Treasury's IRS spent $29M on BMC software maintenance over 6 years via competitive delivery order

Contract Overview

Contract Amount: $29,012,204 ($29.0M)

Contractor: Presidio Networked Solutions, LLC

Awarding Agency: Department of the Treasury

Start Date: 2009-09-30

End Date: 2015-09-30

Contract Duration: 2,191 days

Daily Burn Rate: $13.2K/day

Competition Type: COMPETITIVE DELIVERY ORDER

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: BMC SW MAINTENANCE FY10

Place of Performance

Location: HYATTSVILLE, PRINCE GEORGES County, MARYLAND, 20784

State: Maryland Government Spending

Plain-Language Summary

Department of the Treasury obligated $29.0 million to PRESIDIO NETWORKED SOLUTIONS, LLC for work described as: BMC SW MAINTENANCE FY10 Key points: 1. Value for money appears reasonable given the 6-year duration and competitive nature of the award. 2. Competition dynamics indicate a healthy bidding environment, likely driving favorable pricing. 3. Risk indicators are low, with a firm fixed-price contract and a single, established vendor. 4. Performance context suggests consistent software maintenance needs for the IRS over an extended period. 5. Sector positioning places this contract within the IT services category, specifically software maintenance.

Value Assessment

Rating: good

The contract's total value of approximately $29 million over six years averages to about $4.8 million annually. This figure needs to be benchmarked against similar large-scale software maintenance contracts for enterprise-level solutions. Without direct comparable data, it's difficult to definitively assess if this represents excellent value. However, the competitive award process suggests that pricing was likely scrutinized and found to be fair at the time of award.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded as a competitive delivery order, indicating that multiple vendors had the opportunity to bid. The fact that it was competed suggests a robust process was followed to solicit proposals and select the best value. The presence of competition is generally a positive sign for price discovery and ensuring the government receives competitive rates.

Taxpayer Impact: A competitive award process helps ensure that taxpayer dollars are used efficiently by fostering a market-driven price. This approach minimizes the risk of overpayment compared to sole-source procurements.

Public Impact

The Internal Revenue Service (IRS) benefits from uninterrupted access to critical BMC software, essential for its operations. Services delivered include maintenance and support for BMC software, ensuring its functionality and security. The geographic impact is primarily national, supporting the IRS's nationwide tax administration functions. Workforce implications are indirect, supporting IT professionals who rely on this software for their duties.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if renewal negotiations are not managed carefully.
Reliance on a single vendor for critical software maintenance could pose a risk if the vendor faces financial or operational difficulties.

Positive Signals

Competitive award process suggests a fair market price was established.
Long-term contract (6 years) provides stability and predictability for IT budgeting.
Firm fixed-price contract limits cost uncertainty for the government.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on software maintenance and support. The market for enterprise software maintenance is substantial, with many vendors offering specialized services. This contract represents a significant investment by a large federal agency in maintaining its IT infrastructure, aligning with broader government trends towards modernizing and securing its technology systems.

Small Business Impact

The data indicates this contract was not set aside for small businesses, nor does it explicitly mention subcontracting to small businesses. Therefore, the direct impact on the small business ecosystem appears minimal based on the provided information. Further investigation into subcontracting plans would be needed to fully assess any indirect benefits.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the IRS's contracting officers and program managers. Transparency is generally maintained through contract databases like FPDS. Accountability measures are inherent in the firm fixed-price structure and the delivery order mechanism, which requires adherence to specified terms and conditions. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Federal IT Software Procurement
Enterprise Software Maintenance Contracts
IRS IT Modernization Efforts
Department of the Treasury IT Spending

Risk Flags

Potential for vendor lock-in
Risk of technological obsolescence over 6 years
Reliance on a single vendor for critical software

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $29.0 million to PRESIDIO NETWORKED SOLUTIONS, LLC. BMC SW MAINTENANCE FY10

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 $29.0 million.

What is the period of performance?

Start: 2009-09-30. End: 2015-09-30.

What is the track record of Presidio Networked Solutions, LLC with the federal government, particularly in software maintenance contracts?

Presidio Networked Solutions, LLC has a significant history of federal contracting. A review of federal procurement data would reveal the extent of their awards, the agencies they have served, and the types of services provided. For this specific contract, their role as the awardee suggests they met the technical and financial requirements set forth by the IRS. Their performance on this $29 million, 6-year contract would be a key indicator of their reliability and capability in delivering software maintenance services to large federal agencies. Further analysis would involve examining past performance evaluations and any reported issues or successes on similar contracts.

How does the annual cost of this BMC software maintenance compare to industry benchmarks for similar enterprise software?

The annual cost for this contract averaged approximately $4.8 million ($29M / 6 years). To benchmark this against industry standards, one would need to identify comparable enterprise software suites (e.g., ERP, CRM, core business applications) and their typical annual maintenance and support fees as a percentage of the initial software license cost or as a fixed annual fee. Factors such as the criticality of the software, the level of support required (e.g., 24/7, next-business-day response), and the vendor's pricing model significantly influence these costs. Without knowing the specific BMC software product and its original acquisition cost or licensing terms, a precise comparison is challenging. However, enterprise software maintenance can often range from 15-25% of the initial software cost annually.

What are the primary risks associated with a 6-year firm fixed-price contract for software maintenance?

A primary risk with a long-term, firm fixed-price contract for software maintenance is potential price escalation if market rates for maintenance increase significantly over the contract period, leading to the government potentially overpaying towards the end of the term. Conversely, if market rates decrease, the vendor might be incentivized to reduce service quality to maintain profitability. Another risk is technological obsolescence; the software might become outdated or unsupported by the vendor within the 6-year window, requiring costly upgrades or replacements not fully accounted for in the fixed price. Vendor lock-in is also a concern, as switching maintenance providers for complex enterprise software can be difficult and expensive, potentially weakening the government's negotiating position in future renewals.

How effective has the IRS been in leveraging BMC software for its core tax administration functions?

Assessing the effectiveness of BMC software for the IRS's core tax administration functions requires a deeper dive into the specific modules of BMC software utilized and their impact on key performance indicators (KPIs) such as tax processing efficiency, taxpayer service levels, fraud detection rates, and data security. This contract solely covers maintenance, not the implementation or enhancement of the software. Therefore, its effectiveness is tied to ensuring the software remains operational and supported. The IRS's continued investment and competitive procurement suggest the software is considered essential. However, a comprehensive evaluation would necessitate performance metrics directly linked to the software's contribution to the IRS's mission objectives.

What has been the historical spending trend for BMC software maintenance at the IRS or Treasury?

To determine historical spending trends, one would need to analyze federal procurement data (e.g., FPDS) for the IRS and potentially the broader Department of the Treasury over several fiscal years. This would involve searching for contracts awarded to BMC or its authorized resellers for software maintenance and support. Examining spending patterns before and after this $29 million contract, as well as looking at other similar maintenance contracts, would reveal whether this expenditure is consistent, increasing, or decreasing relative to the agency's overall IT budget and needs. Understanding these trends provides context for the scale and duration of the current contract.

Were there any specific performance issues or contract modifications during the 6-year period of this delivery order?

Information regarding specific performance issues or contract modifications is typically found within the contract's official documentation and performance history reports, which are not fully detailed in the provided summary data. Contract modifications (e.g., change orders, supplemental agreements) would indicate adjustments to scope, price, or schedule. Performance issues might be documented through contractor performance assessments or dispute resolution records. Without access to these detailed records, it's impossible to ascertain if this contract experienced significant modifications or performance challenges beyond standard operational adjustments.

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: COMPETITIVE DELIVERY ORDER

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: FIRM 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: $29,012,204

Exercised Options: $29,012,204

Current Obligation: $29,012,204

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS35F4554G

IDV Type: FSS

Timeline