Accenture Federal Services awarded $46.8M for IRS database support, highlighting IT services for tax administration

Contract Overview

Contract Amount: $46,810,539 ($46.8M)

Contractor: Accenture Federal Services LLC

Awarding Agency: Department of the Treasury

Start Date: 2021-11-21

End Date: 2026-11-20

Contract Duration: 1,825 days

Daily Burn Rate: $25.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: CADE2 FOR DDS DATABASE SUPPORT COVID-19

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22203

State: Virginia Government Spending

Plain-Language Summary

Department of the Treasury obligated $46.8 million to ACCENTURE FEDERAL SERVICES LLC for work described as: CADE2 FOR DDS DATABASE SUPPORT COVID-19 Key points: 1. Contract focuses on essential IT infrastructure for tax processing. 2. Competition was full and open, suggesting a competitive bidding process. 3. Firm-fixed-price contract type aims to control costs. 4. Long duration of 5 years indicates a need for sustained support. 5. Contractor has a significant federal presence. 6. Virginia location suggests concentration of IT services in the region.

Value Assessment

Rating: good

The contract value of $46.8 million over five years for database support is within a reasonable range for IT services of this nature. Benchmarking against similar contracts for IT systems design and support for large federal agencies indicates that this pricing is competitive. The firm-fixed-price structure provides cost certainty for the government, which is a positive indicator of value for money. However, a detailed cost breakdown would be needed for a more precise value assessment.

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 bids. The presence of two bidders suggests a moderate level of competition for this specific requirement. While more bidders could potentially drive prices lower, full and open competition generally ensures a fair process and allows the government to select the best value offer.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it encourages multiple vendors to offer their best pricing and technical solutions, leading to potentially more cost-effective outcomes and a wider pool of qualified contractors.

Public Impact

Benefits the Internal Revenue Service (IRS) by ensuring the stability and performance of critical database systems. Supports the efficient processing of tax information and taxpayer services. Geographic impact is primarily within Virginia, where the contractor's operations are located. Workforce implications include the potential for skilled IT professionals to be engaged in supporting federal tax administration.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Contract duration of 5 years may lead to vendor lock-in if not managed carefully.
Reliance on a single contractor for critical database support could pose risks if performance issues arise.
Potential for scope creep if requirements are not clearly defined and managed throughout the contract period.

Positive Signals

Firm-fixed-price contract provides cost predictability.
Full and open competition suggests a robust selection process.
Contractor's established presence in federal IT services indicates experience and capability.
Long-term nature of the contract allows for deep system understanding and optimization.

Sector Analysis

This contract falls within the Computer Systems Design Services sector, a critical component of the broader Information Technology (IT) industry. The IT sector is characterized by rapid innovation and significant government spending on modernization and support services. Comparable spending benchmarks for IT support contracts with agencies like the IRS often range in the tens to hundreds of millions of dollars, depending on the scope and duration. This contract represents a significant investment in maintaining essential government IT infrastructure.

Small Business Impact

This contract was not awarded as a small business set-aside, nor does it indicate specific subcontracting goals for small businesses in the provided data. Therefore, the direct impact on the small business ecosystem is likely minimal unless the prime contractor voluntarily engages small businesses for subcontracting opportunities. Further analysis of subcontracting plans would be required to assess the full impact on small businesses.

Oversight & Accountability

Oversight for this contract is likely managed by the contracting officer and program managers within the IRS. The firm-fixed-price contract type provides a degree of accountability by fixing the total cost. Transparency is facilitated through contract award databases, though detailed performance metrics and internal oversight processes are not publicly disclosed. The Inspector General for the Treasury Department would have jurisdiction over potential fraud, waste, or abuse related to this contract.

Related Government Programs

IRS IT Modernization Programs
Federal Civilian IT Services
Database Management and Support Contracts
Computer Systems Design Services

Risk Flags

Potential for vendor lock-in due to long contract duration.
Cybersecurity risks associated with handling sensitive taxpayer data.
Dependence on contractor performance for critical IT functions.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $46.8 million to ACCENTURE FEDERAL SERVICES LLC. CADE2 FOR DDS DATABASE SUPPORT COVID-19

Who is the contractor on this award?

The obligated recipient is ACCENTURE FEDERAL 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 $46.8 million.

What is the period of performance?

Start: 2021-11-21. End: 2026-11-20.

What is Accenture Federal Services' track record with the IRS and similar federal agencies for IT support contracts?

Accenture Federal Services has a substantial track record of performing IT support and systems integration services for various federal agencies, including the IRS. Their experience often involves large-scale system modernization, database management, and application development. For the IRS specifically, they have been involved in projects related to tax processing systems and data management. Their history suggests a capacity to handle complex IT requirements. However, a deeper dive into past performance reviews, any past disputes, or contract modifications would provide a more comprehensive understanding of their reliability and effectiveness in similar engagements.

How does the $46.8 million contract value compare to other IRS database support contracts awarded over the last five years?

The $46.8 million contract value for five years of database support is a significant but not unprecedented amount for the IRS. The IRS manages vast amounts of sensitive taxpayer data, requiring robust and continuous IT support. Contracts for similar database management, system design, and IT infrastructure support for the IRS have historically ranged from several million to tens of millions of dollars annually. Given the duration and the critical nature of IRS operations, this award appears to be in line with the agency's typical spending for such essential services. A precise comparison would require analyzing the specific scope, deliverables, and service level agreements of other contracts.

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

Primary risks include potential performance deficiencies by the contractor, cybersecurity threats to sensitive IRS data, and the possibility of cost overruns if the firm-fixed-price model is not strictly adhered to or if unforeseen technical challenges arise. Mitigation strategies likely involve rigorous performance monitoring by the IRS, adherence to strict cybersecurity protocols and compliance requirements (e.g., FISMA), and clear contract terms that define responsibilities and penalties. The long-term nature of the contract also presents a risk of technological obsolescence if not managed proactively through contract modifications or future procurements. The IRS's established contract management processes are designed to address these risks.

How effective is the firm-fixed-price (FFP) contract type in ensuring value for money for this specific database support requirement?

The firm-fixed-price (FFP) contract type is generally effective in ensuring value for money for well-defined IT support services like database management, as it shifts the risk of cost overruns to the contractor. This encourages the contractor to manage resources efficiently and control costs to maximize profit. For the IRS, this means a predictable total cost for the duration of the contract, assuming the scope remains stable. The effectiveness hinges on the accuracy of the initial cost estimation and the clarity of the statement of work. If the scope changes significantly, modifications to the FFP contract can become complex and potentially negate some of the initial cost certainty.

What is the historical spending trend for computer systems design services at the IRS?

Historical spending trends for computer systems design services at the IRS have generally shown a consistent and significant investment, reflecting the agency's reliance on complex IT systems for tax administration. Over the past decade, the IRS has undertaken various modernization efforts, often involving substantial contracts for system design, development, and support. Spending in this category has fluctuated based on specific project needs and budget allocations, but it remains a core area of expenditure. The trend indicates a sustained need for external expertise to maintain, upgrade, and secure its vast IT infrastructure, including database management systems.

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

Solicitation ID: RFQ 8106

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Novetta Solutions, LLC

Address: 800 N GLEBE RD STE 300, ARLINGTON, VA, 22203

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $50,085,364

Exercised Options: $46,810,539

Current Obligation: $46,810,539

Actual Outlays: $43,736,862

Subaward Activity

Number of Subawards: 29

Total Subaward Amount: $19,621,757

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: 47QTCK18D0036

IDV Type: GWAC

Timeline