Treasury's IRS awarded $24.1M for NMCC Support Follow-On, a 6.5-year IT services contract

Contract Overview

Contract Amount: $24,115,164 ($24.1M)

Contractor: Leidos Management Systems Designers, Inc.

Awarding Agency: Department of the Treasury

Start Date: 2006-11-28

End Date: 2013-04-26

Contract Duration: 2,341 days

Daily Burn Rate: $10.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: NMCC SUPPORT FOLLOW-ON CONTRACT

Place of Performance

Location: FAIRFAX, FAIRFAX County, VIRGINIA, 22031

State: Virginia Government Spending

Plain-Language Summary

Department of the Treasury obligated $24.1 million to LEIDOS MANAGEMENT SYSTEMS DESIGNERS, INC. for work described as: NMCC SUPPORT FOLLOW-ON CONTRACT Key points: 1. The contract's value of $24.1 million over 6.5 years suggests a moderate annual spend for IT support services. 2. Full and open competition was utilized, indicating a potentially competitive bidding process for this IT services contract. 3. The contract type is Cost Plus Fixed Fee (CPFF), which can present cost control challenges if not managed diligently. 4. Performance is located in Virginia, a common hub for federal IT contracting and support services. 5. The North American Industry Classification System (NAICS) code 541512 points to a focus on computer systems design services. 6. The contract duration of 2341 days (approximately 6.5 years) is substantial, suggesting a long-term need for these services.

Value Assessment

Rating: fair

Benchmarking the value of this contract requires more granular data on the specific services provided. However, an average annual spend of approximately $3.7 million for IT support services of this nature is within a typical range for large federal agencies. The CPFF contract type necessitates close monitoring to ensure costs remain reasonable and do not escalate beyond the fixed fee component's intent. Without specific performance metrics or comparison to similar contracts for the same services, a definitive value-for-money assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. This typically leads to a more robust price discovery process and potentially better pricing for the government. The fact that it was competed openly implies that the IRS sought the best value from the market rather than restricting it to a limited pool of contractors.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down costs and improve service quality, ensuring government funds are used efficiently.

Public Impact

The Internal Revenue Service (IRS) is the primary beneficiary, receiving essential IT support services. The contract supports the operational continuity and efficiency of the IRS's IT infrastructure. Services are delivered within Virginia, potentially impacting the local IT workforce and economy. The contract ensures the availability of critical computer systems design and support for tax administration functions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can lead to cost overruns if not managed carefully, potentially increasing the final price beyond initial estimates.
The long duration of the contract (over 6 years) may reduce flexibility to adapt to rapidly changing technology or agency needs without costly modifications.
Lack of specific performance metrics in the provided data makes it difficult to assess the contractor's performance and value delivered over the contract's life.

Positive Signals

Awarded under full and open competition, indicating a potentially competitive process that could yield better value.
The contract supports critical IT functions for a major federal agency (IRS), suggesting a stable and important service delivery.
The contractor, Leidos Management Systems Designers, Inc., is a known entity in federal IT services, implying some level of established capability.

Sector Analysis

This contract falls within the IT services sector, specifically computer systems design. The federal IT services market is vast, with agencies consistently investing in maintaining and upgrading their technological infrastructure. Contracts like this are crucial for agencies like the IRS to manage complex IT systems that underpin their operations. Benchmarking requires comparison to other similar IT support and systems design contracts awarded by federal agencies, which often range from millions to billions of dollars annually.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a set-aside provision. The prime contractor, Leidos, may engage small businesses as subcontractors, but this is not mandated by the contract's structure as presented.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Treasury's Inspector General, with specific program management and oversight conducted by the IRS. The CPFF structure necessitates rigorous financial oversight to track costs against the fixed fee. Transparency would be enhanced through contract award databases and reporting requirements, though detailed performance reviews are often internal.

Related Government Programs

IRS IT Modernization Programs
Federal Civilian Agency IT Support Contracts
Computer Systems Design Services
Cost-Plus-Fixed-Fee Contracts

Risk Flags

Cost Plus Fixed Fee (CPFF) contract type requires diligent oversight to manage costs.
Long contract duration may limit flexibility in adapting to technological advancements.
Potential for cost escalation inherent in CPFF structure.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $24.1 million to LEIDOS MANAGEMENT SYSTEMS DESIGNERS, INC.. NMCC SUPPORT FOLLOW-ON CONTRACT

Who is the contractor on this award?

The obligated recipient is LEIDOS MANAGEMENT SYSTEMS DESIGNERS, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $24.1 million.

What is the period of performance?

Start: 2006-11-28. End: 2013-04-26.

What is the track record of Leidos Management Systems Designers, Inc. with similar IT support contracts for federal agencies?

Leidos Management Systems Designers, Inc. (and its predecessor entities) has a significant history of performing IT support and systems integration services for various federal agencies. They have been involved in large-scale contracts for defense, civilian, and intelligence communities. Their track record often includes managing complex IT infrastructures, cybersecurity solutions, and software development. While specific performance details for this particular NMCC contract are not publicly detailed in the provided data, Leidos's general experience suggests a capacity to handle substantial IT service requirements. A deeper dive into their past performance evaluations (e.g., CPARS reports) for comparable contracts would offer more insight into their reliability and effectiveness in delivering services within budget and schedule.

How does the $3.7 million average annual spend compare to similar IT support contracts for large civilian agencies?

An average annual spend of approximately $3.7 million for IT support and computer systems design services for a large agency like the IRS is considered moderate. Larger federal agencies, particularly those with extensive IT footprints like the Department of Defense or Homeland Security, often award IT support contracts in the tens or hundreds of millions of dollars annually. However, for specific functions or divisions within an agency, $3.7 million can represent a significant investment. To provide a precise benchmark, one would need to compare this contract's scope (e.g., number of users supported, systems managed, specific services rendered) against other contracts for similar IT support functions within civilian agencies of comparable size and complexity.

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 set profit margin. If costs escalate significantly due to unforeseen issues, scope creep, or inefficient management, the government bears the increased cost burden, potentially exceeding the initially anticipated total price. For the contractor, there's a risk if they cannot control costs effectively, as their profit is capped by the fixed fee. Effective oversight, detailed cost tracking, and robust change management processes are crucial to mitigate these risks and ensure the government receives good value.

How has the IRS's spending on IT support services evolved over the years, and does this contract fit into that trend?

The IRS has historically invested heavily in IT to manage the complexity of the U.S. tax system. Spending on IT support services has generally trended upwards over the years, driven by the need for modernization, enhanced cybersecurity, and improved taxpayer services. This $24.1 million contract, awarded between 2006 and 2013, represents a portion of the IRS's overall IT expenditure during that period. Given the long contract duration, it likely supported ongoing operational needs. Without historical spending data specific to this contract's predecessors or successors, it's difficult to place it precisely within a long-term trend, but it aligns with the agency's continuous requirement for robust IT infrastructure and support.

What does the 'NMCC SUPPORT FOLLOW-ON' designation imply about the nature of the services and the contract's history?

The 'NMCC SUPPORT FOLLOW-ON' designation strongly suggests that this contract is a continuation or extension of previous services provided to the National Military Command Center (NMCC) or a similar entity, likely within the Department of Defense or a related intelligence/security apparatus, although the agency listed is Treasury/IRS. The 'Follow-On' aspect indicates that the services were previously performed, possibly under a different contract vehicle or by a different contractor, and this award represents a subsequent iteration. This implies a degree of established requirements and potentially a known performance history. However, the agency listed is the Department of the Treasury, Internal Revenue Service (IRS), which makes the 'NMCC' designation unusual unless it refers to a specific internal IRS system or project named NMCC, or there's a misattribution in the data. Assuming it pertains to IRS operations, it signifies ongoing support for a critical system or function.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 2677 PROSPERITY AVE., SUITE 700, FAIRFAX, VA, 11

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $31,870,768

Exercised Options: $30,918,771

Current Obligation: $24,115,164

Parent Contract

Parent Award PIID: TIRNO06D00013

IDV Type: IDC

Timeline