Treasury's IRS awards $11.3M for enterprise software licenses and support to Distributed Technology Group LLC

Contract Overview

Contract Amount: $11,334,230 ($11.3M)

Contractor: Distributed Technology Group LLC

Awarding Agency: Department of the Treasury

Start Date: 2023-09-30

End Date: 2026-09-29

Contract Duration: 1,095 days

Daily Burn Rate: $10.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: MICRO FOCUS/OPEN TEXT/HPE SOFTWARE ENTERPRISE LICENSE, MAINTENANCE AND SUPPORT

Place of Performance

Location: SYRACUSE, ONONDAGA County, NEW YORK, 13202

State: New York Government Spending

Plain-Language Summary

Department of the Treasury obligated $11.3 million to DISTRIBUTED TECHNOLOGY GROUP LLC for work described as: MICRO FOCUS/OPEN TEXT/HPE SOFTWARE ENTERPRISE LICENSE, MAINTENANCE AND SUPPORT Key points: 1. The contract focuses on enterprise software licenses, maintenance, and support, a critical area for government IT infrastructure. 2. Distributed Technology Group LLC secured this award, indicating a competitive landscape for software and IT services. 3. Potential risks include vendor lock-in and the need for ongoing cost management for software maintenance and support. 4. The sector is IT services, specifically computer-related services, which is a significant area of federal spending.

Value Assessment

Rating: fair

The award amount of $11.3M over three years for enterprise software licenses and support appears within a reasonable range for similar government contracts. However, without specific details on the software and services included, a precise benchmark is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting a robust price discovery process. This method typically leads to more competitive pricing as multiple vendors have the opportunity to bid.

Taxpayer Impact: The use of full and open competition is generally beneficial for taxpayers, as it aims to secure the best value and pricing for government services.

Public Impact

Ensures continued operation of essential IRS enterprise software systems. Supports the Internal Revenue Service's ability to process tax information and serve taxpayers. Provides necessary maintenance and support for critical IT infrastructure. The contract duration of three years offers stability for IT operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost creep in maintenance and support over the contract term.
Dependence on a single vendor for critical software functionality.
Need to ensure ongoing alignment with IRS technological needs.

Positive Signals

Awarded through full and open competition, suggesting competitive pricing.
Firm fixed price contract type helps manage cost certainty.
Long-term contract provides operational stability.

Sector Analysis

This contract falls within the IT services sector, specifically 'Other Computer Related Services'. Federal spending in this area is substantial, covering a wide range of software, hardware, and IT support services essential for agency operations.

Small Business Impact

The data indicates that Distributed Technology Group LLC, the awardee, is not a small business. This contract does not appear to have specific set-asides for small businesses, which is a consideration for federal procurement goals.

Oversight & Accountability

The award is a delivery order against a larger contract vehicle. Oversight would involve monitoring performance, adherence to terms, and ensuring value for money throughout the contract's lifecycle by the Department of the Treasury's Internal Revenue Service.

Related Government Programs

Other Computer Related Services
Department of the Treasury Contracting
Internal Revenue Service Programs

Risk Flags

Potential for vendor lock-in.
Risk of increasing maintenance and support costs over time.
Need for ongoing alignment with evolving IT needs.
Dependence on specific software vendors.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $11.3 million to DISTRIBUTED TECHNOLOGY GROUP LLC. MICRO FOCUS/OPEN TEXT/HPE SOFTWARE ENTERPRISE LICENSE, MAINTENANCE AND SUPPORT

Who is the contractor on this award?

The obligated recipient is DISTRIBUTED TECHNOLOGY GROUP 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 $11.3 million.

What is the period of performance?

Start: 2023-09-30. End: 2026-09-29.

What specific enterprise software and support services are included in this $11.3M contract, and how do they align with the IRS's long-term IT modernization strategy?

The contract covers enterprise license, maintenance, and support for software provided by Micro Focus, Open Text, and HPE. A detailed breakdown of the specific software modules and support levels is needed to assess alignment with the IRS's IT modernization strategy. Understanding if these are legacy systems requiring continued support or part of a planned upgrade path is crucial for evaluating long-term value and potential future investments.

Given the nature of enterprise software licenses and maintenance, what are the primary risks associated with vendor lock-in and potential cost escalations over the contract's three-year term?

The primary risks include vendor lock-in, where switching providers becomes prohibitively expensive or complex, and potential cost escalations in annual maintenance and support fees. Without clear benchmarks or competitive re-evaluation clauses, the IRS may face increasing costs. Proactive contract management, including regular market analysis and negotiation strategies, is essential to mitigate these risks and ensure continued cost-effectiveness.

How effectively does the firm fixed price contract type ensure value for money for the taxpayer, considering the ongoing nature of software maintenance and support?

The firm fixed price contract type provides cost certainty for the taxpayer, as the price is set upfront for the defined period. This is effective for managing budget predictability. However, for ongoing maintenance and support, it's crucial that the scope of services is well-defined to prevent scope creep or under-delivery. The IRS must ensure the fixed price adequately covers the necessary support and that the vendor is incentivized to provide efficient service delivery.

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

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 499 S WARREN ST STE 501, SYRACUSE, NY, 13202

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $11,334,230

Exercised Options: $11,334,230

Current Obligation: $11,334,230

Actual Outlays: $11,334,230

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: NNG15SC31B

IDV Type: GWAC

Timeline