Treasury's Bureau of Engraving and Printing awards $3.17M for critical Flowsys software support

Contract Overview

Contract Amount: $3,173,750 ($3.2M)

Contractor: Koenig & Bauer Banknote Solutions SA

Awarding Agency: Department of the Treasury

Start Date: 2025-04-11

End Date: 2027-04-10

Contract Duration: 729 days

Daily Burn Rate: $4.4K/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: FLOWSYS SOFTWARE SUPPORT MAINTENANCE: CONTRACT PROVIDES 100% OF THE DEVELOPMENT AND OPERATIONS AND MAINTENANCE SUPPORT FOR THE FLOWSYS SYSTEM THAT PULLS RAW MACHINE DATA FROM THE PRODUCTION PRESSES.

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20228

State: District of Columbia Government Spending

Plain-Language Summary

Department of the Treasury obligated $3.2 million to KOENIG & BAUER BANKNOTE SOLUTIONS SA for work described as: FLOWSYS SOFTWARE SUPPORT MAINTENANCE: CONTRACT PROVIDES 100% OF THE DEVELOPMENT AND OPERATIONS AND MAINTENANCE SUPPORT FOR THE FLOWSYS SYSTEM THAT PULLS RAW MACHINE DATA FROM THE PRODUCTION PRESSES. Key points: 1. The contract ensures 100% of development and O&M for the Flowsys system, vital for production data. 2. Sole provider Koenig & Bauer Banknote Solutions SA is the only known source for this specialized support. 3. The firm fixed-price contract mitigates cost overrun risk for the government. 4. This IT service falls under Custom Computer Programming Services, a common government expenditure.

Value Assessment

Rating: good

The $3.17M award for a 2-year contract appears reasonable given the critical nature of the Flowsys system. Benchmarking against similar custom programming contracts for specialized industrial systems is difficult without more data, but the firm fixed-price structure provides cost certainty.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed under SAP and is awarded sole-source to Koenig & Bauer Banknote Solutions SA. This lack of competition limits price discovery and may result in a higher price than if multiple vendors were considered.

Taxpayer Impact: Taxpayers may be paying a premium due to the sole-source nature of this award, as competition was bypassed.

Public Impact

Ensures continuous operation of a system critical to the Bureau of Engraving and Printing's production processes. Maintains the integrity and availability of raw machine data from production presses. Supports the development of the Flowsys system, indicating ongoing modernization or enhancement efforts.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and potential cost savings.
Lack of clear justification for sole-source procurement.
Potential for vendor lock-in due to specialized system support.

Positive Signals

Firm fixed-price contract provides cost certainty.
Contract duration of 2 years allows for stable support.
Critical system support ensures operational continuity.

Sector Analysis

This contract falls within the IT sector, specifically custom computer programming services. Government spending in this area is substantial, often driven by the need for specialized software to support unique operational requirements like those at the Bureau of Engraving and Printing.

Small Business Impact

The contract was not awarded to a small business, as indicated by the 'sb': false field. There is no indication of subcontracting opportunities for small businesses within this sole-source award.

Oversight & Accountability

Oversight of this sole-source contract should focus on ensuring the vendor delivers on all development and maintenance obligations as specified. Regular performance reviews and validation of system uptime and functionality are crucial to ensure value for taxpayer money.

Related Government Programs

Custom Computer Programming Services
Department of the Treasury Contracting
Bureau of Engraving and Printing Programs

Risk Flags

Sole-source award
Lack of competition
Potential for inflated pricing
Vendor lock-in risk
Limited transparency on justification

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $3.2 million to KOENIG & BAUER BANKNOTE SOLUTIONS SA. FLOWSYS SOFTWARE SUPPORT MAINTENANCE: CONTRACT PROVIDES 100% OF THE DEVELOPMENT AND OPERATIONS AND MAINTENANCE SUPPORT FOR THE FLOWSYS SYSTEM THAT PULLS RAW MACHINE DATA FROM THE PRODUCTION PRESSES.

Who is the contractor on this award?

The obligated recipient is KOENIG & BAUER BANKNOTE SOLUTIONS SA.

Which agency awarded this contract?

Awarding agency: Department of the Treasury (Bureau of Engraving and Printing).

What is the total obligated amount?

The obligated amount is $3.2 million.

What is the period of performance?

Start: 2025-04-11. End: 2027-04-10.

What is the justification for awarding this contract sole-source, given the potential for higher costs?

The justification for a sole-source award typically stems from a unique capability or proprietary nature of the product or service, where only one vendor can provide the necessary support. Without further documentation, it's presumed that Koenig & Bauer Banknote Solutions SA possesses exclusive knowledge or rights to the Flowsys system, making competition impractical or impossible for essential operational support.

How does the government ensure fair pricing without competition for this critical system?

While competition is the primary driver of fair pricing, the government can employ other methods for sole-source contracts. This may include reviewing historical pricing, obtaining independent cost estimates, or negotiating aggressively based on market research for similar, albeit not identical, services. The firm fixed-price structure also caps the government's financial exposure.

What is the long-term strategy for Flowsys system support to potentially introduce competition in the future?

The long-term strategy is unclear from the provided data. Agencies should explore options like developing in-house expertise, seeking alternative solutions, or working with the incumbent vendor to document the system sufficiently to allow for future competitive procurements. Proactive planning is essential to avoid perpetual sole-source reliance.

Industry Classification

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

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: NOT COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: 2031ZB25Q00037

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Koenig & Bauer AG

Address: 347, LAUSANNE 22

Business Categories: Category Business, Foreign Owned, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $7,415,891

Exercised Options: $3,173,750

Current Obligation: $3,173,750

Actual Outlays: $1,410,750

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline