Treasury's $16.2M IT contract for peripheral equipment awarded to Government Acquisitions Inc. shows fair value

Contract Overview

Contract Amount: $16,225,464 ($16.2M)

Contractor: Government Acquisitions Inc

Awarding Agency: Department of the Treasury

Start Date: 2009-12-16

End Date: 2010-11-30

Contract Duration: 349 days

Daily Burn Rate: $46.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: SUN 4WALLS MAINT (TIER2)

Place of Performance

Location: CINCINNATI, HAMILTON County, OHIO, 45202

State: Ohio Government Spending

Plain-Language Summary

Department of the Treasury obligated $16.2 million to GOVERNMENT ACQUISITIONS INC for work described as: SUN 4WALLS MAINT (TIER2) Key points: 1. The contract represents a moderate investment in IT infrastructure for the IRS. 2. Competition was robust, suggesting potential for competitive pricing. 3. The fixed-price contract structure limits cost overrun risks. 4. Performance duration was within typical ranges for similar procurements. 5. The sector focus is on IT hardware, a critical but mature market. 6. No small business set-aside was utilized, indicating a focus on larger prime contractors.

Value Assessment

Rating: fair

The total contract value of $16.2 million for peripheral equipment over approximately one year appears reasonable when benchmarked against similar IT hardware procurements. The firm fixed-price structure suggests that the contractor assumed the risk for cost overruns, which is a positive indicator for value. However, without specific details on the exact equipment procured and its technical specifications, a precise value-for-money assessment is challenging. The awarded amount is not exceptionally high or low compared to industry averages for comparable IT support contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. The presence of two bidders suggests a moderate level of competition for this specific procurement. While two bidders are better than one, a higher number of bidders typically leads to more aggressive pricing and a wider range of solutions. The competition level here implies that the government likely received competitive offers, but there may have been opportunities for even greater price discovery with more participants.

Taxpayer Impact: The full and open competition, despite having only two bidders, suggests that taxpayer dollars were likely used efficiently by leveraging market forces to obtain a fair price for the required IT peripherals.

Public Impact

The Internal Revenue Service (IRS) benefits from updated or maintained IT peripheral equipment, crucial for its operations. Services delivered include the provision and potentially maintenance of computer peripheral equipment. The geographic impact is primarily within Ohio, where the contract was performed. Workforce implications are likely related to IT support and potentially installation or maintenance roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition (2 bidders) may have restricted optimal price discovery.
Lack of specific performance metrics makes it difficult to assess efficiency.
Contract duration of less than a year might indicate a short-term need or a bridge contract.

Positive Signals

Awarded under full and open competition, ensuring broad market access.
Firm fixed-price contract limits financial risk to the government.
Contractor is Government Acquisitions Inc., which may have a track record with federal agencies.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on computer peripheral equipment. The IT hardware market is mature and highly competitive, with numerous vendors offering a wide range of products. Spending in this category is consistent with the operational needs of large government agencies like the IRS, which rely heavily on robust IT infrastructure. Comparable spending benchmarks would typically involve analyzing IT hardware procurement data from other federal agencies for similar equipment types and quantities.

Small Business Impact

The contract was not set aside for small businesses, and the data indicates no small business participation (sb: false). This suggests that the procurement was likely aimed at larger, established suppliers capable of meeting the scale and technical requirements of the contract. While this may not directly benefit small businesses as prime contractors, it's possible that the prime contractor could engage small businesses for subcontracting opportunities, though this is not explicitly detailed in the provided data.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Department of the Treasury's contracting officers and potentially the IRS's IT program management. Accountability measures are inherent in the firm fixed-price contract type, which obligates the contractor to deliver specified goods or services at an agreed-upon price. Transparency is generally maintained through contract databases like FPDS, where basic award details are publicly accessible. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

IRS IT Modernization Programs
Federal IT Hardware Procurement
Department of the Treasury IT Services
Computer Peripheral Equipment Contracts

Risk Flags

Limited competition
Potential for suboptimal pricing
Ambiguity in specific equipment details

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $16.2 million to GOVERNMENT ACQUISITIONS INC. SUN 4WALLS MAINT (TIER2)

Who is the contractor on this award?

The obligated recipient is GOVERNMENT ACQUISITIONS 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 $16.2 million.

What is the period of performance?

Start: 2009-12-16. End: 2010-11-30.

What specific types of peripheral equipment were procured under this contract, and what were their technical specifications?

The provided data indicates the contract's North American Industry Classification System (NAICS) code is 334119, which covers 'Other Computer Peripheral Equipment Manufacturing.' This broad category can include a wide array of devices such as printers, scanners, external storage devices, monitors, keyboards, and mice. However, the specific types and technical specifications of the peripherals acquired are not detailed in the summary data. Without this granular information, it is impossible to ascertain if the equipment was state-of-the-art, standard issue, or legacy technology, which directly impacts the assessment of value and suitability for the IRS's needs.

How does the awarded price of $16.2 million compare to market rates for similar peripheral equipment during the contract period (2009-2010)?

Benchmarking the $16.2 million contract value against market rates from 2009-2010 requires detailed analysis of IT hardware pricing trends from that era. Given the contract's NAICS code (334119), it likely encompassed a mix of devices. During that period, the IT market was experiencing rapid technological advancements, particularly in areas like solid-state drives and higher-resolution displays, which could influence pricing. A comprehensive comparison would involve identifying specific equipment models or categories procured and cross-referencing their prices with industry reports, government-wide acquisition contracts (GWACs), or other federal contract awards for similar items during the same timeframe. The firm fixed-price nature suggests the government aimed for cost certainty, but the actual value depends on whether the negotiated price reflected competitive market conditions at the time.

What was the track record of Government Acquisitions Inc. with federal contracts prior to and during this award?

Assessing the track record of Government Acquisitions Inc. (GAI) requires accessing historical federal procurement data. Prior to this $16.2 million award in late 2009, GAI's performance history with federal agencies would indicate their experience and reliability in fulfilling government contracts. Key indicators would include the types of contracts previously awarded (e.g., IT hardware, services), their values, contract durations, and any reported performance issues or successes. During the contract period (December 2009 to November 2010), monitoring GAI's performance on this specific award would involve reviewing any contract modifications, delivery performance reports, and payment histories. A positive track record generally suggests a lower risk of performance issues and better value for taxpayer money.

Given the contract's duration of approximately one year, was this a one-time purchase or part of a larger, ongoing IT refresh cycle for the IRS?

The contract duration of 349 days (approximately one year) suggests it was likely intended to fulfill a specific, time-bound need for peripheral equipment rather than a long-term, continuous supply agreement. This could indicate a one-time purchase to address an immediate requirement, a pilot program, or a bridge contract to cover a gap until a larger, more comprehensive procurement could be executed. Without further context on the IRS's broader IT asset management strategy and procurement cadence during 2009-2010, it's difficult to definitively place this contract within a larger refresh cycle. However, the relatively short duration implies it was not a foundational element of a multi-year IT infrastructure overhaul.

What are the potential risks associated with procuring peripheral equipment under a firm fixed-price contract with only two bidders?

Procuring peripheral equipment under a firm fixed-price (FFP) contract with limited competition (two bidders) presents specific risks. Firstly, with only two bidders, the government might not achieve the most competitive pricing possible, as the market pressure is less intense than with multiple offers. This could lead to paying a higher price than necessary. Secondly, while FFP shifts cost overrun risk to the contractor, it places a higher emphasis on clearly defined specifications and quality requirements in the contract. If the specifications are ambiguous or the quality of the delivered peripherals is subpar, the government may face challenges in enforcing contract terms or may receive equipment that does not fully meet its operational needs, potentially leading to performance issues or the need for premature replacement. The limited competition could also mean less incentive for the contractor to provide exceptional service or support beyond the contract minimums.

Industry Classification

NAICS: Manufacturing › Computer and Peripheral Equipment Manufacturing › Other Computer Peripheral Equipment Manufacturing

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF 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: 231 W 4TH ST, CINCINNATI, OH, 90

Business Categories: Category Business, Small Business

Financial Breakdown

Contract Ceiling: $16,225,464

Exercised Options: $16,225,464

Current Obligation: $16,225,464

Parent Contract

Parent Award PIID: GS35F0779J

IDV Type: FSS

Timeline