IRS CITO contract awarded to CHEVO LLC for over $5.3M, utilizing full and open competition

Contract Overview

Contract Amount: $5,368,282 ($5.4M)

Contractor: Chevo LLC

Awarding Agency: Department of the Treasury

Start Date: 2022-09-30

End Date: 2024-09-29

Contract Duration: 730 days

Daily Burn Rate: $7.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IRS CRIMINAL INVESTIGATION TECHNOLOGY OPERATIONS (CITO)

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20850

State: Maryland Government Spending

Plain-Language Summary

Department of the Treasury obligated $5.4 million to CHEVO LLC for work described as: IRS CRIMINAL INVESTIGATION TECHNOLOGY OPERATIONS (CITO) Key points: 1. The contract's firm-fixed-price structure aims to control costs for IT services. 2. A broad scope of 'Other Computer Related Services' suggests potential for varied task execution. 3. The duration of 730 days provides a stable period for service delivery. 4. The award was made under a Blanket Purchase Agreement (BPA) Call, indicating a pre-negotiated framework. 5. The contract's value is moderate within the context of federal IT procurements. 6. Performance is concentrated in Maryland, suggesting a localized operational impact.

Value Assessment

Rating: good

The contract's firm-fixed-price nature is a positive indicator for cost control. Benchmarking against similar 'Other Computer Related Services' contracts within the federal government would provide a clearer picture of value for money. The absence of specific performance metrics in the provided data makes a definitive value assessment challenging, but the competitive award process suggests a reasonable price was sought.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, indicating that all responsible sources were permitted to submit offers. The presence of 4 bidders suggests a healthy level of interest and competition for this requirement. This competitive environment is generally favorable for price discovery and ensuring the government receives competitive pricing.

Taxpayer Impact: Taxpayers benefit from the competitive process, which is expected to drive down costs and ensure the government obtains services at a fair market price.

Public Impact

The Internal Revenue Service (IRS) is the primary beneficiary, receiving technology operations support. Services delivered likely include IT support, system maintenance, and potentially software development or integration. The geographic impact is concentrated in Maryland, where the contractor's operations are likely based. The contract supports the IRS's mission to enforce tax laws and provide taxpayer services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Scope ambiguity: 'Other Computer Related Services' is broad and could lead to scope creep if not tightly managed.
Dependence on a single BPA call: While competitive, the reliance on a specific BPA framework might limit future flexibility.
Contract duration: A two-year term requires timely planning for follow-on procurements to ensure continuity of services.

Positive Signals

Firm-fixed-price contract type: This structure incentivizes contractor efficiency and cost control.
Full and open competition: Ensures a wide range of potential contractors can compete, fostering better pricing.
Multiple bidders (4): Indicates a competitive market for these services, which is positive for the government.

Sector Analysis

This contract falls within the broader Information Technology (IT) sector, specifically focusing on computer-related services. The federal IT services market is substantial, with agencies constantly seeking to modernize systems and enhance operational efficiency. This contract likely supports the IRS's ongoing efforts to maintain and improve its technological infrastructure, aligning with government-wide initiatives for digital transformation and cybersecurity.

Small Business Impact

The data indicates that small business participation was not a specific set-aside requirement for this contract (ss: false, sb: false). Therefore, the direct impact on small businesses is likely limited unless CHEVO LLC engages them as subcontractors. Further analysis of subcontracting plans would be needed to assess the broader impact on the small business ecosystem.

Oversight & Accountability

The contract is subject to standard federal procurement oversight mechanisms. As a firm-fixed-price contract awarded under full and open competition, oversight would focus on performance delivery against the statement of work and adherence to the BPA call terms. The Department of the Treasury's Inspector General may have jurisdiction for audits and investigations related to this contract, ensuring accountability and transparency.

Related Government Programs

IRS IT Modernization Programs
Federal Civilian IT Services Contracts
Department of the Treasury IT Support
BPA Call Procurements

Risk Flags

Potential for scope creep
Contractor performance variability
Cybersecurity risks
Dependence on BPA framework

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $5.4 million to CHEVO LLC. IRS CRIMINAL INVESTIGATION TECHNOLOGY OPERATIONS (CITO)

Who is the contractor on this award?

The obligated recipient is CHEVO 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 $5.4 million.

What is the period of performance?

Start: 2022-09-30. End: 2024-09-29.

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

A review of CHEVO LLC's contract history would be necessary to assess their track record. This would involve examining past performance evaluations, any reported contract disputes or terminations, and the types and values of previous federal contracts they have held. Understanding their experience with similar 'Other Computer Related Services' and their performance on firm-fixed-price contracts would provide insight into their capability to successfully execute this current award. Without specific past performance data, it is difficult to definitively assess their reliability and expertise.

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

To benchmark the value, the awarded price of approximately $5.37 million over two years needs to be compared against market rates for 'Other Computer Related Services' of comparable scope and complexity. This would involve analyzing data from industry reports, commercial IT service pricing, and other federal contract awards for similar services. Factors such as labor categories, geographic location, and specific technical requirements influence pricing. A detailed comparison would reveal whether the government secured a competitive price or if there is potential for cost savings through further negotiation or alternative sourcing.

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

Key risks include potential scope creep due to the broad service category, contractor performance issues, and the possibility of cost overruns if not managed tightly under the fixed-price structure. Risks related to cybersecurity and data protection are also inherent in IT contracts. Management of these risks would typically involve robust contract surveillance by the government, clear definition and management of the statement of work, regular performance reviews, and adherence to security protocols. The firm-fixed-price nature itself is a risk mitigation strategy for cost certainty.

How effective is the IRS in managing technology operations contracts like this one?

The effectiveness of the IRS in managing technology operations contracts can be assessed by examining their historical contract performance data, the number of contract disputes or modifications, and the overall success rate of their IT projects. Agencies with mature contract management processes and dedicated oversight teams tend to achieve better outcomes. The IRS, being a large federal agency, likely has established procedures, but the specific effectiveness of their management for this particular contract would depend on the contracting officers' and technical monitors' diligence and expertise.

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

Analyzing historical spending patterns for similar IT services at the IRS and the broader Department of the Treasury would provide context for this $5.37 million award. This involves looking at previous contract values, durations, and the types of services procured over the last several fiscal years. Understanding trends in spending, such as increases or decreases in IT service procurements, and identifying major vendors can reveal patterns of investment and potential areas for efficiency. This historical data helps in assessing whether current spending is consistent with past investments or represents a significant shift.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related 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: 2032H5-22-Q-00132

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2275 RESEARCH BLVD., STE 100, ROCKVILLE, MD, 20850

Business Categories: Category Business, Limited Liability Corporation, Small Business, Special Designations, U.S.-Owned Business, Woman Owned Business, Women Owned Small Business

Financial Breakdown

Contract Ceiling: $5,368,282

Exercised Options: $5,368,282

Current Obligation: $5,368,282

Actual Outlays: $5,368,282

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 2032H519A00021

IDV Type: BPA

Timeline