Treasury's $383.8M Deloitte Contract for IRS Computer Systems Design Services Awarded via Full and Open Competition

Contract Overview

Contract Amount: $383,773,457 ($383.8M)

Contractor: Deloitte Consulting LLP

Awarding Agency: Department of the Treasury

Start Date: 2020-12-01

End Date: 2025-01-15

Contract Duration: 1,506 days

Daily Burn Rate: $254.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: CADE 2 LTIS3 COVID-19

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22209

State: Virginia Government Spending

Plain-Language Summary

Department of the Treasury obligated $383.8 million to DELOITTE CONSULTING LLP for work described as: CADE 2 LTIS3 COVID-19 Key points: 1. Significant contract value of over $383 million. 2. Awarded to a single, large incumbent contractor, Deloitte. 3. Potential risk associated with long-term IT service contracts. 4. IT services sector, specifically computer systems design.

Value Assessment

Rating: fair

The contract value is substantial, but without specific per-unit cost data or benchmarks for similar IRS IT projects, a precise value assessment is difficult. The fixed-price nature provides some cost control.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through full and open competition, suggesting a robust price discovery process. However, the award to a single large vendor may limit future competitive opportunities if not managed carefully.

Taxpayer Impact: Taxpayer funds are being used for essential IT services. The competitive award aims to ensure reasonable pricing, but the long duration and scale warrant ongoing scrutiny.

Public Impact

Impacts IRS's ability to process taxes and provide taxpayer services. Ensures continued operation and modernization of critical IT infrastructure. Supports jobs within the IT services sector, particularly at Deloitte.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 4 years).
High contract value.
Sole awardee for this specific task order.
Potential for scope creep over the contract life.

Positive Signals

Awarded via full and open competition.
Firm Fixed Price contract type.
Task order is part of a larger contract vehicle (LTIS3).

Sector Analysis

This contract falls within the Information Technology sector, specifically computer systems design services. Spending in this area is critical for government modernization and efficiency, with benchmarks varying widely based on complexity and scope.

Small Business Impact

The data indicates this award went to Deloitte Consulting LLP, a large business. There is no explicit mention of small business participation in this specific award, suggesting limited direct benefit to small businesses.

Oversight & Accountability

Oversight will be crucial given the contract's value and duration. The IRS contracting office and potentially agency-level oversight bodies should monitor performance, costs, and adherence to the Statement of Work to ensure accountability.

Related Government Programs

Computer Systems Design Services
Department of the Treasury Contracting
Internal Revenue Service Programs

Risk Flags

High contract value.
Long contract duration.
Potential for vendor lock-in.
Reliance on a single large contractor.
IT services are critical and complex.
Lack of explicit small business participation noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $383.8 million to DELOITTE CONSULTING LLP. CADE 2 LTIS3 COVID-19

Who is the contractor on this award?

The obligated recipient is DELOITTE CONSULTING LLP.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $383.8 million.

What is the period of performance?

Start: 2020-12-01. End: 2025-01-15.

How does the pricing for these computer systems design services compare to industry benchmarks for similar government contracts of this scale and complexity?

Assessing the value requires comparing Deloitte's pricing against industry benchmarks for large-scale IT system design services within the federal government. Factors like the specific technologies used, the level of customization required, and the contractor's overhead structure influence costs. Without detailed cost breakdowns or comparative data from similar contracts, it's challenging to definitively state if the price is optimal, though the firm fixed-price structure and full and open competition provide some assurance.

What are the primary risks associated with a long-term, high-value IT services contract like this for the IRS?

Key risks include potential cost overruns if the scope expands beyond the initial SOW (scope creep), vendor lock-in limiting future flexibility, and the possibility of technology obsolescence over the contract's lifespan. There's also a risk that the contractor's performance may degrade over time, impacting critical IRS functions. Ensuring robust contract management and regular performance reviews are vital to mitigate these risks.

How effectively does this contract support the IRS's mission and modernization goals?

This contract is likely crucial for maintaining and potentially upgrading the IRS's complex IT infrastructure, which underpins its ability to process tax returns, manage taxpayer data, and deliver services. Its effectiveness hinges on Deloitte's ability to deliver reliable systems and innovative solutions that align with the IRS's strategic objectives. Successful execution should enhance operational efficiency and taxpayer experience.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1919 N LYNN ST, ARLINGTON, VA, 22209

Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $391,779,752

Exercised Options: $391,779,752

Current Obligation: $383,773,457

Actual Outlays: $379,390,385

Subaward Activity

Number of Subawards: 37

Total Subaward Amount: $33,411,523

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: 47QTCK18D0029

IDV Type: GWAC

Timeline