Treasury's $14.5M software contract awarded to FIS Capital Markets without competition, raising value concerns

Contract Overview

Contract Amount: $14,487,139 ($14.5M)

Contractor: FIS Capital Markets US LLC

Awarding Agency: Department of the Treasury

Start Date: 2021-10-01

End Date: 2026-09-30

Contract Duration: 1,825 days

Daily Burn Rate: $7.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: FIS INVESTONE LICENSES, MAINTENANCE, AND OPTIONAL ADDITIONAL SERVICES

Place of Performance

Location: LOMBARD, DUPAGE County, ILLINOIS, 60148

State: Illinois Government Spending

Plain-Language Summary

Department of the Treasury obligated $14.5 million to FIS CAPITAL MARKETS US LLC for work described as: FIS INVESTONE LICENSES, MAINTENANCE, AND OPTIONAL ADDITIONAL SERVICES Key points: 1. The contract's value, while substantial, lacks competitive benchmarking to confirm cost-effectiveness. 2. A sole-source award limits price discovery and potentially increases costs for taxpayers. 3. The absence of competition presents a risk of inflated pricing and reduced vendor innovation. 4. Performance context is limited due to the lack of comparative contract data. 5. This contract falls within the Software Publishers sector, supporting financial operations. 6. The firm-fixed-price structure aims to control costs, but competition is key to ensuring value.

Value Assessment

Rating: questionable

Benchmarking the value of this $14.5 million contract is challenging without competitive data. The lack of a competitive process means there's no direct comparison to similar software licenses or maintenance agreements in the market. While the firm-fixed-price structure provides some cost certainty, the absence of competition raises questions about whether the government is receiving the best possible price and value for these INVESTONE licenses and services. Without a bidding process, it's difficult to assess if the pricing is aligned with market rates or if it represents a fair deal for taxpayers.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. This approach is typically used when only one vendor can provide the required goods or services, or in specific circumstances like urgent needs or follow-on work to a previous sole-source award. The lack of competition means there were no other bidders, and therefore no opportunity for price negotiation or comparison among multiple vendors. This limits the government's ability to leverage market forces to achieve the best possible pricing.

Taxpayer Impact: A sole-source award means taxpayers do not benefit from the cost savings that typically arise from a competitive bidding process. This can lead to higher prices than might be achieved in an open market, potentially resulting in a less efficient use of public funds.

Public Impact

The Bureau of the Fiscal Service benefits from access to essential software for its financial operations. The contract ensures the continued availability and maintenance of the INVESTONE software platform. The services delivered are critical for managing federal financial data and transactions. The geographic impact is primarily within the federal government's operational centers, with no direct public-facing services. Workforce implications are internal to the Bureau of the Fiscal Service, supporting their IT infrastructure.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Sole-source awards can reduce transparency in pricing.
Absence of competitive pressure might limit innovation from alternative vendors.
Difficulty in benchmarking value without comparative bids.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Contract ensures continuity of essential financial software services.
Specific software (INVESTONE) is critical for the Bureau of the Fiscal Service's mission.

Sector Analysis

The Software Publishers sector (NAICS 511210) encompasses companies that develop and publish software. This contract for FIS INVESTONE licenses and maintenance fits within this sector, supporting the critical financial operations of the Department of the Treasury. The market for enterprise financial software is competitive, but specific legacy or highly integrated systems can sometimes lead to sole-source situations for maintenance and upgrades. Comparable spending benchmarks are difficult to establish without knowing the specific modules and user base, but enterprise software licenses and support can represent significant annual expenditures for large organizations.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. There is also no information provided regarding subcontracting plans for small businesses. Therefore, this award is unlikely to have a direct positive impact on the small business ecosystem. The focus is on a large, established software provider, rather than fostering opportunities for smaller firms in this specific procurement.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Treasury's internal procurement and financial management controls. The Bureau of the Fiscal Service is responsible for managing the contract and ensuring performance. Transparency is limited due to the sole-source nature of the award. There is no specific mention of an Inspector General's direct involvement in this particular contract, though the Treasury OIG generally oversees financial management and program integrity across the department.

Related Government Programs

Federal Information Technology Acquisition Reform Act (FITARA)
Software Licensing and Maintenance Contracts
Financial Management Systems
Bureau of the Fiscal Service IT Spending

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for inflated pricing
Limited transparency in cost justification

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $14.5 million to FIS CAPITAL MARKETS US LLC. FIS INVESTONE LICENSES, MAINTENANCE, AND OPTIONAL ADDITIONAL SERVICES

Who is the contractor on this award?

The obligated recipient is FIS CAPITAL MARKETS US LLC.

Which agency awarded this contract?

Awarding agency: Department of the Treasury (Bureau of the Fiscal Service).

What is the total obligated amount?

The obligated amount is $14.5 million.

What is the period of performance?

Start: 2021-10-01. End: 2026-09-30.

What is the track record of FIS Capital Markets US LLC with the federal government, particularly regarding sole-source contracts?

FIS Capital Markets US LLC, a subsidiary of FIS (Fidelity National Information Services), is a significant player in providing financial technology solutions. While specific data on their sole-source federal contracts isn't detailed here, FIS as a whole has a history of engaging with government agencies. Sole-source awards to established vendors like FIS often occur when agencies rely on specialized, integrated systems where vendor lock-in or unique capabilities necessitate direct contracting. Analyzing past sole-source awards to FIS could reveal patterns in pricing, justification, and performance, but this specific contract's details are limited. It's important to note that sole-source awards require strong justification to ensure they are in the government's best interest and not simply a matter of convenience.

How does the $14.5 million contract value compare to similar software licensing and maintenance contracts within the federal government?

Direct comparison of the $14.5 million contract value for FIS INVESTONE licenses and maintenance is difficult without more specific details on the scope of services, number of users, and specific modules licensed. However, enterprise-level software licenses and comprehensive support agreements for critical financial systems within large federal agencies frequently run into the millions of dollars annually. For instance, agencies like the IRS, GSA, or other Treasury bureaus often have multi-million dollar contracts for their core financial, HR, or IT infrastructure software. The value is substantial, but its 'fairness' or 'competitiveness' is obscured by the sole-source nature of this award, preventing a direct benchmark against competitively bid alternatives.

What are the primary risks associated with awarding a contract of this magnitude on a sole-source basis?

The primary risks associated with awarding a $14.5 million contract on a sole-source basis are increased costs and reduced accountability for value. Without competition, the government loses the leverage to negotiate the best possible price, potentially leading to overpayment. There's also a risk of vendor complacency, where the incumbent provider may have less incentive to innovate or offer superior service since there are no immediate threats from competitors. Furthermore, a sole-source award can limit transparency, making it harder for oversight bodies and the public to assess whether taxpayer funds are being used efficiently and effectively. This can also create vendor lock-in, making future transitions to different systems or providers more complex and costly.

What is the expected effectiveness of the INVESTONE software for the Bureau of the Fiscal Service's operations?

The INVESTONE software is described as being for 'FIS INVESTONE LICENSES, MAINTENANCE, AND OPTIONAL ADDITIONAL SERVICES,' suggesting it is a core component of the Bureau of the Fiscal Service's (BFS) operational infrastructure. BFS is responsible for managing the nation's finances, including processing payments, managing government accounts, and handling debt issuance. Therefore, the effectiveness of INVESTONE is likely critical to the BFS's ability to perform these essential functions accurately and efficiently. The contract's duration of five years (2021-2026) indicates a long-term reliance on this system. Its effectiveness is implicitly assumed by the agency's decision to renew or continue services, though specific performance metrics or success stories are not provided in the data.

How has federal spending on software licenses and maintenance evolved, and does this contract align with broader trends?

Federal spending on software licenses and maintenance has consistently been a significant portion of IT budgets, often comprising a substantial percentage of total IT expenditures. Agencies increasingly rely on commercial off-the-shelf (COTS) software for various functions, leading to recurring costs for licenses, subscriptions, and ongoing support. Trends show a shift towards cloud-based solutions and Software-as-a-Service (SaaS), which often involve subscription models rather than perpetual licenses. However, many agencies still maintain significant investments in on-premises software requiring ongoing maintenance. This $14.5 million contract for licenses and maintenance aligns with the trend of agencies investing in and maintaining critical software systems, though the sole-source nature and specific platform (INVESTONE) may represent a more traditional, less competitively sourced approach compared to modern cloud procurement strategies.

Industry Classification

NAICS: Information › Software Publishers › Software Publishers

Product/Service Code: IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 601 RIVERSIDE AVE, JACKSONVILLE, FL, 32204

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $30,602,259

Exercised Options: $14,487,139

Current Obligation: $14,487,139

Actual Outlays: $12,615,178

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline