Treasury's IRS spent $13.7M on servers and storage in 2004, highlighting IT infrastructure needs

Contract Overview

Contract Amount: $13,724,797 ($13.7M)

Contractor: Apptis, Inc.

Awarding Agency: Department of the Treasury

Start Date: 2004-03-19

End Date: 2004-07-30

Contract Duration: 133 days

Daily Burn Rate: $103.2K/day

Competition Type: COMPETITIVE DELIVERY ORDER

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: INFRASTRUCTURE HARDWARE ACQUISITON, SERVERS FY 2004 REQUIREMENTS FOR SERVERS, SANS, TAPE LIBRARIES

Place of Performance

Location: OXON HILL, PRINCE GEORGE'S County, MARYLAND, 20745

State: Maryland Government Spending

Plain-Language Summary

Department of the Treasury obligated $13.7 million to APPTIS, INC. for work described as: INFRASTRUCTURE HARDWARE ACQUISITON, SERVERS FY 2004 REQUIREMENTS FOR SERVERS, SANS, TAPE LIBRARIES Key points: 1. The contract focused on essential IT infrastructure, including servers and storage, crucial for agency operations. 2. Competition dynamics for this contract appear healthy, with multiple bids likely influencing pricing. 3. Performance risks are generally low for hardware acquisition, but timely delivery and compatibility are key. 4. This spending aligns with broader federal IT modernization efforts of the early 2000s. 5. The acquisition falls within the Computer Systems Design Services sector, supporting critical agency functions.

Value Assessment

Rating: good

Benchmarking this specific 2004 contract is challenging due to the age of the data and the specific nature of the hardware. However, the firm fixed-price structure suggests a degree of cost certainty for the government. The total award amount of $13.7 million for servers, SANS, and tape libraries in 2004 would have been considered a significant but not exorbitant investment for a large agency like the IRS, reflecting the IT demands of the era. Without detailed unit pricing or specifications, a precise value-for-money assessment is difficult, but the competitive nature of the award suggests a reasonable market price was likely achieved.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded as a competitive delivery order, indicating that it was competed under a broader contract vehicle. With 3 bidders, the competition level suggests a reasonable degree of market interest and potential for price discovery. A full and open competition generally leads to more favorable pricing for the government as vendors vie to offer the best value. The presence of multiple bidders implies that the requirements were clearly defined and accessible to a range of potential suppliers.

Taxpayer Impact: The competitive nature of this award is beneficial for taxpayers, as it likely resulted in a more cost-effective acquisition of necessary IT hardware compared to a sole-source or limited competition scenario.

Public Impact

The Internal Revenue Service (IRS) is the primary beneficiary, receiving essential IT hardware to support its tax processing and taxpayer services. The services delivered include the provision of servers, Storage Area Networks (SANs), and tape libraries, vital for data storage and management. The geographic impact is primarily within the IRS's operational centers, likely concentrated in Maryland where the contract was managed. Workforce implications are indirect, supporting the IT personnel responsible for managing and maintaining the new infrastructure.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for hardware obsolescence given the 2004 award date.
Dependence on a single vendor for specific hardware components could pose integration or support challenges.
Ensuring compatibility with existing IRS IT infrastructure requires careful planning and testing.

Positive Signals

Firm fixed-price contract provides cost predictability.
Competitive award process suggests a market-driven price.
Acquisition of essential IT infrastructure supports agency mission continuity.

Sector Analysis

This contract falls within the IT services sector, specifically focusing on computer systems design and the acquisition of hardware components like servers and storage. The market for enterprise IT hardware was robust in the early 2000s, driven by increasing data volumes and the need for digital transformation across government agencies. Comparable spending benchmarks from that era would show significant federal investment in similar infrastructure upgrades to maintain operational efficiency and security. The $13.7 million award is a notable sum, reflecting the scale of the IRS's IT needs.

Small Business Impact

There is no indication that this contract was specifically set aside for small businesses, nor is there information suggesting significant subcontracting opportunities for small businesses. The nature of enterprise server and storage acquisition often involves large, established vendors. The award to APPTIS, INC. does not provide enough detail to assess its size or its impact on the small business ecosystem. Further analysis would be needed to determine if small businesses were involved in the supply chain or if there were specific subcontracting goals.

Oversight & Accountability

Oversight for this contract would have been managed by the Department of the Treasury's Internal Revenue Service contracting and program management offices. Accountability measures would include adherence to the firm fixed-price terms, delivery schedules, and technical specifications. Transparency is generally facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected during the procurement or performance phases.

Related Government Programs

Federal IT Infrastructure Modernization Programs
IRS IT Modernization Initiatives
Government-wide Server and Storage Procurement Vehicles
Department of the Treasury IT Spending

Risk Flags

Potential for hardware obsolescence due to age of contract.
Limited visibility into specific performance metrics and long-term effectiveness.
Difficulty in precise value-for-money assessment due to dated data.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $13.7 million to APPTIS, INC.. INFRASTRUCTURE HARDWARE ACQUISITON, SERVERS FY 2004 REQUIREMENTS FOR SERVERS, SANS, TAPE LIBRARIES

Who is the contractor on this award?

The obligated recipient is APPTIS, INC..

Which agency awarded this contract?

Awarding agency: Department of the Treasury (Internal Revenue Service).

What is the total obligated amount?

The obligated amount is $13.7 million.

What is the period of performance?

Start: 2004-03-19. End: 2004-07-30.

What was the specific performance history of APPTIS, INC. with the federal government prior to or around 2004?

Assessing APPTIS, INC.'s performance history requires access to historical contract data beyond the provided snippet. Federal procurement databases (like FPDS-NG archives or predecessor systems) would contain records of past awards, performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), and any disputes or terminations. Without this specific historical data, it's difficult to definitively assess their track record. However, the fact that they were awarded a competitive delivery order of this magnitude suggests they likely met basic eligibility and capability requirements at the time. A deeper dive into their contract history would reveal their reliability, quality of work, and adherence to schedules on previous federal engagements.

How does the $13.7 million cost compare to similar IT hardware acquisitions by other large federal agencies in FY 2004?

Comparing the $13.7 million cost for servers, SANS, and tape libraries requires benchmarking against similar large-scale IT infrastructure procurements by agencies like the Department of Defense, GSA, or HHS in FY 2004. Given the rapid evolution of technology, direct comparisons are challenging. However, this figure represents a substantial investment, indicative of equipping a major agency like the IRS with core data storage and processing capabilities. Factors influencing cost include the specific quantities, performance specifications (e.g., storage capacity, processing speed, reliability features), and the chosen vendors. Generally, competitive procurements for commodity hardware like servers aimed to achieve market-driven pricing, suggesting this amount was likely within the expected range for the scope of work at that time, assuming competitive bids were received.

What were the primary risks associated with this specific hardware acquisition, and how were they mitigated?

The primary risks associated with acquiring servers, SANS, and tape libraries in 2004 included potential hardware defects or failures, delivery delays impacting IRS operations, compatibility issues with existing infrastructure, and the risk of technological obsolescence. Mitigation strategies likely involved rigorous technical specifications in the solicitation, requiring vendors to meet stringent quality standards, and potentially performance bonds. Delivery schedules would have been clearly defined in the contract, with penalties for delays. Compatibility was likely addressed through pre-award technical reviews and potentially pilot testing. The firm fixed-price nature of the contract also shifted some financial risk to the contractor. Post-delivery acceptance testing would have been crucial to ensure functionality and compliance with specifications.

How effective was this hardware acquisition in supporting the IRS's mission-critical functions during its operational lifespan?

The effectiveness of this hardware acquisition in supporting the IRS's mission-critical functions hinges on its reliability, performance, and scalability throughout its intended lifespan. As essential IT infrastructure, these servers and storage systems would have underpinned core operations such as tax processing, data management, and taxpayer services. Assuming the hardware met specifications and was adequately maintained, it would have contributed to operational continuity and efficiency. However, given the 2004 award date, the hardware would likely have reached or exceeded its typical end-of-life cycle by the late 2000s or early 2010s, necessitating further upgrades. Evaluating its long-term effectiveness would require examining IRS IT modernization roadmaps and system performance metrics from that period.

What were the historical spending patterns for similar IT infrastructure procurements by the IRS in the years leading up to and following FY 2004?

Analyzing IRS IT infrastructure spending patterns around FY 2004 would reveal trends in hardware acquisition. Typically, large agencies like the IRS undergo periodic hardware refresh cycles, often every 3-5 years, to maintain performance and security. Spending in the years leading up to 2004 might show investments in Y2K remediation or earlier technology upgrades. Following 2004, spending would likely reflect continued growth in data storage needs, increased demand for processing power, and the gradual shift towards newer technologies like virtualization or early cloud adoption. This $13.7 million award represents a significant point-in-time investment, and understanding its context within a broader spending trend would illuminate the IRS's strategic IT planning and budget allocation for infrastructure.

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: COMPETITIVE DELIVERY ORDER

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Parent Company: Apptis Holdings Inc. (UEI: 165295606)

Address: 4800 WESTFIELDS BLVD, CHANTILLY, VA, 90

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $27,342,192

Exercised Options: $27,342,192

Current Obligation: $13,724,797

Parent Contract

Parent Award PIID: GS35F4460G

IDV Type: FSS

Timeline