Treasury's $80.6M IRS contract for IEP portal services awarded to Accenture Federal Services

Contract Overview

Contract Amount: $80,645,551 ($80.6M)

Contractor: Accenture Federal Services LLC

Awarding Agency: Department of the Treasury

Start Date: 2024-06-03

End Date: 2025-12-02

Contract Duration: 547 days

Daily Burn Rate: $147.4K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IEP 1.5 PORTAL SERVICES DELIVERY OPERATIONS AND MAINTENANCE

Place of Performance

Location: LANHAM, PRINCE GEORGES County, MARYLAND, 20706

State: Maryland Government Spending

Plain-Language Summary

Department of the Treasury obligated $80.6 million to ACCENTURE FEDERAL SERVICES LLC for work described as: IEP 1.5 PORTAL SERVICES DELIVERY OPERATIONS AND MAINTENANCE Key points: 1. Contract value represents a significant investment in critical IT infrastructure for tax administration. 2. Accenture Federal Services, a large incumbent, secured this award through full and open competition. 3. The contract duration of 547 days suggests a focus on ongoing operations and maintenance. 4. Fixed-price contract type aims to control costs and provide predictable spending. 5. The award is for Computer Systems Design Services, a key area for modernizing government IT. 6. The contract is managed by the Department of the Treasury's Internal Revenue Service. 7. The contract is located in Maryland, a hub for federal IT contracting.

Value Assessment

Rating: good

The contract value of $80.6 million over approximately 18 months appears reasonable for comprehensive IT portal services. Benchmarking against similar large-scale IT operations and maintenance contracts within federal agencies suggests this pricing is within expected ranges. The firm fixed-price structure provides cost certainty for the government, mitigating risk of cost overruns. However, a detailed cost breakdown and comparison to specific, comparable contracts would be needed for a more precise value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The specific number of bidders is not provided, but this procurement method generally fosters a competitive environment, which can lead to better pricing and service offerings for the government. The IRS's decision to use full and open competition suggests confidence in the market's ability to provide qualified vendors for these complex IT services.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically drives down costs through market forces and encourages innovation from a wider pool of contractors, ensuring government funds are used efficiently.

Public Impact

Taxpayers benefit from improved access to and functionality of IRS online portals for tax filing and information. The contract ensures the continued operation and maintenance of critical IT systems supporting tax administration. Services delivered are essential for the IRS's digital transformation efforts and taxpayer engagement. The geographic impact is primarily national, affecting all taxpayers who interact with IRS online services. Workforce implications may include the retention of specialized IT skills within Accenture Federal Services to support the IRS.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if renewal options are not carefully managed.
Reliance on a single large contractor for critical IT infrastructure could pose risks if performance degrades.
Ensuring ongoing innovation and adaptation to evolving cybersecurity threats within the portal services.

Positive Signals

Accenture Federal Services has a significant track record with federal IT contracts, suggesting experience and stability.
The firm fixed-price contract type provides cost predictability and reduces financial risk for the government.
Award through full and open competition indicates a robust market response and potential for competitive pricing.

Sector Analysis

This contract falls within the IT services sector, specifically focusing on computer systems design and operations. The federal IT services market is vast, with agencies consistently investing in modernization, cybersecurity, and digital service delivery. This contract for portal services is crucial for the IRS's ability to interact with taxpayers digitally. Comparable spending benchmarks would involve looking at other large-scale IT operations and maintenance contracts awarded to system integrators by agencies like the Department of Defense or Health and Human Services.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a large contract awarded to a major federal contractor, it is unlikely to involve significant direct subcontracting opportunities for small businesses unless specifically mandated or pursued by the prime contractor. The focus is on a large, established IT service provider, rather than fostering small business participation through set-asides.

Oversight & Accountability

Oversight for this contract is likely managed by the Department of the Treasury and the Internal Revenue Service contracting officers and program managers. Accountability measures are embedded in the firm fixed-price contract terms, performance standards, and delivery schedules. Transparency is facilitated through public contract databases like FPDS. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

IRS Modernization Efforts
Federal IT Infrastructure Modernization
Taxpayer Services IT Contracts
Computer Systems Design Services
Government Operations and Maintenance Contracts

Risk Flags

Potential for vendor lock-in
Cybersecurity risks associated with critical infrastructure
Dependence on a single large contractor for essential services

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $80.6 million to ACCENTURE FEDERAL SERVICES LLC. IEP 1.5 PORTAL SERVICES DELIVERY OPERATIONS AND MAINTENANCE

Who is the contractor on this award?

The obligated recipient is ACCENTURE FEDERAL SERVICES 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 $80.6 million.

What is the period of performance?

Start: 2024-06-03. End: 2025-12-02.

What is Accenture Federal Services' track record with the IRS and similar federal agencies for IT services?

Accenture Federal Services has a substantial history of performing IT services for the IRS and other federal agencies. They are a major player in the federal IT contracting space, often handling large-scale system integration, modernization, and operations and maintenance projects. Their past performance with the IRS likely includes managing complex financial and tax systems. A review of their contract history would reveal numerous awards across various agencies, demonstrating their capacity to handle significant government IT requirements. This extensive experience suggests a lower risk profile for performance compared to less experienced contractors, although specific performance metrics on past contracts would provide a more definitive assessment.

How does the $80.6 million contract value compare to similar IRS IT portal service contracts?

The $80.6 million contract value for approximately 18 months of operations and maintenance for the IEP portal services is substantial, reflecting the complexity and criticality of IRS systems. To benchmark effectively, one would compare this to other large IT operations and maintenance contracts awarded by the IRS or similar large agencies (e.g., Treasury bureaus, SSA, HHS) for their primary citizen-facing portals or core IT infrastructure. Given the IRS's scale and the importance of taxpayer access, this figure appears to be in line with expectations for such a critical function. However, without specific data on the scope of services, number of users supported, and system complexity for comparable contracts, a precise value-for-money assessment is challenging.

What are the primary risks associated with this contract, and how are they mitigated?

Primary risks include potential performance degradation of the IEP portal, cybersecurity vulnerabilities, and vendor lock-in. Performance risks are mitigated through the firm fixed-price contract structure, which incentivizes the contractor to meet defined service levels efficiently. Cybersecurity risks are addressed through standard government security requirements, audits, and the contractor's own security protocols, which are subject to government oversight. Vendor lock-in is a potential concern with long-term IT service providers; mitigation involves clear contract terms, defined exit strategies, and potentially fostering competition for future contract renewals or replacements. The IRS's oversight and performance monitoring are key to managing these risks.

How effective is the firm fixed-price contract type in ensuring value for money for this specific service?

The firm fixed-price (FFP) contract type is generally effective in ensuring value for money for well-defined services like operations and maintenance, as it shifts the risk of cost overruns to the contractor. For the IRS IEP portal services, FFP provides budget certainty and incentivizes Accenture Federal Services to perform efficiently to maximize profit. This structure encourages cost control and predictability, which is beneficial for taxpayers. However, if the scope of work is not perfectly defined or if unforeseen technical challenges arise, the contractor might be less inclined to undertake necessary additional work without formal change orders, potentially impacting service quality or requiring renegotiation. Continuous monitoring of performance against the defined scope is crucial.

What are the historical spending patterns for IRS IT portal services, and how does this contract fit?

Historical spending on IRS IT systems, particularly for taxpayer-facing portals and modernization efforts, has been significant and often spans multiple years and large dollar values. The IRS has consistently invested in upgrading its technological infrastructure to improve taxpayer services, enhance security, and streamline operations. This $80.6 million contract for IEP portal services fits within this pattern of sustained investment in critical IT infrastructure. It represents a component of the IRS's broader strategy to maintain and enhance its digital service delivery capabilities, likely building upon or replacing previous contracts for similar functions.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Novetta Solutions, LLC

Address: 800 NORTH GLEBE RD #300, ARLINGTON, VA, 22203

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

Financial Breakdown

Contract Ceiling: $81,178,643

Exercised Options: $80,717,315

Current Obligation: $80,645,551

Actual Outlays: $80,645,551

Subaward Activity

Number of Subawards: 61

Total Subaward Amount: $30,098,297

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: TIRNO17D00004

IDV Type: IDC

Timeline