Treasury's $54M software support contract awarded to FCN, Inc. after full and open competition

Contract Overview

Contract Amount: $54,212,418 ($54.2M)

Contractor: FCN, Inc.

Awarding Agency: Department of the Treasury

Start Date: 2015-10-01

End Date: 2020-09-30

Contract Duration: 1,826 days

Daily Burn Rate: $29.7K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: COMPUTER ASSOCIATES (CA) CONSOLIDATED MAINFRAME AND DISTRIBUTED SOFTWARE SUPPORT AND MAINTENANCE

Place of Performance

Location: PARKERSBURG, WOOD County, WEST VIRGINIA, 26106

State: West Virginia Government Spending

Plain-Language Summary

Department of the Treasury obligated $54.2 million to FCN, INC. for work described as: COMPUTER ASSOCIATES (CA) CONSOLIDATED MAINFRAME AND DISTRIBUTED SOFTWARE SUPPORT AND MAINTENANCE Key points: 1. Contract value of $54.2M over five years suggests a significant investment in IT infrastructure. 2. Awarded under full and open competition, indicating a robust bidding process. 3. The contract duration of 1826 days (5 years) allows for sustained support and potential for long-term vendor relationship. 4. The fixed-price contract type aims to control costs and provide predictability for the agency. 5. The North American Industry Classification System (NAICS) code 541519 points to a broad range of computer-related services. 6. The contract's focus on mainframe and distributed software support highlights the ongoing need for legacy system maintenance. 7. The vendor, FCN, Inc., has secured a substantial contract, indicating their capability to handle large-scale IT support. 8. The contract's geographic location in West Virginia is noted, though the services are likely nationwide.

Value Assessment

Rating: good

The contract value of $54.2 million over five years for software support and maintenance appears reasonable given the scope of supporting both mainframe and distributed systems. Benchmarking against similar large-scale IT support contracts for federal agencies would provide a more precise value-for-money assessment. The firm fixed-price structure helps manage cost overruns, but the total value should be evaluated against the specific services and Service Level Agreements (SLAs) in place. Without detailed performance metrics or comparison data, a definitive value assessment is challenging, but the competitive award suggests a fair market price was likely achieved.

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 the solicitation was broadly advertised, and multiple responsible bidders were allowed to submit proposals. The presence of 4 bids suggests a healthy level of competition for this significant IT support requirement. A competitive process like this generally leads to better pricing and service offerings as vendors vie for the contract. The exclusion of sources clause might indicate specific technical requirements or prior performance considerations that narrowed the initial pool, but the overall competition was open.

Taxpayer Impact: The full and open competition process is beneficial for taxpayers as it encourages multiple vendors to offer their best pricing and technical solutions, driving down costs and improving service quality. This competitive environment helps ensure that taxpayer dollars are used efficiently for essential IT support services.

Public Impact

Federal agencies, particularly the Department of the Treasury's Bureau of the Fiscal Service, benefit from uninterrupted access to critical mainframe and distributed software. Ensures the continued operation and maintenance of essential IT systems supporting financial management and government operations. The contract supports the IT workforce by providing employment opportunities for software engineers, system administrators, and support technicians. While the contract is managed from West Virginia, the services likely support nationwide federal IT infrastructure, impacting various government functions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if specialized knowledge is developed solely by FCN, Inc.
Reliance on a single vendor for critical software support could pose a risk if the vendor experiences financial instability or strategic shifts.
The complexity of mainframe and distributed systems requires continuous monitoring to ensure optimal performance and security.
Ensuring adequate knowledge transfer and documentation from the vendor throughout the contract lifecycle is crucial.

Positive Signals

Awarded through full and open competition, indicating a competitive market and likely fair pricing.
Firm fixed-price contract type provides cost certainty for the government.
Long contract duration (5 years) allows for stable support and potential for building strong vendor-agency partnership.
The vendor, FCN, Inc., has secured a significant contract, suggesting established capabilities in IT support.
The contract addresses the critical need for maintaining both legacy mainframe and modern distributed software systems.

Sector Analysis

This contract falls within the Information Technology (IT) services sector, specifically focusing on software support and maintenance. The IT services market is vast and highly competitive, with significant government spending allocated to maintaining and modernizing federal IT infrastructure. Contracts for software support are crucial for agencies to ensure the operational continuity of their systems, ranging from legacy mainframe applications to distributed computing environments. Comparable spending benchmarks for similar large-scale IT support contracts often run into tens or hundreds of millions of dollars annually, depending on the complexity and scope of the systems supported.

Small Business Impact

This contract was awarded under full and open competition and does not indicate any specific small business set-aside provisions. The vendor, FCN, Inc., is not explicitly identified as a small business in the provided data. Therefore, the direct impact on small business set-asides appears minimal. However, the contract may include subcontracting requirements that could offer opportunities for small businesses to participate in delivering specific services or components. The overall impact on the small business ecosystem would depend on the extent and nature of any subcontracting plans.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Treasury's Bureau of the Fiscal Service contracting officers and program managers. They are responsible for monitoring vendor performance, ensuring compliance with contract terms, and approving payments. The firm fixed-price nature of the contract provides a degree of cost control. Transparency is facilitated through contract databases like FPDS-NG, where award details are publicly available. While no specific Inspector General jurisdiction is mentioned, the Treasury Inspector General for Tax Administration (TIGTA) or the Government Accountability Office (GAO) could potentially audit or review such contracts for efficiency and effectiveness.

Related Government Programs

IT Software Maintenance Services
Mainframe Support Contracts
Distributed Systems Support
Federal IT Infrastructure Modernization
IT Services for Financial Management Agencies

Risk Flags

Potential for vendor lock-in
Reliance on single vendor for critical IT infrastructure
Complexity of supporting both mainframe and distributed systems
Need for continuous monitoring of performance and security
Ensuring adequate knowledge transfer and documentation

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $54.2 million to FCN, INC.. COMPUTER ASSOCIATES (CA) CONSOLIDATED MAINFRAME AND DISTRIBUTED SOFTWARE SUPPORT AND MAINTENANCE

Who is the contractor on this award?

The obligated recipient is FCN, 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 $54.2 million.

What is the period of performance?

Start: 2015-10-01. End: 2020-09-30.

What is the track record of FCN, Inc. in providing similar large-scale IT support contracts to federal agencies?

FCN, Inc. has a history of securing federal contracts, including those related to IT services and support. While this specific contract for consolidated mainframe and distributed software support is substantial, FCN has experience with various government agencies. A deeper analysis would involve reviewing their past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), the types and values of previous contracts, and any reported issues or successes. Their ability to win this significant award suggests a demonstrated capability, but a comprehensive review of their past performance is essential to fully assess their reliability and expertise in managing complex IT support requirements over an extended period.

How does the per-unit cost or service rate for this contract compare to industry benchmarks for mainframe and distributed software support?

Determining a precise per-unit cost or service rate for this contract is challenging without access to the detailed pricing structure and the specific services delivered under the firm fixed-price agreement. Federal contracts often include labor categories with associated rates, but the overall value is a consolidated figure. To benchmark effectively, one would need to compare the rates for specific roles (e.g., senior mainframe engineer, distributed systems administrator) against market data from sources like the Bureau of Labor Statistics or private IT consulting firms. Additionally, comparing the total contract value relative to the number of systems supported or the complexity of the software environment would provide a broader context for value assessment.

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

The provided data does not detail the specific Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) for this contract. However, for a contract of this nature and value, it is highly probable that robust SLAs are in place to govern aspects such as system uptime, response times for issue resolution, patch management, and security compliance. Performance monitoring would typically be conducted by the Bureau of the Fiscal Service's contracting officer's representative (COR) or program manager, who would track vendor adherence to these SLAs through regular reporting, system audits, and performance reviews. Failure to meet agreed-upon KPIs could result in penalties or impact future contract renewals.

What is the risk associated with relying on a single vendor for both mainframe and distributed software support, especially considering potential technology obsolescence?

Relying on a single vendor for both mainframe and distributed software support presents several risks. Firstly, it can lead to vendor lock-in, making it difficult and costly to switch providers if performance issues arise or if better solutions become available. Secondly, the vendor might lack the incentive to innovate aggressively if they are guaranteed business for the contract's duration. Regarding technology obsolescence, the contract's scope includes both legacy mainframe and modern distributed systems. The risk lies in ensuring the vendor can adequately support evolving technologies while maintaining older systems, and that the agency has a strategy for managing the lifecycle of both types of infrastructure. Regular contract reviews and market analysis are crucial to mitigate these risks.

How has federal spending on IT software support and maintenance evolved over the past five years, and where does this contract fit within that trend?

Federal spending on IT software support and maintenance has generally been substantial and consistent, reflecting the government's reliance on technology for its operations. Over the past five years, there has been a trend towards modernizing legacy systems while also managing existing infrastructure. This contract, valued at approximately $54.2 million over five years (roughly $10.8 million annually), fits within the typical spending patterns for large agencies like the Treasury requiring comprehensive IT support. It represents a significant, but not extraordinary, investment for maintaining critical financial systems. The continued need for both mainframe and distributed support highlights the ongoing challenge federal agencies face in balancing modernization efforts with the operational requirements of existing systems.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: TFSAOIT15Q0024

Offers Received: 4

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: $54,212,418

Exercised Options: $54,212,418

Current Obligation: $54,212,418

Actual Outlays: $10,817,182

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Parent Contract

Parent Award PIID: NNG15SC71B

IDV Type: GWAC

Timeline