Treasury's IRS awards $68.7M contract for computer systems design services to Accenture Federal Services

Contract Overview

Contract Amount: $68,726,351 ($68.7M)

Contractor: Accenture Federal Services LLC

Awarding Agency: Department of the Treasury

Start Date: 2018-09-30

End Date: 2023-09-29

Contract Duration: 1,825 days

Daily Burn Rate: $37.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: LABOR HOURS

Sector: IT

Official Description: THIS SMART ID REPLACES 2032H5-18-F-00482 FOR IIPE TASK ORDER AWARD-GSA ALLIANT VENDOR AFS.

Place of Performance

Location: LANHAM, PRINCE GEORGES County, MARYLAND, 20706

State: Maryland Government Spending

Plain-Language Summary

Department of the Treasury obligated $68.7 million to ACCENTURE FEDERAL SERVICES LLC for work described as: THIS SMART ID REPLACES 2032H5-18-F-00482 FOR IIPE TASK ORDER AWARD-GSA ALLIANT VENDOR AFS. Key points: 1. Contract value represents a significant investment in IT infrastructure modernization. 2. The award was made under full and open competition, suggesting a competitive bidding process. 3. The duration of the contract (5 years) indicates a long-term need for these services. 4. The specific NAICS code (541512) points to a focus on computer systems design and integration. 5. The contract is a delivery order, implying it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle.

Value Assessment

Rating: good

The contract value of $68.7 million over five years for computer systems design services appears reasonable given the scope. Benchmarking against similar large-scale IT service contracts for federal agencies suggests this falls within expected ranges for complex system design and integration. The pricing structure, likely based on labor hours, will be a key factor in determining overall value for money, but the initial award amount does not raise immediate red flags for being excessively high or low compared to market rates for specialized IT services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The fact that it was competed suggests that the IRS sought to leverage market competition to obtain the best value. Without specific details on the number of bids received, it's difficult to definitively assess the intensity of the competition, but the 'full and open' designation is a positive indicator for price discovery and potential cost savings.

Taxpayer Impact: A full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down prices and encourage innovation, leading to more efficient use of public funds.

Public Impact

The primary beneficiaries are the Internal Revenue Service (IRS) and its mission to administer and enforce tax laws. The services delivered will likely enhance the IRS's IT infrastructure, potentially improving taxpayer services, data processing, and internal operational efficiency. The geographic impact is primarily within the United States, supporting federal government operations. The contract supports a workforce of IT professionals and system designers, contributing to the federal IT services sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if requirements are not clearly defined and managed.
Dependence on a single vendor for critical IT systems design could pose risks if performance falters.
Ensuring effective knowledge transfer and documentation is crucial for long-term system maintainability.

Positive Signals

Awarded through full and open competition, suggesting a robust selection process.
The contract duration of five years allows for stable planning and execution of IT modernization efforts.
Accenture Federal Services is a well-established IT services provider with significant experience in the federal sector.

Sector Analysis

This contract falls within the broader IT services sector, specifically focusing on computer systems design and integration. The federal government is a major consumer of these services, with significant spending allocated annually to modernize and maintain its complex IT infrastructure. Comparable spending benchmarks for large federal IT contracts often run into tens or hundreds of millions of dollars, depending on the complexity and duration. This contract's value aligns with the typical scale of such engagements.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses arising from a specific set-aside requirement. However, the prime contractor, Accenture Federal Services, may engage small businesses as subcontractors to fulfill certain aspects of the contract, depending on their own subcontracting plans and the nature of the services required.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program managers within the IRS. Accountability measures are embedded in the contract terms, including performance standards, delivery schedules, and payment milestones. Transparency is facilitated through contract award databases and public reporting mechanisms. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract.

Related Government Programs

GSA Alliant Government-wide IT Services IDIQ
IRS IT Modernization Initiatives
Federal Civilian Agency IT Spending
Computer Systems Design and Related Services

Risk Flags

Potential for cost overruns due to complexity of systems design.
Risk of vendor performance not meeting contract requirements.
Dependency on a single vendor for critical IT infrastructure.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $68.7 million to ACCENTURE FEDERAL SERVICES LLC. THIS SMART ID REPLACES 2032H5-18-F-00482 FOR IIPE TASK ORDER AWARD-GSA ALLIANT VENDOR AFS.

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 $68.7 million.

What is the period of performance?

Start: 2018-09-30. End: 2023-09-29.

What is the track record of Accenture Federal Services in delivering similar computer systems design services to the federal government?

Accenture Federal Services (AFS) has a substantial track record of delivering IT services, including systems design, integration, and modernization, to various federal agencies. They have been involved in numerous large-scale IT projects across civilian and defense sectors. Past performance data, often available through contract databases and agency performance evaluations, would provide specific details on their success rates, adherence to schedules and budgets, and client satisfaction for similar engagements. Their extensive experience suggests a capacity to handle complex requirements, but a detailed review of specific past projects would be necessary for a comprehensive assessment of their suitability for this particular IRS contract.

How does the awarded amount compare to similar computer systems design contracts awarded by the IRS or other Treasury bureaus?

The awarded amount of approximately $68.7 million over five years for computer systems design services is substantial and indicative of a significant IT undertaking. To benchmark this effectively, one would need to compare it against other large IT service contracts awarded by the IRS or similar bureaus within the Department of the Treasury, as well as other civilian agencies with comparable IT needs. Factors such as contract duration, scope of work (e.g., cloud migration, legacy system modernization, new system development), and the specific technologies involved would influence comparability. Without access to a detailed database of comparable contracts with granular scope information, a precise comparison is difficult, but the value appears consistent with major federal IT modernization efforts.

What are the primary risks associated with this contract, and what mitigation strategies are likely in place?

Key risks for this contract include potential scope creep, where project requirements expand beyond the initial agreement, leading to cost overruns and schedule delays. Another risk is vendor lock-in, where the IRS becomes overly dependent on Accenture for critical systems, making future transitions difficult or costly. Performance risk, where Accenture may not deliver services to the required standards, is also present. Mitigation strategies likely include robust contract management, clearly defined performance metrics (Service Level Agreements - SLAs), regular progress reviews, change control processes to manage scope adjustments, and potentially incorporating knowledge transfer requirements to ensure the IRS retains system understanding.

How effective is the 'full and open competition' approach likely to be in ensuring value for money for this specific contract?

The 'full and open competition' approach is generally considered the most effective method for ensuring value for money in federal contracting, as it maximizes the pool of potential bidders and encourages competitive pricing. For this computer systems design contract, it means that multiple qualified vendors had the opportunity to propose solutions and bid on the work. The effectiveness in this specific case depends on factors such as the number of bids received, the clarity of the solicitation requirements, and the evaluation criteria used. If the competition was robust, it likely drove Accenture to offer competitive pricing and a strong technical solution to win the award. However, the true measure of value for money will be realized over the life of the contract through successful delivery and performance.

What are the historical spending patterns for computer systems design services at the IRS, and how does this award fit within them?

Historical spending patterns for computer systems design services at the IRS would likely show a consistent need for IT support and modernization, given the agency's complex operational requirements and the ever-evolving technological landscape. The IRS, like many large federal agencies, invests significantly in IT to manage tax administration, process returns, ensure data security, and improve taxpayer services. This $68.7 million award over five years represents a substantial, but potentially typical, investment for a major IT systems design initiative. It likely fits within a broader strategy of ongoing IT modernization and maintenance, possibly replacing or upgrading systems that have reached end-of-life or are no longer meeting operational demands. Analyzing past IRS IT budgets and contract awards would provide context on whether this amount is an increase, decrease, or continuation of previous spending levels.

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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: LABOR HOURS (Z)

Evaluated Preference: NONE

Contractor Details

Parent Company: Novetta Solutions, LLC

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

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

Financial Breakdown

Contract Ceiling: $317,498,835

Exercised Options: $260,635,169

Current Obligation: $68,726,351

Actual Outlays: $59,002,868

Subaward Activity

Number of Subawards: 95

Total Subaward Amount: $19,908,963

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS00Q09BGD0005

IDV Type: GWAC

Timeline