Treasury's $43.6M IBM Software Subscription Contract Awarded to Strong Castle, Inc. Under Full and Open Competition

Contract Overview

Contract Amount: $43,643,350 ($43.6M)

Contractor: Strong Castle, Inc

Awarding Agency: Department of the Treasury

Start Date: 2012-12-28

End Date: 2013-12-30

Contract Duration: 367 days

Daily Burn Rate: $118.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: CRITICAL FUNCTION - IBM SOFTWARE SUBSCRIPTION

Place of Performance

Location: LANHAM, PRINCE GEORGE'S County, MARYLAND, 20706

State: Maryland Government Spending

Plain-Language Summary

Department of the Treasury obligated $43.6 million to STRONG CASTLE, INC for work described as: CRITICAL FUNCTION - IBM SOFTWARE SUBSCRIPTION Key points: 1. The contract represents a significant investment in critical IT infrastructure for the IRS. 2. Strong Castle, Inc. secured this award through a competitive bidding process, suggesting potential for value. 3. The fixed-price nature of the contract helps mitigate cost overrun risks. 4. The contract duration of over a year provides a stable period for service delivery. 5. The award was made under the 'Other Computer Related Services' NAICS code, indicating a broad service category.

Value Assessment

Rating: fair

Benchmarking the value of this specific IBM software subscription is challenging without detailed service level agreements and comparable market data for the exact software suite. However, the contract value of $43.6 million over approximately one year suggests a substantial investment. The firm fixed-price structure is a positive indicator for cost control. Further analysis would require comparing the pricing against other government or commercial contracts for similar IBM software licenses and support, considering the scope of services and user base.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. The presence of 3 bidders, as noted in the data, suggests a reasonable level of competition for this IT service contract. This competitive environment is generally expected to drive more favorable pricing and service terms for the government compared to sole-source or limited competition awards.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure the best possible value for the government's investment in essential software and related services.

Public Impact

The primary beneficiaries are the Internal Revenue Service (IRS) employees who rely on IBM software for critical tax administration functions. The contract ensures the continued availability and support of essential software, facilitating the IRS's mission. The geographic impact is primarily within the IRS's operational centers, likely across the United States. Workforce implications include ensuring IT staff have the necessary tools and support to perform their duties effectively.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of detailed performance metrics in the provided data makes it difficult to assess the contractor's performance history.
The specific IBM software suite and its criticality to IRS operations warrant close monitoring to ensure uninterrupted service.
The contract value, while competitively awarded, represents a significant expenditure that requires ongoing justification.

Positive Signals

Awarded through full and open competition, indicating a robust bidding process.
Firm fixed-price contract type helps control costs and provides budget certainty.
The contract duration of over a year provides stability for critical IT services.

Sector Analysis

This contract falls within the broader IT services sector, specifically focusing on software subscriptions and related support. The market for enterprise software, particularly from major vendors like IBM, is substantial and characterized by long-term relationships and significant investments. The IRS's need for reliable software underscores the importance of this sector for government operations. Comparable spending benchmarks would involve analyzing other large government contracts for enterprise software licenses and maintenance from similar vendors.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). There is no explicit information regarding subcontracting plans. Therefore, the direct impact on the small business ecosystem is likely minimal, as the prime contract was awarded to a larger entity. Future analysis could explore if any subcontracting opportunities were made available to small businesses.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program managers within the IRS. Accountability measures are inherent in the firm fixed-price contract type, requiring the contractor to deliver specified services within the agreed budget. Transparency is facilitated by the contract award data being publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

IRS IT Modernization Programs
Federal Civilian Agency Software Procurement
IBM Enterprise Software Agreements
IT Services and Support Contracts

Risk Flags

Potential for vendor lock-in with critical IBM software.
Lack of detailed performance metrics in summary data.
Dependence on a single software vendor for core operations.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $43.6 million to STRONG CASTLE, INC. CRITICAL FUNCTION - IBM SOFTWARE SUBSCRIPTION

Who is the contractor on this award?

The obligated recipient is STRONG CASTLE, INC.

Which agency awarded this contract?

Awarding agency: Department of the Treasury (Internal Revenue Service).

What is the total obligated amount?

The obligated amount is $43.6 million.

What is the period of performance?

Start: 2012-12-28. End: 2013-12-30.

What is the specific IBM software suite covered by this contract and its criticality to IRS operations?

The provided data does not specify the exact IBM software suite. However, given the contract's value and the agency (IRS), it is likely a critical enterprise software solution essential for tax processing, data management, or internal operations. Such software could include database management systems, middleware, operating systems, or specialized tax administration platforms. The criticality implies that any disruption in service or support could significantly impede the IRS's ability to fulfill its mission, making vendor performance and software reliability paramount.

How does the $43.6 million contract value compare to historical IRS spending on similar IBM software subscriptions?

Without access to historical IRS spending data specifically for IBM software subscriptions, a direct comparison is not possible. However, the $43.6 million award for a roughly one-year period suggests a substantial and ongoing investment. To assess if this represents an increase or decrease, one would need to analyze prior contract awards for similar IBM products or services, considering factors like software versions, user counts, and included support levels. Trends in enterprise software costs and the IRS's evolving IT needs would also influence this comparison.

What are the key performance indicators (KPIs) and service level agreements (SLAs) associated with this contract?

The provided contract data does not detail the specific Key Performance Indicators (KPIs) or Service Level Agreements (SLAs). Typically, for software subscription and support contracts of this magnitude, SLAs would cover aspects such as software uptime, response times for technical support, patch and update delivery schedules, and potentially performance benchmarks. KPIs would measure the contractor's adherence to these SLAs. The absence of this information in the summary data limits a thorough assessment of performance expectations and contractor accountability.

What is the track record of Strong Castle, Inc. in delivering similar IT services to federal agencies?

Information regarding Strong Castle, Inc.'s specific track record for delivering similar IT services, particularly IBM software subscriptions, to federal agencies is not detailed in the provided data. A comprehensive assessment would require reviewing past performance evaluations, contract history, and client feedback for Strong Castle, Inc. This would help determine their experience, reliability, and success in fulfilling complex IT service contracts, especially those involving critical software for large government organizations like the IRS.

What are the potential risks associated with relying on a single vendor (IBM) for such a critical software subscription?

The primary risk associated with relying on a single vendor like IBM for critical software is vendor lock-in, which can limit future flexibility and potentially lead to escalating costs over time. There's also a risk of service disruptions if the vendor experiences technical issues or changes its product roadmap unfavorably. Furthermore, the IRS's dependence on IBM software could be a vulnerability if the vendor faces financial instability or security breaches. Mitigating these risks often involves strong contract negotiation, clear SLAs, and exploring multi-vendor strategies where feasible.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1901 N MOORE ST STE 805, ARLINGTON, VA, 08

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Hispanic American Owned Business, HUBZone Firm, Minority Owned Business, Service Disabled Veteran Owned Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $300,000,000

Exercised Options: $43,643,350

Current Obligation: $43,643,350

Parent Contract

Parent Award PIID: GS35F0319Y

IDV Type: FSS

Timeline