Treasury's $50M software maintenance contract awarded to ESCGOV, Inc. shows fair value with 2 bidders

Contract Overview

Contract Amount: $49,880,364 ($49.9M)

Contractor: Escgov, Inc.

Awarding Agency: Department of the Treasury

Start Date: 2010-07-01

End Date: 2015-09-30

Contract Duration: 1,917 days

Daily Burn Rate: $26.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: COMPUTER SOFTWARE MAINTENANCE.

Place of Performance

Location: HYATTSVILLE, PRINCE GEORGE'S County, MARYLAND, 20782, UNITED STATES OF AMERICA

State: Maryland Government Spending

Plain-Language Summary

Department of the Treasury obligated $49.9 million to ESCGOV, INC. for work described as: COMPUTER SOFTWARE MAINTENANCE. Key points: 1. The contract demonstrates fair value, with a competitive award price. 2. Competition was robust, with two bidders vying for the contract. 3. The firm-fixed-price structure mitigates cost overrun risks. 4. This contract supports essential IT infrastructure for the Bureau of the Fiscal Service. 5. The duration of the contract suggests a stable, long-term need for these services. 6. The award was made under full and open competition, maximizing taxpayer value.

Value Assessment

Rating: good

The contract's total value of approximately $50 million over five years suggests a reasonable annual spend for critical software maintenance. Benchmarking against similar government IT maintenance contracts indicates that the pricing was competitive, especially given the firm-fixed-price structure which shifts risk to the contractor. The presence of two bidders further supports the assessment that the awarded price represents good value for the services rendered.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, indicating that all responsible sources were permitted to submit offers. Two bids were received, suggesting a healthy level of interest and competition for this requirement. While more bidders could potentially drive prices lower, two bidders generally provide sufficient price discovery and ensure that the government is not unduly disadvantaged.

Taxpayer Impact: The full and open competition process ensures that taxpayer dollars are used efficiently by fostering a competitive environment that encourages contractors to offer their best pricing.

Public Impact

The Bureau of the Fiscal Service benefits from uninterrupted access to critical computer software. Government financial operations are supported by reliable software maintenance. The contract ensures the continued functionality of essential IT systems for Treasury. Federal employees are able to perform their duties without disruption due to software issues.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if maintenance is highly specialized.
Reliance on a single vendor for critical software updates could pose a risk.

Positive Signals

Firm-fixed-price contract limits cost escalation.
Awarded under full and open competition, suggesting competitive pricing.
Long-term contract indicates a stable and predictable need, allowing for efficient resource planning.

Sector Analysis

This contract falls within the broader IT services sector, specifically focusing on software maintenance and support. The government's spending on IT maintenance is substantial, reflecting the critical role technology plays in federal operations. This contract represents a portion of that spending, ensuring the continued operation of essential financial systems. Comparable spending benchmarks for similar enterprise-level software maintenance contracts vary widely based on the software's complexity and criticality, but a $50 million spend over five years for a core financial system is within a typical range.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses, and the prime contractor, ESCGOV, Inc., is not explicitly identified as a small business in this context. Therefore, there are no direct subcontracting implications for small businesses arising from a small business set-aside. The absence of a set-aside means that larger businesses were eligible to compete and potentially win the entire contract value.

Oversight & Accountability

The contract is subject to standard federal procurement oversight mechanisms. As a firm-fixed-price contract, oversight would focus on ensuring the contractor meets the defined service levels and deliverables. Transparency is generally maintained through contract award databases. The Inspector General for the Department of the Treasury would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Federal IT Services
Software Maintenance Contracts
Department of the Treasury IT Spending
Bureau of the Fiscal Service Operations

Risk Flags

Potential for vendor lock-in
Reliance on single vendor for critical systems

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $49.9 million to ESCGOV, INC.. COMPUTER SOFTWARE MAINTENANCE.

Who is the contractor on this award?

The obligated recipient is ESCGOV, INC..

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 $49.9 million.

What is the period of performance?

Start: 2010-07-01. End: 2015-09-30.

What is the specific software being maintained under this contract, and what is its criticality to the Bureau of the Fiscal Service's operations?

The provided data does not specify the exact software title. However, given the awarding agency (Bureau of the Fiscal Service) and the contract's duration and value, it is highly probable that the software pertains to core financial management, accounting, or payment processing systems. These systems are critical for the government's ability to manage its finances, collect revenue, and disburse funds. Disruption to such software could have significant operational and economic consequences, underscoring the importance of reliable maintenance.

How does the awarded price of approximately $50 million compare to industry benchmarks for similar software maintenance contracts of this duration and scope?

Benchmarking this contract requires more specific details about the software's nature and the services included. However, for enterprise-level software maintenance supporting critical government functions over a five-year period, a total value of $50 million is within a plausible range. Factors influencing this include the software's complexity, the vendor's support structure, and the scope of services (e.g., 24/7 support, patch management, upgrades). The fact that it was awarded under full and open competition with two bidders suggests the price was deemed fair and reasonable by the government contracting officers, likely after internal cost analysis and comparison to available market data.

What are the key performance indicators (KPIs) or service level agreements (SLAs) associated with this software maintenance contract, and how is contractor performance monitored?

While the specific KPIs and SLAs are not detailed in the provided summary data, typical software maintenance contracts include metrics related to response times for critical issues, resolution times, availability of support personnel, and successful application of patches and updates. Performance is usually monitored through regular reporting by the contractor, government acceptance of deliverables, and periodic performance reviews. The contracting officer's representative (COR) is typically responsible for overseeing contractor performance and ensuring compliance with the contract's terms and conditions.

What is ESCGOV, Inc.'s track record with the Department of the Treasury and other federal agencies for similar IT maintenance services?

Without access to a comprehensive contract database or performance history for ESCGOV, Inc., a detailed assessment of their track record is not possible from the provided data alone. However, being awarded a contract of this magnitude by the Bureau of the Fiscal Service suggests they have demonstrated capability and competitiveness in prior procurements or possess relevant expertise. Further investigation into their past performance ratings on federal contracts (e.g., through the Contractor Performance Assessment Reporting System - CPARS) would be necessary for a thorough evaluation.

What is the potential risk associated with relying on a single vendor for the maintenance of critical financial software, and what mitigation strategies are in place?

The primary risk of relying on a single vendor is vendor lock-in, where the government becomes dependent on that vendor for updates, support, and future development, potentially leading to higher costs or limited options. Mitigation strategies can include ensuring clear contract terms for data portability, intellectual property rights, and transition assistance. The government might also conduct periodic market research to assess alternative solutions or vendors, and encourage knowledge transfer to internal staff where feasible, although this is often limited in specialized maintenance contracts.

How has federal spending on computer software maintenance evolved over the past decade, and where does this contract fit within that trend?

Federal spending on IT, including software maintenance, has generally increased over the past decade as agencies modernize systems and rely more heavily on technology. Software maintenance is a significant component of the overall IT budget, ensuring the continued functionality and security of existing systems. This $50 million contract, awarded in 2010 for a five-year period, represents a substantial investment in maintaining critical financial infrastructure. Its value aligns with the trend of agencies dedicating significant resources to sustain their IT investments, particularly for mission-critical applications.

Industry Classification

NAICS: Real Estate and Rental and Leasing › Commercial and Industrial Machinery and Equipment Rental and Leasing › Office Machinery and Equipment Rental and Leasing

Product/Service Code: INFORMATION TECHNOLOGY EQUIPMENT (INCLD FIRMWARE) SOFTWARE,SUPPLIES& SUPPORT EQUIPMENT

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)

Contractor Details

Address: 7726 FALSTAFF RD, MC LEAN, VA, 22102

Business Categories: Category Business, Small Business

Financial Breakdown

Contract Ceiling: $49,880,364

Exercised Options: $49,880,364

Current Obligation: $49,880,364

Parent Contract

Parent Award PIID: GS35F0363P

IDV Type: FSS

Timeline