IRS Contracts $2.4M for Expert Witness Services, Lacking Competition

Contract Overview

Contract Amount: $2,401,538 ($2.4M)

Contractor: Groff Engineering & Consulting PLLC

Awarding Agency: Department of the Treasury

Start Date: 2023-02-21

End Date: 2028-02-20

Contract Duration: 1,825 days

Daily Burn Rate: $1.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: LABOR HOURS

Sector: Other

Official Description: EXPERT WITNESS SERVICES: IRS EXPERT WITNESSES THAT IS CAPABLE OF PROVIDING LITIGATION SUPPORT FOR CASES INVOLVING IRS AUDIT DEFENSE, PERFORM FORENSIC ACCOUNTING SERVICES, AND/OR ASSIST IN TAX ABATEMENT.

Place of Performance

Location: MOUNT STERLING, MONTGOMERY County, KENTUCKY, 40353

State: Kentucky Government Spending

Plain-Language Summary

Department of the Treasury obligated $2.4 million to GROFF ENGINEERING & CONSULTING PLLC for work described as: EXPERT WITNESS SERVICES: IRS EXPERT WITNESSES THAT IS CAPABLE OF PROVIDING LITIGATION SUPPORT FOR CASES INVOLVING IRS AUDIT DEFENSE, PERFORM FORENSIC ACCOUNTING SERVICES, AND/OR ASSIST IN TAX ABATEMENT. Key points: 1. Contract awarded to Groff Engineering & Consulting PLLC for specialized IRS expert witness services. 2. Services include litigation support, forensic accounting, and tax abatement assistance. 3. The contract was not competed, raising questions about price discovery and value. 4. This falls under 'All Other Professional, Scientific, and Technical Services' (NAICS 541990).

Value Assessment

Rating: questionable

The contract value of $2.4M over five years for expert witness services appears high given the lack of competition. Benchmarking against similar contracts for specialized forensic accounting and litigation support is difficult without more data, but the absence of a competitive process suggests potential overpricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. This limits price discovery and may prevent the government from securing the best possible pricing or a wider range of qualified vendors.

Taxpayer Impact: The lack of competition could lead to taxpayers paying more than necessary for these essential expert witness services.

Public Impact

Taxpayers may bear the cost of potentially inflated prices due to the sole-source award. The IRS relies on these services for critical litigation and audit defense, impacting tax enforcement. Limited visibility into the selection process for Groff Engineering & Consulting PLLC. Potential for missed opportunities to engage smaller, specialized firms through a competitive process.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
Potential for overpricing
Limited small business participation

Positive Signals

Essential services for IRS operations
Long-term contract provides stability
Vendor has specific expertise

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically focusing on specialized legal and financial support. Benchmarks for similar expert witness services can vary widely based on complexity and required expertise, but competitive bidding typically drives costs down.

Small Business Impact

The contract data indicates that small business participation was not a factor (sb: false). This sole-source award missed an opportunity to engage or develop relationships with small businesses specializing in forensic accounting or expert witness testimony.

Oversight & Accountability

The sole-source nature of this award warrants scrutiny. Further oversight is needed to ensure the IRS adequately justified the lack of competition and that the pricing is reasonable and reflects fair market value.

Related Government Programs

All Other Professional, Scientific, and Technical Services
Department of the Treasury Contracting
Internal Revenue Service Programs

Risk Flags

Sole-source award lacks transparency.
Potential for inflated costs due to no competition.
Missed opportunity for small business engagement.
Limited vendor pool may affect service quality/innovation.
Justification for sole-source needs further review.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $2.4 million to GROFF ENGINEERING & CONSULTING PLLC. EXPERT WITNESS SERVICES: IRS EXPERT WITNESSES THAT IS CAPABLE OF PROVIDING LITIGATION SUPPORT FOR CASES INVOLVING IRS AUDIT DEFENSE, PERFORM FORENSIC ACCOUNTING SERVICES, AND/OR ASSIST IN TAX ABATEMENT.

Who is the contractor on this award?

The obligated recipient is GROFF ENGINEERING & CONSULTING PLLC.

Which agency awarded this contract?

Awarding agency: Department of the Treasury (Internal Revenue Service).

What is the total obligated amount?

The obligated amount is $2.4 million.

What is the period of performance?

Start: 2023-02-21. End: 2028-02-20.

What was the justification for awarding this contract on a sole-source basis instead of utilizing a competitive process?

The justification for a sole-source award typically involves circumstances where only one vendor possesses the unique capabilities, qualifications, or proprietary information necessary for the requirement. For expert witness services, this might relate to highly specialized knowledge of specific tax laws, prior involvement in similar high-profile cases, or unique forensic accounting methodologies. However, without explicit documentation from the agency, it remains speculative and raises concerns about whether alternatives were thoroughly explored.

How does the per-unit cost or hourly rate compare to industry benchmarks for similar expert witness services, especially considering the lack of competition?

Without specific rate information or a competitive bidding process, it is challenging to establish a precise benchmark. However, the absence of competition inherently limits the government's ability to negotiate favorable rates. A thorough review would require comparing the awarded rates against publicly available data for similar services, factoring in the specific expertise required, and assessing if the rates align with what would be expected in a competitive market.

What is the potential impact on IRS litigation outcomes and taxpayer fairness due to the sole-source nature of this contract?

A sole-source award can impact litigation outcomes if the chosen expert lacks the breadth of perspective or innovative approaches that might have emerged from a competitive field. For taxpayers, it raises concerns about fairness if the IRS is perceived to be using non-competitively procured services, potentially at a higher cost, without demonstrating that the best possible value and expertise were secured through market forces.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Other Professional, Scientific, and Technical Services › All Other Professional, Scientific, and Technical Services

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: LABOR HOURS (Z)

Evaluated Preference: NONE

Contractor Details

Address: 306 JONATHAN CT, MOUNT STERLING, KY, 40353

Business Categories: Category Business, Limited Liability Corporation, Small Business, Sole Proprietorship, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $2,401,538

Exercised Options: $2,401,538

Current Obligation: $2,401,538

Actual Outlays: $310,122

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline