Treasury's IRS awards $26.1M for Mainframe SCRS hardware/software maintenance to SAIC
Contract Overview
Contract Amount: $26,141,442 ($26.1M)
Contractor: Science Applications International Corporation
Awarding Agency: Department of the Treasury
Start Date: 2023-11-01
End Date: 2025-10-31
Contract Duration: 730 days
Daily Burn Rate: $35.8K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: MAINFRAME SERVICE CENTER REPLACEMENT SYSTEM (SCRS) HARDWARE AND SOFTWARE MAINTENANCE
Place of Performance
Location: MEMPHIS, SHELBY County, TENNESSEE, 38103
Plain-Language Summary
Department of the Treasury obligated $26.1 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION for work described as: MAINFRAME SERVICE CENTER REPLACEMENT SYSTEM (SCRS) HARDWARE AND SOFTWARE MAINTENANCE Key points: 1. Contract value of $26.1M for 2 years. 2. Sole-source award to Science Applications International Corporation (SAIC). 3. Risk of vendor lock-in and potential overpayment due to lack of competition. 4. IT sector spending on maintenance and support services.
Value Assessment
Rating: questionable
The contract value of $26.1M for two years of maintenance for a critical system appears high given the sole-source nature. Benchmarking against similar mainframe maintenance contracts is difficult without competitive data, but the lack of competition raises concerns about pricing efficiency.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded sole-source, meaning there was no competition. This significantly limits price discovery and may lead to higher costs for taxpayers. The justification for a sole-source award should be thoroughly reviewed.
Taxpayer Impact: The lack of competition in this sole-source award could result in taxpayers paying more than necessary for essential mainframe maintenance services.
Public Impact
Taxpayers may be overpaying for critical IT infrastructure maintenance. Dependence on a single vendor for essential system support poses a risk. Lack of transparency in the procurement process limits public scrutiny.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Potential for overpricing
- Vendor lock-in
Positive Signals
- Essential service maintenance
- Long-term vendor relationship
Sector Analysis
This contract falls within the IT sector, specifically for computer systems design services and maintenance. Spending on IT maintenance is substantial across government agencies, with significant portions often allocated to legacy systems like mainframes.
Small Business Impact
This contract was not awarded to a small business. There is no indication of subcontracting opportunities for small businesses within this award.
Oversight & Accountability
The sole-source nature of this award warrants close oversight to ensure the pricing is fair and reasonable and that the services provided are essential and effectively delivered. The IRS should have a clear justification for not competing this requirement.
Related Government Programs
- Computer Systems Design Services
- Department of the Treasury Contracting
- Internal Revenue Service Programs
Risk Flags
- Sole-source award limits competition and price discovery.
- Potential for inflated costs due to lack of competitive pressure.
- Risk of vendor lock-in and dependence on a single provider.
- Lack of transparency in the procurement process.
- No small business participation identified.
Tags
computer-systems-design-services, department-of-the-treasury, tn, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of the Treasury awarded $26.1 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION. MAINFRAME SERVICE CENTER REPLACEMENT SYSTEM (SCRS) HARDWARE AND SOFTWARE MAINTENANCE
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 $26.1 million.
What is the period of performance?
Start: 2023-11-01. End: 2025-10-31.
What is the justification for awarding this contract sole-source, and has an alternatives analysis been performed?
The justification for a sole-source award is critical for understanding why competition was bypassed. An alternatives analysis would typically explore whether other vendors could provide similar services or if the system could be transitioned to a different platform. Without this information, it's difficult to assess if taxpayers are receiving the best value.
How does the per-unit cost of this maintenance contract compare to industry benchmarks for similar mainframe systems?
Benchmarking the per-unit cost is challenging without competitive bids. However, industry benchmarks for mainframe hardware and software maintenance can vary widely based on system complexity, age, and vendor. A lack of competition makes it difficult to ascertain if SAIC's pricing is aligned with market rates or if it represents a premium.
What is the IRS's strategy for mitigating the risks associated with a sole-source vendor for critical mainframe support?
The IRS's strategy should include rigorous performance monitoring, regular price reviews (even without competition), and a proactive plan for future competition or system modernization. Building in clear exit strategies and ensuring knowledge transfer can also mitigate risks associated with long-term sole-source reliance.
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 - END USER
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: $28,767,651
Exercised Options: $26,141,442
Current Obligation: $26,141,442
Actual Outlays: $9,376,764
Subaward Activity
Number of Subawards: 2
Total Subaward Amount: $13,307,439
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: 2032H523D00001
IDV Type: IDC
Timeline
Start Date: 2023-11-01
Current End Date: 2025-10-31
Potential End Date: 2028-10-31 00:00:00
Last Modified: 2025-09-08
More Contracts from Science Applications International Corporation
- Task Order to Provide Project Management Support, Transition Support, Engineering and Design Support, Securing the Infrastructure Support and O&M Support for the Department's IT Consolidation Program — $2.1B (Department of State)
- Software Life Cycle Development — $1.4B (General Services Administration)
- Unified Nasa Information Technology Services (unites) — $1.4B (National Aeronautics and Space Administration)
- THE Scope of the to IS to Provide Enterprise IT Services for the Usace — $1.1B (General Services Administration)
- This Effort IS for a Follow on Procurement Requirement. the Name of This Procurement IS the Omnibus Multidiscipline Engineering Services (omes) II. the Principal Purpose of This Contract IS to Provide Multidiscipline Engineering Support Services and Related Work to EED, Istd, SED, MSD, Mesa, Jpss, Ssco, and Related Organizations, AS Required, for the Study, Design, Systems Engineering, Development, Fabrication, Integration, Testing, Verification, and Operations of Space Flight, Airborne, and Ground System Hardware and Software, Including Development and Validation of NEW Technologies to Enable Future Space and Science Missions. to This END, the Contractor Shall Provide On/Off-Site Multidiscipline Engineering Services, Pursuant to Task Orders Issued by the Contracting Officer. These Services Shall Include the Personnel, Facilities, and Materials (unless Otherwise Provided by the Government) to Accomplish the Tasks. Travel MAY BE Required by the Contractor to Support Certain Task Orders, These Travel Requirements Will BE Identified on a Task by Task Basis — $1.0B (National Aeronautics and Space Administration)
View all Science Applications International Corporation federal contracts →
Other Department of the Treasury Contracts
- Advertising Services — $636.5M (True North Communications Inc)
- Cade 2 Ltis3 Covid-19 — $383.8M (Deloitte Consulting LLP)
- Establish a Broad Networking and Telecommunications Service Environment to Meet ITS Network Services (wide Area and Local Area Network), Voice Telecommunications Services, Audio/Video/Web Conferencing, and Cyber Requirements — $320.2M (AT&T Enterprises, LLC)
- THE Internal Revenue Service (IRS), Office of Information Technology Office, Issues This Order Under GSA Alliant 2 (unrestricted). Enterprise Case Management (ECM) Solution Integration Services — $305.5M (Booz Allen Hamilton Inc)
- THE Tfcceis Task Order IS to Transition the Existing Tfcc Services From the Networx Contract Onto the EIS Contract Vehicle in a Manner That Will Enable Continuity of an Enterprise Network of Toll Free Services for the IRS — $264.6M (Verizon Business Network Services LLC)