Accenture LLP awarded $30.1M contract for IRS IT services, highlighting full and open competition

Contract Overview

Contract Amount: $30,141,475 ($30.1M)

Contractor: Accenture LLP

Awarding Agency: Department of the Treasury

Start Date: 2004-08-25

End Date: 2005-05-30

Contract Duration: 278 days

Daily Burn Rate: $108.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 18

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: RE-COMP FOR ICCE T.O. ON TIPSSII

Place of Performance

Location: OXON HILL, PRINCE GEORGE'S County, MARYLAND, 20745

State: Maryland Government Spending

Plain-Language Summary

Department of the Treasury obligated $30.1 million to ACCENTURE LLP for work described as: RE-COMP FOR ICCE T.O. ON TIPSSII Key points: 1. Contract value of $30.1M for IT services suggests a significant investment in the IRS's technological infrastructure. 2. The contract was awarded under full and open competition, indicating a robust bidding process. 3. The duration of 278 days points to a focused, short-term project or task order. 4. The Cost Plus Fixed Fee (CPFF) pricing structure can present cost control challenges if not closely monitored. 5. Accenture LLP's selection implies a perceived capability to meet the IRS's complex IT needs. 6. The contract's focus on IT services aligns with ongoing modernization efforts within federal agencies.

Value Assessment

Rating: fair

The contract value of $30.1 million for a 278-day period represents a substantial investment. Without specific benchmarks for similar IT services at the IRS or within the broader federal government, it is difficult to definitively assess value for money. The CPFF structure, while allowing for flexibility, necessitates rigorous oversight to ensure costs remain reasonable and do not escalate beyond the fixed fee. Comparisons to other large-scale IT service contracts awarded by the Treasury or IRS would be necessary for a more precise valuation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' suggesting that all responsible sources were permitted to submit bids. The presence of 18 bidders indicates a highly competitive environment. This level of competition is generally favorable for price discovery and can lead to more competitive pricing for the government.

Taxpayer Impact: A competitive bidding process for this contract likely resulted in a more favorable price for taxpayers compared to a sole-source or limited competition award.

Public Impact

The Internal Revenue Service (IRS) is the primary beneficiary, receiving enhanced IT services. The contract supports the delivery of critical IT infrastructure and services necessary for IRS operations. The geographic impact is primarily within the IRS's operational footprint, likely supporting national functions. The contract may have implications for the IT workforce, potentially involving specialized skills and project management.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) pricing can lead to cost overruns if not managed diligently.
The short duration (278 days) might indicate a project with tight deadlines or a specific, limited scope, potentially increasing pressure.
Reliance on a single contractor for a significant IT task order requires robust performance monitoring.

Positive Signals

Awarded under full and open competition with 18 bidders, suggesting a strong market response and competitive pricing.
Accenture LLP is a well-established IT services provider, implying a level of expertise and reliability.
The contract addresses essential IT services for a critical federal agency, supporting its mission.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on IT services for a government agency. The federal IT services market is substantial, with agencies continually investing in modernization, cybersecurity, and data management. Comparable spending benchmarks would involve looking at other large IT service contracts awarded to system integrators and IT consulting firms by agencies like the Department of Defense, Health and Human Services, or other Treasury bureaus. The market is characterized by a mix of large prime contractors and specialized subcontractors.

Small Business Impact

The data indicates that small business participation was not a specific set-aside for this contract (ss: false, sb: false). While the primary award went to Accenture LLP, there is no explicit information on subcontracting plans for small businesses within this data. Further investigation into the subcontracting reports associated with this contract would be needed to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program office within the IRS. Performance monitoring, invoice review, and adherence to the Cost Plus Fixed Fee terms would be key accountability measures. Transparency is generally facilitated through contract award databases like FPDS-NG. The Inspector General for the Department of the Treasury would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

IRS IT Modernization Programs
Treasury Department IT Services
Federal Civilian Agency IT Contracts
Cost Plus Fixed Fee Contracts
IT Consulting Services

Risk Flags

Cost Plus Fixed Fee (CPFF) pricing structure requires diligent oversight to manage costs.
Short contract duration may indicate high-pressure timelines or a narrowly defined scope.
Potential for scope creep in IT projects can impact budget and schedule.
Reliance on a single contractor necessitates robust performance monitoring.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $30.1 million to ACCENTURE LLP. RE-COMP FOR ICCE T.O. ON TIPSSII

Who is the contractor on this award?

The obligated recipient is ACCENTURE LLP.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $30.1 million.

What is the period of performance?

Start: 2004-08-25. End: 2005-05-30.

What is Accenture LLP's track record with federal IT contracts, particularly with the IRS or Treasury?

Accenture LLP has a significant history of performing IT services for various federal agencies, including the IRS and the Department of the Treasury. Their portfolio often includes large-scale system modernization, cloud migration, cybersecurity solutions, and business process re-engineering. Analyzing past performance reviews, contract modifications, and any past performance issues associated with Accenture's federal contracts would provide a clearer picture of their reliability and effectiveness. For this specific contract, understanding if there were any performance issues or significant deviations from the original scope or budget would be crucial. Their extensive experience suggests a strong understanding of government contracting requirements and IT service delivery.

How does the $30.1M value compare to similar IT service contracts awarded by the IRS in the same period?

Comparing the $30.1 million value of this contract to similar IT service contracts awarded by the IRS between August 2004 and May 2005 requires access to historical federal procurement data. However, for a 278-day task order, this value suggests a substantial project. Typical IT service contracts for the IRS can range from smaller, specialized support tasks to large-scale system overhauls. A value of $30.1M for less than a year's work indicates a high-intensity effort, possibly involving complex system integration, development, or critical infrastructure support. Benchmarking against contracts for similar services (e.g., software development, network infrastructure, IT consulting) awarded around the same time would reveal if this represents a premium, standard, or discounted rate for the services rendered.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for IT services?

The primary risk with a Cost Plus Fixed Fee (CPFF) contract is the potential for cost overruns. While the contractor is reimbursed for allowable costs, the fixed fee provides a guaranteed profit margin. This structure can incentivize contractors to incur higher costs if the oversight is not rigorous, as their profit is fixed regardless of the actual costs incurred. For the government, the risk lies in paying higher-than-necessary costs while still ensuring the contractor meets the performance objectives. Effective management requires detailed cost tracking, regular audits, and strong program oversight to ensure that costs are reasonable and allocable to the contract's scope of work. Scope creep is another significant risk, as changes can lead to increased costs and extended timelines.

Given the 18 bidders, what does this level of competition imply about the IRS's IT needs and the market's responsiveness?

The fact that 18 bidders responded to this 'full and open competition' solicitation indicates a strong interest from the IT services market in supporting the IRS. This high level of competition suggests that the IRS's IT needs were well-defined and attractive to a broad range of potential contractors. It implies that the market possesses sufficient capacity and capability to address the agency's requirements. Furthermore, such robust competition typically leads to more favorable pricing for the government, as contractors vie to win the award. It also suggests that the contract's scope and requirements were clear enough to allow multiple firms to develop competitive proposals, reducing ambiguity and potential disputes later on.

What are the potential performance implications of a contract awarded in August 2004 with an end date in May 2005?

A contract awarded in August 2004 and ending in May 2005 has a duration of approximately 278 days, or about 9 months. This relatively short timeframe suggests that the contract was likely for a specific project, task order, or a defined phase of a larger initiative, rather than a long-term sustainment or development effort. The implications for performance include a need for rapid mobilization and efficient execution. The contractor, Accenture LLP, would need to quickly understand the requirements and deliver results within the specified period. For the IRS, it means that the expected outcomes should be achievable within this timeframe, and the contract's success hinges on clear deliverables and milestones being met promptly. Any delays or scope changes could significantly impact the project's completion.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 18

Pricing Type: COST PLUS FIXED FEE (U)

Contractor Details

Parent Company: Accenture Public Limited Company (UEI: 985015354)

Address: 11951 FREEDOM DR, RESTON, VA, 11

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $30,247,366

Exercised Options: $30,247,366

Current Obligation: $30,141,475

Parent Contract

Parent Award PIID: TIRNO00D00009

IDV Type: IDC

Timeline