Treasury's IRS awards $5.47M BPA Call for legacy modernization support to Cybermedia Technologies

Contract Overview

Contract Amount: $5,473,291 ($5.5M)

Contractor: Cybermedia Technologies, LLC

Awarding Agency: Department of the Treasury

Start Date: 2026-01-05

End Date: 2027-01-04

Contract Duration: 364 days

Daily Burn Rate: $15.0K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: TASK ORDER 10 - INFORMATION RETURNS PROGRAM DEVELOPMENT (IRPD) LEGACY MODERNIZATION SUPPORT

Place of Performance

Location: LANHAM, PRINCE GEORGES County, MARYLAND, 20706

State: Maryland Government Spending

Plain-Language Summary

Department of the Treasury obligated $5.5 million to CYBERMEDIA TECHNOLOGIES, LLC for work described as: TASK ORDER 10 - INFORMATION RETURNS PROGRAM DEVELOPMENT (IRPD) LEGACY MODERNIZATION SUPPORT Key points: 1. Contract focuses on critical legacy system modernization for the Information Returns Program. 2. Cybermedia Technologies, an LLC, secured this task order under a broader BPA. 3. The contract is a Firm Fixed Price award, indicating defined scope and cost. 4. Duration of 364 days suggests a focused, short-term effort for modernization. 5. The award falls under custom computer programming services, a key IT sector. 6. No small business set-aside was utilized for this specific task order.

Value Assessment

Rating: good

The award amount of $5.47 million for a 364-day period for custom computer programming services appears reasonable. Benchmarking against similar IT modernization contracts for federal agencies suggests that costs for specialized programming and system integration can range significantly, but this figure falls within expected parameters for a task order of this nature. The firm fixed-price structure provides cost certainty for the government, which is a positive indicator of value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This task order was awarded under a Full and Open Competition BPA Call. This indicates that the initial BPA was competed broadly, allowing any qualified vendor to participate. The specific task order was then likely awarded based on pre-established criteria within the BPA, potentially involving best value or lowest price technically acceptable evaluations among BPA holders. The broad initial competition suggests a robust process for selecting prime contractors.

Taxpayer Impact: Full and open competition generally leads to more competitive pricing and a wider pool of potential solutions, which is beneficial for taxpayer dollars. It ensures that the government is not limited to a single vendor, fostering a market that drives innovation and cost-effectiveness.

Public Impact

The primary beneficiaries are the Internal Revenue Service (IRS) and its operational efficiency. Services delivered include support for the Information Returns Program (IRP) legacy modernization. This modernization aims to improve data processing, compliance, and taxpayer services. The impact is primarily on the IRS workforce and the broader tax administration ecosystem. Improved data integrity and processing can indirectly benefit taxpayers through more accurate and timely tax administration.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if this modernization effort is extensive and critical.
Reliance on a single vendor for critical legacy system support could pose continuity risks.
Scope creep in modernization projects can lead to cost overruns if not tightly managed.

Positive Signals

Focus on modernizing legacy systems addresses technical debt and improves operational resilience.
Firm Fixed Price contract provides cost predictability for this specific task order.
Award under a BPA suggests a pre-vetted pool of capable vendors, streamlining acquisition.
Cybermedia Technologies' role in supporting critical IRS functions highlights its importance.

Sector Analysis

The Information Returns Program (IRP) is a critical component of tax administration, processing millions of information returns annually. Modernizing its legacy systems is essential for maintaining compliance, detecting fraud, and improving efficiency. This contract falls within the Custom Computer Programming Services (NAICS 541511) sector, a significant segment of the IT services market. Spending in this area often involves substantial investments by government agencies to update outdated infrastructure and software to meet evolving technological and regulatory demands.

Small Business Impact

This specific task order was not set aside for small businesses, nor does it appear to have a subcontracting requirement indicated by the provided data (sb: false, ss: false). While this particular award may not directly benefit small businesses, the broader BPA under which it was issued might have provisions or goals for small business participation. Analysis of the overall BPA would be needed to determine the full impact on the small business ecosystem.

Oversight & Accountability

The contract is a BPA Call, which operates under the umbrella of a larger Basic Ordering Agreement (BOA). Oversight typically involves the contracting officer and program managers within the IRS. The firm fixed-price nature of the award provides a degree of financial oversight. Transparency is generally maintained through federal procurement databases like FPDS. Inspector General oversight would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

IRS Information Returns Program (IRP)
IRS Taxpayer Services Modernization
Federal IT Modernization Initiatives
Custom Computer Programming Services Contracts

Risk Flags

Legacy System Modernization Risk
Data Migration Complexity
Potential for Scope Creep
Cybersecurity Vulnerabilities during Transition

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $5.5 million to CYBERMEDIA TECHNOLOGIES, LLC. TASK ORDER 10 - INFORMATION RETURNS PROGRAM DEVELOPMENT (IRPD) LEGACY MODERNIZATION SUPPORT

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 $5.5 million.

What is the period of performance?

Start: 2026-01-05. End: 2027-01-04.

What is the track record of Cybermedia Technologies, LLC with the federal government, particularly in IT modernization projects?

A review of federal procurement data indicates that Cybermedia Technologies, LLC has a history of receiving federal contracts, primarily within the IT services domain. While specific details on their track record for large-scale legacy modernization projects require deeper analysis of past performance evaluations and contract histories, their presence as a prime contractor suggests they possess the necessary clearances and capabilities. Further investigation into their past performance on similar IRS or Treasury projects, including any reported issues or successes, would provide a more comprehensive understanding of their suitability for this critical modernization effort. The current award is a BPA Call, implying they were selected from a pool of pre-qualified vendors for the larger BPA.

How does the $5.47 million cost for this task order compare to similar IT modernization efforts at the IRS or other federal agencies?

The award amount of $5.47 million for a 364-day task order focused on legacy modernization for the Information Returns Program (IRP) appears to be within a reasonable range for specialized IT services. Federal IT modernization projects, especially those involving complex legacy systems, can vary widely in cost depending on the scope, technology stack, and duration. For a single task order of this nature, which likely represents a specific phase or component of a larger modernization strategy, this figure is not exceptionally high. Benchmarking against contracts for custom computer programming (NAICS 541511) for agencies like the IRS, Department of Defense, or Health and Human Services often reveals costs ranging from hundreds of thousands to tens of millions of dollars for significant modernization efforts. The firm fixed-price nature also helps in controlling costs for this defined scope.

What are the primary risks associated with modernizing legacy IT systems for the IRS's Information Returns Program?

Modernizing legacy IT systems for the IRS's Information Returns Program (IRP) carries several inherent risks. A primary concern is the complexity and potential fragility of the existing legacy systems; changes can have unforeseen impacts on critical functions. There's also the risk of data migration errors, where data could be lost, corrupted, or inaccurately transferred to the new system. Technical risks include compatibility issues between new and old technologies, and the potential for the chosen modernization approach to become obsolete quickly. Furthermore, there's a risk of schedule delays and cost overruns, common in large-scale IT projects, especially if the scope is not clearly defined or if unexpected technical challenges arise. Finally, ensuring the security of sensitive taxpayer data throughout the modernization process is paramount and presents a continuous risk.

What is the expected impact of this modernization effort on the IRS's ability to process information returns and support tax administration?

The modernization of the Information Returns Program (IRP) legacy systems is expected to significantly enhance the IRS's operational capabilities. By updating outdated technology, the IRS anticipates improved efficiency in processing the vast volume of information returns (e.g., W-2s, 1099s) it receives. This modernization should lead to more robust data validation and error detection, reducing manual intervention and improving data accuracy. Enhanced system performance can also expedite the identification of non-compliance and potential fraud, thereby strengthening tax administration. Ultimately, a modernized IRP should contribute to a more streamlined and effective tax system, potentially improving taxpayer services and ensuring greater fiscal integrity.

How has federal spending on custom computer programming services (NAICS 541511) evolved over the past five years, and does this contract align with trends?

Federal spending on custom computer programming services (NAICS 541511) has generally shown a consistent upward trend over the past five years, driven by agencies' ongoing needs to modernize legacy systems, enhance cybersecurity, and develop new digital services. Agencies across government are increasingly reliant on IT to deliver services and manage operations efficiently. This contract, valued at $5.47 million for a task order focused on legacy modernization, aligns with this trend. It represents a specific investment within a broader category of federal IT spending that prioritizes updating critical infrastructure. The IRS's focus on modernizing its IRP systems reflects a common governmental objective to leverage modern technology for improved performance and cost-effectiveness, mirroring the overall federal investment pattern in this sector.

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: 8444 WESTPARK DR STE 620, MCLEAN, VA, 22102

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: $9,956,224

Exercised Options: $5,473,291

Current Obligation: $5,473,291

Actual Outlays: $456,108

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 2032H522A00009

IDV Type: BPA

Timeline