Treasury's $21.5M IT operations contract awarded to Engility Services, LLC, ran for over 5 years

Contract Overview

Contract Amount: $21,514,837 ($21.5M)

Contractor: Engility Services, LLC

Awarding Agency: Department of the Treasury

Start Date: 2008-10-01

End Date: 2014-03-31

Contract Duration: 2,007 days

Daily Burn Rate: $10.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: FOR OPERATIONS & MAINTENANCE SUPPORT 10/01/2008 - 09/30/2009

Place of Performance

Location: HYATTSVILLE, PRINCE GEORGES County, MARYLAND, 20782

State: Maryland Government Spending

Plain-Language Summary

Department of the Treasury obligated $21.5 million to ENGILITY SERVICES, LLC for work described as: FOR OPERATIONS & MAINTENANCE SUPPORT 10/01/2008 - 09/30/2009 Key points: 1. Contract provided essential IT operations and maintenance support, ensuring continuity of critical government functions. 2. Awarded under full and open competition, suggesting a broad market search for qualified vendors. 3. The contract's duration extended significantly beyond its initial period, indicating sustained need and performance. 4. Fixed-price contract type likely provided cost certainty for the government, though it may limit flexibility. 5. The specific NAICS code points to custom computer programming services, a key area for government IT infrastructure. 6. The contract was awarded as a Delivery Order, suggesting it was part of a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle.

Value Assessment

Rating: fair

The contract's total value of approximately $21.5 million over its extended period suggests a moderate investment in IT support. Benchmarking this against similar IT operations and maintenance contracts is challenging without more specific service details. However, the firm fixed-price structure implies that the contractor bore the risk of cost overruns, which can be a favorable arrangement for the government if the scope was well-defined. The extended duration might indicate reasonable value, as the government continued to utilize the services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, indicating that the government solicited bids from all responsible sources. The presence of two bidders suggests a degree of competition, though the exact number of interested parties and the rigor of the evaluation process are not detailed. Full and open competition is generally expected to yield competitive pricing and a wider range of technical solutions.

Taxpayer Impact: Full and open competition typically benefits taxpayers by driving down prices through market forces and ensuring the government receives the best value available. It also promotes fairness and transparency in the procurement process.

Public Impact

The Bureau of the Fiscal Service benefited from continuous IT operations and maintenance, crucial for managing federal financial data and systems. Citizens and businesses relying on Treasury services experienced uninterrupted access to government financial platforms. The contract supported IT infrastructure stability, indirectly impacting the broader U.S. economy through reliable government financial operations. Workforce implications are likely related to the IT professionals employed by Engility Services, LLC, to fulfill the contract's requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if the initial requirements were not precisely defined, given the extended duration.
Reliance on a single contractor for an extended period could lead to vendor lock-in and reduced leverage in future negotiations.
The firm fixed-price nature might disincentivize innovation or proactive problem-solving if not carefully managed through performance metrics.

Positive Signals

Successful delivery of IT operations and maintenance over a multi-year period indicates consistent performance and reliability.
Award through full and open competition suggests a competitive process that likely secured a reasonable price for the services.
The extended contract period implies satisfaction with the contractor's performance and the value provided to the agency.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on custom computer programming and IT support services. The market for such services is vast and highly competitive, with numerous firms offering specialized solutions to government agencies. Government IT spending is a significant portion of the federal budget, driven by the need to maintain aging infrastructure, modernize systems, and enhance cybersecurity. Comparable spending benchmarks would typically involve analyzing IT operations and maintenance contracts across various agencies with similar scope and duration.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a result, large businesses like Engility Services, LLC, were the primary awardees. There is no direct information on subcontracting plans or their impact on the small business ecosystem from this data alone. Future contracts of this nature would need specific provisions to ensure small business participation if that is a goal.

Oversight & Accountability

Oversight for this contract would have been managed by the Bureau of the Fiscal Service within the Department of the Treasury. As a delivery order under a potential IDIQ, oversight would involve monitoring performance against the established terms and conditions, ensuring adherence to the firm fixed-price agreement, and managing any modifications or task orders. Transparency is generally facilitated through contract databases like FPDS, where basic award information is recorded. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Federal IT Modernization Programs
IT Operations and Maintenance Services
Custom Computer Programming Services
Department of the Treasury IT Contracts
Bureau of the Fiscal Service Support Contracts

Risk Flags

Extended contract duration beyond initial period
Potential for vendor lock-in due to long-term relationship
Firm Fixed Price may limit flexibility for evolving requirements

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $21.5 million to ENGILITY SERVICES, LLC. FOR OPERATIONS & MAINTENANCE SUPPORT 10/01/2008 - 09/30/2009

Who is the contractor on this award?

The obligated recipient is ENGILITY SERVICES, LLC.

Which agency awarded this contract?

Awarding agency: Department of the Treasury (Bureau of the Fiscal Service).

What is the total obligated amount?

The obligated amount is $21.5 million.

What is the period of performance?

Start: 2008-10-01. End: 2014-03-31.

What was the specific nature of the 'operations and maintenance support' provided under this contract?

The contract's NAICS code (541511) indicates 'Custom Computer Programming Services'. Therefore, the 'operations and maintenance support' likely encompassed a range of IT services including maintaining existing software applications, managing IT infrastructure (servers, networks), providing technical support to end-users, ensuring system uptime and performance, applying patches and updates, and potentially performing minor enhancements or bug fixes to custom-developed or integrated systems. The exact scope would be detailed in the specific delivery order's statement of work, but it centers on keeping the Bureau of the Fiscal Service's IT systems running efficiently and securely.

How did the firm fixed-price (FFP) contract type influence the government's cost and the contractor's risk?

A Firm Fixed Price (FFP) contract, like the one awarded to Engility Services, LLC, obligates the contractor to perform the specified work for a predetermined price. This structure provides the government with significant cost certainty, as the total expenditure is known upfront, assuming the scope remains unchanged. For the contractor, it means assuming the full risk of cost overruns; if their expenses exceed the contract price, their profit margin shrinks or they incur a loss. Conversely, if they can deliver the services more efficiently than anticipated, their profit increases. This type of contract is generally preferred for well-defined requirements where cost and performance risks can be reasonably estimated.

What does the extended contract duration (from 2008 to 2014) imply about the contractor's performance and the agency's needs?

The contract's original period was from October 1, 2008, to September 30, 2009, but it ultimately extended through March 31, 2014. This nearly 5.5-year duration strongly suggests that the Bureau of the Fiscal Service was satisfied with Engility Services, LLC's performance and the value provided. Agencies typically extend contracts when the services are critical, the incumbent contractor performs well, and transitioning to a new vendor would be disruptive or costly. The extended period indicates a sustained need for the IT operations and maintenance support and implies the contractor consistently met or exceeded performance expectations.

Given it was a Delivery Order, what was the likely parent IDIQ contract, and what does that mean for competition?

A Delivery Order (DO) is typically issued under an Indefinite-Delivery/Indefinite-Quantity (IDIQ) contract. This means Engility Services, LLC likely held a larger IDIQ contract with the government, and this specific DO was one task order against that contract. The IDIQ vehicle itself would have been competed previously, potentially on a larger scale. Issuing DOs allows agencies to procure services incrementally as needed, offering flexibility. The competition level for the parent IDIQ would determine the overall market access, while the specific DO might have had further competition or been awarded based on pre-competed terms, depending on the IDIQ's structure.

How does the $21.5 million total award value compare to typical IT support contracts for agencies of similar size?

The total award value of approximately $21.5 million spread over roughly 5.5 years equates to an average annual spend of about $3.9 million. This figure is moderate for IT operations and maintenance support for a federal bureau like the Fiscal Service, which manages significant financial data and systems. Larger agencies or those with more complex IT infrastructures often spend tens or hundreds of millions annually on similar services. Without knowing the specific number of users, systems supported, and complexity of the environment, a precise benchmark is difficult, but this amount appears reasonable for sustaining essential IT functions.

Industry Classification

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

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: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 35 NEW ENGLAND BUSINESS CTR DR STE 200, ANDOVER, MA, 01810

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

Financial Breakdown

Contract Ceiling: $21,514,837

Exercised Options: $21,514,837

Current Obligation: $21,514,837

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS35F0333P

IDV Type: FSS

Timeline