Accenture's $74.7M Treasury contract for IT systems design saw limited competition, raising value questions

Contract Overview

Contract Amount: $74,711,657 ($74.7M)

Contractor: Accenture LLP

Awarding Agency: Department of the Treasury

Start Date: 2006-06-20

End Date: 2009-08-31

Contract Duration: 1,168 days

Daily Burn Rate: $64.0K/day

Competition Type: NON-COMPETITIVE DELIVERY ORDER

Number of Offers Received: 1

Pricing Type: FIXED PRICE LEVEL OF EFFORT

Sector: IT

Official Description: ACCENTURE, TIPSS-3

Place of Performance

Location: LANHAM, PRINCE GEORGE'S County, MARYLAND, 20706

State: Maryland Government Spending

Plain-Language Summary

Department of the Treasury obligated $74.7 million to ACCENTURE LLP for work described as: ACCENTURE, TIPSS-3 Key points: 1. The contract's fixed-price structure aimed to control costs, but the non-competitive award limits direct value-for-money assessment. 2. Limited competition suggests potential for higher pricing than a fully competed contract. 3. The duration of the contract (over 3 years) indicates a significant, ongoing need for these services. 4. Performance context is limited due to the nature of the award, making direct comparison difficult. 5. This contract falls within the IT services sector, specifically computer systems design. 6. The lack of small business set-aside or subcontracting requirements is noted.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging due to its non-competitive nature and the lack of detailed performance metrics. The fixed-price level-of-effort structure provides some cost control, but without a competitive baseline, it's difficult to ascertain if the pricing reflects optimal market rates. The total award amount of $74.7 million over approximately three years suggests a substantial investment in IT systems design services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a non-competitive delivery order under the TIPSS-3 contract vehicle. This indicates that the agency did not solicit bids from multiple vendors for this specific requirement. While sole-source awards can be justified for specific reasons, they inherently limit the competitive pressure that typically drives down prices and fosters innovation.

Taxpayer Impact: Taxpayers may not have received the best possible price due to the absence of a competitive bidding process. This lack of competition can lead to higher costs compared to what might have been achieved in an open market scenario.

Public Impact

The primary beneficiaries are likely the internal departments within the Department of the Treasury that rely on the IT systems designed and implemented under this contract. The services delivered focus on computer systems design, crucial for the operational efficiency of the agency. The geographic impact is primarily within Maryland, where the contractor is located. Workforce implications include the employment of IT professionals by Accenture to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may have resulted in suboptimal pricing.
Limited transparency into the justification for a sole-source award.
Potential for vendor lock-in given the long-term nature of the services.

Positive Signals

Fixed-price contract structure provides some cost predictability.
Awarded under an existing contract vehicle (TIPSS-3), suggesting some level of pre-qualification.
Long contract duration indicates a sustained need and potential for stable service delivery.

Sector Analysis

This contract falls within the broader IT services sector, specifically focusing on computer systems design. The market for these services is highly competitive, with numerous large and small firms offering specialized expertise. Government spending in this area is substantial, supporting a wide range of IT modernization and operational needs across federal agencies. Comparable spending benchmarks would typically involve analyzing other large IT services contracts awarded by Treasury or similar agencies for system design and integration.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'ss': false and 'sb': false. There is no explicit information regarding subcontracting plans for small businesses. This suggests that the primary awardee, Accenture, likely performed the majority of the work, and opportunities for small businesses to participate in this specific contract may have been limited.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Treasury's contracting and program management offices. Specific accountability measures would be defined in the contract's terms and conditions, including performance standards and reporting requirements. Transparency is limited by the non-competitive nature of the award; however, contract award data is publicly available through federal procurement databases.

Related Government Programs

Department of the Treasury IT Modernization Programs
Federal Civilian IT Services Contracts
Computer Systems Design Services
TIPSS-3 Contract Vehicle

Risk Flags

Non-competitive award
Lack of transparency in justification
Potential for overpricing due to limited competition

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $74.7 million to ACCENTURE LLP. ACCENTURE, TIPSS-3

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 $74.7 million.

What is the period of performance?

Start: 2006-06-20. End: 2009-08-31.

What was the specific justification for awarding this contract on a sole-source basis?

The provided data indicates this was a 'NON-COMPETITIVE DELIVERY ORDER' under the TIPSS-3 contract. While the specific justification is not detailed in the provided data, common reasons for sole-source awards include the existence of a unique capability, urgent need, or when only one responsible source can provide the required services. Without further documentation from the agency, the precise rationale remains unclear. However, sole-source awards are typically subject to strict justification requirements to ensure fair and open competition is bypassed only when absolutely necessary and in the government's best interest.

How does the per-unit cost of this contract compare to similar IT systems design services?

A direct per-unit cost comparison is not feasible with the provided data. The contract is a 'FIXED PRICE LEVEL OF EFFORT' type, and the data does not break down costs by specific units of service (e.g., hours, deliverables, modules). To perform a meaningful comparison, one would need access to the detailed CLINs (Contract Line Item Numbers) and associated pricing, as well as data on similar contracts awarded by the IRS or other agencies for comparable computer systems design services. Benchmarking would require identifying contracts with similar scopes of work and analyzing their pricing structures, factoring in differences in complexity, duration, and contractor rates.

What are the key performance indicators (KPIs) associated with this contract, and how did Accenture perform against them?

The provided data does not include specific Key Performance Indicators (KPIs) or performance evaluation details for this contract. Typically, performance metrics are outlined in the contract's Statement of Work (SOW) and are used to assess the contractor's adherence to requirements, quality of deliverables, and timeliness. Without access to the SOW or performance reports, it is impossible to assess Accenture's performance against defined objectives. Government contracts usually include clauses for performance monitoring and remedies for deficiencies.

What is Accenture's track record with the Department of the Treasury and the IRS, particularly on similar IT services contracts?

Accenture has a significant history of contracting with the U.S. federal government, including the Department of the Treasury and the Internal Revenue Service (IRS). They are a large, established IT consulting firm that frequently wins contracts for complex system design, integration, and modernization projects. While this specific contract was non-competitive, Accenture's broader track record likely includes numerous other IT services awards, some competitive and some potentially sole-source or limited competition, across various agencies. A comprehensive review would involve analyzing historical contract awards, performance ratings (if publicly available), and any past performance issues or successes.

What was the total spending on computer systems design services by the IRS in the years this contract was active (2006-2009)?

The provided data focuses solely on this specific $74.7 million contract awarded to Accenture. To determine the IRS's total spending on computer systems design services during the contract period (June 20, 2006, to August 31, 2009), one would need to access broader federal procurement databases (like USASpending.gov or FPDS) and filter for the IRS as the agency, 'Computer Systems Design Services' (NAICS code 541512) as the product service code, and the relevant fiscal years. This would involve aggregating data from all contracts awarded for these services during that timeframe, not just this single award.

Industry Classification

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

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: NON-COMPETITIVE DELIVERY ORDER

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: FIXED PRICE LEVEL OF EFFORT (B)

Evaluated Preference: NONE

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: $78,163,701

Exercised Options: $77,693,096

Current Obligation: $74,711,657

Parent Contract

Parent Award PIID: TIRNO06D00006

IDV Type: IDC

Timeline