Treasury's $46.2M network convergence contract awarded to AMERICAN SYSTEMS CORPORATION for wired telecommunications services

Contract Overview

Contract Amount: $46,246,350 ($46.2M)

Contractor: American Systems Corporation

Awarding Agency: Department of the Treasury

Start Date: 2012-09-27

End Date: 2018-09-28

Contract Duration: 2,192 days

Daily Burn Rate: $21.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: OTHER FUNCTION: NETWORK CONVERGENCE EQIPMENT AND SERVICES

Place of Performance

Location: LANHAM, PRINCE GEORGES County, MARYLAND, 20706

State: Maryland Government Spending

Plain-Language Summary

Department of the Treasury obligated $46.2 million to AMERICAN SYSTEMS CORPORATION for work described as: OTHER FUNCTION: NETWORK CONVERGENCE EQIPMENT AND SERVICES Key points: 1. Contract value represents a significant investment in essential network infrastructure. 2. Full and open competition suggests a potentially competitive pricing environment. 3. Contract duration of nearly six years indicates a long-term need for these services. 4. Fixed-price contract type shifts performance risk to the contractor. 5. The award to a single entity for a large sum warrants scrutiny of value for money. 6. Services provided are critical for the IRS's operational continuity.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific service details and market rates for wired telecommunications at the time of award. The total value of $46.2 million over nearly six years suggests an average annual spend of approximately $7.7 million. This figure needs to be compared against similar large-scale network infrastructure procurements by federal agencies to assess if it aligns with market expectations. The fixed-price nature of the contract provides some cost certainty, but the overall value proposition depends heavily on the quality and reliability of the delivered services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of six bidders (no) suggests a reasonably competitive landscape for this type of telecommunications service. This level of competition is generally favorable for price discovery and can lead to more cost-effective solutions for the government. However, the ultimate price achieved still depends on the specific technical requirements and the perceived value by the bidders.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a market that drives down prices and encourages innovation, leading to better value for public funds.

Public Impact

The Internal Revenue Service (IRS) is the primary beneficiary, receiving enhanced network capabilities. Services delivered support critical tax administration functions and taxpayer services. The contract's impact is primarily national, supporting federal government operations. Workforce implications are likely within the IT and telecommunications sectors, potentially supporting specialized roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if scope creep occurs despite fixed-price contract.
Dependence on a single contractor for critical network infrastructure.
Risk of service degradation if contractor performance falters over the contract duration.

Positive Signals

Fixed-price contract structure provides cost certainty for the government.
Full and open competition suggests a robust bidding process.
Long-term contract allows for stable planning and integration of services.

Sector Analysis

This contract falls within the telecommunications sector, specifically wired network infrastructure and services. The market for such services is mature, with established providers offering a range of solutions. Federal spending in this area is substantial, driven by the need for secure, reliable, and high-capacity networks to support agency operations. Comparable spending benchmarks would involve looking at other large federal contracts for network equipment and managed telecommunications services, which can range from tens to hundreds of millions of dollars annually.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract. Given the nature and scale of network convergence equipment and services, it is possible that larger, established telecommunications companies were the primary bidders. Further analysis would be needed to determine if any subcontracting opportunities were mandated or utilized for small businesses, which could provide them with access to this significant federal spending.

Oversight & Accountability

Oversight for this contract would typically reside within the Department of the Treasury and the Internal Revenue Service's contracting and program management offices. Accountability measures are inherent in the fixed-price contract terms, requiring the contractor to deliver specified services. Transparency is generally facilitated through contract award databases like FPDS, though detailed performance metrics and oversight reports may not always be publicly accessible. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Federal Information Technology Acquisition Reform Act (FITARA) related spending
Telecommunications Services Contracts
Network Infrastructure Modernization Programs
IRS IT Modernization Initiatives

Risk Flags

Long contract duration may lead to technology obsolescence if not managed proactively.
Dependence on a single vendor for critical infrastructure poses a risk.
Scope creep potential in large, multi-year IT infrastructure projects.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $46.2 million to AMERICAN SYSTEMS CORPORATION. OTHER FUNCTION: NETWORK CONVERGENCE EQIPMENT AND SERVICES

Who is the contractor on this award?

The obligated recipient is AMERICAN SYSTEMS CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $46.2 million.

What is the period of performance?

Start: 2012-09-27. End: 2018-09-28.

What specific network convergence equipment and services were procured under this contract?

The contract, valued at $46.2 million, was for 'OTHER FUNCTION: NETWORK CONVERGENCE EQUIPMENT AND SERVICES'. While the specific details are not fully elaborated in the provided data, 'network convergence' typically refers to the integration of voice, data, and video communications over a single IP-based network. This could encompass a wide range of equipment such as routers, switches, firewalls, and related hardware, as well as services like network design, implementation, management, and maintenance. The 'wired telecommunications carriers' NAICS code (517110) suggests a focus on the underlying physical infrastructure and connectivity, potentially including fiber optics, copper cabling, and associated transmission services essential for reliable data flow within and between IRS facilities.

How does the $46.2 million total contract value compare to similar federal spending on network convergence?

Comparing the $46.2 million total contract value requires context regarding the contract's duration and scope. Awarded in 2012 and ending in 2018, this represents an average annual spend of approximately $7.7 million. Federal agencies, particularly large ones like the IRS, often invest heavily in network infrastructure. Large-scale network modernization or convergence projects can easily reach tens or hundreds of millions of dollars over several years. Without specific details on the services and equipment, a direct comparison is difficult, but this figure appears within the expected range for a significant, multi-year network upgrade or sustainment contract for a major federal agency. It's crucial to benchmark against contracts with similar technical requirements and service levels.

What is the track record of AMERICAN SYSTEMS CORPORATION with federal contracts, particularly in telecommunications?

AMERICAN SYSTEMS CORPORATION has a history of federal contracting. While the provided data focuses on this specific $46.2 million contract, a broader review of their contract portfolio would reveal their experience across various agencies and service areas. For telecommunications and network services, their past performance, including successful delivery on similar-sized contracts, contract modifications, and any past performance issues or disputes, would be critical indicators. Assessing their financial stability and technical expertise in delivering complex network solutions is essential for understanding their capability to fulfill such a significant requirement.

What are the key performance indicators (KPIs) likely used to measure the success of this contract?

Key performance indicators for a network convergence contract would likely focus on network availability (uptime), latency, bandwidth utilization, data throughput, and response times for service restoration. For equipment, KPIs might include Mean Time Between Failures (MTBF) and Mean Time To Repair (MTTR). Given the fixed-price nature, adherence to schedule for deployments and upgrades would also be critical. The IRS would likely have established service level agreements (SLAs) outlining these metrics, with financial implications (e.g., service credits) tied to performance failures. Regular performance reviews and reporting would track progress against these KPIs.

How has federal spending on wired telecommunications carriers evolved since this contract was awarded?

Since the award of this contract in 2012, federal spending on wired telecommunications has seen significant evolution. There has been a continued push towards higher bandwidth, more resilient networks, and increased adoption of software-defined networking (SDN) and network function virtualization (NFV). While traditional wired services remain crucial, there's a growing emphasis on integrated solutions that encompass cloud connectivity, cybersecurity, and mobility. Agencies are increasingly looking for flexible, scalable, and cost-efficient solutions, often leveraging enterprise-wide agreements and shared services. Spending patterns have also been influenced by cybersecurity mandates and the need to modernize legacy infrastructure to meet evolving mission requirements.

Industry Classification

NAICS: Information › Wired and Wireless Telecommunications (except Satellite) › Wired Telecommunications Carriers

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: TIRNO-12-R-00007

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 14151 PARK MEADOW DR STE 500, CHANTILLY, VA, 20151

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $46,363,610

Exercised Options: $46,363,610

Current Obligation: $46,246,350

Subaward Activity

Number of Subawards: 12

Total Subaward Amount: $21,238,935

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS00Q12NSD0002

IDV Type: IDC

Timeline