Treasury's $18M IRAQI PAYMENT SYSTEM contract awarded to Montran Corporation for consulting services

Contract Overview

Contract Amount: $18,049,070 ($18.0M)

Contractor: Montran Corporation

Awarding Agency: Department of the Treasury

Start Date: 2004-07-19

End Date: 2008-02-29

Contract Duration: 1,320 days

Daily Burn Rate: $13.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: IRAQI PAYMENT SYSTEM

Plain-Language Summary

Department of the Treasury obligated $18.0 million to MONTRAN CORPORATION for work described as: IRAQI PAYMENT SYSTEM Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract duration of 1320 days indicates a significant, long-term engagement. 3. The 'Other Scientific and Technical Consulting Services' NAICS code points to specialized expertise. 4. Award type 'DCA' (Definitized Contract Action) suggests a modification or adjustment to an existing agreement. 5. The absence of small business set-aside flags indicates no specific provisions for small business participation. 6. The contract's focus on a payment system implies critical financial infrastructure support.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance metrics or comparable project data. The total award amount of approximately $18 million over roughly 3.6 years suggests a moderate annual expenditure. However, without details on the specific services rendered or the outcomes achieved, a definitive assessment of value for money is difficult. The cost-plus-fixed-fee (CPFF) contract type can sometimes lead to higher costs if not managed tightly, but it also allows for flexibility in scope.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit a bid. This suggests a robust bidding environment where multiple companies likely vied for the contract. The presence of two bidders (as indicated by 'no': 2) further supports the notion of competition, though a higher number of bidders would typically indicate stronger price discovery and potentially lower costs for the government.

Taxpayer Impact: A competitive award process generally benefits taxpayers by fostering price reductions and encouraging efficient service delivery from contractors seeking to win the bid.

Public Impact

The primary beneficiaries are likely the Department of the Treasury and potentially entities involved in international financial operations or reconstruction efforts. The services delivered relate to the development, implementation, or maintenance of a payment system, crucial for financial transactions. The geographic impact is likely focused on supporting U.S. financial interests or operations abroad, potentially in post-conflict zones like Iraq. Workforce implications would involve specialized technical and consulting personnel required for complex financial system projects.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contracts require diligent oversight to ensure costs remain reasonable and do not escalate beyond initial projections.
The 'DCA' award type might indicate a history of modifications or adjustments, necessitating scrutiny of the reasons and financial impact of these changes.
Lack of explicit small business participation could limit opportunities for smaller firms in this specific contract's value chain.

Positive Signals

Awarded through full and open competition, suggesting a fair and transparent procurement process.
The contract addresses a critical need for a payment system, indicating strategic importance.
The fixed fee component in the CPFF structure provides some cost predictability for the government.

Sector Analysis

The IT consulting and professional services sector is vast, encompassing a wide range of specialized expertise. Contracts like this, focused on financial systems and technical consulting, fall within the broader category of business and management consulting services, often overlapping with IT infrastructure and financial technology. The market size for such services is substantial, driven by government needs for modernization, security, and operational efficiency in financial management and transaction processing.

Small Business Impact

This contract does not appear to have included specific small business set-aside provisions, as indicated by 'sb': false. Consequently, small businesses were likely not prioritized in the initial solicitation. However, Montran Corporation, as the prime contractor, may have subcontracting opportunities, though the extent to which small businesses would be involved is not specified. The absence of set-asides means the primary focus was on competition among all eligible sources, potentially larger firms.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Treasury's contracting and financial management offices. Accountability measures would be tied to the terms of the Cost Plus Fixed Fee (CPFF) agreement, requiring Montran Corporation to adhere to performance standards and cost reporting requirements. Transparency is generally facilitated through contract award databases, though detailed performance reports may not always be publicly accessible. The Inspector General for the Department of the Treasury would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Financial Systems Modernization
International Payment Systems
Government Financial Management Systems
Consulting Services for Treasury
IT Services for Financial Sector

Risk Flags

Potential for cost overruns inherent in CPFF contracts.
Need for robust oversight due to complexity of financial systems.
Importance of clear performance metrics for value assessment.
Risk associated with operating in potentially unstable environments (implied by 'IRAQI').

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $18.0 million to MONTRAN CORPORATION. IRAQI PAYMENT SYSTEM

Who is the contractor on this award?

The obligated recipient is MONTRAN CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of the Treasury (Departmental Offices).

What is the total obligated amount?

The obligated amount is $18.0 million.

What is the period of performance?

Start: 2004-07-19. End: 2008-02-29.

What was the specific nature of the 'IRAQI PAYMENT SYSTEM' and Montran Corporation's role in its development or maintenance?

The 'IRAQI PAYMENT SYSTEM' likely refers to a financial infrastructure project aimed at facilitating monetary transactions within Iraq, potentially during a post-conflict reconstruction phase or for managing government disbursements. Montran Corporation, specializing in financial transaction systems, would have been responsible for providing the technical expertise, software development, system integration, or operational support necessary for this payment system. Their role could have encompassed designing the architecture, implementing the software, ensuring security protocols, and potentially training local personnel. The exact scope would be detailed in the contract's Statement of Work (SOW), which is not provided here but would outline deliverables, milestones, and performance standards.

How does the $18 million award compare to typical spending on similar payment system development contracts by the government?

Comparing the $18 million award requires context regarding the complexity, duration, and scope of the 'IRAQI PAYMENT SYSTEM.' Government contracts for developing or modernizing financial payment systems can vary significantly in cost. Large-scale national payment infrastructures or international financial transaction platforms can cost tens or hundreds of millions of dollars. Smaller, more localized systems or specific component developments might fall within the single-digit millions. An $18 million contract over approximately 3.6 years suggests a moderately sized project, likely involving significant customization and integration, but perhaps not a complete overhaul of a national banking system. Benchmarking against similar projects within Treasury or other agencies dealing with international finance would provide a more precise comparison.

What are the key risks associated with a Cost Plus Fixed Fee (CPFF) contract for a complex system like this?

The primary risk with a Cost Plus Fixed Fee (CPFF) contract is that the government may end up paying more than necessary if the contractor's costs escalate beyond initial estimates, even though the fee is fixed. While the fixed fee incentivizes the contractor to control costs to maximize their profit margin, there's still a risk of scope creep or unforeseen technical challenges driving up the base cost. Effective oversight is crucial to scrutinize incurred costs and ensure they are reasonable and allocable to the contract. Another risk is that the contractor might prioritize completing the work to earn their fee over achieving the absolute best technical outcome if not carefully managed through performance metrics and quality assurance.

What does the 'DCA' (Definitized Contract Action) award type imply about the contract's history?

A 'Definitized Contract Action' (DCA) typically indicates that the contract was initially awarded under a more flexible or provisional agreement, such as a letter contract or an undefinitized contract action (UCA), and has now been formally finalized with a definitive contract. This process involves negotiating and agreeing upon all the terms and conditions, including the final price, scope of work, and delivery schedule. Receiving a DCA suggests that the initial agreement was necessary to allow work to commence quickly, perhaps due to urgent needs or ongoing negotiations. The definitization process then solidifies the government's commitment and the contractor's obligations, providing greater certainty for both parties.

Given the 'Other Scientific and Technical Consulting Services' NAICS code, what level of technical expertise was likely required?

The NAICS code 541690, 'Other Scientific and Technical Consulting Services,' signifies that the contract required highly specialized knowledge and expertise beyond general management or IT consulting. This could include areas such as engineering, physics, environmental science, or, in this case, highly specialized financial systems engineering and consulting. For the 'IRAQI PAYMENT SYSTEM,' this likely involved consultants with deep understanding of financial transaction protocols, cybersecurity for financial data, regulatory compliance in international finance, and potentially expertise in specific software platforms or hardware related to payment processing. The nature of the work suggests a need for professionals with advanced degrees or extensive practical experience in niche technical fields.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Other Scientific and Technical Consulting Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Contractor Details

Address: 475 5TH AVE FL 8, NEW YORK, NY, 90

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $18,049,070

Exercised Options: $18,049,070

Current Obligation: $18,049,070

Timeline