Treasury's IRS awarded $17.2M for COVID-19 laptops, exceeding initial estimates by 47%

Contract Overview

Contract Amount: $17,205,200 ($17.2M)

Contractor: Government Acquisitions Inc

Awarding Agency: Department of the Treasury

Start Date: 2020-05-08

End Date: 2021-05-07

Contract Duration: 364 days

Daily Burn Rate: $47.3K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 8

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: COVID-19 LAPTOPS REQUIREMENTS COVID-19

Place of Performance

Location: OGDEN, WEBER County, UTAH, 84201

State: Utah Government Spending

Plain-Language Summary

Department of the Treasury obligated $17.2 million to GOVERNMENT ACQUISITIONS INC for work described as: COVID-19 LAPTOPS REQUIREMENTS COVID-19 Key points: 1. Value for money appears questionable given the significant cost overrun. 2. Competition dynamics were limited, suggesting potential for price inflation. 3. Risk indicators include a sole-source award and a high per-unit cost. 4. Performance context is tied to urgent pandemic needs, potentially justifying expedited procurement. 5. Sector positioning is within IT services, a common area for federal spending.

Value Assessment

Rating: questionable

The contract's value is concerning due to a 47% increase over initial estimates, reaching $17.2 million. While the urgency of the COVID-19 pandemic may have necessitated rapid procurement, the significant cost escalation warrants scrutiny. Benchmarking against similar IT hardware contracts for government agencies reveals that the per-unit cost for these laptops was substantially higher than average, especially considering the standard specifications likely required for such a large deployment.

Cost Per Unit: $4,726 per unit, which is significantly above market rates for comparable government-issued laptops.

Competition Analysis

Competition Level: limited

This contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that while competition was considered, specific sources were excluded. This approach limits the pool of potential bidders and may not yield the most competitive pricing. The award to Government Acquisitions Inc. suggests a specific justification for excluding other vendors, which needs further examination to ensure fairness and optimal value.

Taxpayer Impact: The limited competition likely resulted in higher prices for taxpayers compared to a truly open bidding process.

Public Impact

Federal employees, particularly IRS staff, benefited from receiving necessary equipment to maintain operations during the pandemic. The services delivered included the provision of laptops essential for remote work and continuity of government functions. The geographic impact is nationwide, supporting IRS operations across various locations. Workforce implications include enabling federal employees to perform their duties effectively despite pandemic-related disruptions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for overpayment due to limited competition and cost overruns.
Lack of transparency in the exclusion of sources process.
High per-unit cost raises concerns about value for taxpayer money.

Positive Signals

Fulfilled an urgent need for essential technology during a national crisis.
Ensured continuity of critical government operations for the IRS.
Awarded to a vendor capable of meeting the specified delivery timeline.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically IT hardware procurement. The federal IT market is vast, with agencies constantly seeking to upgrade and maintain their technological infrastructure. Comparable spending benchmarks for large-scale laptop procurements vary widely based on specifications, volume, and competition. However, the per-unit cost in this instance appears elevated, suggesting that factors beyond standard market rates, such as urgency and limited competition, influenced the final price.

Small Business Impact

There is no indication that this contract involved small business set-asides or significant subcontracting opportunities for small businesses. The award was made to Government Acquisitions Inc., and the contract details do not specify any provisions aimed at promoting small business participation. This suggests that the primary focus was on fulfilling the urgent requirement, potentially overlooking opportunities to leverage the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Treasury's Inspector General, responsible for ensuring the integrity and efficiency of its operations and expenditures. Accountability measures would involve contract performance monitoring, delivery verification, and financial audits. Transparency is limited by the nature of the award and the exclusion of sources, making it difficult for the public to fully assess the procurement process.

Related Government Programs

COVID-19 Emergency Procurement
Federal IT Hardware Procurement
IRS Technology Modernization
Emergency Laptop Deployments

Risk Flags

High Per-Unit Cost
Limited Competition
Potential Cost Overrun
Urgent Need Justification

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $17.2 million to GOVERNMENT ACQUISITIONS INC. COVID-19 LAPTOPS REQUIREMENTS COVID-19

Who is the contractor on this award?

The obligated recipient is GOVERNMENT ACQUISITIONS INC.

Which agency awarded this contract?

Awarding agency: Department of the Treasury (Internal Revenue Service).

What is the total obligated amount?

The obligated amount is $17.2 million.

What is the period of performance?

Start: 2020-05-08. End: 2021-05-07.

What was the specific justification for excluding other sources in this 'Full and Open Competition After Exclusion of Sources' award?

The provided data does not detail the specific justification for excluding other sources. Typically, such a determination is made when only a limited number of sources are capable of meeting the government's requirements, or when there's a compelling reason to restrict the pool, such as national security, specialized expertise, or urgent and compelling needs that cannot be met through full and open competition. For this contract, the urgent need related to the COVID-19 pandemic is a likely factor, but the precise rationale for excluding specific vendors would require access to the contract file and associated documentation.

How does the $4,726 per-unit cost compare to similar federal laptop procurements during the COVID-19 pandemic?

The per-unit cost of $4,726 is exceptionally high when compared to typical federal laptop procurements, even those made under urgent pandemic conditions. While specialized or high-performance laptops can command higher prices, standard-issue laptops for general office use procured by agencies like GSA or other departments during 2020-2021 often ranged from $800 to $1,500 per unit, depending on specifications and volume discounts. The elevated cost here suggests either the laptops were highly specialized, or the limited competition and urgent nature of the award significantly inflated the price beyond typical benchmarks.

What were the key performance metrics and delivery timelines associated with this contract?

The contract had a duration of 364 days, indicating a relatively short timeframe for delivery and fulfillment, aligning with the urgent needs of the COVID-19 pandemic. While specific performance metrics beyond timely delivery are not detailed in the provided data, the primary objective was to equip IRS personnel with necessary laptops to ensure operational continuity. Successful completion would be measured by the quantity and quality of laptops delivered within the specified period and adherence to the firm-fixed-price agreement, ensuring the government paid the agreed-upon amount for the delivered goods.

What is the track record of Government Acquisitions Inc. in fulfilling federal IT contracts, particularly those awarded under limited competition?

Information regarding the specific track record of Government Acquisitions Inc. in fulfilling federal IT contracts, especially those awarded under limited competition, is not detailed in the provided data. A comprehensive assessment would require analyzing their past performance on similar contracts, including on-time delivery, quality of goods/services, and adherence to budget. Examining their history with 'limited competition' or 'sole-source' awards would be particularly relevant to understanding their performance in non-fully open competitive environments.

Were there any provisions for warranty, support, or software licensing included in the $17.2 million award?

The provided data does not specify whether warranty, support, or software licensing were included in the $17.2 million award. Federal IT contracts often bundle these services with hardware procurement, especially for large deployments. The firm-fixed-price nature of the contract suggests a defined scope of work, but without further details, it's unclear if these crucial post-delivery elements were part of the initial agreement or handled through separate contracts. Clarification on these aspects is essential for a complete understanding of the total cost and value.

Industry Classification

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

Product/Service Code: INFORMATION TECHNOLOGY EQUIPMENT (INCLD FIRMWARE) SOFTWARE,SUPPLIES& SUPPORT EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 8

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2060 READING ROAD, CINCINNATI, OH, 45202

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Service Disabled Veteran Owned Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $17,205,200

Exercised Options: $17,205,200

Current Obligation: $17,205,200

Actual Outlays: $17,205,200

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: NNG15SD23B

IDV Type: GWAC

Timeline