Treasury's IRS awards $21.5M for subscription services to Clarivate Analytics, a sole-source contract

Contract Overview

Contract Amount: $21,475 ($21.5K)

Contractor: Clarivate Analytics (US) LLC

Awarding Agency: Department of the Treasury

Start Date: 2021-09-27

End Date: 2022-09-26

Contract Duration: 364 days

Daily Burn Rate: $59/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: SUBSCRIPTION SERVICES

Place of Performance

Location: CHANDLER, MARICOPA County, ARIZONA, 85226

State: Arizona Government Spending

Plain-Language Summary

Department of the Treasury obligated $21,475.17 to CLARIVATE ANALYTICS (US) LLC for work described as: SUBSCRIPTION SERVICES Key points: 1. The contract value represents a significant investment in essential data and research resources. 2. Limited competition raises concerns about potential overpayment and lack of market-driven pricing. 3. The sole-source nature of this award warrants scrutiny of the justification for not seeking competitive bids. 4. Performance context is limited without specific deliverables or performance metrics. 5. This contract falls within the broader category of information services supporting government operations. 6. The duration of the contract suggests a need for ongoing access to these subscription services.

Value Assessment

Rating: questionable

Benchmarking the value of this $21.5 million contract is challenging due to the sole-source nature and lack of publicly available comparable contracts for similar subscription services. Without competitive bidding, it is difficult to assess if the price paid reflects fair market value or if alternative, more cost-effective solutions were overlooked. The fixed-price nature provides some cost certainty, but the absence of competition prevents a robust value-for-money assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed under the simplified acquisition procedures (SAP) and was awarded on a sole-source basis. This indicates that the agency likely determined that only one source, Clarivate Analytics (US) LLC, could provide the required subscription services. The lack of competition means there was no opportunity for multiple bidders to offer their services, potentially leading to higher prices than might be achieved in an open market.

Taxpayer Impact: Taxpayers may not be receiving the best possible price for these services due to the absence of competitive pressure. The justification for a sole-source award needs to be robust to ensure public funds are used efficiently.

Public Impact

The Internal Revenue Service (IRS) is the primary beneficiary, gaining access to critical subscription services. These services likely support tax administration, research, and data analysis functions within the IRS. The geographic impact is national, as IRS operations are nationwide. Workforce implications include enabling IRS employees to perform their duties effectively with access to necessary information resources.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potentially inflates costs for taxpayers.
Lack of competition raises questions about the thoroughness of market research and alternative solutions.
Absence of performance metrics makes it difficult to assess the effectiveness and value derived from the subscription services.

Positive Signals

The contract provides essential subscription services, indicating a recognized need for these resources.
A firm fixed-price contract offers cost predictability for the agency.
The contract duration suggests a stable, ongoing requirement for these services.

Sector Analysis

This contract falls within the Information Services sector, specifically related to data, publishing, and web search portals. The market for such subscription services is often characterized by specialized content and proprietary databases. While specific spending benchmarks for IRS subscription services are not readily available, government spending on data and information services is substantial across various agencies, supporting diverse operational needs.

Small Business Impact

This contract does not appear to involve a small business set-aside. As a sole-source award to a large commercial entity, there are no direct subcontracting implications for small businesses stemming from this specific award. The focus is on acquiring specialized services from a single provider.

Oversight & Accountability

Oversight of this contract would typically fall under the purview of the Department of the Treasury's contracting officers and potentially the IRS's internal audit and compliance functions. Transparency is limited due to the sole-source nature and the lack of detailed public reporting on performance metrics or cost breakdowns. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

IRS Information Technology Services
Government Data and Research Subscriptions
Federal Agency Subscription Services
Clarivate Analytics Government Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for overpayment
Limited transparency
No performance metrics specified

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $21,475.17 to CLARIVATE ANALYTICS (US) LLC. SUBSCRIPTION SERVICES

Who is the contractor on this award?

The obligated recipient is CLARIVATE ANALYTICS (US) 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 $21,475.17.

What is the period of performance?

Start: 2021-09-27. End: 2022-09-26.

What specific subscription services are being provided by Clarivate Analytics under this contract, and how do they directly support the IRS's mission?

The provided data indicates the contract is for 'SUBSCRIPTION SERVICES' under NAICS code 519130 (Internet Publishing and Broadcasting and Web Search Portals). While the exact nature of the subscriptions is not detailed, Clarivate Analytics is known for providing a wide range of data, analytics, and research services, including intellectual property data, scientific literature, market research, and regulatory information. For the IRS, these services could support various functions such as tax law research, economic analysis, identifying trends in business and innovation, or compliance activities. Without specific line-item details, it's presumed these subscriptions are critical for informed decision-making and operational efficiency within the agency.

What was the justification for awarding this contract on a sole-source basis, and were alternative solutions considered?

The contract was explicitly marked as 'NOT COMPETED UNDER SAP' and awarded on a sole-source basis. Government agencies typically sole-source contracts when only one responsible source can provide the required supplies or services. This could be due to proprietary technology, unique capabilities, or urgent requirements where competition is not feasible. For Clarivate Analytics, this might stem from exclusive rights to certain databases, specialized analytical tools, or a long-standing integration with IRS systems that makes switching sources impractical or prohibitively expensive. A formal justification document (e.g., a Justification and Approval for Other Than Full and Open Competition) would normally exist, detailing the rationale and confirming that alternatives were assessed or deemed unsuitable.

How does the $21.5 million contract value compare to historical spending on similar services by the IRS or other federal agencies?

Direct historical spending comparisons for this specific type of subscription service by the IRS are not readily available from the provided data. However, $21.5 million over a one-year period (based on the 364-day duration) represents a substantial investment. Federal agencies across various sectors frequently procure subscription-based data and research services, with costs varying widely based on the scope, exclusivity, and user base. Without knowing the precise nature of Clarivate's offerings and the number of users or access levels, it's difficult to benchmark against other contracts. However, given the sole-source nature, there's a risk that this amount may be higher than what could be achieved through competitive procurement.

What are the potential risks associated with a sole-source contract of this magnitude, particularly concerning cost control and vendor lock-in?

Sole-source contracts carry inherent risks, primarily related to cost control and vendor lock-in. Without competition, there is less pressure on the vendor to offer the most competitive pricing, potentially leading to inflated costs for taxpayers. The agency may also face 'vendor lock-in,' where switching to a different provider becomes difficult and expensive due to proprietary systems, data formats, or established workflows. This can reduce the agency's leverage in future negotiations and limit its ability to adopt potentially superior or more cost-effective solutions. The lack of transparency inherent in sole-source awards also makes it harder to identify potential inefficiencies or overspending.

Are there any performance metrics or key performance indicators (KPIs) associated with this contract to ensure the value and effectiveness of the subscription services?

The provided data does not include specific performance metrics or Key Performance Indicators (KPIs) for this contract. Typically, government contracts, especially those of significant value, should outline measurable performance standards. For subscription services, these might include uptime guarantees, data accuracy levels, response times for support, or the availability of specific content. The absence of such details in the summary data suggests that either they are not publicly disclosed, or the contract focuses primarily on the delivery of access rather than specific performance outcomes. This lack of defined metrics makes it challenging to objectively assess the value and effectiveness of the services received.

Industry Classification

NAICS: Information › Other Information Services › Internet Publishing and Broadcasting and Web Search Portals

Product/Service Code: SPECIAL STUDIES/ANALYSIS, NOT R&D › SPECIAL STUDIES - NOT R and D

Competition & Pricing

Extent Competed: NOT COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3133 W FRYE RD STE 100, CHANDLER, AZ, 85226

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: $21,475

Exercised Options: $21,475

Current Obligation: $21,475

Actual Outlays: $21,475

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Timeline