IRS transitions toll-free services to EIS contract, valued at $264.6M, ensuring network continuity

Contract Overview

Contract Amount: $264,558,691 ($264.6M)

Contractor: Verizon Business Network Services LLC

Awarding Agency: Department of the Treasury

Start Date: 2019-09-26

End Date: 2026-09-25

Contract Duration: 2,556 days

Daily Burn Rate: $103.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Other

Official Description: THE TFCCEIS TASK ORDER IS TO TRANSITION THE EXISTING TFCC SERVICES FROM THE NETWORX CONTRACT ONTO THE EIS CONTRACT VEHICLE IN A MANNER THAT WILL ENABLE CONTINUITY OF AN ENTERPRISE NETWORK OF TOLL FREE SERVICES FOR THE IRS.

Place of Performance

Location: LANHAM, PRINCE GEORGES County, MARYLAND, 20706

State: Maryland Government Spending

Plain-Language Summary

Department of the Treasury obligated $264.6 million to VERIZON BUSINESS NETWORK SERVICES LLC for work described as: THE TFCCEIS TASK ORDER IS TO TRANSITION THE EXISTING TFCC SERVICES FROM THE NETWORX CONTRACT ONTO THE EIS CONTRACT VEHICLE IN A MANNER THAT WILL ENABLE CONTINUITY OF AN ENTERPRISE NETWORK OF TOLL FREE SERVICES FOR THE IRS. Key points: 1. Value for money assessed through comparison to similar telecommunications contracts and market rates. 2. Competition dynamics indicate a full and open process, potentially driving competitive pricing. 3. Risk indicators include the complexity of transitioning enterprise network services and ensuring continuity. 4. Performance context relies on the successful migration of existing TFCC services. 5. Sector positioning within Wired Telecommunications Carriers, a mature and competitive market.

Value Assessment

Rating: good

The contract value of $264.6 million over its period of performance appears reasonable for an enterprise-wide telecommunications transition. Benchmarking against similar large-scale network migrations for federal agencies suggests this pricing is within expected ranges, especially considering the scope of services and the inclusion of economic price adjustments. The fixed-price nature with EPA aims to manage cost fluctuations while ensuring service delivery.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, indicating that multiple bidders had the opportunity to submit proposals. The presence of multiple bidders in a competitive telecommunications market like this generally fosters price discovery and encourages contractors to offer competitive terms. The specific number of bidders is not provided, but the 'full and open' designation is a positive sign for robust competition.

Taxpayer Impact: A full and open competition is beneficial for taxpayers as it increases the likelihood of securing services at the most competitive prices, preventing potential overspending and maximizing the value of federal dollars.

Public Impact

Benefits the Internal Revenue Service (IRS) by ensuring the continuity of essential toll-free services. Delivers enterprise network services, including toll-free communication capabilities. Geographic impact is nationwide, supporting IRS operations across the United States. Workforce implications are primarily related to the IT and telecommunications support staff managing the network.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Complexity of migrating existing services without disruption.
Ensuring data security and integrity during the transition.
Potential for unforeseen technical challenges during the migration process.

Positive Signals

Leverages an existing enterprise contract vehicle (EIS) for efficiency.
Clear objective to ensure continuity of critical services.
Experienced contractor likely involved in the transition.

Sector Analysis

The Wired Telecommunications Carriers sector is characterized by established providers and significant infrastructure investment. Federal agencies are major consumers of these services, often consolidating spending onto large enterprise contracts like EIS to achieve economies of scale and streamline procurement. This contract fits within the broader trend of federal agencies modernizing their telecommunications infrastructure and leveraging shared services.

Small Business Impact

The data does not indicate any specific small business set-asides for this particular task order. However, the prime contractor, Verizon Business Network Services LLC, is a large entity. Subcontracting opportunities for small businesses may exist within the execution of this task order, but this is not explicitly detailed in the provided information. Further analysis would be needed to determine the extent of small business participation.

Oversight & Accountability

Oversight is typically managed through the contracting officer's representative (COR) at the IRS, who monitors performance against the contract terms. Accountability measures are built into the fixed-price structure and performance requirements. Transparency is facilitated by the contract award process and the availability of contract data, though specific performance metrics are not detailed here. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Networx Contract
Enterprise Infrastructure Solutions (EIS) Contract
IRS IT Modernization Efforts
Federal Telecommunications Services

Risk Flags

Potential for service disruption during transition
Complexity of enterprise-wide network migration
Ensuring data security and privacy
Dependency on contractor performance

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $264.6 million to VERIZON BUSINESS NETWORK SERVICES LLC. THE TFCCEIS TASK ORDER IS TO TRANSITION THE EXISTING TFCC SERVICES FROM THE NETWORX CONTRACT ONTO THE EIS CONTRACT VEHICLE IN A MANNER THAT WILL ENABLE CONTINUITY OF AN ENTERPRISE NETWORK OF TOLL FREE SERVICES FOR THE IRS.

Who is the contractor on this award?

The obligated recipient is VERIZON BUSINESS NETWORK 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 $264.6 million.

What is the period of performance?

Start: 2019-09-26. End: 2026-09-25.

What is the track record of Verizon Business Network Services LLC in managing similar large-scale federal telecommunications transitions?

Verizon Business Network Services LLC has a significant track record in managing large-scale telecommunications infrastructure and services for both government and commercial clients. As a major telecommunications provider, they have been involved in numerous network migrations and enterprise solution deployments. Their experience with previous federal contracts, including potentially the Networx contract which this task order aims to transition from, suggests a capability to handle complex projects. However, specific performance details and client satisfaction metrics for similar IRS or Treasury transitions would provide a more granular assessment of their suitability for this particular task.

How does the cost of this task order compare to the previous TFCC services under the Networx contract?

Direct cost comparison between this task order and the previous TFCC services under the Networx contract is challenging without detailed historical spending data from Networx. However, the transition to the EIS contract vehicle is intended to achieve greater efficiency and potentially cost savings through enterprise-wide consolidation. The $264.6 million value represents the total estimated cost for the transition and ongoing services over the contract period. The objective of moving to EIS is often to leverage better pricing and more flexible service options compared to older, legacy contracts like Networx, implying an expectation of value improvement, though not necessarily a direct dollar-for-dollar reduction.

What are the primary risks associated with transitioning toll-free services for the IRS?

The primary risks associated with transitioning toll-free services for the IRS revolve around service disruption and continuity. The IRS relies heavily on these services for taxpayer interaction, making any interruption critical. Technical challenges during the migration, compatibility issues between legacy systems and the new EIS platform, and ensuring data security and privacy throughout the process are significant risks. Furthermore, inadequate planning or execution could lead to degraded service quality, increased costs, or failure to meet performance requirements, impacting taxpayer access and IRS operational efficiency.

How will the success of this transition be measured, and what are the key performance indicators (KPIs)?

The success of this transition will likely be measured by the seamless continuity of toll-free services for the IRS, adherence to the project schedule, and meeting defined performance standards. Key performance indicators (KPIs) would typically include metrics such as service uptime, call completion rates, call answer times, network latency, and security compliance. The contract likely includes specific Service Level Agreements (SLAs) that define these KPIs and associated remedies or credits for non-performance. The transition itself would also be evaluated based on factors like the completeness of the migration, successful decommissioning of old systems, and user satisfaction.

What is the historical spending pattern for similar telecommunications services by the IRS or other large federal agencies?

Historical spending on telecommunications services by large federal agencies like the IRS has generally been substantial, often running into hundreds of millions of dollars annually across various contracts. Agencies typically procure a wide range of services, including voice, data, internet, and specialized network solutions. The move towards enterprise-wide contracts like EIS reflects a government-wide effort to consolidate spending, gain better control over costs, and leverage bulk purchasing power. While specific historical data for IRS toll-free services isn't provided, the overall trend indicates significant and ongoing investment in robust telecommunications infrastructure to support agency operations.

Industry Classification

NAICS: Information › Wired and Wireless Telecommunications (except Satellite) › Wired Telecommunications Carriers

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: 3

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

Evaluated Preference: NONE

Contractor Details

Parent Company: Verizon Maryland LLC

Address: 22001 LOUDOUN COUNTY PKWY, ASHBURN, VA, 20147

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

Financial Breakdown

Contract Ceiling: $552,232,950

Exercised Options: $426,593,041

Current Obligation: $264,558,691

Actual Outlays: $209,394,220

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS00Q17NSD3009

IDV Type: IDC

Timeline