Treasury's IRS awards $19.7M contract for COVID-19 IT services to AlphaSix, LLC

Contract Overview

Contract Amount: $19,743,247 ($19.7M)

Contractor: Alphasix, LLC.

Awarding Agency: Department of the Treasury

Start Date: 2021-09-27

End Date: 2025-04-22

Contract Duration: 1,303 days

Daily Burn Rate: $15.2K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: FIRM FIXED PRICE DELIVERY ORDER FOR ALPHA SIX COVID-19

Place of Performance

Location: STERLING, LOUDOUN County, VIRGINIA, 20166

State: Virginia Government Spending

Plain-Language Summary

Department of the Treasury obligated $19.7 million to ALPHASIX, LLC. for work described as: FIRM FIXED PRICE DELIVERY ORDER FOR ALPHA SIX COVID-19 Key points: 1. Contract value appears reasonable for specialized IT support during a pandemic. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. The contract duration extends over three years, indicating a need for sustained support. 4. The North American Industry Classification System (NAICS) code 541519 points to general computer services. 5. The contract is a delivery order under a larger contract vehicle. 6. The vendor, AlphaSix, LLC, is based in Virginia.

Value Assessment

Rating: good

The contract value of $19.7 million for a period of approximately 3.5 years (September 2021 to April 2025) for IT services related to COVID-19 response appears to be within a reasonable range. Benchmarking against similar IT support contracts for federal agencies of this size and scope would provide a more precise assessment. However, given the specialized nature of IT support, especially during a public health crisis, the pricing is likely competitive due to the full and open competition.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'Full and Open Competition After Exclusion of Sources,' which indicates that the agency sought bids from all responsible sources after initially excluding certain ones. While the exact number of bidders is not specified, the 'full and open' nature suggests a robust competition, which typically leads to better price discovery and value for the government. The exclusion of sources clause might warrant further investigation into the specific reasons for exclusion.

Taxpayer Impact: The use of full and open competition is beneficial for taxpayers as it encourages multiple vendors to bid, driving down prices and ensuring the government receives the best possible value for its investment.

Public Impact

The primary beneficiary is the Internal Revenue Service (IRS), which receives critical IT support. The services delivered are related to IT infrastructure and support, likely crucial for the IRS's operations, especially in adapting to pandemic-related challenges. The geographic impact is primarily within Virginia, where the contractor AlphaSix, LLC is located, and potentially wherever the IRS IT infrastructure is managed. The contract supports the IT workforce, potentially involving skilled technicians and IT professionals.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if the initial requirements are not clearly defined.
Dependence on a single vendor for critical IT services could pose a risk if performance issues arise.
The 'exclusion of sources' clause, while part of a full and open competition, could obscure specific reasons for limiting the initial pool of bidders.

Positive Signals

Awarded through full and open competition, indicating a competitive process.
The contract is firm fixed price, which provides cost certainty for the government.
The vendor is an established entity, likely with experience in government contracting.
The contract duration suggests a stable, long-term need being met.

Sector Analysis

The IT services sector is a vast and critical component of federal spending. This contract falls under the 'Other Computer Related Services' category (NAICS 541519), which encompasses a wide range of IT support, including system integration, IT consulting, and data processing services. The federal government is a major consumer of IT services, with spending often driven by modernization efforts, cybersecurity needs, and support for agency operations. Comparable spending benchmarks would depend on the specific IT services rendered, but the overall federal IT budget runs into the tens of billions annually.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a small business set-aside. The primary focus of this contract appears to be on larger, established IT service providers capable of meeting the IRS's requirements. The impact on the small business ecosystem is neutral in this instance, as it was not specifically designed to benefit them.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program office within the IRS. Accountability measures are embedded in the firm-fixed-price structure, requiring the contractor to deliver specified services within the agreed-upon cost. Transparency is generally maintained through contract databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

IRS IT Modernization Programs
Federal Civilian IT Services Contracts
COVID-19 Response Technology Support
General Services Administration (GSA) IT Schedule Contracts

Risk Flags

Potential for vendor lock-in if not managed carefully.
Cybersecurity risks associated with IT service delivery.
Clarity of 'exclusion of sources' rationale in competitive bidding.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $19.7 million to ALPHASIX, LLC.. FIRM FIXED PRICE DELIVERY ORDER FOR ALPHA SIX COVID-19

Who is the contractor on this award?

The obligated recipient is ALPHASIX, 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 $19.7 million.

What is the period of performance?

Start: 2021-09-27. End: 2025-04-22.

What is the track record of AlphaSix, LLC in performing similar federal IT contracts?

A review of AlphaSix, LLC's federal contract history would be necessary to assess their track record. This would involve examining past performance evaluations, any documented issues or disputes on previous contracts, and the types of IT services they have successfully delivered to government agencies. Understanding their experience with firm-fixed-price contracts and delivery orders of similar magnitude would provide insight into their capability to fulfill the current IRS contract requirements effectively. Without specific past performance data, it's difficult to definitively assess their reliability.

How does the awarded price compare to market rates for similar IT services?

To compare the awarded price of $19.7 million to market rates, one would need to benchmark it against similar IT support contracts awarded by other federal agencies or even state and local governments. Key factors for comparison include the specific services rendered (e.g., network management, cybersecurity, software development), the duration of the contract, and the geographic location of service delivery. Given that this is a firm-fixed-price contract awarded under full and open competition, it suggests that the price is likely competitive. However, a detailed market analysis using government databases and industry reports would be required for a precise valuation.

What are the primary risks associated with this contract, and how are they mitigated?

Primary risks include potential vendor performance issues, cybersecurity vulnerabilities, and the possibility of cost overruns if the scope is not well-defined, despite the firm-fixed-price nature. Mitigation strategies typically involve robust contract oversight by the IRS, clear performance metrics and deliverables, regular progress reviews, and adherence to strict cybersecurity protocols. The 'exclusion of sources' clause, while part of a competitive process, could also be a risk if it limits the pool of qualified vendors unnecessarily. The IRS would have mitigation plans in place, likely including contingency planning and defined remedies for non-performance.

How effective has AlphaSix, LLC been in meeting the objectives of this contract to date?

Assessing the effectiveness of AlphaSix, LLC in meeting the contract objectives requires access to performance reports, acceptance criteria, and any feedback from the IRS program office. Since the contract started in September 2021 and ends in April 2025, it is likely still in its execution phase. Performance metrics would typically include timeliness of service delivery, quality of IT support, adherence to security standards, and overall responsiveness. Without specific performance data or official evaluations, it is not possible to determine the current level of effectiveness.

What are the historical spending patterns for similar IT services at the IRS?

Historical spending patterns for similar IT services at the IRS would reveal trends in IT procurement, vendor relationships, and the overall investment in technology infrastructure. Analyzing past contracts for IT support, system maintenance, and network services would provide context for the $19.7 million award. This analysis could highlight whether spending has increased or decreased, identify dominant contractors, and indicate shifts in technology priorities. Such data is crucial for understanding the IRS's long-term IT strategy and budget allocation.

What specific IT services are included under the 'Other Computer Related Services' NAICS code for this contract?

The NAICS code 541519, 'Other Computer Related Services,' is broad and encompasses a variety of IT services beyond core software development or hardware maintenance. For this specific contract, it likely includes services such as IT consulting, systems integration, network design and management, data processing, IT support services, and potentially cloud computing services. The contract's statement of work (SOW) would detail the precise services required by the IRS, which could range from help desk support to complex system administration, all aimed at supporting the agency's operational needs, particularly in the context of COVID-19 response.

Industry Classification

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

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Alphasix Corporation

Address: 21355 RIDGETOP CIRCLE, #330, DULLES, VA, 20166

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

Financial Breakdown

Contract Ceiling: $19,743,247

Exercised Options: $19,743,247

Current Obligation: $19,743,247

Actual Outlays: $19,171,395

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: NNG15SD28B

IDV Type: GWAC

Timeline