IRS awards $3.9M contract for expert witness services to Lustig Credit Rating Advisory LLC

Contract Overview

Contract Amount: $3,924,957 ($3.9M)

Contractor: Lustig Credit Rating Advisory LLC

Awarding Agency: Department of the Treasury

Start Date: 2023-08-23

End Date: 2028-08-22

Contract Duration: 1,826 days

Daily Burn Rate: $2.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: LABOR HOURS

Sector: Other

Official Description: EXPERT WITNESS SERVICES: IRS EXPERT WITNESSES THAT IS CAPABLE OF PROVIDING LITIGATION SUPPORT FOR CASES INVOLVING IRS AUDIT DEFENSE, PERFORM FORENSIC ACCOUNTING SERVICES, AND/OR ASSIST IN TAX ABATEMENT

Place of Performance

Location: CHICAGO HEIGHTS, COOK County, ILLINOIS, 60411

State: Illinois Government Spending

Plain-Language Summary

Department of the Treasury obligated $3.9 million to LUSTIG CREDIT RATING ADVISORY LLC for work described as: EXPERT WITNESS SERVICES: IRS EXPERT WITNESSES THAT IS CAPABLE OF PROVIDING LITIGATION SUPPORT FOR CASES INVOLVING IRS AUDIT DEFENSE, PERFORM FORENSIC ACCOUNTING SERVICES, AND/OR ASSIST IN TAX ABATEMENT Key points: 1. Contract focuses on litigation support for IRS audit defense and forensic accounting. 2. The award is a definitive contract with a duration of 1826 days. 3. Services include providing expert testimony and assisting in tax abatement cases. 4. The contract was not competed, raising questions about price discovery. 5. The primary service area is Illinois, with potential for broader application. 6. This contract supports the Internal Revenue Service's litigation and enforcement activities.

Value Assessment

Rating: fair

The contract value of $3.9 million for expert witness services over five years appears moderate for specialized litigation support. Benchmarking against similar contracts for IRS expert witnesses is challenging due to the specific nature of the services and the lack of competitive bidding. Without a competitive process, it is difficult to definitively assess if the pricing represents excellent value for money. However, the defined scope of services suggests a clear need for specialized expertise in tax law and forensic accounting.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when a specific contractor possesses unique qualifications or capabilities essential for the requirement, or in cases of urgent need. The lack of competition means that the government did not benefit from a bidding process that could have potentially driven down prices or offered a wider range of solutions. The rationale for the sole-source award would need to be thoroughly documented by the agency.

Taxpayer Impact: A sole-source award limits the opportunity for taxpayers to benefit from cost savings that might arise from a competitive bidding process. It also reduces transparency in how public funds are allocated for these specialized services.

Public Impact

Taxpayers facing IRS audits will benefit from specialized legal and forensic accounting support. The contract delivers essential litigation support services to the Internal Revenue Service. Services are primarily focused on Illinois but may support cases nationwide. The contract supports a specialized workforce of expert witnesses and forensic accountants.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs than a competed contract.
Sole-source awards require strong justification to ensure fair pricing.
Performance monitoring is crucial to ensure value is delivered as expected.

Positive Signals

Contract addresses a critical need for specialized IRS litigation support.
Defined scope of services provides clarity on expected deliverables.
Long-term contract (5 years) offers stability for service provision.

Sector Analysis

The market for expert witness services in tax litigation is specialized, involving firms with deep expertise in accounting, auditing, and tax law. This contract fits within the broader professional services sector, specifically supporting government agencies in complex legal and financial matters. Comparable spending benchmarks are difficult to establish due to the niche nature of the services and the sole-source award. The IRS relies on such services to effectively litigate tax disputes and ensure compliance.

Small Business Impact

This contract does not appear to have a small business set-aside. The award to Lustig Credit Rating Advisory LLC, a single entity, suggests it is either a large business or a specialized firm capable of meeting the contract's requirements. There is no immediate indication of subcontracting opportunities for small businesses within this specific award, though the prime contractor's overall business practices would determine this.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Treasury and the Internal Revenue Service's contracting and legal departments. Accountability measures would include performance reviews, adherence to contract terms, and the quality of expert testimony provided. Transparency is limited due to the sole-source nature of the award, but contract details should be publicly available through federal procurement databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

IRS Audit Defense Services
Forensic Accounting Services
Tax Litigation Support
Expert Witness Services
Government Contract Litigation

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for higher costs
Need for strong performance oversight

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $3.9 million to LUSTIG CREDIT RATING ADVISORY LLC. EXPERT WITNESS SERVICES: IRS EXPERT WITNESSES THAT IS CAPABLE OF PROVIDING LITIGATION SUPPORT FOR CASES INVOLVING IRS AUDIT DEFENSE, PERFORM FORENSIC ACCOUNTING SERVICES, AND/OR ASSIST IN TAX ABATEMENT

Who is the contractor on this award?

The obligated recipient is LUSTIG CREDIT RATING ADVISORY 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 $3.9 million.

What is the period of performance?

Start: 2023-08-23. End: 2028-08-22.

What is the specific expertise of Lustig Credit Rating Advisory LLC in IRS audit defense and forensic accounting?

The provided data does not detail the specific expertise or track record of Lustig Credit Rating Advisory LLC. To assess this, further investigation into the company's past performance, client testimonials, and any certifications or accreditations relevant to forensic accounting and tax litigation support would be necessary. Understanding their experience with similar IRS cases, the complexity of those cases, and the outcomes would be crucial for evaluating their capability to fulfill the contract requirements effectively. Without this information, the assessment of their suitability remains incomplete.

How does the $3.9 million contract value compare to similar IRS expert witness contracts?

Direct comparison of the $3.9 million contract value to similar IRS expert witness contracts is challenging without access to a comprehensive database of historical sole-source or competed awards for these specific services. The value is spread over five years, making the annual expenditure approximately $785,000. This figure needs to be benchmarked against the typical rates and contract sizes for specialized forensic accounting and expert witness testimony in tax law. The lack of competitive bidding for this award further complicates a direct value-for-money assessment, as market-driven pricing is absent.

What are the primary risks associated with a sole-source award for expert witness services?

The primary risks associated with a sole-source award for expert witness services include potential overpayment due to the absence of competitive pricing, limited innovation or alternative approaches from a single provider, and a reduced incentive for the contractor to maintain high performance standards. There's also a risk that the chosen contractor may not possess the absolute best or most cost-effective expertise available in the market. Furthermore, sole-source awards can raise concerns about fairness and transparency in government contracting, potentially leading to public scrutiny if not adequately justified.

What is the expected impact of these expert witness services on IRS litigation outcomes?

The expected impact of these expert witness services on IRS litigation outcomes is to strengthen the government's case by providing credible, expert testimony and analysis. These services are crucial for explaining complex financial and accounting issues to judges and juries, validating IRS findings, and countering arguments presented by taxpayers' defense teams. Effective expert witnesses can significantly influence the outcome of tax disputes, potentially leading to increased tax revenue collection, successful enforcement actions, and deterrence of tax evasion. The quality and credibility of the expert witness are paramount.

What are the historical spending patterns for IRS expert witness services?

Historical spending patterns for IRS expert witness services are not detailed in the provided data. To analyze this, one would need to examine past federal procurement records, looking at the total amount spent by the IRS on expert witness services over several fiscal years, the number of contracts awarded, whether they were competed or sole-source, and the primary contractors. Understanding these patterns would reveal trends in demand, average contract values, and the prevalence of competitive versus non-competitive awards, providing context for the current $3.9 million contract.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Business Support Services › Credit Bureaus

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: LABOR HOURS (Z)

Evaluated Preference: NONE

Contractor Details

Address: 653 ARBUCKLE AVE, WOODMERE, NY, 11598

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $3,924,957

Exercised Options: $3,924,957

Current Obligation: $3,924,957

Actual Outlays: $3,337,491

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline