Treasury's $59M IRS telecom contract awarded to FCN, Inc. under full and open competition

Contract Overview

Contract Amount: $59,144,157 ($59.1M)

Contractor: FCN, Inc.

Awarding Agency: Department of the Treasury

Start Date: 2013-06-15

End Date: 2018-03-31

Contract Duration: 1,750 days

Daily Burn Rate: $33.8K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::CT::IGF CISCO COMBINED SRVICES FOR IRS USER&NETWORKS SERVICE ORGANIZATION THAT REQUIRES CONSISTENT AND RELIABLE MAINTENANCE OF THE IRS TELECOMUNICATIONS INFRASTRUCTURES.

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20852

State: Maryland Government Spending

Plain-Language Summary

Department of the Treasury obligated $59.1 million to FCN, INC. for work described as: IGF::CT::IGF CISCO COMBINED SRVICES FOR IRS USER&NETWORKS SERVICE ORGANIZATION THAT REQUIRES CONSISTENT AND RELIABLE MAINTENANCE OF THE IRS TELECOMUNICATIONS INFRASTRUCTURES. Key points: 1. Contract value represents a significant investment in maintaining critical IRS telecommunications infrastructure. 2. The award was made through full and open competition, suggesting a competitive bidding process. 3. The contract duration of approximately 4.8 years (1750 days) indicates a long-term need for these services. 4. The fixed-price contract type aims to control costs and provide budget certainty. 5. The 'Other Computer Related Services' NAICS code suggests a broad scope of technical support. 6. The contract was awarded as a Delivery Order, implying it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle.

Value Assessment

Rating: good

The contract's total value of $59.14 million over nearly five years suggests a substantial investment in maintaining the IRS's telecommunications infrastructure. Benchmarking this against similar large-scale IT service contracts for federal agencies is challenging without more specific service details. However, the firm fixed-price nature of the contract indicates an effort to manage costs and ensure predictable spending for the government. The number of bids received (2) is on the lower side for a full and open competition, which could warrant further investigation into pricing competitiveness.

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 all responsible sources were permitted to submit offers. Despite the broad solicitation, only two bids were received. This limited number of bidders, while still meeting the 'full and open' criteria, may suggest potential barriers to entry for other firms or a concentrated market for these specific services. The competition level, though technically open, might not have yielded the most aggressive pricing due to the limited number of participants.

Taxpayer Impact: While the competition was open, only two bidders participated. This could mean taxpayers did not benefit from the full potential of market competition, potentially leading to higher prices than if more firms had bid.

Public Impact

The primary beneficiary is the Internal Revenue Service (IRS), ensuring the reliable operation of its telecommunications infrastructure. Services delivered include maintenance and support for the IRS's vital communication networks. The geographic impact is likely nationwide, supporting IRS operations across all its facilities. Workforce implications include the potential for IT specialists and technicians employed by FCN, Inc. to support the IRS's network.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited number of bidders (2) in a full and open competition could indicate potential market concentration or barriers to entry, impacting price discovery.
The specific nature of 'Other Computer Related Services' is broad; a lack of detailed service descriptions could obscure potential performance risks.
The contract's duration and value warrant ongoing scrutiny to ensure continued value for money throughout its term.

Positive Signals

Awarded through full and open competition, adhering to federal procurement principles.
Firm Fixed Price contract type provides cost certainty for the government.
The contract supports critical infrastructure for a major federal agency (IRS), ensuring operational continuity.
Delivery Order award suggests it may be part of a larger, potentially pre-competed, IDIQ contract.

Sector Analysis

The IT services sector, particularly within government contracting, is highly competitive and diverse. This contract falls under the 'Other Computer Related Services' category (NAICS 541519), which encompasses a wide range of IT support, integration, and maintenance activities. Federal spending in this area is substantial, driven by the need to maintain and modernize complex IT systems across agencies. Comparable spending benchmarks would typically involve analyzing IT support and maintenance contracts for agencies of similar size and complexity, such as other large cabinet-level departments.

Small Business Impact

The contract data indicates that small business participation was not a primary focus, as the 'sb' (small business) flag is false. There is no explicit mention of small business set-asides or subcontracting requirements in the provided data. This suggests that the prime contract was not specifically targeted towards small businesses, and any involvement of small businesses would likely be through subcontracting opportunities offered by the prime contractor, FCN, Inc. The impact on the small business ecosystem would depend on FCN's subcontracting strategy, which is not detailed here.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Treasury's contracting officers and program managers, responsible for ensuring FCN, Inc. meets its contractual obligations. The IRS likely has internal oversight mechanisms to monitor the performance and quality of telecommunications services. Given the nature of IT services, the agency's own IT security and compliance teams would also play a role. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

IRS IT Infrastructure Modernization Programs
General Services Administration (GSA) IT Schedule Contracts
Department of the Treasury IT Support Services
Federal Network Infrastructure Maintenance Contracts

Risk Flags

Limited Competition (2 bidders)
Potential for Vendor Lock-in
Cybersecurity Risks in Telecommunications Infrastructure

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $59.1 million to FCN, INC.. IGF::CT::IGF CISCO COMBINED SRVICES FOR IRS USER&NETWORKS SERVICE ORGANIZATION THAT REQUIRES CONSISTENT AND RELIABLE MAINTENANCE OF THE IRS TELECOMUNICATIONS INFRASTRUCTURES.

Who is the contractor on this award?

The obligated recipient is FCN, 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 $59.1 million.

What is the period of performance?

Start: 2013-06-15. End: 2018-03-31.

What is the track record of FCN, Inc. in performing similar large-scale federal IT service contracts?

FCN, Inc. has a history of performing IT services for the federal government, often through large IDIQ vehicles like GSA's Alliant and NASA SEWP. Their portfolio includes network engineering, cybersecurity, and IT infrastructure support for various agencies, including defense and civilian branches. Analyzing their past performance on contracts of similar scope and value, particularly those involving telecommunications maintenance for large organizations, would provide insight into their capabilities and reliability. Specific metrics such as on-time delivery, adherence to budget, and customer satisfaction ratings from previous contracts would be key indicators of their track record.

How does the per-unit cost or overall value of this contract compare to similar telecommunications maintenance contracts for federal agencies?

Benchmarking this contract's value requires detailed comparison with similar telecommunications maintenance contracts awarded to other federal agencies. Factors such as the scope of services (e.g., types of equipment supported, geographic coverage, service level agreements), contract duration, and the specific technologies involved are crucial. Without access to detailed service level agreements and specific deliverables for this $59 million contract, a precise per-unit cost comparison is difficult. However, the firm fixed-price nature suggests an attempt to lock in costs. A broader analysis of IT infrastructure maintenance spending across agencies like the Department of Defense or other large civilian agencies could provide a general context for the scale of this investment.

What are the primary risks associated with this contract, and what mitigation strategies are in place?

Key risks include potential vendor lock-in due to the specialized nature of telecommunications infrastructure, performance degradation if maintenance is not consistently high-quality, and cybersecurity vulnerabilities within the network. Given the critical nature of IRS operations, any disruption could have significant consequences. Mitigation strategies likely involve robust Service Level Agreements (SLAs) with defined penalties for non-performance, regular performance reviews, stringent cybersecurity protocols mandated by the contract, and potentially contingency plans for service continuity. The limited number of bidders (2) also presents a risk of reduced competitive pressure over time.

How effective has FCN, Inc. been in delivering telecommunications services to the IRS under this contract, based on available performance data?

Assessing the effectiveness requires access to performance reports, contract modifications, and any documented issues or successes related to this specific contract. Publicly available data often lacks granular performance metrics. However, the contract's duration (awarded 2013, ending 2018) suggests a sustained need and likely satisfactory performance to warrant its full term. Further investigation would involve reviewing contract performance evaluations (if publicly accessible), any contract disputes, or awards for exceptional performance. The absence of major contract terminations or significant disputes would generally imply adequate service delivery.

What has been the historical spending trend for IRS telecommunications infrastructure maintenance prior to and during this contract period?

Analyzing historical spending requires examining IRS budgets and contract awards for telecommunications maintenance over several years. This specific contract, valued at approximately $59 million over its ~4.8-year term (roughly $12.3M/year), represents a significant but potentially stable annual investment. Understanding prior spending levels would reveal whether this contract reflects an increase, decrease, or consistent level of investment in maintaining the IRS's telecom infrastructure. Trends might also indicate shifts in technology or service needs. Without prior contract data, it's difficult to establish a precise historical trend, but the scale suggests a consistent, high-priority need.

What is the strategic importance of this contract to the IRS's overall mission and operational continuity?

Telecommunications infrastructure is the backbone of modern communication for any large organization, especially the IRS, which handles vast amounts of sensitive taxpayer data and requires secure, reliable communication channels for its employees nationwide. This contract ensures the continuous operation and maintenance of these critical systems. Its strategic importance lies in preventing service disruptions that could impact tax processing, taxpayer assistance, and internal operations. Reliable telecom services are fundamental to the IRS's ability to function effectively and maintain public trust.

Industry Classification

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

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 12315 WILKINS AVE, ROCKVILLE, MD, 20852

Business Categories: Category Business, Small Business, Woman Owned Business

Financial Breakdown

Contract Ceiling: $61,645,922

Exercised Options: $61,645,922

Current Obligation: $59,144,157

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Parent Contract

Parent Award PIID: NNG07DA26B

IDV Type: GWAC

Timeline