Treasury's IRS awards $60M Big Data Analytics contract to Red River Technology LLC

Contract Overview

Contract Amount: $59,939,158 ($59.9M)

Contractor: RED River Technology LLC

Awarding Agency: Department of the Treasury

Start Date: 2021-06-25

End Date: 2025-06-24

Contract Duration: 1,460 days

Daily Burn Rate: $41.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: BIG DATA ANALYTICS GREENPLUM (BDA GP)

Place of Performance

Location: LANHAM, PRINCE GEORGES County, MARYLAND, 20706

State: Maryland Government Spending

Plain-Language Summary

Department of the Treasury obligated $59.9 million to RED RIVER TECHNOLOGY LLC for work described as: BIG DATA ANALYTICS GREENPLUM (BDA GP) Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract is a delivery order under a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle, indicating potential for future task orders. 3. The fixed-price contract type aims to control costs and provide predictability for the government. 4. The contract duration of 1460 days (4 years) provides a stable period for service delivery. 5. The North American Industry Classification System (NAICS) code 541519 suggests a broad range of computer-related services. 6. The contract is not set aside for small businesses, implying larger prime contractors are expected to perform the work.

Value Assessment

Rating: good

The total award amount of $59,939,157.84 over approximately four years suggests a significant investment in big data analytics capabilities for the IRS. Benchmarking this against similar large-scale IT service contracts requires detailed analysis of scope and deliverables. However, the firm fixed-price nature of the contract provides a degree of cost certainty for the government, which is a positive indicator of value.

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 a bid. The specific number of bidders is not provided, but this procurement method generally fosters a competitive environment, which can lead to better pricing and service offerings for the government. The IRS likely sought to maximize competition to ensure they received the best value.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it encourages multiple vendors to offer competitive pricing and innovative solutions, potentially leading to cost savings and improved service delivery.

Public Impact

The Internal Revenue Service (IRS) is the primary beneficiary, gaining enhanced capabilities in big data analytics. The contract supports the delivery of advanced data processing and analytical services crucial for tax administration and enforcement. The primary geographic impact is likely within the IRS's operational centers, supporting national tax functions. The contract may have implications for the IT workforce, potentially requiring specialized skills in data science and analytics.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if the chosen platform or services become highly specialized.
Dependence on Red River Technology LLC for critical big data analytics functions could pose a risk if performance falters.

Positive Signals

Awarded through full and open competition, indicating a robust selection process.
Firm fixed-price contract type provides cost predictability.
Long-term duration (4 years) suggests a stable and ongoing need for these services.

Sector Analysis

The IT services sector, particularly within government contracting, is highly competitive. Big data analytics is a rapidly growing segment, with agencies increasingly relying on advanced data processing to manage complex operations, improve efficiency, and enhance security. The IRS's investment aligns with a broader government trend towards leveraging data for improved decision-making and service delivery. Comparable spending benchmarks would typically involve other large federal IT procurements focused on data management and analytics platforms.

Small Business Impact

This contract was not set aside for small businesses, and there is no explicit indication of small business subcontracting requirements in the provided data. This suggests that the primary contractor, Red River Technology LLC, is expected to perform the majority of the work. The absence of a small business set-aside may limit direct opportunities for small businesses to participate as prime contractors on this specific award, though they might be involved as subcontractors if Red River chooses to engage them.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the IRS's contracting officers and program managers. The firm fixed-price nature of the contract provides a degree of financial oversight by establishing a set cost. Transparency is generally facilitated through contract award databases and public reporting mechanisms. The Inspector General for Tax Administration (TIGTA) may also conduct audits or investigations related to the contract's performance and financial integrity.

Related Government Programs

IRS IT Modernization Initiatives
Federal Big Data Investments
Government Cloud Computing Services
Data Analytics Platforms for Federal Agencies

Risk Flags

Potential for scope creep if requirements are not tightly managed.
Dependence on vendor expertise for critical data functions.
Ensuring data security and privacy compliance with sensitive IRS data.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $59.9 million to RED RIVER TECHNOLOGY LLC. BIG DATA ANALYTICS GREENPLUM (BDA GP)

Who is the contractor on this award?

The obligated recipient is RED RIVER TECHNOLOGY 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 $59.9 million.

What is the period of performance?

Start: 2021-06-25. End: 2025-06-24.

What is Red River Technology LLC's track record with large federal IT contracts, particularly in big data analytics?

Red River Technology LLC has a significant history of performing IT services for the federal government. While specific details on their big data analytics track record for the IRS are not fully detailed in this summary, they have secured numerous prime contracts across various agencies, including the Department of Defense and civilian departments. Their experience often spans hardware, software, and IT services. A deeper dive into their past performance evaluations and contract history, particularly for similar large-scale data projects, would be necessary to fully assess their capabilities and reliability for this specific IRS requirement. Their ability to win a full and open competition award of this magnitude suggests a demonstrated capacity to meet stringent government requirements.

How does the $59.9 million award compare to other federal spending on big data analytics services?

The $59.9 million award for Big Data Analytics Greenplum (BDA GP) services to Red River Technology LLC is a substantial investment, aligning with the increasing federal focus on leveraging data. Federal spending on big data analytics has been on an upward trajectory, driven by needs in areas like cybersecurity, fraud detection, and operational efficiency. While this specific contract is significant, it represents one component of a much larger federal IT and data analytics spending landscape. For context, other agencies also award multi-million dollar contracts for data warehousing, business intelligence, and advanced analytics platforms. A comprehensive comparison would involve analyzing the total federal spend across similar NAICS codes and contract types over the past few fiscal years to understand the relative scale and market trends.

What are the primary risks associated with this contract for the IRS?

Key risks for the IRS on this contract include potential performance issues if Red River Technology LLC fails to deliver the expected big data analytics capabilities effectively. There's also a risk of vendor lock-in, especially if the implemented solutions are highly proprietary or difficult to transition. Given the critical nature of IRS operations, any disruption or underperformance in data analytics could impact tax administration, enforcement, and taxpayer services. Ensuring robust contract management, clear performance metrics, and contingency plans for service continuity are crucial mitigation strategies. The reliance on a single vendor for a significant duration also presents a risk that needs careful management.

How effective is the firm fixed-price contract type in managing costs for big data analytics projects?

The firm fixed-price (FFP) contract type is generally considered effective for managing costs in projects where the scope of work is well-defined and unlikely to change significantly. For big data analytics, FFP provides cost certainty for the government, as the contractor assumes the risk of cost overruns. This encourages efficiency from the contractor. However, if the scope of big data analytics needs to evolve substantially due to unforeseen technical challenges or changing requirements, an FFP contract can make modifications more complex and potentially costly. In such cases, a cost-reimbursement or time-and-materials contract might offer more flexibility, but with less cost predictability for the government. The IRS's choice of FFP suggests they have a clear understanding of the deliverables and are prioritizing cost control.

What are the historical spending patterns for the IRS in the 'Other Computer Related Services' category?

Historical spending patterns for the IRS within the 'Other Computer Related Services' (NAICS 541519) category would reveal the agency's ongoing investment in a broad range of IT support and services beyond specialized software development or hardware. Analyzing past expenditures in this category would indicate the IRS's reliance on external vendors for tasks such as IT consulting, system integration, data management, and potentially specialized analytics support. Significant or increasing spending in this area often correlates with modernization efforts or the adoption of new technologies. Understanding these patterns provides context for the current $60 million award, suggesting it may be part of a sustained strategy to enhance IT infrastructure and capabilities.

Industry Classification

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

Product/Service Code: IT AND TELECOM - END USER

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: 21 WATER ST STE 500, CLAREMONT, NH, 03743

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

Financial Breakdown

Contract Ceiling: $64,719,639

Exercised Options: $60,939,158

Current Obligation: $59,939,158

Actual Outlays: $59,711,418

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: HHSN316201500065W

IDV Type: GWAC

Timeline