Treasury's IRS awarded $27.8M to Presidio for IT hardware, with a 1383-day duration

Contract Overview

Contract Amount: $27,880,158 ($27.9M)

Contractor: Presidio Networked Solutions, LLC

Awarding Agency: Department of the Treasury

Start Date: 2004-12-17

End Date: 2008-09-30

Contract Duration: 1,383 days

Daily Burn Rate: $20.2K/day

Competition Type: NON-COMPETITIVE DELIVERY ORDER

Number of Offers Received: 1

Pricing Type: FIXED PRICE

Sector: IT

Official Description: CONVERT CREDITS

Place of Performance

Location: LANHAM, PRINCE GEORGES County, MARYLAND, 20706

State: Maryland Government Spending

Plain-Language Summary

Department of the Treasury obligated $27.9 million to PRESIDIO NETWORKED SOLUTIONS, LLC for work described as: CONVERT CREDITS Key points: 1. Value for money appears fair given the long contract duration and fixed-price nature. 2. Competition dynamics were limited, as this was a non-competitive delivery order. 3. Risk indicators are moderate, with a long performance period and a single awardee. 4. Performance context suggests a need for ongoing IT hardware support for the IRS. 5. Sector positioning is within IT hardware procurement, a common government need.

Value Assessment

Rating: fair

The total award of $27.8 million over approximately 3.8 years suggests a moderate annual spend. Without specific details on the hardware procured, direct comparison to similar contracts is challenging. However, the fixed-price contract type implies that the government aimed to control costs upfront. The benchmarked per-unit cost is not available, but the overall value should be assessed against the criticality and longevity of the IT assets provided to the IRS.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a non-competitive delivery order, indicating that it was not openly competed. This typically occurs when a specific vendor is chosen based on prior relationships, unique capabilities, or when it's a follow-on to an existing contract. The limited competition means there was no opportunity for multiple vendors to bid, potentially impacting price discovery and the government's ability to secure the lowest possible price.

Taxpayer Impact: The lack of competition means taxpayers may not have benefited from the cost savings that could arise from a more robust bidding process. The government did not leverage market forces to drive down prices.

Public Impact

The Internal Revenue Service (IRS) is the primary beneficiary, receiving essential IT hardware. This contract supports the operational needs of tax administration and processing. The geographic impact is likely concentrated where IRS facilities require this hardware, primarily in Maryland. Workforce implications are indirect, supporting the IT infrastructure used by IRS employees.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Non-competitive award limits price scrutiny and potential savings.
Long contract duration increases the risk of technology obsolescence or changing needs.
Lack of defined performance metrics makes assessing contractor effectiveness difficult.

Positive Signals

Fixed-price contract provides cost certainty for the government.
Award to an established vendor may ensure continuity of essential IT services.
Long duration suggests a stable, ongoing requirement for the procured goods.

Sector Analysis

This contract falls within the Information Technology (IT) hardware sector, specifically computer and software stores. The federal government is a significant purchaser of IT hardware, with annual spending in the billions across various agencies. This contract represents a portion of the IRS's investment in maintaining its technological infrastructure, which is crucial for its operations. Comparable spending benchmarks would involve analyzing other large-scale IT hardware procurements for federal agencies.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. The awardee, Presidio Networked Solutions, LLC, is a large business. Therefore, this specific contract does not directly contribute to the small business contracting ecosystem or provide opportunities for small business subcontractors.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Treasury's Inspector General, who is responsible for auditing and investigating waste, fraud, and abuse within the department. Transparency is limited due to the non-competitive nature of the award. Accountability would be managed through contract administration by the IRS contracting officers.

Related Government Programs

IRS IT Modernization Programs
Federal Civilian Agency IT Procurement
General Services Administration (GSA) Schedule Contracts

Risk Flags

Non-competitive award
Long contract duration for IT hardware
Lack of detailed performance metrics in summary data

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $27.9 million to PRESIDIO NETWORKED SOLUTIONS, LLC. CONVERT CREDITS

Who is the contractor on this award?

The obligated recipient is PRESIDIO NETWORKED SOLUTIONS, 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 $27.9 million.

What is the period of performance?

Start: 2004-12-17. End: 2008-09-30.

What specific types of IT hardware were procured under this contract?

The provided data indicates the North American Industry Classification System (NAICS) code as 443120, which corresponds to 'Computer and Software Stores.' This suggests the procurement likely involved computer hardware, peripherals, and potentially related software. However, the specific line items, quantities, and technical specifications of the hardware are not detailed in the summary data. Further investigation into the contract's statement of work or delivery orders would be necessary to ascertain the precise nature of the IT hardware acquired by the IRS.

How does the total award amount compare to typical IT hardware spending for an agency of the IRS's size?

The total award of $27.8 million over approximately 3.8 years represents an average annual spend of roughly $7.3 million for IT hardware. This figure needs to be contextualized within the IRS's overall IT budget, which is substantial given its mission. While $7.3 million annually might seem significant, it could be a relatively small portion of the IRS's total IT expenditure, which includes software, services, personnel, and infrastructure. Benchmarking this against other large federal agencies' IT hardware procurement would provide a clearer picture of its relative scale.

What are the potential risks associated with a non-competitive delivery order for IT hardware?

The primary risk of a non-competitive delivery order is the potential for paying a higher price than could be achieved through open competition. Without multiple bids, the government loses the leverage of market forces to drive down costs. Additionally, there's a risk that the chosen vendor may not offer the most innovative or cost-effective solutions available. For IT hardware, a long performance period on a non-competitively awarded contract could also lead to acquiring technology that quickly becomes outdated or unsupported, necessitating costly replacements sooner than anticipated.

What is the significance of the contract's fixed-price type for the IRS?

A fixed-price contract type is generally advantageous for the government when the scope of work is well-defined and the risks of cost overruns are manageable. For the IRS procuring IT hardware, a fixed-price agreement means the total cost is established upfront, providing budget certainty. This shifts the risk of cost increases to the contractor. It simplifies financial management and protects the agency from unexpected price hikes during the contract period, assuming the initial price was negotiated fairly.

How does the duration of this contract (1383 days) impact its overall value and risk?

The contract duration of 1383 days, approximately 3.8 years, is substantial for IT hardware procurement. While a longer duration can provide stability and ensure continuous supply, it also increases the risk of technology obsolescence. IT hardware evolves rapidly, and equipment purchased early in the contract might be outdated or unsupported by the end of its term. This could necessitate early replacement or lead to performance issues. From a value perspective, the fixed price over this period locks in costs, but it might not reflect potential future market price decreases or the availability of more advanced, cost-effective solutions.

Industry Classification

NAICS: Retail Trade › Electronics and Appliance Stores › Computer and Software Stores

Product/Service Code: INFORMATION TECHNOLOGY EQUIPMENT (INCLD FIRMWARE) SOFTWARE,SUPPLIES& SUPPORT EQUIPMENT

Competition & Pricing

Extent Competed: NON-COMPETITIVE DELIVERY ORDER

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Presidio, Inc. (UEI: 799064451)

Address: 5100 PHILADELPHIA WAY J, LANHAM, MD, 20706

Business Categories: Category Business, Small Business, Woman Owned Business

Financial Breakdown

Contract Ceiling: $120,860,632

Exercised Options: $107,940,553

Current Obligation: $27,880,158

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS35F4554G

IDV Type: FSS

Timeline