) structure inherently provides a degree of cost control, as the contractor is responsible for delivering the specified services within the agreed-upon price. Oversight should focus on monitoring contractor performance against the contract's technical requirements, service level agreements (SLAs), and delivery schedules. Regular performance reviews, site visits, and audits are crucial. The contract's duration necessitates ongoing vigilance to prevent scope creep and ensure that the services remain relevant and cost-effective as technology evolves. The SEC's Office of Inspector General also provides an independent layer of oversight, capable of investigating potential fraud, waste, or abuse.

What is the historical spending pattern for IT support services at the SEC?

Analyzing historical spending patterns for IT support services at the SEC is essential for context. This involves examining the total amount spent on IT support over previous fiscal years, the types of contracts awarded (e.g., FFP, cost-plus), the primary contractors utilized, and the specific services procured. Understanding these patterns can reveal trends in IT investment, identify areas of consistent spending, and highlight any significant increases or decreases in expenditure. For instance, has the SEC consistently relied on large, long-term contracts like this one, or has it favored shorter-term, more agile procurements? Comparing the current contract's value and duration to historical norms can help determine if current spending is aligned with past practices or represents a significant shift in strategy. This analysis also helps in assessing whether the current contract represents a good value compared to previous investments.

What does the 'exclusion of sources' clause imply for competition and taxpayer value?

The 'exclusion of sources' clause, even within a 'full and open competition' framework, suggests that while the competition was broadly solicited, specific entities were intentionally excluded from bidding. The reasons for exclusion must be clearly documented and justifiable, often related to security, proprietary information, or specific technical requirements that only certain sources can meet. While the intent is to ensure the best possible outcome, such exclusions can potentially limit the competitive pool, which might, in turn, affect price discovery and potentially lead to higher costs for taxpayers if the remaining pool of bidders is less competitive. Transparency regarding the justification for exclusions is key to ensuring that taxpayer interests are protected and that the competition remains as robust as possible under the circumstances.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 12

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Maximus Inc

Address: 1600 TYSONS BLVD STE 1400, MCLEAN, VA, 22102

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $168,018,666

Exercised Options: $150,879,899

Current Obligation: $150,879,899

Actual Outlays: $67,697,900

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HHSN316201200117W

IDV Type: GWAC

Timeline