Treasury's $125.8M cloud services contract awarded to SAIC via BPA call, highlighting IT infrastructure modernization
Contract Overview
Contract Amount: $125,764,363 ($125.8M)
Contractor: Science Applications International Corporation
Awarding Agency: Department of the Treasury
Start Date: 2024-06-20
End Date: 2026-01-21
Contract Duration: 580 days
Daily Burn Rate: $216.8K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: THIS ORDER PROVIDES CLOUD SERVICES FOR THE DEPARTMENT OF TREASURY (TCLOUD)
Place of Performance
Location: RESTON, FAIRFAX County, VIRGINIA, 20190
State: Virginia Government Spending
Plain-Language Summary
Department of the Treasury obligated $125.8 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION for work described as: THIS ORDER PROVIDES CLOUD SERVICES FOR THE DEPARTMENT OF TREASURY (TCLOUD) Key points: 1. Value for money assessed through competitive bidding and firm-fixed-price structure. 2. Competition dynamics indicate a robust market for cloud services, benefiting price discovery. 3. Risk indicators include contract duration and potential for scope creep in evolving cloud technologies. 4. Performance context relies on SAIC's established capabilities in IT services. 5. Sector positioning places this contract within the broader government IT modernization and cloud adoption trend.
Value Assessment
Rating: good
The contract's value of approximately $125.8 million over its period of performance appears reasonable given the scope of cloud services for a major agency like the Department of the Treasury. As a BPA call, it likely leverages pre-negotiated rates, which can offer cost efficiencies. Benchmarking against similar large-scale cloud service contracts for federal agencies suggests this pricing is within expected ranges, though specific service-level agreements and performance metrics would be needed for a definitive value assessment. The firm-fixed-price structure provides cost certainty for the government.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. The use of a BPA call suggests that the underlying Blanket Purchase Agreement was also competitively awarded. While the exact number of bidders for this specific call is not provided, the 'full and open' designation implies a competitive process that should lead to favorable pricing and service offerings for the government. This approach maximizes the potential for innovation and cost savings.
Taxpayer Impact: Taxpayers benefit from the assurance that the government sought the best possible value through a competitive process, rather than being limited to a single provider or a restricted set of options.
Public Impact
Federal employees within the Department of the Treasury will benefit from enhanced IT infrastructure and cloud-based services. The contract delivers essential cloud computing capabilities, supporting the agency's digital transformation and operational efficiency. Geographic impact is likely nationwide, as Treasury operates across various locations. Workforce implications may include the need for IT professionals skilled in cloud technologies to manage and utilize these services effectively.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for vendor lock-in if not managed carefully.
- Dependence on a single contractor for critical cloud infrastructure.
- Risk of cost overruns if scope expands beyond initial estimates.
- Ensuring data security and compliance in a cloud environment.
Positive Signals
- Awarded through full and open competition, suggesting competitive pricing.
- Firm-fixed-price contract provides cost certainty.
- Leverages existing BPA framework for potential efficiencies.
- SAIC has a strong track record in government IT services.
Sector Analysis
The federal IT services sector is characterized by rapid technological advancement and significant government investment in modernization. Cloud computing is a major focus, with agencies increasingly migrating services to cloud environments to improve scalability, flexibility, and cost-effectiveness. This contract for cloud services for the Department of the Treasury fits within this broader trend. Comparable spending benchmarks for large federal cloud contracts often range from tens to hundreds of millions of dollars, depending on the scope and duration.
Small Business Impact
The data indicates this contract was awarded under 'full and open competition' and does not specify any small business set-aside. Therefore, it is unlikely that small businesses were specifically targeted for this award. However, the prime contractor, Science Applications International Corporation (SAIC), may engage small businesses as subcontractors to fulfill portions of the contract requirements. The extent of small business subcontracting would depend on SAIC's internal policies and the specific needs of the cloud services being provided.
Oversight & Accountability
Oversight for this contract will likely be managed by the Department of the Treasury's contracting officers and program managers. Accountability measures are embedded within the firm-fixed-price contract terms, requiring SAIC to deliver specified cloud services. Transparency is generally maintained through contract award databases and public reporting. The Inspector General for the Department of the Treasury may have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.
Related Government Programs
- GSA Cloud Computing Services
- NASA Enterprise Service Desk
- DoD Cloud Computing Strategy
- IRS IT Modernization Initiatives
Risk Flags
- Contract duration may exceed typical modernization cycles.
- Reliance on a single awardee for critical IT infrastructure.
- Potential for scope creep in evolving cloud technology landscape.
Tags
it-services, cloud-computing, department-of-the-treasury, science-applications-international-corporation, bpa-call, firm-fixed-price, full-and-open-competition, fiscal-year-2024, fiscal-year-2025, fiscal-year-2026, information-technology, computer-systems-design-services
Frequently Asked Questions
What is this federal contract paying for?
Department of the Treasury awarded $125.8 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION. THIS ORDER PROVIDES CLOUD SERVICES FOR THE DEPARTMENT OF TREASURY (TCLOUD)
Who is the contractor on this award?
The obligated recipient is SCIENCE APPLICATIONS INTERNATIONAL CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of the Treasury (Internal Revenue Service).
What is the total obligated amount?
The obligated amount is $125.8 million.
What is the period of performance?
Start: 2024-06-20. End: 2026-01-21.
What is Science Applications International Corporation's (SAIC) track record with similar large-scale federal cloud service contracts?
SAIC has a substantial track record in providing IT services to the federal government, including cloud solutions. They have been involved in numerous large contracts across various agencies, such as the Department of Defense and NASA, focusing on areas like cloud migration, managed services, cybersecurity, and IT infrastructure modernization. Their experience often includes supporting complex, mission-critical systems. While specific details on past cloud contracts of this exact scale for Treasury are not detailed here, SAIC's general profile suggests they possess the technical expertise and capacity to manage such an undertaking. Reviewing their past performance evaluations and contract history would provide further insight into their reliability and success rates in delivering comparable services.
How does the pricing of this $125.8 million contract compare to similar cloud service contracts awarded by the Department of the Treasury or other large federal agencies?
The $125.8 million contract value for cloud services over its estimated duration (approximately 2.5 years) represents a significant but not unprecedented investment for a federal agency of the Treasury's size. As a BPA call, it likely benefits from pre-negotiated rates that are generally competitive. To conduct a precise comparison, one would need to analyze the specific services included (e.g., IaaS, PaaS, SaaS, specific cloud providers supported), service level agreements (SLAs), and the total number of users or data volume. However, based on general market knowledge of federal IT spending, this contract appears to be within the expected range for comprehensive cloud solutions supporting a large agency. Benchmarking against other Treasury IT contracts or similar agency-wide cloud procurements would offer more granular insights into its value proposition.
What are the primary risks associated with this contract, and what mitigation strategies are in place?
Primary risks include potential vendor lock-in, dependence on SAIC for critical infrastructure, cybersecurity vulnerabilities inherent in cloud environments, and the possibility of cost overruns if the scope of services expands beyond initial projections. Mitigation strategies likely involve robust contract management, clearly defined SLAs, regular performance reviews, and adherence to strict cybersecurity protocols mandated by federal regulations (e.g., FISMA). The firm-fixed-price nature of the contract helps mitigate cost overrun risks, provided the scope remains controlled. Furthermore, the 'full and open competition' award suggests that the government has options and is not solely reliant on one vendor in the long term, fostering a competitive environment that encourages performance.
How effective is the 'full and open competition' approach in ensuring value for money for this specific cloud services contract?
The 'full and open competition' approach is generally considered the most effective method for ensuring value for money in federal contracting. By allowing all responsible sources to compete, it fosters a competitive environment that drives down prices, encourages innovation, and leads to better service offerings. For this $125.8 million cloud services contract, this approach means that the Department of the Treasury likely received multiple proposals, allowing them to select the offer that provided the best combination of technical merit, performance, and price. This process minimizes the risk of paying inflated prices or receiving suboptimal services that might occur under sole-source or limited competition scenarios. The resulting contract is more likely to align with taxpayer interests.
What are the historical spending patterns for cloud services within the Department of the Treasury, and how does this contract fit into that trend?
Historical spending patterns for cloud services within the Department of the Treasury, like most federal agencies, have shown a consistent upward trend as agencies embrace digital transformation and cloud adoption. Initially, spending might have been on pilot projects or specific departmental needs. Over time, this has evolved into more comprehensive, enterprise-wide cloud strategies aimed at consolidating infrastructure, improving efficiency, and enhancing data analytics capabilities. This $125.8 million contract represents a significant investment that aligns with this broader trend, likely supporting the TCloud initiative and furthering the Treasury's move towards modern, scalable cloud infrastructure. It signifies a commitment to leveraging cloud technology for core government functions.
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 › IT AND TELECOM - END USER
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 12010, SUNSET HILLS ROAD, RESTON, VA, 20190
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $134,653,757
Exercised Options: $125,764,363
Current Obligation: $125,764,363
Actual Outlays: $116,292,418
Subaward Activity
Number of Subawards: 53
Total Subaward Amount: $5,114,404,296
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Parent Contract
Parent Award PIID: 2032H523A00010
IDV Type: BPA
Timeline
Start Date: 2024-06-20
Current End Date: 2026-01-21
Potential End Date: 2026-02-11 00:00:00
Last Modified: 2026-01-12
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