IRS telecommunications infrastructure maintenance contract awarded to FCN, INC. for over $129 million

Contract Overview

Contract Amount: $129,184,532 ($129.2M)

Contractor: FCN, Inc.

Awarding Agency: Department of the Treasury

Start Date: 2018-09-01

End Date: 2023-08-31

Contract Duration: 1,825 days

Daily Burn Rate: $70.8K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 9

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: CISCO COMBINED SERVICES FOR THE INTERNAL REVENUE SERVICE USER AND NETWORKS SERVICE ORGANIZATION (UNS) THAT REQUIRES CONSISTENT AND RELIABLE MAINTENANCE OF THE IRS TELECOMMUNICATIONS INFRASTRUCTURE

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20852

State: Maryland Government Spending

Plain-Language Summary

Department of the Treasury obligated $129.2 million to FCN, INC. for work described as: CISCO COMBINED SERVICES FOR THE INTERNAL REVENUE SERVICE USER AND NETWORKS SERVICE ORGANIZATION (UNS) THAT REQUIRES CONSISTENT AND RELIABLE MAINTENANCE OF THE IRS TELECOMMUNICATIONS INFRASTRUCTURE Key points: 1. Contract provides essential maintenance for IRS telecommunications infrastructure, ensuring operational continuity. 2. Awarded through full and open competition, suggesting a competitive bidding process. 3. The contract duration of five years indicates a long-term commitment to service. 4. Fixed-price contract type helps manage cost certainty for the government. 5. The North American Industry Classification System (NAICS) code 541519 points to a broad range of IT services. 6. The contract's value places it as a significant investment in IT infrastructure.

Value Assessment

Rating: good

The contract value of over $129 million for five years of telecommunications infrastructure maintenance appears reasonable given the scope of supporting a large federal agency like the IRS. Benchmarking against similar large-scale IT service contracts for federal agencies suggests that pricing is within expected ranges, especially considering the complexity and criticality of IRS systems. The firm fixed-price structure provides cost predictability, which is a positive indicator of value.

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,' which typically implies a robust competitive process where all responsible sources were allowed to submit offers. With 9 bidders participating, the level of competition was substantial, likely driving competitive pricing and encouraging innovation from the offerors. This broad participation suggests that the market has sufficient capacity and interest in providing these services.

Taxpayer Impact: A high level of competition generally benefits taxpayers by leading to more favorable pricing and better service quality as contractors vie for the award.

Public Impact

Taxpayers benefit from the reliable operation of IRS systems, facilitating tax processing and services. The contract ensures the maintenance of critical telecommunications infrastructure for the Internal Revenue Service. Services are delivered nationwide, supporting IRS operations across all geographic locations. The contract supports IT professionals and technicians involved in network maintenance and telecommunications.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if future requirements are heavily tied to Cisco technologies.
Reliance on a single vendor for critical infrastructure maintenance could pose risks if performance degrades.
The broad NAICS code might obscure specific service delivery details and performance metrics.

Positive Signals

FCN, INC. has a track record of performing federal contracts, indicating experience.
The firm fixed-price contract type provides cost certainty and limits the government's exposure to cost overruns.
Multiple bidders (9) indicate a healthy competitive environment, which can lead to better outcomes.
The contract duration of five years suggests a stable and ongoing need for these services.

Sector Analysis

This contract falls within the broader Information Technology (IT) services sector, specifically focusing on telecommunications infrastructure maintenance. The IT services market is highly competitive and dynamic, with significant government spending allocated to maintaining and modernizing federal IT systems. Comparable spending benchmarks for large federal IT service contracts often run into hundreds of millions of dollars over several years, reflecting the scale and complexity of government IT needs. This contract represents a substantial portion of spending within the IT infrastructure maintenance sub-sector.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses arising from a small business set-aside. However, the prime contractor, FCN, INC., may engage small businesses as subcontractors, though this is not explicitly detailed in the provided data. The absence of a small business set-aside means the primary competition was open to all eligible firms, regardless of size.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program office within the Internal Revenue Service. Accountability measures are inherent in the firm fixed-price contract type, which obligates the contractor to deliver services within the agreed-upon price. Transparency is generally facilitated through contract award databases and reporting requirements. While specific Inspector General (IG) jurisdiction is not detailed, the Treasury Inspector General for Tax Administration (TIGTA) would likely have oversight over IRS spending and performance.

Related Government Programs

IRS IT Modernization Initiatives
Federal Telecommunications Infrastructure Contracts
General Services Administration (GSA) IT Schedule Contracts
Department of the Treasury IT Spending

Risk Flags

Potential for vendor lock-in
Reliance on single vendor for critical infrastructure
Scope creep risk
Performance degradation risk

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $129.2 million to FCN, INC.. CISCO COMBINED SERVICES FOR THE INTERNAL REVENUE SERVICE USER AND NETWORKS SERVICE ORGANIZATION (UNS) THAT REQUIRES CONSISTENT AND RELIABLE MAINTENANCE OF THE IRS TELECOMMUNICATIONS INFRASTRUCTURE

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 $129.2 million.

What is the period of performance?

Start: 2018-09-01. End: 2023-08-31.

What is FCN, INC.'s past performance record with the federal government, particularly on similar telecommunications maintenance contracts?

FCN, INC. has a history of performing federal contracts, as indicated by its presence in contract award databases. While specific details on past performance for telecommunications maintenance are not fully elaborated in the provided data, the award of this significant contract suggests a positive assessment of their capabilities by the IRS. Further analysis would involve reviewing past performance evaluations and any reported issues on previous contracts to gauge their reliability and effectiveness in delivering similar services. Their ability to win a competitive bid for this substantial contract implies a level of trust and demonstrated competence in the federal contracting space.

How does the per-unit cost or service rate for this contract compare to industry benchmarks for similar telecommunications maintenance services?

Direct per-unit cost comparisons are challenging without granular data on the specific services rendered (e.g., cost per circuit, cost per device maintained). However, the overall contract value of over $129 million spread over five years for comprehensive IRS telecommunications infrastructure maintenance suggests a significant investment. Benchmarking against large-scale IT service contracts for federal agencies indicates that pricing is generally within expected ranges, especially considering the criticality and scale of IRS operations. The firm fixed-price nature of the contract provides cost certainty, which is a key value indicator. A detailed comparison would require access to specific service level agreements and pricing breakdowns.

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

Key risks include potential service disruptions if maintenance is inadequate, vendor lock-in with Cisco technologies, and the possibility of cost overruns if the scope expands beyond initial expectations (though mitigated by fixed-price). Mitigation strategies likely involve robust Service Level Agreements (SLAs) with performance penalties, regular performance reviews by the IRS, and contingency planning for critical system failures. The competitive nature of the award also incentivizes FCN, INC. to perform well to secure future business. The IRS's own internal IT governance and oversight mechanisms would also play a role in risk management.

How effective has FCN, INC. been in delivering services under this contract, based on available performance data?

Specific performance data for this contract is not provided in the initial data extract. However, the contract's duration (five years) and its continuation suggest a level of satisfaction with FCN, INC.'s service delivery. To assess effectiveness thoroughly, one would need to examine performance metrics, user feedback, and any formal evaluations conducted by the IRS throughout the contract period. The absence of major reported issues or contract terminations could be interpreted as a positive indicator, but a definitive assessment requires access to detailed performance reports and quality assurance reviews.

What are the historical spending patterns for IRS telecommunications infrastructure maintenance, and how does this contract compare?

Historical spending data for IRS telecommunications infrastructure maintenance prior to this contract is not provided. However, the award of a $129 million, five-year contract indicates a substantial and ongoing commitment to maintaining this critical infrastructure. Federal agencies typically allocate significant budgets to IT infrastructure, and the IRS, being a large and complex organization, would be expected to have consistent and considerable spending in this area. This contract likely represents a continuation or consolidation of previous spending, possibly reflecting updated technology needs or service requirements compared to earlier periods.

What is the potential impact of this contract on the broader IT services market, particularly concerning competition and innovation?

The award to FCN, INC. through full and open competition with 9 bidders suggests a healthy and competitive IT services market capable of supporting large federal contracts. This level of competition can drive innovation as contractors strive to offer superior solutions and pricing. For FCN, INC., this contract represents a significant revenue stream and a key reference point for future business. The IRS benefits from access to potentially innovative solutions and competitive pricing. The market dynamics indicate that specialized telecommunications maintenance is a viable and sought-after service area within the federal IT sector.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 9

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 12501 ARDENNES AVE STE 101, ROCKVILLE, MD, 20852

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, U.S.-Owned Business, Woman Owned Business, Women Owned Small Business

Financial Breakdown

Contract Ceiling: $129,189,583

Exercised Options: $129,184,532

Current Obligation: $129,184,532

Actual Outlays: $97,514,140

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: NNG15SC71B

IDV Type: GWAC

Timeline