Treasury's $10.9M Financial Data Application Package awarded to Standard & Poor's faces scrutiny over competition
Contract Overview
Contract Amount: $10,895,120 ($10.9M)
Contractor: Standard & Poor's Financial Services LLC
Awarding Agency: Department of the Treasury
Start Date: 2005-12-01
End Date: 2010-09-30
Contract Duration: 1,764 days
Daily Burn Rate: $6.2K/day
Competition Type: COMPETED UNDER SAP
Number of Offers Received: 5
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: FINANCIAL DATA APPLICATION PACKAGE
Place of Performance
Location: CENTENNIAL, ARAPAHOE County, COLORADO, 80112
State: Colorado Government Spending
Plain-Language Summary
Department of the Treasury obligated $10.9 million to STANDARD & POOR'S FINANCIAL SERVICES LLC for work described as: FINANCIAL DATA APPLICATION PACKAGE Key points: 1. The contract value is $10.9 million over nearly five years. 2. Awarded to Standard & Poor's, a major financial data provider. 3. Competition method is 'Competed Under SAP', raising questions about full and open competition. 4. The sector is Information Services, with potential for high markups.
Value Assessment
Rating: questionable
The contract's fixed-price nature provides some cost certainty. However, without clear benchmarks or competitive pricing data, assessing value for money is difficult. The lack of detailed cost breakdowns hinders a thorough evaluation.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was 'Competed Under SAP' (Simplified Acquisition Procedures), suggesting it may not have undergone full and open competition. This limited competition could have impacted price discovery and potentially led to a higher price than if a broader competition had been conducted.
Taxpayer Impact: The limited competition raises concerns about whether taxpayers received the best possible price for these financial data services.
Public Impact
Citizens may be paying more than necessary for essential financial data services due to limited competition. The IRS relies on this data for critical functions, making vendor lock-in a potential issue. Transparency in government contracting is reduced when SAP is used for significant contract values.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition method (SAP)
- Lack of detailed pricing justification
- Potential for overpayment due to limited competition
Positive Signals
- Firm Fixed Price contract type
- Long-term relationship with a known vendor
Sector Analysis
The Information Services sector is broad, encompassing data provision, software, and IT support. Benchmarks vary widely, but for specialized data services like those provided by S&P, costs can be significant, especially when competition is limited.
Small Business Impact
There is no indication that small businesses were involved in this contract, either as prime contractors or subcontractors. The award to a large, established firm like Standard & Poor's suggests a focus on incumbent or specialized capabilities.
Oversight & Accountability
The use of Simplified Acquisition Procedures for a contract of this value warrants review to ensure proper justification and adherence to procurement regulations. Further oversight is needed to confirm fair pricing and competition.
Related Government Programs
- All Other Information Services
- Department of the Treasury Contracting
- Internal Revenue Service Programs
Risk Flags
- Potential for inflated pricing due to limited competition.
- Lack of transparency in the procurement process (use of SAP).
- Risk of vendor lock-in for critical financial data.
- Insufficient justification for contract value without competitive benchmarks.
Tags
all-other-information-services, department-of-the-treasury, co, dca, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of the Treasury awarded $10.9 million to STANDARD & POOR'S FINANCIAL SERVICES LLC. FINANCIAL DATA APPLICATION PACKAGE
Who is the contractor on this award?
The obligated recipient is STANDARD & POOR'S FINANCIAL SERVICES 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 $10.9 million.
What is the period of performance?
Start: 2005-12-01. End: 2010-09-30.
Was the use of Simplified Acquisition Procedures (SAP) appropriate for a contract of this value and duration, and did it achieve fair and reasonable pricing?
The appropriateness of SAP for a nearly $11 million contract over five years is questionable. SAP is typically intended for smaller procurements to increase efficiency. Using it here may have bypassed opportunities for broader competition, potentially impacting price discovery and leading to a less favorable outcome for taxpayers. A review of the justification for using SAP is warranted.
What is the risk of vendor lock-in and price escalation given the limited competition and the specialized nature of the data provided?
There is a moderate risk of vendor lock-in and potential price escalation. Standard & Poor's is a primary source for much of this financial data. Limited competition during the initial award makes it harder for the government to negotiate aggressively on price or switch vendors. Future contract renewals could see price increases if competition remains restricted.
How effectively does this contract support the IRS's mission, and could alternative data sources or methods achieve similar results at a lower cost?
The effectiveness of the contract is presumed given its duration and renewal, suggesting it meets IRS needs for financial data. However, without a cost-benefit analysis comparing S&P's data to potential alternatives or in-house solutions, it's difficult to definitively assess cost-effectiveness. Exploring other data providers or analytical tools could reveal more economical options.
Industry Classification
NAICS: Information › Other Information Services › All Other Information Services
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS
Competition & Pricing
Extent Competed: COMPETED UNDER SAP
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 5
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: S&P Global Inc. (UEI: 001213206)
Address: 7400 SOUTH ALTON COURT, CENTENNIAL, CO, 06
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $12,948,864
Exercised Options: $12,153,596
Current Obligation: $10,895,120
Timeline
Start Date: 2005-12-01
Current End Date: 2010-09-30
Potential End Date: 2010-09-30 00:00:00
Last Modified: 2011-03-01
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