Treasury's IRS awards $9.1M for COBOL developer support to Science Applications International Corporation

Contract Overview

Contract Amount: $9,158,156 ($9.2M)

Contractor: Science Applications International Corporation

Awarding Agency: Department of the Treasury

Start Date: 2023-04-11

End Date: 2026-04-10

Contract Duration: 1,095 days

Daily Burn Rate: $8.4K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: THIS IS A TASK ORDER TO ACQUIRE SUBMISSION PROCESSING DOMAIN COBOL DEVELOPER SUPPORT

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20220

State: District of Columbia Government Spending

Plain-Language Summary

Department of the Treasury obligated $9.2 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION for work described as: THIS IS A TASK ORDER TO ACQUIRE SUBMISSION PROCESSING DOMAIN COBOL DEVELOPER SUPPORT Key points: 1. Contract focuses on critical submission processing domain, indicating a need for specialized legacy system expertise. 2. Sole-source award raises questions about competition and potential for price optimization. 3. Long-term duration (3 years) suggests a sustained need for these services. 4. Firm Fixed Price contract type provides cost certainty for the government. 5. Awardee has a significant presence in federal IT services, suggesting established capabilities. 6. Geographic concentration in Washington D.C. may indicate proximity to IRS headquarters or key personnel.

Value Assessment

Rating: fair

The contract value of $9.16 million over three years for specialized COBOL developer support appears reasonable given the niche skillset required. However, without comparable sole-source awards for similar legacy system maintenance, a precise value-for-money assessment is challenging. The firm fixed-price structure offers predictability, but the lack of competition limits opportunities for potentially lower pricing through a competitive bidding process. Benchmarking against industry rates for senior COBOL developers with specific domain knowledge would be beneficial.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when a specific contractor possesses unique capabilities or when urgency precludes a full and open competition. The lack of competition means that the government did not benefit from a range of proposals and pricing strategies that could have emerged from a competitive process, potentially leading to higher costs than if it had been competed.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure to drive down costs. The government missed an opportunity to explore alternative solutions or more cost-effective approaches that might have been presented by other qualified vendors.

Public Impact

Benefits the Internal Revenue Service by ensuring the continued operation and maintenance of critical submission processing systems. Services delivered include specialized COBOL development support, crucial for legacy systems. Geographic impact is concentrated in Washington D.C., likely supporting IRS operations in the region. Workforce implications involve retaining or acquiring specialized IT skills necessary for maintaining essential government functions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potential cost savings.
Reliance on a single vendor for critical legacy system support poses a potential risk if performance issues arise.
The long duration of the contract could lead to vendor lock-in if not managed carefully.

Positive Signals

Firm Fixed Price contract provides budget certainty.
Awardee is an established federal contractor with demonstrated IT capabilities.
Focus on a critical IRS function ensures continuity of essential government services.

Sector Analysis

This contract falls within the Computer Systems Design Services sector, a vital part of the broader IT services industry. The market for specialized legacy system maintenance, particularly for COBOL, remains significant as many government agencies and large enterprises rely on these systems. While the overall IT services market is competitive, niche areas like COBOL development can have fewer specialized providers. Comparable spending benchmarks for similar legacy system support contracts are difficult to ascertain without more specific details on the scope and complexity.

Small Business Impact

This contract was not awarded to a small business, nor does it appear to have specific small business set-aside provisions. The prime contractor, Science Applications International Corporation, is a large business. There is no explicit information provided regarding subcontracting plans for small businesses. This award does not directly contribute to the small business contracting goals of the federal government.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program managers within the IRS. Accountability measures are inherent in the firm fixed-price contract, requiring the contractor to deliver specified services. Transparency is limited due to the sole-source nature of the award, with less public information available compared to competed contracts. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

IRS Taxpayer Services Modernization
Federal Legacy System Modernization Programs
IT Services for Financial Management Agencies
COBOL Application Development and Maintenance

Risk Flags

Sole-source award
Reliance on legacy technology
Potential for cost overruns due to lack of competition

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $9.2 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION. THIS IS A TASK ORDER TO ACQUIRE SUBMISSION PROCESSING DOMAIN COBOL DEVELOPER SUPPORT

Who is the contractor on this award?

The obligated recipient is SCIENCE APPLICATIONS INTERNATIONAL CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of the Treasury (Internal Revenue Service).

What is the total obligated amount?

The obligated amount is $9.2 million.

What is the period of performance?

Start: 2023-04-11. End: 2026-04-10.

What is the track record of Science Applications International Corporation (SAIC) in supporting IRS legacy systems, particularly those involving COBOL?

Science Applications International Corporation (SAIC) has a substantial history of providing IT services to various federal agencies, including the IRS. Their experience often encompasses supporting complex, mission-critical systems, which frequently include legacy applications. While specific details on their COBOL development support for the IRS's submission processing domain are not publicly detailed in this award notice, SAIC's broad capabilities in systems integration, software development, and IT modernization suggest they possess the necessary expertise. Their past performance on similar contracts, often involving large-scale IT infrastructure and application support, indicates a capacity to handle the demands of maintaining and enhancing critical government systems. Further investigation into SAIC's specific contract history with the IRS would provide a more granular understanding of their performance in this niche area.

How does the $9.16 million contract value compare to similar sole-source awards for COBOL developer support in the federal government?

Benchmarking this $9.16 million contract against similar sole-source awards for COBOL developer support is challenging due to the specialized nature of the requirement and the limited public data on such contracts. Sole-source awards are less common and often involve unique circumstances, making direct comparisons difficult. However, the value suggests a significant, multi-year engagement for specialized skills. The average cost for senior COBOL developers can range widely based on experience, location, and specific system knowledge, but a contract of this magnitude over three years implies a dedicated team or significant ongoing support. Without access to a database of comparable sole-source legacy system support contracts, it's hard to definitively state if this represents a premium or a fair market price. The lack of competition is the primary factor preventing a robust value comparison.

What are the primary risks associated with a sole-source award for critical IT infrastructure support like COBOL development?

The primary risks associated with a sole-source award for critical IT infrastructure support, such as COBOL development, revolve around cost, innovation, and vendor dependency. Without competition, there is less pressure on the contractor to offer the most competitive pricing, potentially leading to higher costs for the government. The absence of multiple bidders can also stifle innovation, as the government may not be exposed to a wider range of technical solutions or process improvements. Furthermore, a sole-source award can create vendor lock-in, making it difficult and costly to switch providers in the future if performance issues arise or if better alternatives become available. This reliance on a single vendor for essential services also poses a risk to continuity of operations if the vendor faces financial difficulties, operational challenges, or decides to exit the market.

How critical is the 'submission processing domain' for the IRS, and what is the potential impact of disruptions?

The 'submission processing domain' is absolutely critical for the Internal Revenue Service (IRS) as it directly relates to the intake, validation, and initial processing of tax returns and related documents submitted by taxpayers. This domain forms the foundation of the tax administration system. Disruptions in this area could lead to significant backlogs in processing tax returns, delays in issuing refunds, inaccuracies in taxpayer accounts, and potential failures to meet legal and regulatory deadlines. Such disruptions could erode taxpayer confidence, lead to increased administrative costs for correcting errors, and potentially impact government revenue collection. Ensuring the stability and efficiency of this domain through skilled developer support is therefore paramount for the IRS's core mission.

What are the historical spending patterns for COBOL developer support at the IRS or similar agencies?

Historical spending patterns for COBOL developer support at the IRS and similar agencies often reflect a long-term reliance on these systems due to their criticality and the significant investment in their development. Agencies typically allocate substantial budgets to maintain and modernize these legacy applications, as complete replacement can be prohibitively expensive and risky. Spending often fluctuates based on specific modernization initiatives, system upgrades, or the need to address security vulnerabilities. While precise historical figures for COBOL support at the IRS are not detailed here, it's common for agencies to have dedicated contracts or task orders for such specialized skills, often spanning multiple years and involving significant dollar amounts. The trend is generally towards maintaining these systems while gradually migrating functionalities to newer platforms, requiring a continuous need for COBOL expertise.

Industry Classification

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

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 12010 SUNSET HILLS ROAD, RESTON, VA, 20190

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

Financial Breakdown

Contract Ceiling: $9,471,342

Exercised Options: $9,471,342

Current Obligation: $9,158,156

Actual Outlays: $8,692,040

Subaward Activity

Number of Subawards: 6

Total Subaward Amount: $1,794,986

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 2032H523D00001

IDV Type: IDC

Timeline