Treasury's IRS awarded $12.7M for router and switch maintenance, with APPTIS, INC. securing the competitive delivery order

Contract Overview

Contract Amount: $12,729,162 ($12.7M)

Contractor: Apptis, Inc.

Awarding Agency: Department of the Treasury

Start Date: 2004-12-07

End Date: 2009-06-03

Contract Duration: 1,639 days

Daily Burn Rate: $7.8K/day

Competition Type: COMPETITIVE DELIVERY ORDER

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: GFE ROUTER, SWITCH, PROBE MAINTENANCE

Place of Performance

Location: CHANTILLY, FAIRFAX County, VIRGINIA, 20151

State: Virginia Government Spending

Plain-Language Summary

Department of the Treasury obligated $12.7 million to APPTIS, INC. for work described as: GFE ROUTER, SWITCH, PROBE MAINTENANCE Key points: 1. The contract value represents a significant investment in maintaining critical IT infrastructure for tax administration. 2. Competition dynamics for this delivery order are crucial for assessing price reasonableness and contractor performance. 3. Risk indicators include the long duration of the contract and the potential for technology obsolescence. 4. Performance context is tied to the IRS's need for reliable network operations to support its mission. 5. This contract falls within the broader IT services sector, specifically focusing on network hardware maintenance.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance metrics or detailed cost breakdowns. However, the duration of nearly five years suggests a substantial, ongoing need for these services. Comparing the per-unit cost of maintenance against industry standards for similar hardware would provide a clearer picture of value for money. The fixed-price nature of the contract shifts some risk to the contractor, but the overall cost-effectiveness depends on the quality and efficiency of the maintenance provided.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded as a competitive delivery order, indicating that multiple vendors had the opportunity to bid. The presence of three bidders suggests a reasonable level of competition for this specific requirement. A competitive process generally leads to better price discovery and encourages contractors to offer competitive terms to win the award. The specific details of the bidding process and the number of proposals received would offer further insight into the strength of the competition.

Taxpayer Impact: A competitive award process is beneficial for taxpayers as it helps ensure that the government is not overpaying for essential IT maintenance services.

Public Impact

Taxpayers benefit indirectly through the reliable operation of IRS systems, which are essential for tax processing and administration. The services delivered ensure the continuous functioning of network hardware, including routers and switches, vital for data transmission. The geographic impact is primarily within the IRS's operational centers, supporting its national functions. Workforce implications are minimal for the public, but the contract supports IT maintenance jobs within the contractor's organization.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for technology obsolescence over the contract's nearly five-year duration.
Dependence on a single contractor for critical network maintenance could pose a risk if performance degrades.
Limited transparency into the specific maintenance activities performed and their direct impact on system uptime.

Positive Signals

Awarded through a full and open competitive process, indicating a fair marketplace.
Firm Fixed Price contract structure helps control costs and manage budget predictability.
Long-term contract duration suggests a stable and ongoing need for these essential IT services.

Sector Analysis

The IT services sector, particularly computer systems design and related services (NAICS 541512), is a significant area of federal spending. This contract for network hardware maintenance fits within the broader category of IT infrastructure support, which is critical for government operations. Comparable spending benchmarks for similar maintenance contracts can vary widely based on the scale and complexity of the network, as well as the specific hardware involved. The federal government consistently invests billions annually in IT maintenance and support services.

Small Business Impact

This contract was not set aside for small businesses, and the data indicates no specific subcontracting requirements were mandated. Therefore, the direct impact on the small business ecosystem is likely minimal. While APPTIS, INC. may be a small business itself, the absence of a set-aside or explicit subcontracting goals means there's no targeted effort to engage smaller firms in this particular award.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the IRS's IT program management and contracting officers. Accountability measures are inherent in the firm-fixed-price contract type, which obligates the contractor to deliver specified services. Transparency is generally facilitated through contract award databases, though detailed performance reports may not always be publicly accessible. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

IRS IT Infrastructure Modernization Programs
Federal Network Security Contracts
Government-wide IT Services Contracts
Department of the Treasury IT Support

Risk Flags

Long contract duration may lead to technology obsolescence.
Potential for vendor lock-in with a single provider for critical maintenance.
Need for clear performance metrics to ensure value for money.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $12.7 million to APPTIS, INC.. GFE ROUTER, SWITCH, PROBE MAINTENANCE

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 $12.7 million.

What is the period of performance?

Start: 2004-12-07. End: 2009-06-03.

What is the track record of APPTIS, INC. in performing similar IT maintenance contracts for federal agencies?

Information regarding APPTIS, INC.'s specific track record on similar federal IT maintenance contracts is not detailed in the provided data. A comprehensive assessment would require reviewing past performance evaluations, contract histories, and any reported issues or successes on previous awards. Federal procurement databases often contain contractor performance information that can shed light on their reliability, quality of service, and ability to meet deadlines and technical requirements. Without this specific data, it is difficult to definitively assess their past performance in this domain.

How does the awarded amount of $12.7 million compare to similar network maintenance contracts for agencies of the IRS's size?

Comparing the $12.7 million award to similar contracts requires access to a broader dataset of federal IT maintenance agreements. Factors such as the number of devices maintained, the criticality of the systems, the specific hardware models, and the geographic scope of support significantly influence contract values. For an agency like the IRS, which manages vast amounts of sensitive data and requires high system availability, this amount for nearly five years of router and switch maintenance could be within a reasonable range, assuming it covers a substantial portion of their network infrastructure. However, a detailed benchmark against contracts with similar scope and duration would be necessary for a definitive value assessment.

What are the primary risks associated with a nearly five-year contract for IT hardware maintenance?

The primary risks associated with a nearly five-year contract for IT hardware maintenance include technological obsolescence, where the hardware may become outdated or unsupported by manufacturers before the contract ends. There's also the risk of vendor lock-in, making it difficult to switch to newer technologies or different service providers. Performance degradation over time is another concern, as is the potential for price increases if the contract includes escalation clauses. Furthermore, if the contractor's financial stability or operational capacity diminishes, it could lead to service disruptions. Ensuring robust service level agreements (SLAs) and regular performance reviews can help mitigate some of these risks.

How effective is a firm-fixed-price contract in ensuring value for money for IT maintenance services?

A firm-fixed-price (FFP) contract is generally effective in ensuring value for money for IT maintenance services by shifting the risk of cost overruns to the contractor. This structure incentivizes the contractor to manage costs efficiently and deliver services within the agreed-upon budget. For predictable services like routine maintenance, FFP provides budget certainty for the government. However, the effectiveness hinges on a well-defined scope of work; if the scope is unclear or changes frequently, it can lead to disputes or require costly contract modifications. For complex or evolving IT services, other contract types might offer better flexibility and value.

What is the historical spending trend for network hardware maintenance at the IRS?

The provided data only details a single contract award of $12.7 million for router, switch, and probe maintenance from 2004 to 2009. To understand the historical spending trend for network hardware maintenance at the IRS, a broader analysis of multiple contracts over various fiscal years would be required. This would involve examining annual IT budgets, specific procurement actions related to network infrastructure, and the total expenditure on maintenance services. Without this comprehensive historical data, it is impossible to identify trends, such as increasing or decreasing spending, or shifts in procurement strategies for network maintenance.

What are the implications of having three bidders for this competitive delivery order?

Having three bidders for this competitive delivery order suggests a moderate level of competition. This number typically indicates that the requirement was sufficiently defined and accessible to multiple capable vendors. A healthy competition among three bidders generally leads to more competitive pricing and encourages contractors to offer better terms and service quality to secure the award. It also provides the agency with a reasonable basis for comparison to ensure they are receiving fair market value. While more bidders could potentially drive prices lower, three is often considered a good balance between ensuring competition and managing the procurement process efficiently.

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

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

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, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $31,693,234

Exercised Options: $31,693,234

Current Obligation: $12,729,162

Parent Contract

Parent Award PIID: GS35F4460G

IDV Type: FSS

Timeline