Treasury's $14.8M IT contract for application development and integration awarded to VETS2 SYNERGY LLC

Contract Overview

Contract Amount: $14,812,968 ($14.8M)

Contractor: Vets2 Synergy LLC

Awarding Agency: Department of the Treasury

Start Date: 2021-09-30

End Date: 2026-09-29

Contract Duration: 1,825 days

Daily Burn Rate: $8.1K/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: APPLICATION DEVELOPMENT TECHNICAL INTEGRATION LLP LINUX UPGRADE

Place of Performance

Location: WINDSOR MILL, BALTIMORE County, MARYLAND, 21244

State: Maryland Government Spending

Plain-Language Summary

Department of the Treasury obligated $14.8 million to VETS2 SYNERGY LLC for work described as: APPLICATION DEVELOPMENT TECHNICAL INTEGRATION LLP LINUX UPGRADE Key points: 1. Contract focuses on critical IT infrastructure, including Linux upgrades and application development. 2. Awarded through full and open competition, suggesting a competitive bidding process. 3. The contract duration of five years indicates a long-term need for these services. 4. The fixed-price contract type aims to control costs and provide budget certainty. 5. The North American Industry Classification System (NAICS) code 541512 points to specialized computer systems design services. 6. The contract is a delivery order, implying it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle.

Value Assessment

Rating: good

The contract's value of $14.8 million over five years for application development and technical integration appears reasonable given the scope. Benchmarking against similar IT services contracts for government agencies of this size and complexity suggests that the pricing is competitive. The firm-fixed-price structure further supports value for money by shifting cost risk to the contractor. Without specific details on the deliverables, a precise value-for-money assessment is challenging, but the overall structure indicates a commitment to achieving defined outcomes within a set budget.

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,' indicating that the opportunity was broadly advertised, and multiple vendors were allowed to bid. The presence of 9 bidders suggests a healthy level of competition for this requirement. A competitive process like this generally leads to better price discovery and potentially more innovative solutions as contractors vie for the award.

Taxpayer Impact: The robust competition for this contract is beneficial for taxpayers, as it likely drove down the price and ensured the government received a fair market value for the IT services procured.

Public Impact

Internal Revenue Service (IRS) users will benefit from improved application performance and system stability. The contract supports the modernization of critical IT infrastructure within the Treasury. Workforce implications include the potential for skilled IT professionals to be engaged in government projects. Geographic impact is primarily within Maryland, where the contractor is based, but the services support a national agency.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if requirements are not clearly defined and managed.
Dependence on contractor performance for critical IT system upgrades.
Risk of vendor lock-in if integration is highly specialized.

Positive Signals

Firm-fixed-price contract provides cost certainty.
Full and open competition suggests a competitive market for these services.
Long-term contract duration allows for sustained support and development.
Award to a contractor with 'VETS' in its name may indicate a focus on veteran-owned businesses.

Sector Analysis

The IT services sector, particularly computer systems design, is a significant area of federal spending. This contract falls within the broader category of IT modernization and support, which is crucial for government operations. The market for these services is competitive, with numerous firms offering specialized expertise. Comparable spending benchmarks for similar IT integration and application development contracts with federal agencies often range from millions to tens of millions of dollars annually, depending on complexity and duration.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses (ss: false, sb: false). While the prime contractor, VETS2 SYNERGY LLC, may be a small business, the award mechanism itself was full and open competition. There is no explicit information on subcontracting plans for small businesses within this delivery order. The impact on the small business ecosystem would depend on whether VETS2 SYNERGY LLC utilizes small business subcontractors.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program office within the IRS. Accountability measures are embedded in the firm-fixed-price contract terms, requiring the contractor to deliver specific services. Transparency is facilitated by contract databases like FPDS, which record award details. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

IT Modernization Initiatives
Application Development Services
Computer Systems Design
Cloud Computing Services
Cybersecurity Support

Risk Flags

Potential for vendor lock-in
Complexity of technical integration
Dependence on contractor expertise

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $14.8 million to VETS2 SYNERGY LLC. APPLICATION DEVELOPMENT TECHNICAL INTEGRATION LLP LINUX UPGRADE

Who is the contractor on this award?

The obligated recipient is VETS2 SYNERGY LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $14.8 million.

What is the period of performance?

Start: 2021-09-30. End: 2026-09-29.

What is the specific nature of the 'APPLICATION DEVELOPMENT TECHNICAL INTEGRATION' and 'LINUX UPGRADE' tasks under this contract?

The contract description 'APPLICATION DEVELOPMENT TECHNICAL INTEGRATION LLP LINUX UPGRADE' suggests a multi-faceted IT project. 'Application Development' likely involves creating new software or enhancing existing applications to meet specific IRS needs. 'Technical Integration' implies connecting different software systems, databases, or hardware components to work seamlessly together. The 'LINUX UPGRADE' component points to modernizing the operating system environment, potentially for improved performance, security, or compatibility. These tasks collectively aim to enhance the IRS's IT infrastructure, ensuring its applications are robust, integrated, and running on up-to-date systems.

How does the $14.8 million contract value compare to typical spending on similar IT services by the IRS or Treasury?

The $14.8 million contract value over five years, averaging approximately $2.96 million per year, is within the typical range for IT services supporting large federal agencies like the IRS. The IRS manages a vast and complex IT ecosystem, requiring continuous investment in application development, maintenance, and infrastructure upgrades. Spending on similar IT contracts can vary significantly based on scope, complexity, and duration, but multi-million dollar awards for specialized services like system integration and application development are common. This contract's value appears proportionate to the likely demands of supporting a major federal agency's IT operations.

What are the key performance indicators (KPIs) or metrics used to evaluate the contractor's performance?

While specific KPIs are not detailed in the provided data, performance for such IT contracts is typically evaluated against several key areas. These often include adherence to project timelines and milestones, quality of deliverables (e.g., bug-free code, successful integration), system performance post-upgrade, security compliance, and responsiveness to technical issues. The contracting officer's representative (COR) or a designated technical point of contact usually monitors these metrics. Contractual clauses often stipulate remedies for failing to meet performance standards, which could include financial penalties or termination.

What is the track record of VETS2 SYNERGY LLC in performing similar government IT contracts?

Information on VETS2 SYNERGY LLC's specific track record for similar government IT contracts is not provided in the summary data. However, their name suggests a potential focus on veteran-owned businesses, which is a category the government actively seeks to support. To assess their track record thoroughly, one would need to review their past performance evaluations on federal contracts, including CPARS (Contractor Performance Assessment Reporting System) reports, and examine the types and scale of previous projects they have successfully completed for federal agencies. This would provide insight into their reliability, technical capabilities, and overall performance history.

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

Potential risks include technical challenges in integrating disparate systems, delays in project completion, cost overruns (though mitigated by fixed-price), and security vulnerabilities during system upgrades. Mitigation strategies often involve detailed project planning, phased implementation, rigorous testing protocols, clear communication channels between the government and contractor, and robust cybersecurity measures. The firm-fixed-price nature of the contract shifts some financial risk to the contractor, incentivizing efficient project management. The government's oversight role, through the COR and contracting officer, is crucial for identifying and addressing risks proactively.

How does this contract align with the Treasury Department's broader IT modernization goals?

This contract directly supports the Treasury Department's IT modernization goals by focusing on critical areas like application development, technical integration, and operating system upgrades. Modernizing IT infrastructure is essential for improving efficiency, enhancing data security, and delivering better services to the public. By ensuring that applications are well-developed, integrated, and running on current platforms like Linux, the Treasury can maintain and improve its operational capabilities. This investment is likely part of a larger strategy to update legacy systems and adopt more agile and secure IT practices across the department.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

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: 2020 KRAFT DR STE 2400, BLACKSBURG, VA, 24060

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Self-Certified Small Disadvantaged Business, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $20,708,304

Exercised Options: $15,513,787

Current Obligation: $14,812,968

Actual Outlays: $13,185,997

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 47QTCH18D0068

IDV Type: GWAC

Timeline