Treasury's IRS awards $25M IT services BPA call to Cybermedia Technologies for custom programming

Contract Overview

Contract Amount: $25,000,000 ($25.0M)

Contractor: Cybermedia Technologies, LLC

Awarding Agency: Department of the Treasury

Start Date: 2023-03-08

End Date: 2024-06-07

Contract Duration: 457 days

Daily Burn Rate: $54.7K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IRPD TO 2

Place of Performance

Location: RESTON, FAIRFAX County, VIRGINIA, 20191

State: Virginia Government Spending

Plain-Language Summary

Department of the Treasury obligated $25.0 million to CYBERMEDIA TECHNOLOGIES, LLC for work described as: IRPD TO 2 Key points: 1. Contract value appears reasonable given the scope of custom computer programming services. 2. Full and open competition suggests a competitive bidding process was utilized. 3. Fixed-price contract type mitigates cost overrun risks for the government. 4. Contract duration of over a year provides stability for service delivery. 5. The award falls within the IT services sector, a common area for federal spending.

Value Assessment

Rating: good

The contract value of $25 million for custom computer programming services over approximately 15 months appears to be within a reasonable range for federal IT procurements of this nature. Benchmarking against similar contracts for custom software development and IT support services would provide a more precise value-for-money assessment. The firm fixed-price structure is a positive indicator, as it shifts cost risk to the contractor and encourages efficient service delivery.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. While the exact number of bidders is not provided, this method generally fosters a competitive environment, which can lead to better pricing and service offerings for the government. The agency's commitment to open competition suggests a deliberate effort to explore the market and secure the best value.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically drives down prices through market forces and ensures that the government is not overpaying for services due to a lack of alternatives.

Public Impact

Federal taxpayers benefit from the efficient delivery of custom computer programming services to the IRS. The IRS receives essential IT support to maintain and enhance its critical systems. Services are likely delivered within Virginia, impacting the local IT workforce. The contract supports the operational needs of a key federal agency responsible for tax administration.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if requirements are not clearly defined and managed.
Dependence on a single contractor for critical custom programming services could pose a risk if performance issues arise.

Positive Signals

Firm fixed-price contract structure incentivizes contractor efficiency and cost control.
Awarded under full and open competition, suggesting a robust selection process.
Contract duration provides a stable period for service delivery and knowledge transfer.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically custom computer programming services. The federal IT market is substantial, with significant annual spending on software development, maintenance, and support. This contract represents a portion of the IRS's investment in maintaining and modernizing its technological infrastructure to support its mission. Comparable spending benchmarks for custom IT development services can be found across various federal agencies, often categorized under NAICS code 541511.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific impacts on the small business ecosystem stemming from a set-aside provision. The primary contractor, Cybermedia Technologies, LLC, is likely a small business itself, but the award mechanism did not prioritize small business participation through a set-aside.

Oversight & Accountability

The contract is a BPA Call, which typically operates under an existing Blanket Purchase Agreement (BPA), implying that the overarching BPA likely has established oversight mechanisms. The firm fixed-price nature of the award provides a degree of financial oversight by capping costs. Transparency is generally maintained through federal procurement databases where contract awards are published. Further oversight would depend on the specific reporting and review processes within the IRS and potentially the Treasury Inspector General for Tax Administration.

Related Government Programs

IRS IT Modernization Initiatives
Custom Software Development Services
Federal IT Services Procurement
BPA Call Awards

Risk Flags

Potential for scope creep in custom development projects.
Contractor performance risk for specialized IT services.
Need for clear performance metrics and oversight.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $25.0 million to CYBERMEDIA TECHNOLOGIES, LLC. IRPD TO 2

Who is the contractor on this award?

The obligated recipient is CYBERMEDIA TECHNOLOGIES, 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 $25.0 million.

What is the period of performance?

Start: 2023-03-08. End: 2024-06-07.

What is Cybermedia Technologies, LLC's track record with federal contracts, particularly for custom programming services?

Assessing Cybermedia Technologies, LLC's track record requires a review of their past federal contract awards. Data on previous performance, including contract values, agencies served, and types of services rendered, would be crucial. Specifically, looking for prior awards related to custom computer programming (NAICS 541511) or similar IT services would provide insight into their experience and capabilities. A history of successful contract completions, positive past performance reviews, and minimal disputes or terminations would indicate a reliable contractor. Conversely, a pattern of performance issues or contract cancellations could raise concerns about their ability to meet the current IRS requirements effectively.

How does the $25 million award compare to similar custom programming contracts awarded by the IRS or other federal agencies?

To benchmark the $25 million award, one would compare it against recent contracts for custom computer programming services (NAICS 541511) awarded by the IRS and other agencies of similar size and mission. Factors such as contract duration, scope of work, and the specific technologies involved are important for a fair comparison. For instance, if similar 15-month contracts for custom development with comparable complexity have been awarded in the range of $20-$30 million, then this award appears competitive. If, however, comparable contracts are significantly lower or higher, it might suggest either exceptional value or potential overpricing. Analyzing the number of bidders in comparable procurements also provides context on market competitiveness.

What are the primary risks associated with this firm fixed-price contract for custom programming?

While firm fixed-price (FFP) contracts are generally preferred for cost control, risks can still exist, particularly with custom programming. A primary risk is the potential for scope creep, where the requirements evolve beyond the initial agreement, leading to disputes or the need for contract modifications if not managed rigorously. Another risk is that the contractor might cut corners on quality or performance to maximize profit under the fixed price, especially if the initial price was set too low or if unforeseen technical challenges arise. The government also bears the risk if the contractor's proposed solution is technically inadequate or if the contractor lacks the necessary expertise, which could lead to delays or failure to meet performance objectives.

How effective is the 'full and open competition' approach likely to be in ensuring value for this specific IRS contract?

The 'full and open competition' approach is generally considered the most effective method for ensuring value in federal contracting, as it maximizes the pool of potential bidders and encourages competitive pricing. For this IRS contract, its effectiveness hinges on the clarity of the solicitation's requirements and the agency's ability to attract a sufficient number of qualified bidders. If the solicitation was well-defined and the market for these specialized custom programming services is robust, competition should drive down costs and improve service quality. However, if the technical requirements are highly specialized or the market is limited, the number of competitive bids might be low, potentially diminishing the price discovery benefits typically associated with full and open competition.

What are the historical spending patterns for custom computer programming services at the IRS?

Analyzing historical spending patterns for custom computer programming services at the IRS would involve examining contract data over several fiscal years. This would reveal trends in contract values, the number of awards, and the types of services procured. Understanding these patterns can help determine if the current $25 million award is consistent with past investments or represents a significant increase or decrease. For example, if the IRS has consistently spent $50-$70 million annually on similar services, this $25 million award might be part of a larger, ongoing modernization effort or a shift in strategy. Conversely, a sudden spike or drop could warrant further investigation into the underlying reasons.

Industry Classification

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

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Cybermedia Technologies LLC

Address: 11490 COMMERCE PARK DR, RESTON, VA, 20191

Business Categories: Category Business, Corporate Entity Not Tax Exempt, DoT Certified Disadvantaged Business Enterprise, Economically Disadvantaged Women Owned Small Business, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Subchapter S Corporation, Indian (Subcontinent) American Owned Business, U.S.-Owned Business, Woman Owned Business, Women Owned Small Business

Financial Breakdown

Contract Ceiling: $25,000,000

Exercised Options: $25,000,000

Current Obligation: $25,000,000

Actual Outlays: $25,000,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 2032H522A00009

IDV Type: BPA

Timeline