IRS spends $27M on BMC products and services to support IT infrastructure, awarded via full and open competition

Contract Overview

Contract Amount: $27,039,768 ($27.0M)

Contractor: Four Points Technology, L.L.C.

Awarding Agency: Department of the Treasury

Start Date: 2015-03-01

End Date: 2020-02-29

Contract Duration: 1,826 days

Daily Burn Rate: $14.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: TIER 1 BMC PRODUCTS AND SERVICES REQUIRED TO MEET IRS S BUSINESS NEEDS AND STRATEGIC GOALS. CONSISTENT WITH THE EXISTING IRS IBM TIER 1, AND TIER 2 HARDWARE ENVIRONMENT; REPRESENTATIVE OF THE ACTUAL BMC PRODUCTS REQUIRED AND UTILIZED ACROSS THE IRS TIER 1, AND TIER 2 ENVIRONMENT;

Place of Performance

Location: CHANTILLY, FAIRFAX County, VIRGINIA, 20151

State: Virginia Government Spending

Plain-Language Summary

Department of the Treasury obligated $27.0 million to FOUR POINTS TECHNOLOGY, L.L.C. for work described as: TIER 1 BMC PRODUCTS AND SERVICES REQUIRED TO MEET IRS S BUSINESS NEEDS AND STRATEGIC GOALS. CONSISTENT WITH THE EXISTING IRS IBM TIER 1, AND TIER 2 HARDWARE ENVIRONMENT; REPRESENTATIVE OF THE ACTUAL BMC PRODUCTS REQUIRED AND UTILIZED ACROSS THE IRS TIER 1, AND TIER 2 ENVIRONME… Key points: 1. Contract supports critical IRS business needs and strategic goals for IT infrastructure. 2. Procurement aligns with existing IRS hardware environment, ensuring compatibility. 3. Focus on BMC products indicates a specific technology reliance for the agency. 4. Delivery order structure suggests flexibility in fulfilling ongoing needs. 5. Firm-fixed-price contract type provides cost certainty for the government. 6. The contract duration of five years indicates a long-term IT support requirement.

Value Assessment

Rating: good

The total award of approximately $27 million over five years for BMC products and services appears reasonable given the scope of supporting a large federal agency like the IRS. Benchmarking against similar IT hardware and software procurements for large agencies suggests this spending is within expected ranges. The firm-fixed-price structure helps manage cost overruns, contributing to good value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of a single award for a delivery order suggests that Four Points Technology, L.L.C. was the most advantageous offer received based on the established criteria. The competitive process should have driven a fair market price.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to lower prices and better quality goods and services.

Public Impact

IRS employees benefit from reliable IT infrastructure, enabling efficient tax processing and taxpayer services. The services delivered ensure the operational continuity of critical IRS systems. The geographic impact is nationwide, supporting IRS operations across all its facilities. Workforce implications include ensuring IT staff have the necessary tools and support to perform their duties.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if BMC products become deeply integrated into IRS systems.
Reliance on a single vendor for specific product lines could limit future negotiation leverage.
The long duration of the contract might not fully account for rapid technological advancements in IT.

Positive Signals

The contract was awarded through full and open competition, suggesting a competitive pricing environment.
Firm-fixed-price terms provide budget predictability for the IRS.
Alignment with existing IRS hardware environments minimizes integration risks and costs.

Sector Analysis

This contract falls within the IT hardware and software merchant wholesalers sector, specifically focusing on BMC products. The IT sector is characterized by rapid innovation and significant government spending. The IRS, as a major federal agency, requires robust and reliable IT infrastructure to manage vast amounts of data and complex operations. Spending on enterprise software and hardware maintenance is a common and substantial expenditure for such organizations.

Small Business Impact

The data indicates this contract was not set aside for small businesses, nor does it explicitly mention subcontracting requirements for small businesses. Therefore, the direct impact on the small business ecosystem appears limited for this specific award. However, the prime contractor may engage small businesses for support services not covered by this particular contract.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Internal Revenue Service's contracting officers and program managers. Transparency is facilitated through contract award databases like FPDS. Accountability is ensured through the firm-fixed-price structure and performance expectations outlined in the delivery order. The IRS has an Office of Inspector General that could investigate any potential fraud, waste, or abuse related to this spending.

Related Government Programs

IRS IT Modernization Initiatives
Federal Enterprise Software Licensing
Government IT Infrastructure Support
Department of the Treasury IT Spending

Risk Flags

Potential for vendor lock-in
Risk of technological obsolescence
Dependence on specific vendor products

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $27.0 million to FOUR POINTS TECHNOLOGY, L.L.C.. TIER 1 BMC PRODUCTS AND SERVICES REQUIRED TO MEET IRS S BUSINESS NEEDS AND STRATEGIC GOALS. CONSISTENT WITH THE EXISTING IRS IBM TIER 1, AND TIER 2 HARDWARE ENVIRONMENT; REPRESENTATIVE OF THE ACTUAL BMC PRODUCTS REQUIRED AND UTILIZED ACROSS THE IRS TIER 1, AND TIER 2 ENVIRONMENT;

Who is the contractor on this award?

The obligated recipient is FOUR POINTS TECHNOLOGY, L.L.C..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $27.0 million.

What is the period of performance?

Start: 2015-03-01. End: 2020-02-29.

What is the track record of Four Points Technology, L.L.C. in fulfilling federal contracts, particularly for IT products and services?

Four Points Technology, L.L.C. has a history of receiving federal contracts, primarily as a reseller and integrator of IT hardware, software, and related services. Their awards often fall under large government-wide acquisition contracts (GWACs) or specific agency solicitations. Analysis of their contract history reveals a focus on providing IT solutions to various federal agencies, including the Department of Defense and civilian agencies. Performance on past contracts, as indicated by contract close-out data and any available past performance information, would be crucial for assessing their reliability. While specific details on performance metrics for this IRS contract are not provided, their consistent presence in the federal IT market suggests a capacity to meet government requirements. Further investigation into their performance ratings on similar, large-scale IT procurements would offer a more comprehensive view of their track record.

How does the $27 million spending on BMC products compare to the IRS's overall IT budget or similar procurements by other large federal agencies?

The $27 million expenditure over five years for BMC products and services represents a portion of the IRS's overall IT budget, which typically runs into the hundreds of millions or even billions of dollars annually, given the agency's scale and complexity. To benchmark this specific amount, one would compare it to spending on enterprise software licenses and support from other large agencies like the Social Security Administration or the Department of Veterans Affairs for similar product categories or vendor types. For instance, if other agencies are spending comparable amounts on enterprise resource planning (ERP) software or core IT infrastructure management tools from vendors like Oracle, SAP, or Microsoft over similar timeframes, it suggests this IRS spending is in line with industry norms for large federal organizations. Without access to the IRS's detailed IT budget or direct comparisons of BMC product spending across agencies, a precise value-for-money assessment is challenging, but the amount appears consistent with the needs of a large federal agency.

What are the primary risks associated with this contract, and how are they mitigated?

Key risks include potential vendor lock-in, where the IRS becomes heavily reliant on BMC products, making future transitions costly and complex. Rapid technological obsolescence is another risk, as IT solutions evolve quickly, potentially rendering the procured products outdated before the contract's end. Performance issues or delivery delays from the contractor could disrupt IRS operations. Mitigation strategies include the firm-fixed-price contract type, which shifts some financial risk to the contractor. The requirement for the products to be consistent with the existing IRS environment helps manage integration risks. Furthermore, the full and open competition process aims to select a capable vendor. Ongoing contract management, performance monitoring, and clear service level agreements (SLAs) are essential for mitigating performance and delivery risks. The IRS likely has contingency plans for critical IT systems to address potential disruptions.

How effective is the IRS in managing its IT contracts to ensure optimal value and performance?

The IRS employs standard federal contracting practices, including the use of contracting officers, program managers, and oversight bodies to manage its IT contracts. The use of firm-fixed-price contracts and delivery orders suggests an effort to control costs and manage scope. The agency's reliance on established IT vendors and adherence to existing hardware environments indicates a strategy aimed at stability and compatibility. Effectiveness can be further assessed by examining the IRS's contract close-out data, any reported contract disputes or modifications, and the outcomes of audits by the Treasury Inspector General for Tax Administration (TIGTA). While this specific contract award doesn't detail performance outcomes, the IRS's continuous need for IT services implies a functional, albeit complex, contract management process. Benchmarking against other large agencies' IT contract management success rates would provide a more objective measure.

What has been the historical spending trend for BMC products or similar IT infrastructure services at the IRS?

Historical spending data for BMC products or similar IT infrastructure services at the IRS would reveal trends in the agency's technology investments. If the IRS has consistently procured BMC products over multiple contract cycles, it suggests a strategic decision to standardize on this vendor's solutions for specific IT functions. Conversely, a shift in spending towards different vendors or technologies could indicate a modernization effort or a response to changing market conditions or agency needs. Analyzing past contract awards for IT hardware, software, and maintenance services from the IRS, particularly those related to enterprise systems management, would provide context. A significant increase or decrease in spending on such items could signal changes in IT strategy, budget allocations, or the adoption of new technologies. Without specific historical data, it's difficult to ascertain the precise trend, but the current $27 million award suggests a sustained requirement.

Industry Classification

NAICS: Wholesale Trade › Professional and Commercial Equipment and Supplies Merchant Wholesalers › Computer and Computer Peripheral Equipment and Software Merchant Wholesalers

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 14900 CONFERENCE CENTER DR STE 100, CHANTILLY, VA, 20151

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Service Disabled Veteran Owned Business, Small Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $27,039,768

Exercised Options: $27,039,768

Current Obligation: $27,039,768

Actual Outlays: $302,031

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Parent Contract

Parent Award PIID: GS35F0553P

IDV Type: FSS

Timeline