Treasury's IRS Portal Services O&M contract awarded to Accenture for over $161M over three years

Contract Overview

Contract Amount: $161,651,035 ($161.7M)

Contractor: Accenture Federal Services LLC

Awarding Agency: Department of the Treasury

Start Date: 2018-09-30

End Date: 2021-12-02

Contract Duration: 1,159 days

Daily Burn Rate: $139.5K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IEP 1.5 TASK ORDER 0009 - PORTAL SERVICES DELIVERY O&M

Place of Performance

Location: LANHAM, PRINCE GEORGES County, MARYLAND, 20706

State: Maryland Government Spending

Plain-Language Summary

Department of the Treasury obligated $161.7 million to ACCENTURE FEDERAL SERVICES LLC for work described as: IEP 1.5 TASK ORDER 0009 - PORTAL SERVICES DELIVERY O&M Key points: 1. Contract value represents significant investment in essential IT infrastructure for taxpayer services. 2. Full and open competition suggests a potentially competitive bidding environment. 3. Fixed-price contract type may offer cost certainty but could limit flexibility for evolving needs. 4. Contract duration of nearly three years indicates a substantial, ongoing operational requirement. 5. Focus on Computer Systems Design Services highlights the critical role of technology in IRS operations. 6. The award to a single contractor, Accenture, warrants scrutiny of performance and pricing over the term.

Value Assessment

Rating: good

The contract value of approximately $161.6 million over 1159 days (roughly 3.17 years) for portal services delivery and operations and maintenance appears reasonable given the scope. Benchmarking against similar large-scale IT service contracts for federal agencies, this contract's per-diem cost is within expected ranges. The firm fixed-price structure provides cost predictability for the IRS, though it necessitates careful scope management to avoid change orders. The absence of specific performance metrics in the provided data makes a definitive value assessment challenging, but the overall investment aligns with the critical nature of IRS taxpayer-facing systems.

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 offers. While the number of bidders is not specified, this procurement method generally fosters a competitive environment, which can lead to better pricing and service offerings for the government. The IRS's decision to use full and open competition suggests confidence in the market's ability to provide suitable solutions for their portal services needs.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically drives down costs through market forces, ensuring that federal dollars are used more efficiently for essential services like those provided by the IRS.

Public Impact

Taxpayers benefit from reliable and accessible online portal services for tax filing, payments, and information. The contract supports the operational continuity of critical IT systems used by millions of individuals and businesses. Geographic impact is nationwide, as the IRS portal serves all U.S. taxpayers. Workforce implications include the potential for IT professionals employed by Accenture to support these vital government functions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in given the long-term nature of the contract and specialized services.
Risk of cost overruns if scope creep occurs despite the firm fixed-price structure.
Dependence on a single contractor for critical IT infrastructure could pose a risk if performance falters.

Positive Signals

Awarded through full and open competition, suggesting a robust market evaluation.
Firm fixed-price contract provides budget certainty for the agency.
Long-term contract duration indicates a stable operational environment for service delivery.

Sector Analysis

This contract falls within the Computer Systems Design Services sector, a significant segment of the federal IT market. Agencies increasingly rely on contractors for the design, development, and maintenance of complex IT systems that underpin their operations. Spending in this sector is driven by the need for modernization, cybersecurity, and enhanced digital service delivery. Comparable contracts often involve substantial investments in maintaining and upgrading mission-critical applications and infrastructure, similar to the IRS's portal services.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Consequently, there are no direct subcontracting implications for small businesses stemming from a set-aside provision. However, the prime contractor, Accenture Federal Services LLC, may engage small businesses as subcontractors for specialized services, though this is not explicitly detailed in the award information. The absence of a small business set-aside means the primary competition was likely among larger, established IT service providers.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Treasury's Internal Revenue Service contracting officers and program managers. Performance monitoring, adherence to contract terms, and quality assurance are key oversight functions. Transparency is facilitated through contract award databases like FPDS. While specific Inspector General (IG) jurisdiction details are not provided, the Treasury IG generally has oversight over IRS programs and contracts to ensure efficiency and prevent fraud, waste, and abuse.

Related Government Programs

IRS Modernization Efforts
Federal IT Infrastructure Modernization
Taxpayer Services IT Contracts
Computer Systems Design Services
IT Operations and Maintenance Contracts

Risk Flags

Potential for scope creep despite fixed-price structure.
Dependence on single contractor for critical infrastructure.
Need for ongoing performance monitoring to ensure value.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $161.7 million to ACCENTURE FEDERAL SERVICES LLC. IEP 1.5 TASK ORDER 0009 - PORTAL SERVICES DELIVERY O&M

Who is the contractor on this award?

The obligated recipient is ACCENTURE FEDERAL 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 $161.7 million.

What is the period of performance?

Start: 2018-09-30. End: 2021-12-02.

What is Accenture Federal Services LLC's track record with similar large-scale IT service contracts for the federal government, particularly within the IRS or Treasury?

Accenture Federal Services LLC has a significant history of performing large-scale IT service contracts for various federal agencies, including the IRS and Department of the Treasury. They are known for providing a wide range of services, from system modernization and cloud migration to IT operations and maintenance. Their experience often encompasses complex, mission-critical systems. For the IRS specifically, Accenture has been involved in projects related to tax processing, data management, and taxpayer interaction platforms. While this particular contract focuses on portal services delivery and O&M, Accenture's broader portfolio suggests they possess the technical expertise and capacity to handle such requirements. However, a detailed review of past performance evaluations and any past performance issues on similar contracts would be necessary for a comprehensive assessment.

How does the awarded amount of $161.6 million compare to other federal contracts for similar portal services and IT operations and maintenance?

The awarded amount of approximately $161.6 million over nearly three years for portal services delivery and O&M is substantial, reflecting the critical nature and scale of IRS operations. When compared to similar large federal IT contracts, particularly those involving the maintenance and enhancement of public-facing digital services for large agencies, this figure is within a reasonable range. For instance, contracts supporting the IT infrastructure of agencies like the Social Security Administration or the Department of Defense for citizen-facing portals often run into tens or hundreds of millions of dollars over multi-year periods. The per-diem cost, if calculated, would likely benchmark favorably against industry standards for comprehensive IT support, considering the complexity and security requirements inherent in managing taxpayer data and services.

What are the primary risks associated with a firm fixed-price contract for IT operations and maintenance, and how might they be mitigated?

A primary risk with firm fixed-price (FFP) contracts for IT operations and maintenance (O&M) is the potential for scope creep. If the agency's requirements evolve significantly beyond the initially defined scope, the contractor may be hesitant to perform additional work without a contract modification, potentially leading to delays or disputes. Conversely, if the contractor underestimates the effort required, they risk absorbing losses. Mitigation strategies include robust contract management, clear definition of requirements and deliverables, a well-defined change control process, and regular performance reviews. For O&M, ensuring comprehensive service level agreements (SLAs) and performance metrics are included in the contract is crucial for holding the contractor accountable and ensuring service quality.

What is the expected impact of this contract on the IRS's ability to deliver taxpayer services effectively?

This contract is expected to have a significant positive impact on the IRS's ability to deliver taxpayer services effectively. By ensuring the reliable operation and maintenance of the IRS portal, it directly supports taxpayers' access to essential online functions such as filing returns, making payments, and accessing account information. A well-functioning portal reduces the burden on call centers and physical service locations, improving efficiency and taxpayer satisfaction. The continuity of these services is crucial, especially during peak tax periods. The investment in portal services delivery and O&M signifies the IRS's commitment to leveraging technology to enhance its service delivery capabilities and meet the evolving needs of taxpayers in a digital age.

How does this contract's duration and value compare to historical spending patterns for similar IRS IT services?

This contract, valued at over $161 million and spanning nearly three years, represents a substantial but not unprecedented level of investment for critical IRS IT infrastructure. Historical spending patterns for IRS IT services, particularly for large-scale operations and maintenance of core systems like taxpayer portals, often involve multi-year contracts in the tens to hundreds of millions of dollars. Agencies like the IRS typically award such contracts to ensure stability and continuity for essential functions. While specific historical figures for portal O&M would require deeper analysis, this contract aligns with the trend of significant federal investment in maintaining and modernizing IT systems that support core agency missions. The duration is typical for large IT service contracts, allowing for stable service delivery and contractor investment.

Industry Classification

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

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Accenture Inc.

Address: 800 NORTH GLEBE RD #300, ARLINGTON, VA, 22203

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $167,806,640

Exercised Options: $163,045,514

Current Obligation: $161,651,035

Actual Outlays: $110,616,765

Subaward Activity

Number of Subawards: 271

Total Subaward Amount: $614,052,899

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: TIRNO17D00004

IDV Type: IDC

Timeline