VA awarded $31.9M for IBM Filenet licenses to Merlin International, Inc

Contract Overview

Contract Amount: $31,874,306 ($31.9M)

Contractor: Merlin International, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2010-07-01

End Date: 2013-05-31

Contract Duration: 1,065 days

Daily Burn Rate: $29.9K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IBM FILENET LICENSES

Place of Performance

Location: ENGLEWOOD, ARAPAHOE County, COLORADO, 80112

State: Colorado Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $31.9 million to MERLIN INTERNATIONAL, INC. for work described as: IBM FILENET LICENSES Key points: 1. Contract awarded for software licenses, indicating ongoing operational needs. 2. The contract duration of 1065 days suggests a medium-term commitment. 3. Fixed-price contract type aims to control costs for the government. 4. The award was made under full and open competition. 5. The North American Industry Classification System (NAICS) code 541519 points to computer-related services. 6. The contract was awarded by the Department of Veterans Affairs. 7. The vendor, Merlin International, Inc., is a key provider in this space.

Value Assessment

Rating: fair

The contract value of $31.9 million for IBM Filenet licenses over approximately three years appears to be within a reasonable range for enterprise software licensing. Benchmarking against similar large-scale software procurements is challenging without specific details on the number of licenses, user types, and support levels. However, the fixed-price nature of the contract suggests an attempt to establish clear cost expectations. Further analysis would require comparing the per-unit cost of licenses and support to market rates or previous government purchases of the same software.

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 3 bids suggests a moderate level of competition for this specific requirement. While full and open competition is generally preferred for ensuring the best value, the number of bidders can influence price discovery. A higher number of bidders typically leads to more competitive pricing.

Taxpayer Impact: Taxpayers benefit from the competitive bidding process, which is designed to secure the most favorable pricing and terms for the government. Full and open competition increases the likelihood that the awarded price reflects market value and minimizes the risk of overpayment.

Public Impact

Veterans will benefit from the services and systems supported by these IBM Filenet licenses, likely related to document management and workflow automation within the VA. The contract ensures the continued availability and functionality of critical software infrastructure for the Department of Veterans Affairs. The geographic impact is national, as the VA operates across the United States. Workforce implications include IT support staff and end-users within the VA who rely on the Filenet system.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in with proprietary software licenses.
Reliance on a single vendor for critical software support and maintenance.
The fixed-price nature might limit flexibility if requirements change significantly during the contract period.

Positive Signals

Awarded through full and open competition, suggesting a competitive process.
Fixed-price contract type helps in budget predictability.
The vendor, Merlin International, Inc., has a track record in providing IT solutions.

Sector Analysis

This contract falls within the broader Information Technology sector, specifically focusing on software licensing and related services. The market for enterprise content management (ECM) systems like IBM Filenet is mature, with several established players. Government spending on IT infrastructure, including software licenses, is substantial, often driven by the need for secure, scalable, and efficient data management solutions to support agency operations and citizen services. Comparable spending benchmarks would involve looking at other large federal agencies' procurements of similar ECM software.

Small Business Impact

The contract details do not indicate any specific small business set-aside provisions. Merlin International, Inc. is not explicitly identified as a small business in the provided data. Therefore, the primary impact on small businesses would be through potential subcontracting opportunities, which are not detailed here. The absence of a small business set-aside suggests this was likely awarded based on best value or technical merit to the prime contractor.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Veterans Affairs contracting officers and program managers. Accountability measures are embedded in the firm fixed-price contract terms, requiring delivery of specified licenses and support. Transparency is facilitated by the contract award being made under full and open competition, with the award details publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Veterans Affairs IT Modernization Programs
Federal Enterprise Content Management (ECM) Systems
Software Licensing and Maintenance Contracts
IBM Software Procurements by Federal Agencies

Risk Flags

Potential for vendor lock-in
Reliance on proprietary software
Complexity of enterprise software licensing

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $31.9 million to MERLIN INTERNATIONAL, INC.. IBM FILENET LICENSES

Who is the contractor on this award?

The obligated recipient is MERLIN INTERNATIONAL, INC..

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $31.9 million.

What is the period of performance?

Start: 2010-07-01. End: 2013-05-31.

What is Merlin International, Inc.'s track record with the Department of Veterans Affairs and other federal agencies for similar software licensing contracts?

Merlin International, Inc. has a history of contracting with federal agencies, including the Department of Veterans Affairs, for various IT products and services. Their expertise often lies in providing software licenses, maintenance, and support for enterprise solutions. Analyzing their past performance on similar contracts, particularly those involving IBM software or large-scale license procurements, would provide insight into their reliability and ability to meet government requirements. Federal procurement databases and contract award histories can be reviewed to assess the volume and nature of their previous awards, payment performance, and any reported issues or successes. A consistent record of successful contract completion and positive performance reviews would indicate a lower risk associated with this award.

How does the awarded price of $31.9 million compare to market rates for IBM Filenet licenses and support over a 3-year period?

Determining the precise market rate comparison for $31.9 million in IBM Filenet licenses and support over approximately three years is complex without granular data on the specific license types (e.g., per user, per processor, feature-specific), quantities, and the level of support included. IBM Filenet is an enterprise-level solution, and its pricing can vary significantly based on deployment scale and features. Generally, large federal procurements aim for volume discounts. To benchmark effectively, one would need to compare the 'per-unit' cost derived from this contract (total cost divided by estimated units) against publicly available IBM pricing, reseller quotes, or pricing from similar government contracts for comparable deployments. Given the fixed-price nature, the VA likely negotiated based on anticipated usage and market conditions at the time of award. If the per-unit cost appears significantly higher than commercial list prices or other government contracts, it could indicate a fair-to-questionable value.

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

Key risks include potential cost overruns if the fixed-price contract doesn't adequately account for unforeseen usage increases or if support needs escalate beyond initial estimates, although the fixed-price structure itself aims to mitigate this. Another risk is vendor performance; if Merlin International, Inc. fails to provide timely support or necessary license updates, it could disrupt VA operations. Mitigation strategies include the VA's oversight by contracting officers who monitor performance and adherence to contract terms. The competitive award process helps mitigate the risk of selecting an underqualified vendor. Furthermore, the contract likely includes clauses for remedies in case of non-performance. The reliance on a specific software vendor (IBM) also presents a long-term risk of vendor lock-in and potential future price increases upon renewal, which is a broader strategic consideration for the VA.

What is the historical spending pattern for IBM Filenet licenses or similar document management systems at the Department of Veterans Affairs?

Analyzing historical spending patterns for IBM Filenet or comparable document management systems at the VA is crucial for context. This involves examining past contract awards for similar software, including their values, durations, and vendors. If the VA has consistently spent significant amounts on Filenet or related systems, it suggests a long-term strategic investment in this technology. A sudden spike or decrease in spending could indicate a shift in technology strategy, consolidation efforts, or changes in operational needs. Comparing the current $31.9 million award against previous expenditures can reveal whether this represents an increase, decrease, or stable level of investment. Understanding this trend helps assess if the current spending is aligned with historical patterns and agency priorities, providing a baseline for evaluating value.

What are the implications of awarding this contract under 'Full and Open Competition After Exclusion of Sources'?

The contract type 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' (often referred to as FAR 6.302-1 or similar justifications) implies that while the agency intended to use full and open competition, specific circumstances led to excluding certain sources or limiting the pool initially. This could occur if a particular brand of software is required (like IBM Filenet), and only authorized resellers or specific vendors can provide it, or if there was a prior sole-source justification that was later revised to allow for competition among a limited set of qualified sources. The 'after exclusion of sources' part suggests a deliberate decision to limit the field, possibly due to specialized requirements or existing relationships. While it's not pure unrestricted full and open competition, it aims for a competitive process among identified, capable vendors, balancing specialized needs with price discovery.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4 B INVERNESS COURT ESTE 100, ENGLEWOOD, CO, 06

Business Categories: 8(a) Program Participant, Category Business, Hispanic American Owned Business, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $43,992,010

Exercised Options: $31,874,306

Current Obligation: $31,874,306

Parent Contract

Parent Award PIID: NNG07DA23B

IDV Type: GWAC

Timeline