Treasury's IRS awards $4.1M for data encryption support, highlighting a need for secure IT infrastructure

Contract Overview

Contract Amount: $4,116,228 ($4.1M)

Contractor: ATP GOV, LLC

Awarding Agency: Department of the Treasury

Start Date: 2023-09-30

End Date: 2025-04-15

Contract Duration: 563 days

Daily Burn Rate: $7.3K/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: DATA AT REST ENCRYPTION (DARE) TECHNICAL INTEGRATION SUPPORT SERVICES

Place of Performance

Location: LANHAM, PRINCE GEORGES County, MARYLAND, 20706

State: Maryland Government Spending

Plain-Language Summary

Department of the Treasury obligated $4.1 million to ATP GOV, LLC for work described as: DATA AT REST ENCRYPTION (DARE) TECHNICAL INTEGRATION SUPPORT SERVICES Key points: 1. The contract value of $4.1 million for data encryption support suggests a significant investment in safeguarding sensitive taxpayer information. 2. Competition dynamics for this contract are noted as 'Full and Open Competition After Exclusion of Sources,' indicating a potentially complex procurement process. 3. The duration of 563 days points to a medium-term need for these specialized technical integration services. 4. The primary service category, 'Other Computer Related Services,' is broad and requires further breakdown to understand specific technical requirements. 5. The contract's focus on data encryption aligns with ongoing government-wide efforts to enhance cybersecurity postures. 6. The fixed-price contract type aims to provide cost certainty for the government, though it may limit flexibility for unforeseen technical challenges.

Value Assessment

Rating: good

The contract value of $4.1 million for 563 days of service averages approximately $7,311 per day. Benchmarking this against similar IT support contracts requires detailed analysis of the specific technical services provided. However, the fixed-price nature suggests an attempt to control costs. Without more granular data on the scope of work and comparable market rates for specialized data encryption integration, a precise value-for-money assessment is challenging, but the award appears reasonable for specialized IT support.

Cost Per Unit: $7,311 per day (estimated)

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This designation implies that while the competition was intended to be open, specific sources may have been excluded for reasons not detailed in the provided data. The number of bidders is not specified, but the 'full and open' aspect suggests a competitive process was initiated. The exclusion of sources warrants further investigation to understand its impact on the breadth of competition and potential price discovery.

Taxpayer Impact: A full and open competition, even with exclusions, generally benefits taxpayers by encouraging multiple vendors to bid, which can lead to more competitive pricing and better service offerings. However, the specific exclusions could limit the pool of qualified bidders, potentially impacting the final price.

Public Impact

Taxpayer data security is enhanced through the implementation of advanced encryption technologies. The Internal Revenue Service (IRS) benefits from improved technical capabilities for data protection. Federal IT infrastructure resilience is strengthened, reducing the risk of data breaches. The contract supports the federal government's broader cybersecurity initiatives. Specialized IT professionals may be engaged in delivering these critical services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'Exclusion of Sources' clause in the competition type requires clarification to ensure no undue restrictions limited competitive pricing.
The specific technical deliverables and performance metrics are not detailed, making it difficult to fully assess performance risks.
The reliance on a single delivery order for this service might indicate a concentrated risk if the contractor faces performance issues.

Positive Signals

The contract is awarded under a full and open competition framework, suggesting a broad search for qualified vendors.
The firm fixed-price contract type provides cost predictability for the government.
The focus on data encryption directly addresses critical cybersecurity needs for sensitive government data.

Sector Analysis

This contract falls within the broader IT services sector, specifically focusing on computer systems design and related services (NAICS 541519). The market for data encryption and cybersecurity solutions is robust and growing, driven by increasing cyber threats and regulatory requirements. The IRS, as a major federal agency handling vast amounts of sensitive financial data, represents a significant client for such specialized IT support. Comparable spending benchmarks would involve analyzing other federal contracts for similar data security and integration services, which often range from hundreds of thousands to millions of dollars depending on scope and duration.

Small Business Impact

The provided data indicates that small business participation (ss: false, sb: false) was not a primary set-aside consideration for this specific contract. This suggests the requirement was likely fulfilled by larger, specialized IT firms. There is no explicit mention of subcontracting plans for small businesses. The impact on the small business ecosystem is likely minimal for this particular award, as it does not appear to have been designed to specifically benefit small businesses through set-asides.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the IRS's contracting officers and program managers. The firm fixed-price nature provides a degree of financial oversight by fixing the cost. Transparency is facilitated through federal contract databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to the contract is suspected. Regular performance reviews and milestone tracking are standard accountability measures.

Related Government Programs

Federal Information Security Management Act (FISMA) compliance
Cybersecurity Modernization Initiatives
IRS IT Modernization Program
Data Protection Services
Cloud Security Services

Risk Flags

Competition Type Ambiguity
Lack of Detailed Scope of Work
Potential for Contractor Performance Issues

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $4.1 million to ATP GOV, LLC. DATA AT REST ENCRYPTION (DARE) TECHNICAL INTEGRATION SUPPORT SERVICES

Who is the contractor on this award?

The obligated recipient is ATP GOV, 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 $4.1 million.

What is the period of performance?

Start: 2023-09-30. End: 2025-04-15.

What specific technical services are included under 'Other Computer Related Services' for data encryption?

The provided data classifies this contract under NAICS code 541519, 'Other Computer Related Services.' This broad category can encompass a wide range of activities, including IT consulting, systems integration, and technical support. For this specific contract, the focus is on 'DATA AT REST ENCRYPTION (DARE) TECHNICAL INTEGRATION SUPPORT SERVICES.' This implies services related to implementing, configuring, and maintaining encryption solutions for data stored on IRS systems. Specific tasks could include software installation, system configuration, security policy implementation, testing and validation of encryption protocols, and potentially training or documentation related to the DARE system. A more detailed statement of work (SOW) would be required to fully delineate the precise technical services rendered.

How does the $4.1 million contract value compare to historical IRS spending on data encryption and IT security?

Comparing this $4.1 million contract to historical IRS spending requires access to detailed historical procurement data. The IRS, like other large federal agencies, consistently invests significant resources in IT security and data protection due to the sensitive nature of taxpayer information. Annual IT security budgets for agencies of the IRS's size often run into the hundreds of millions of dollars. This specific contract represents a portion of that overall investment, focused on a particular aspect of data security – encryption integration. To provide a precise comparison, one would need to analyze past contracts for similar encryption services, IT integration, and cybersecurity support awarded to the IRS over several fiscal years to identify trends and average award values.

What are the primary risks associated with this data encryption technical integration contract?

The primary risks associated with this contract include technical integration challenges, potential performance issues with the chosen encryption solution, and cybersecurity vulnerabilities during the implementation phase. If the integration is not seamless, it could disrupt existing IRS systems or compromise data accessibility. Performance risks involve the chosen encryption technology not meeting expected security standards or operational efficiency. Cybersecurity risks are inherent in any IT project, particularly those involving sensitive data; a misstep during integration could expose data. Furthermore, contractor performance risk, where ATP GOV, LLC may not deliver services as expected, is always present. The fixed-price nature also poses a risk if unforeseen technical complexities arise, potentially leading to scope creep or disputes.

What is the significance of the 'Exclusion of Sources' in the contract's competition type?

The designation 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' indicates that the procurement process was initially intended to be fully open, allowing all responsible sources to submit offers. However, specific sources were subsequently excluded. The reasons for exclusion are not provided but could range from failure to meet minimum qualifications, past performance issues, or specific government requirements that only a subset of vendors could meet. While the intent was open competition, the exclusion narrows the field of potential bidders. This can impact price discovery, as fewer competitors might lead to less aggressive bidding. It also raises questions about whether the exclusion was justified and if it inadvertently limited the government's access to potentially optimal solutions or pricing.

How does this contract contribute to the IRS's overall IT modernization and cybersecurity strategy?

This contract directly supports the IRS's IT modernization and cybersecurity strategy by addressing a critical component of data protection: encryption at rest. Modernizing IT infrastructure often involves upgrading security protocols to protect against evolving threats. Implementing robust data encryption ensures that sensitive taxpayer information remains confidential even if storage systems are compromised. By investing in technical integration support for encryption, the IRS is taking a proactive step to safeguard data integrity and privacy, aligning with federal mandates like FISMA and executive orders aimed at enhancing national cybersecurity. This initiative is likely part of a larger effort to replace legacy systems and adopt more secure, efficient technologies.

Industry Classification

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

Product/Service Code: IT AND TELECOM - END USER

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

Address: 575 LIVELY BLVD, ELK GROVE, IL, 60007

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Manufacturer of Goods, Small Business, Special Designations, U.S.-Owned Business, Woman Owned Business, Women Owned Small Business

Financial Breakdown

Contract Ceiling: $4,116,228

Exercised Options: $4,116,228

Current Obligation: $4,116,228

Actual Outlays: $4,116,228

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: NNG15SC58B

IDV Type: GWAC

Timeline