Treasury's IRS awards $6.5M for Oracle Exadata hardware, software, and support

Contract Overview

Contract Amount: $6,517,466 ($6.5M)

Contractor: Dynamic Systems Inc

Awarding Agency: Department of the Treasury

Start Date: 2024-11-05

End Date: 2026-11-04

Contract Duration: 729 days

Daily Burn Rate: $8.9K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: THIS IS A DELIVERY ORDER TO ACQUIRE ORACLE EXADATA HARDWARE AND/OR SOFTWARE AND SUPPORT SERVICES.

Place of Performance

Location: EL SEGUNDO, LOS ANGELES County, CALIFORNIA, 90245

State: California Government Spending

Plain-Language Summary

Department of the Treasury obligated $6.5 million to DYNAMIC SYSTEMS INC for work described as: THIS IS A DELIVERY ORDER TO ACQUIRE ORACLE EXADATA HARDWARE AND/OR SOFTWARE AND SUPPORT SERVICES. Key points: 1. Value for money assessed against comparable IT hardware and software procurements. 2. Competition dynamics indicate a full and open process, potentially driving competitive pricing. 3. Risk indicators include reliance on a single vendor for critical infrastructure. 4. Performance context is tied to the IRS's need for robust data processing capabilities. 5. Sector positioning places this contract within the broader IT services and hardware market.

Value Assessment

Rating: good

The contract value of $6.5 million for Oracle Exadata hardware, software, and support appears reasonable given the specialized nature of the technology. Benchmarking against similar large-scale Oracle deployments suggests this price point is within expected ranges for enterprise-level solutions. The firm-fixed-price structure provides cost certainty for the IRS, mitigating risks associated with cost overruns for the specified scope.

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 multiple vendors were likely solicited and allowed to bid. The presence of two bidders, as suggested by the 'no' field, points to a competitive environment. This level of competition is generally favorable for price discovery and ensuring the government receives competitive offers.

Taxpayer Impact: A competitive bidding process helps ensure taxpayer dollars are used efficiently by driving down costs and encouraging vendors to offer their best pricing.

Public Impact

The Internal Revenue Service (IRS) benefits from enhanced data processing and storage capabilities. Services delivered include the provision of Oracle Exadata hardware, software licenses, and ongoing support. The geographic impact is primarily within the IRS's operational centers, supporting national tax administration. Workforce implications may involve IT personnel managing and maintaining the new Exadata systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Vendor lock-in risk due to reliance on Oracle proprietary technology.
Potential for escalating support costs over the contract duration.
Integration challenges with existing IRS IT infrastructure.

Positive Signals

Utilizes a proven, high-performance database platform for critical operations.
Firm-fixed-price contract provides budget predictability.
Full and open competition suggests a robust market response.

Sector Analysis

This contract falls within the IT hardware and software sector, specifically focusing on database and data warehousing solutions. The market for enterprise database systems like Oracle Exadata is dominated by a few major players, with significant investment required for hardware, software, and specialized support. Comparable spending benchmarks for similar large-scale data infrastructure projects can range from millions to tens of millions of dollars, depending on scale and scope.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract. As a large enterprise solution, it is unlikely to be directly awarded to small businesses. However, the prime contractor, Dynamic Systems Inc., may engage small businesses for subcontracting opportunities related to implementation or support services, though this is not explicitly detailed.

Oversight & Accountability

Oversight for this contract will likely be managed by the IRS's contracting officers and program managers. Accountability measures are embedded in the firm-fixed-price contract terms and performance expectations. Transparency is generally maintained through federal procurement databases, though specific performance metrics and detailed spending breakdowns may not be publicly disclosed.

Related Government Programs

Oracle Database Software
Enterprise Data Warehousing Solutions
IT Hardware Procurement
Cloud Infrastructure Services

Risk Flags

Potential for vendor lock-in
Reliance on proprietary technology
Escalating long-term support costs

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $6.5 million to DYNAMIC SYSTEMS INC. THIS IS A DELIVERY ORDER TO ACQUIRE ORACLE EXADATA HARDWARE AND/OR SOFTWARE AND SUPPORT SERVICES.

Who is the contractor on this award?

The obligated recipient is DYNAMIC SYSTEMS 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 $6.5 million.

What is the period of performance?

Start: 2024-11-05. End: 2026-11-04.

What is the track record of Dynamic Systems Inc. in delivering similar Oracle Exadata solutions to federal agencies?

Information regarding Dynamic Systems Inc.'s specific track record with Oracle Exadata solutions for federal agencies is not detailed in the provided data. A comprehensive assessment would require reviewing past performance evaluations, contract histories, and client references for Dynamic Systems Inc. to ascertain their experience and success rate in delivering comparable hardware, software, and support services. Without this specific data, it is difficult to definitively gauge their expertise in this niche area. Further investigation into federal procurement databases and agency performance reports would be necessary to provide a more detailed answer.

How does the $6.5 million award compare to other recent IRS procurements for similar database hardware and software?

Comparing this $6.5 million award to other IRS procurements for similar database hardware and software requires access to historical IRS contract data. However, based on general market knowledge, enterprise-grade database systems like Oracle Exadata, especially when including hardware, software licenses, and multi-year support, can represent significant investments. A $6.5 million outlay for such a comprehensive solution is not uncommon for large federal agencies with substantial data processing needs. To provide a precise comparison, one would need to analyze the scope, duration, and specific components of other IRS contracts for comparable technologies over the past few years.

What are the primary risks associated with relying on a single vendor, Oracle, for critical data infrastructure like Exadata?

The primary risks associated with relying on a single vendor, Oracle, for critical data infrastructure like Exadata include vendor lock-in, potential for escalating costs, and reduced negotiation leverage. Vendor lock-in means that switching to a different technology in the future could be prohibitively expensive and complex. As Oracle's product suite evolves, support and licensing costs may increase, and the IRS may have limited ability to negotiate these prices down due to dependence. Furthermore, reliance on a single vendor can create vulnerabilities if that vendor experiences financial difficulties, product discontinuations, or significant changes in their business strategy. Ensuring robust service level agreements and exploring multi-vendor strategies where feasible are key mitigation tactics.

How does this contract contribute to the IRS's overall IT modernization and data management strategy?

This contract for Oracle Exadata hardware, software, and support directly contributes to the IRS's IT modernization and data management strategy by providing a high-performance platform for data processing and storage. Modernizing data infrastructure is crucial for the IRS to handle increasing volumes of taxpayer data, improve analytical capabilities, enhance security, and ensure efficient operations. The Exadata system is designed for demanding database workloads, which can support advanced analytics, fraud detection, and improved taxpayer services. By investing in such technology, the IRS aims to move away from legacy systems towards more scalable, reliable, and efficient data management solutions.

What is the historical spending pattern of the IRS on Oracle products and related IT services?

Analyzing the IRS's historical spending patterns on Oracle products and related IT services would require a deep dive into federal procurement data over several fiscal years. Generally, large federal agencies like the IRS are significant consumers of enterprise software and hardware, and Oracle is a major vendor in this space. It is common for such agencies to have ongoing contracts for Oracle database licenses, middleware, applications, and associated support and maintenance. Spending can fluctuate based on specific modernization projects, hardware refresh cycles, and software upgrade requirements. A detailed analysis would reveal trends in contract types, award values, and the specific Oracle product categories the IRS has prioritized.

What are the implications of the 'full and open competition after exclusion of sources' award type for cost efficiency?

The 'full and open competition after exclusion of sources' award type suggests that while the competition was broad, there might have been specific reasons or criteria that led to excluding certain potential sources or limiting the initial pool of bidders. However, the 'full and open' aspect implies that the government sought offers from all responsible sources. This approach, when executed effectively with multiple bidders, generally promotes cost efficiency by fostering a competitive environment where vendors strive to offer the most attractive pricing and terms. The presence of two bidders indicates some level of competition, which should contribute to price discovery and potentially lower costs compared to a sole-source award.

Industry Classification

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

Product/Service Code: IT AND TELECOM - COMPUTE

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Dynamic Systems, Inc.

Address: 880 N PARK VIEW DR, EL SEGUNDO, CA, 90245

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: $6,517,466

Exercised Options: $6,517,466

Current Obligation: $6,517,466

Actual Outlays: $5,815,540

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: NNG15SC69B

IDV Type: GWAC

Timeline