Treasury's $26.8M Cybersecurity Contract with VariQ Corporation: A Deep Dive into Value and Competition

Contract Overview

Contract Amount: $26,805,032 ($26.8M)

Contractor: Variq Corporation

Awarding Agency: Department of the Treasury

Start Date: 2016-10-05

End Date: 2022-07-18

Contract Duration: 2,112 days

Daily Burn Rate: $12.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 7

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::CT::IGF. CYBERSECURITY DEFENSE CENTER SERVICES.

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20219

State: District of Columbia Government Spending

Plain-Language Summary

Department of the Treasury obligated $26.8 million to VARIQ CORPORATION for work described as: IGF::CT::IGF. CYBERSECURITY DEFENSE CENTER SERVICES. Key points: 1. Analysis reveals a focus on specialized cybersecurity defense services for the Treasury. 2. The contract was awarded through full and open competition, suggesting a robust bidding process. 3. Performance duration spans over six years, indicating a long-term need for these services. 4. The fixed-price contract type aims to control costs and provide budget predictability. 5. Geographic concentration in Washington D.C. may indicate a focus on federal agency support. 6. The contract's value is moderate within the context of federal IT and cybersecurity spending.

Value Assessment

Rating: good

The contract's total value of $26.8 million over six years suggests a moderate annual spend. Benchmarking against similar cybersecurity defense contracts requires more granular data on specific services rendered. However, the firm fixed-price structure is generally favorable for cost control. The number of bids received (7) indicates a competitive environment that likely contributed to a reasonable price point, though a direct per-unit cost comparison is not feasible without service details.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with seven bids received. This level of competition is generally positive, as it allows multiple vendors to propose solutions and pricing, fostering a more dynamic market and potentially leading to better value for the government. The presence of seven bidders suggests that the cybersecurity defense services market is sufficiently robust to support multiple capable providers for this type of requirement.

Taxpayer Impact: A competitive bidding process like this one helps ensure that taxpayer dollars are used efficiently by driving down prices and encouraging innovation among contractors.

Public Impact

The primary beneficiary is the Department of the Treasury, specifically the Office of the Comptroller of the Currency, which receives enhanced cybersecurity defense. Services delivered likely include threat detection, incident response, vulnerability management, and security consulting. The geographic impact is concentrated in the District of Columbia, supporting federal agency operations. Workforce implications may involve specialized cybersecurity professionals employed by VariQ Corporation and potentially subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if services are highly specialized and integrated.
Reliance on a single contractor for critical cybersecurity functions could pose a risk if performance degrades.
The long contract duration might not always align with rapidly evolving cybersecurity threats, requiring potential modifications.

Positive Signals

Awarded through full and open competition, indicating a healthy market and competitive pricing.
Firm fixed-price contract type provides cost certainty for the government.
The contractor, VariQ Corporation, has a track record of performing federal contracts.
The contract duration of over six years suggests a stable, ongoing need for these critical services.

Sector Analysis

This contract falls within the broader Information Technology (IT) and Cybersecurity sector, a rapidly growing area of federal spending. The market for cybersecurity defense services is highly competitive, with numerous firms offering specialized solutions. Federal agencies increasingly rely on external contractors to manage complex cyber threats. Comparable spending benchmarks for similar cybersecurity defense services can vary widely based on scope, but this contract's value is within a typical range for specialized support.

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 specifically tied to small business set-asides for this award. Analysis of VariQ Corporation's subcontracting plan, if available, would be necessary to determine the extent to which small businesses may be involved in fulfilling the contract requirements.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program office within the Office of the Comptroller of the Currency. The firm fixed-price nature of the contract provides a degree of accountability by linking payment to deliverables. Transparency is generally facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to the contract were suspected.

Related Government Programs

Federal Cybersecurity Initiatives
IT Services for Government Agencies
Cyber Defense Contracts
Office of the Comptroller of the Currency IT Support

Risk Flags

Long contract duration may not adapt quickly to evolving threats.
Reliance on a single vendor for critical cybersecurity functions.
Potential for performance issues if not actively managed.
Lack of specific performance metrics in public data.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $26.8 million to VARIQ CORPORATION. IGF::CT::IGF. CYBERSECURITY DEFENSE CENTER SERVICES.

Who is the contractor on this award?

The obligated recipient is VARIQ CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of the Treasury (Office of the Comptroller of the Currency).

What is the total obligated amount?

The obligated amount is $26.8 million.

What is the period of performance?

Start: 2016-10-05. End: 2022-07-18.

What is VariQ Corporation's past performance record with the federal government, particularly in cybersecurity services?

VariQ Corporation has a history of performing federal contracts, including those related to IT services and cybersecurity. A detailed review of their past performance evaluations, available through sources like the Contractor Performance Assessment Reporting System (CPARS), would provide specific insights into their reliability, quality of work, and adherence to schedules and budgets on previous engagements. This contract's duration and value suggest a level of trust built on prior performance, but a thorough assessment requires examining specific contract histories and ratings.

How does the $26.8 million contract value compare to similar cybersecurity defense contracts awarded by the Treasury or other agencies?

The $26.8 million total contract value over approximately six years represents an average annual spend of roughly $4.5 million. This is a moderate figure within the federal cybersecurity landscape. Larger, more comprehensive cybersecurity contracts can reach hundreds of millions or even billions of dollars. However, for specialized cybersecurity defense services supporting a specific office like the OCC, this value is reasonable. Benchmarking requires comparing the specific services, deliverables, and contract types (e.g., firm-fixed-price vs. cost-plus) with similar awards.

What are the primary cybersecurity risks associated with this contract, and how are they mitigated?

Key risks include potential performance failures by VariQ Corporation, data breaches resulting from inadequate security measures, and the risk of vendor lock-in. Mitigation strategies typically involve robust performance monitoring by the government, clearly defined security requirements and service level agreements (SLAs) within the contract, and regular audits. The firm fixed-price nature also incentivizes the contractor to manage risks effectively to maintain profitability. The long duration could also pose a risk if technology evolves rapidly, necessitating contract modifications or re-competition.

How effective has this contract been in enhancing the cybersecurity posture of the Office of the Comptroller of the Currency?

Assessing the effectiveness requires access to performance metrics and outcomes directly related to the cybersecurity services provided under this contract. This would typically involve reviewing reports on threat mitigation, incident response times, vulnerability reduction, and compliance with security standards. Without specific performance data and independent evaluations, it is difficult to definitively state the contract's effectiveness. However, the renewal or continuation of such a contract often implies a degree of satisfaction with the services rendered.

What has been the historical spending trend for cybersecurity defense services at the Office of the Comptroller of the Currency or the Treasury?

Analyzing historical spending trends would involve examining prior contracts for similar cybersecurity defense services awarded to the OCC or the broader Treasury department. This contract, awarded in late 2016 with an end date in mid-2022, represents a significant investment over its period. Understanding the trend would require looking at spending in preceding years and subsequent periods to identify increases or decreases in demand and budget allocation for these critical services, potentially influenced by evolving threat landscapes and agency priorities.

Industry Classification

NAICS: Information › Newspaper, Periodical, Book, and Directory Publishers › All Other Publishers

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: 7

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2600 TOWER OAKS BLVD STE 300, ROCKVILLE, MD, 20852

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

Financial Breakdown

Contract Ceiling: $27,889,544

Exercised Options: $26,805,032

Current Obligation: $26,805,032

Actual Outlays: $13,530,392

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: GS35F0389V

IDV Type: FSS

Timeline