Treasury's $22M Mail Handling Contract Awarded to Fedgovit, Inc. Amidst Full and Open Competition

Contract Overview

Contract Amount: $22,064,178 ($22.1M)

Contractor: Fedgovit, Inc.

Awarding Agency: Department of the Treasury

Start Date: 2023-09-30

End Date: 2025-06-05

Contract Duration: 614 days

Daily Burn Rate: $35.9K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: MAIL INSERTERS/SORTERS/WARRANTY/TRAINING AND INSTALLATION

Place of Performance

Location: ORLANDO, ORANGE County, FLORIDA, 32822

State: Florida Government Spending

Plain-Language Summary

Department of the Treasury obligated $22.1 million to FEDGOVIT, INC. for work described as: MAIL INSERTERS/SORTERS/WARRANTY/TRAINING AND INSTALLATION Key points: 1. Value for money appears reasonable given the duration and scope of services. 2. The contract was awarded under full and open competition, suggesting a competitive pricing environment. 3. Risk indicators are moderate, with a fixed-price contract type mitigating cost overrun risks. 4. Performance context is tied to essential IRS operations, highlighting the importance of reliable mail processing. 5. This contract falls within the 'Other Computer Related Services' sector, indicating a focus on specialized IT support. 6. The award amount is substantial, reflecting the critical nature of mail processing for tax administration.

Value Assessment

Rating: good

The contract's total value of $22,064,178 over approximately 20 months suggests a monthly expenditure of roughly $1.1 million. This figure needs to be benchmarked against similar contracts for mail inserters, sorters, and related services. Without direct comparable data, it's difficult to definitively assess pricing, but the fixed-price nature of the award provides some cost certainty. The inclusion of warranty, training, and installation indicates a comprehensive service package, which could justify the overall cost if executed effectively.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating that while the competition was open, specific sources may have been excluded prior to the main solicitation. This suggests a deliberate effort to ensure broad participation while potentially focusing on qualified vendors. The number of bidders is not specified, but the 'full and open' nature implies multiple interested parties, which generally leads to better price discovery and potentially more favorable terms for the government.

Taxpayer Impact: A competitive bidding process, even with prior exclusions, is beneficial for taxpayers as it drives down costs through market forces. This approach helps ensure that the government is not overpaying for essential services.

Public Impact

The Internal Revenue Service (IRS) benefits directly from this contract through the reliable processing of mail. Services include the operation and maintenance of mail inserters and sorters, crucial for handling tax documents and correspondence. The contract has a geographic impact primarily within Florida, where the vendor is located. Workforce implications may include employment opportunities for technicians and support staff involved in mail processing operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if specialized equipment or software is proprietary.
Dependence on a single vendor for critical mail processing could pose operational risks.
Ensuring consistent service quality and timely maintenance across the contract duration.

Positive Signals

Award under full and open competition suggests a robust vendor selection process.
Fixed-price contract type provides cost predictability for the government.
Inclusion of warranty, training, and installation indicates a comprehensive service offering.

Sector Analysis

This contract falls under the 'Other Computer Related Services' category (NAICS 541519), which encompasses a wide range of IT services not elsewhere classified. The market for mailroom automation and related services is competitive, with several established players offering sophisticated inserter, sorter, and tracking solutions. The total federal spending in this broad IT services category is significant, with individual contracts varying widely based on scope and duration. This specific award represents a moderate investment within the broader IT services landscape, focused on a critical operational function for the IRS.

Small Business Impact

The contract data indicates that small business participation was not a specific set-aside (ss: false, sb: false). This suggests that the primary competition was likely among larger, established firms capable of handling the scale and technical requirements of the contract. There is no explicit information on subcontracting plans for small businesses, which could be a missed opportunity to engage the small business ecosystem in supporting this federal requirement.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Treasury's contracting officers and program managers. The IRS likely has internal audit and compliance functions to monitor performance and ensure adherence to contract terms. Given the nature of the services, regular performance reviews and site visits would be expected. Transparency is facilitated through contract award databases, but detailed operational oversight mechanisms are internal to the agency.

Related Government Programs

Federal Mail Management Services
IT Support Services
Government Logistics and Operations

Risk Flags

Potential for vendor lock-in
Dependence on single vendor for critical operations
Ensuring consistent service quality and uptime
Effectiveness of 'exclusion of sources' in maintaining broad competition

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $22.1 million to FEDGOVIT, INC.. MAIL INSERTERS/SORTERS/WARRANTY/TRAINING AND INSTALLATION

Who is the contractor on this award?

The obligated recipient is FEDGOVIT, 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 $22.1 million.

What is the period of performance?

Start: 2023-09-30. End: 2025-06-05.

What is the track record of Fedgovit, Inc. in performing similar federal contracts, particularly those involving mail processing equipment and services?

Assessing Fedgovit, Inc.'s track record requires a review of its past performance on federal contracts. Information available through federal procurement databases (like SAM.gov or FPDS) would detail previous awards, contract types, agencies served, and performance evaluations. Specifically, looking for contracts related to mail inserters, sorters, warranty, training, and installation is crucial. A history of successful contract completion, positive past performance reviews, and adherence to delivery schedules and quality standards would indicate a lower risk. Conversely, a history of contract disputes, performance issues, or late deliveries would raise concerns about their capability to fulfill the current Treasury contract effectively. Without specific past performance data readily available in the provided snippet, a deeper dive into federal contract databases is necessary for a comprehensive assessment.

How does the pricing structure and total award amount compare to industry benchmarks for similar mail handling solutions?

Benchmarking the $22 million award for mail inserters, sorters, warranty, training, and installation requires comparing it against market rates for comparable services. Factors influencing this comparison include the volume of mail processed, the sophistication of the equipment, the duration of the contract (approx. 20 months), and the specific services included (warranty, training, installation). Industry reports on office equipment leasing and maintenance, as well as IT service contracts, can provide context. If similar-sized federal agencies or large private sector organizations procure comparable solutions, their contract values and service level agreements can serve as benchmarks. A preliminary assessment suggests the monthly expenditure (approx. $1.1M) is substantial, necessitating a detailed cost-benefit analysis against alternative solutions or previous contracts to confirm value for money.

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

The primary risks associated with this contract include potential operational disruptions if the mail handling equipment fails or requires extensive maintenance, vendor performance issues leading to delays or subpar service, and the possibility of cost increases if the fixed-price structure doesn't adequately account for unforeseen circumstances (though less likely with fixed-price). A key risk is also vendor dependency; the IRS relies heavily on Fedgovit, Inc. for critical mail processing. Mitigation strategies likely include robust Service Level Agreements (SLAs) with defined penalties for non-performance, regular performance monitoring by the contracting officer's representative (COR), contingency planning for equipment failure, and ensuring the contract includes clear requirements for maintenance, training, and support. The fixed-price nature itself mitigates financial risk for the government regarding the base service cost.

How effective is the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' approach in ensuring competitive pricing and vendor quality for this type of service?

The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' (FOUCAES) approach aims to balance broad market access with specific procurement goals. By excluding certain sources upfront, the agency might be targeting vendors with particular capabilities, security clearances, or past performance relevant to the IRS's needs, potentially streamlining the evaluation process. However, the 'full and open' aspect ensures that any qualified vendor not excluded has the opportunity to bid. This method can lead to competitive pricing if multiple capable vendors participate. The effectiveness hinges on whether the exclusions were justified and did not unduly limit competition, and if the remaining pool of bidders was sufficiently large and diverse to drive down costs and ensure high quality. Without knowing the rationale for exclusions or the number of bidders, it's difficult to definitively assess its impact.

What is the historical spending pattern for mail inserters and sorters by the Department of the Treasury or the IRS?

Analyzing historical spending patterns for mail inserters and sorters by the Department of the Treasury and the IRS is crucial for contextualizing the current $22 million award. This involves examining procurement data over several fiscal years to identify trends in contract values, durations, awarded vendors, and competition levels. Understanding past investments in similar technologies can reveal whether spending has been consistent, increasing, or decreasing. It also helps determine if the IRS has historically relied on full and open competition or other methods like sole-source awards for these services. Significant fluctuations or a lack of consistent spending might indicate changes in operational needs, technology adoption, or budget priorities. This historical perspective provides a baseline against which the current contract's value and terms can be more accurately assessed.

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: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 5840 S SEMORAN BLVD, ORLANDO, FL, 32822

Business Categories: 8(a) Program Participant, Category Business, Corporate Entity Not Tax Exempt, Economically Disadvantaged Women Owned Small Business, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Indian (Subcontinent) American Owned Business, U.S.-Owned Business, Woman Owned Business, Women Owned Small Business

Financial Breakdown

Contract Ceiling: $22,064,178

Exercised Options: $22,064,178

Current Obligation: $22,064,178

Actual Outlays: $22,064,178

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline