SEC awards $7.7M contract for computing infrastructure to FINRA, impacting financial data services

Contract Overview

Contract Amount: $7,712,523 ($7.7M)

Contractor: Financial Industry Regulatory Authority Inc

Awarding Agency: Securities and Exchange Commission

Start Date: 2021-10-01

End Date: 2026-12-31

Contract Duration: 1,917 days

Daily Burn Rate: $4.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: LABOR HOURS

Sector: IT

Official Description: BLUESHEET SYSTEM

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20549

State: District of Columbia Government Spending

Plain-Language Summary

Securities and Exchange Commission obligated $7.7 million to FINANCIAL INDUSTRY REGULATORY AUTHORITY INC for work described as: BLUESHEET SYSTEM Key points: 1. Contract value of $7.7M over 5 years for computing infrastructure. 2. Sole-source award to FINRA raises questions about competition. 3. Potential risk in reliance on a single provider for critical data services. 4. Spending falls within the IT sector, specifically data processing and hosting.

Value Assessment

Rating: questionable

The contract value of $7.7M for 5 years suggests a significant investment in computing infrastructure. Benchmarking is difficult without specific service details, but the lack of competition may have led to a suboptimal price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded sole-source, meaning there was no open competition. This method limits price discovery and may not yield the best value for the government.

Taxpayer Impact: The lack of competitive bidding could result in taxpayers paying more than necessary for these essential computing services.

Public Impact

Ensures continued operation of critical financial data processing and web hosting services. Supports the regulatory functions of the Securities and Exchange Commission. Potential for increased costs due to sole-source award impacts taxpayer funds.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
Potential for overpricing

Positive Signals

Ensures continuity of essential services
Supports regulatory functions

Sector Analysis

This contract falls under the IT sector, specifically focusing on computing infrastructure, data processing, and web hosting. Spending in this area is crucial for government operations, but competitive procurement is key to cost-effectiveness.

Small Business Impact

The contract was not awarded to a small business. There is no indication of subcontracting opportunities for small businesses within this sole-source award.

Oversight & Accountability

The sole-source nature of this award warrants scrutiny to ensure the SEC obtained fair value and that the necessity for a sole-source justification is well-documented and periodically reviewed.

Related Government Programs

Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services
Securities and Exchange Commission Contracting
Securities and Exchange Commission Programs

Risk Flags

Sole-source award limits competition and price discovery.
Potential for higher costs due to lack of competitive bidding.
Dependency on a single vendor for critical IT infrastructure.
No small business participation noted.

Frequently Asked Questions

What is this federal contract paying for?

Securities and Exchange Commission awarded $7.7 million to FINANCIAL INDUSTRY REGULATORY AUTHORITY INC. BLUESHEET SYSTEM

Who is the contractor on this award?

The obligated recipient is FINANCIAL INDUSTRY REGULATORY AUTHORITY INC.

Which agency awarded this contract?

Awarding agency: Securities and Exchange Commission (Securities and Exchange Commission).

What is the total obligated amount?

The obligated amount is $7.7 million.

What is the period of performance?

Start: 2021-10-01. End: 2026-12-31.

What is the justification for the sole-source award, and were alternative competitive strategies considered?

The justification for a sole-source award is critical for understanding why competition was bypassed. Agencies typically cite unique capabilities, urgent needs, or lack of market availability. Without this justification, it's difficult to assess if taxpayers received fair value or if alternative, more competitive approaches were overlooked, potentially leading to higher costs.

How does the pricing compare to similar sole-source or competitively awarded contracts for comparable computing infrastructure services?

Benchmarking this contract's price against similar services is essential for value assessment. If comparable competitively awarded contracts show lower per-unit costs or better service levels for the price, it indicates potential overpayment. Conversely, if similar sole-source contracts are priced higher, it might suggest the current price is within an expected range, though still potentially suboptimal.

What are the risks associated with relying on a single provider for critical data processing and web hosting services?

Sole-source reliance introduces risks such as vendor lock-in, potential price increases upon contract renewal, and vulnerability to service disruptions if the vendor faces issues. It also limits the government's ability to leverage innovation from a competitive market, potentially hindering long-term efficiency and modernization efforts.

Industry Classification

NAICS: Information › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 50310221R0022

Offers Received: 1

Pricing Type: LABOR HOURS (Z)

Evaluated Preference: NONE

Contractor Details

Address: 1735 K ST NW, WASHINGTON, DC, 20006

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

Financial Breakdown

Contract Ceiling: $9,140,018

Exercised Options: $9,140,018

Current Obligation: $7,712,523

Actual Outlays: $7,255,734

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline