Treasury's $44.2M IT contract for computer systems design services awarded to INSYSCO, INC

Contract Overview

Contract Amount: $44,216,736 ($44.2M)

Contractor: Insysco, Inc.

Awarding Agency: Department of the Treasury

Start Date: 2006-07-17

End Date: 2014-08-01

Contract Duration: 2,937 days

Daily Burn Rate: $15.1K/day

Competition Type: COMPETITIVE DELIVERY ORDER

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: TIPSS 3 TASK ORDER 0003

Place of Performance

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

State: Maryland Government Spending

Plain-Language Summary

Department of the Treasury obligated $44.2 million to INSYSCO, INC. for work described as: TIPSS 3 TASK ORDER 0003 Key points: 1. The contract value of $44.2 million over its period of performance suggests a significant investment in IT infrastructure. 2. Competition dynamics for this delivery order are noted as 'COMPETITIVE DELIVERY ORDER', indicating a degree of market engagement. 3. The contract type 'COST PLUS FIXED FEE' can introduce cost escalation risks if not managed diligently. 4. Performance context is provided by the duration of over 8 years, implying a long-term need for these services. 5. This contract falls within the IT sector, specifically computer systems design services, a critical area for government operations. 6. The award to INSYSCO, INC. represents a specific vendor's role in fulfilling a government requirement.

Value Assessment

Rating: fair

Benchmarking the value of this $44.2 million contract requires more granular data on the specific services rendered and their market rates. However, the duration of over 8 years suggests a substantial, long-term engagement. The 'COST PLUS FIXED FEE' contract type, while allowing for flexibility, can sometimes lead to higher overall costs compared to fixed-price contracts if cost controls are not robust. Without comparable contract data for similar computer systems design services at the IRS or Treasury, a definitive value-for-money assessment is challenging, but the extended period indicates a sustained need and potentially a reasonable cost over time.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under a 'COMPETITIVE DELIVERY ORDER' designation, suggesting that it was competed openly among eligible vendors. The presence of only one awardee (no: 1) for this specific task order does not necessarily indicate a lack of competition at the broader contract vehicle level, but it means only one entity was selected for this particular work. The competitive nature of the initial award vehicle is crucial for ensuring fair pricing and access to a range of capabilities.

Taxpayer Impact: A competitive award process, even for a single delivery order, generally benefits taxpayers by fostering price discovery and encouraging vendors to offer competitive terms. This helps ensure that government funds are used efficiently.

Public Impact

The primary beneficiaries are likely the various departments and agencies within the Department of the Treasury that rely on the computer systems designed and implemented under this contract. The services delivered include computer systems design, crucial for maintaining and upgrading the technological infrastructure of the IRS. The geographic impact is primarily centered in Maryland (st: MD, sn: MARYLAND), where the contractor is located and likely where the services are performed or managed. Workforce implications include the employment of IT professionals by INSYSCO, INC. to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can lead to cost overruns if not managed tightly.
Limited information on the specific performance metrics makes it difficult to assess the quality of services delivered.
The long duration of the contract (over 8 years) could indicate a lack of agile adaptation to evolving technological needs if not actively managed.

Positive Signals

The contract was awarded through a competitive process, suggesting a degree of market validation.
The task order was awarded to INSYSCO, INC., indicating a specific vendor was chosen for their capabilities.
The contract duration implies a stable and ongoing need for these IT services within the IRS.

Sector Analysis

The IT services sector, particularly computer systems design, is a cornerstone of modern government operations. This contract, valued at $44.2 million over its lifespan, represents a significant investment within this domain for the Internal Revenue Service. Comparable spending benchmarks in this sector vary widely based on the complexity and scope of services, but large-scale system design and integration projects often run into tens of millions of dollars. This contract fits within the broader trend of federal agencies outsourcing complex IT functions to specialized firms to leverage expertise and manage resources effectively.

Small Business Impact

This contract does not appear to have a small business set-aside component (sb: false). As a competitive delivery order, the primary focus was likely on obtaining the best value from the available market. There is no explicit information regarding subcontracting plans with small businesses. The absence of set-aside provisions means that large businesses were eligible to compete and potentially win, which could limit direct opportunities for small businesses unless they are part of a larger subcontracting chain.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program managers within the IRS. The 'COST PLUS FIXED FEE' structure necessitates close monitoring of costs and performance to ensure adherence to the fixed fee and prevent unnecessary expenditures. Transparency is generally maintained through contract reporting mechanisms, though specific details of ongoing oversight are not provided. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

IRS IT Modernization Programs
Treasury Department IT Infrastructure Support
Federal Civilian Agency IT Services Contracts
Computer Systems Design Services Contracts

Risk Flags

Cost Plus Fixed Fee contract type requires diligent oversight to manage potential cost overruns.
Limited detail on specific services and performance metrics hinders a full value assessment.
Long contract duration may pose risks if not managed with evolving technological needs in mind.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $44.2 million to INSYSCO, INC.. TIPSS 3 TASK ORDER 0003

Who is the contractor on this award?

The obligated recipient is INSYSCO, 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 $44.2 million.

What is the period of performance?

Start: 2006-07-17. End: 2014-08-01.

What was the specific nature of the computer systems design services provided under this contract?

The contract, TIPSS 3 TASK ORDER 0003, was awarded for 'Computer Systems Design Services' (na: 541512) to INSYSCO, INC. While the specific details of the design services are not elaborated in the provided data, this NAICS code typically encompasses services related to analyzing user needs and designing, developing, and implementing information systems. This could include activities such as requirements gathering, system architecture design, software integration planning, database design, and network infrastructure design, all aimed at improving or creating new IT systems for the IRS.

How does the $44.2 million contract value compare to other similar IT services contracts at the IRS or Treasury?

The $44.2 million contract value over its 8-year lifespan represents a substantial investment. Without access to a comprehensive database of all IRS and Treasury IT contracts, a direct comparison is difficult. However, for large-scale IT system design and implementation projects, especially those involving critical infrastructure like tax systems, expenditures in the tens of millions are not uncommon. The value should be assessed in the context of the complexity, duration, and criticality of the systems being designed. Longer-term contracts often have higher aggregate values but may represent better annual value if costs are managed effectively.

What are the primary risks associated with a 'Cost Plus Fixed Fee' contract type for this service?

The primary risk with a Cost Plus Fixed Fee (CPFF) contract is potential cost escalation. While the contractor is reimbursed for allowable costs, the 'fixed fee' component provides a profit margin that is fixed. However, if the contractor does not manage costs efficiently or if unforeseen complexities arise that increase the cost of performance, the government bears the brunt of these increased costs. This necessitates robust oversight from the government to ensure that costs are reasonable and allocable to the contract. For computer systems design, scope creep or unforeseen technical challenges can drive up costs, making diligent government oversight critical.

What does the 'COMPETITIVE DELIVERY ORDER' designation imply about the competition for this specific task order?

A 'COMPETITIVE DELIVERY ORDER' signifies that this specific task order was awarded through a competitive process, likely against a pre-existing Indefinite Delivery/Indefinite Quantity (IDIQ) contract or similar vehicle. This means multiple vendors were likely solicited or had the opportunity to bid on this particular piece of work. While the data indicates only one awardee (no: 1) for this task order, the competitive nature of the solicitation process itself is intended to drive better pricing and service offerings compared to a sole-source award. It suggests that the IRS sought proposals and evaluated them based on defined criteria.

What is the historical spending pattern for computer systems design services at the IRS?

The provided data focuses on a single task order (TIPSS 3 TASK ORDER 0003) awarded in 2006. To understand historical spending patterns for computer systems design services at the IRS, a broader analysis of multiple contracts over several fiscal years would be necessary. This would involve examining spending across different contract vehicles, awardees, and service types within the 'Computer Systems Design Services' (NAICS 541512) category. Such an analysis would reveal trends in IT investment, the prevalence of competitive versus sole-source awards, and the average contract values over time.

How does the contractor, INSYSCO, INC., perform on other federal contracts?

Assessing the performance of INSYSCO, INC. on other federal contracts would require accessing a broader database of federal procurement data, such as the Federal Procurement Data System (FPDS) or contract performance assessment reporting tools. The provided data only includes information for this specific task order. A comprehensive review would involve looking at contract histories, past performance evaluations, any reported disputes or terminations, and the types and values of other contracts awarded to INSYSCO, INC. across various federal agencies.

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: COMPETITIVE DELIVERY ORDER

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Maximus Federal Systems, LLC (UEI: 831503482)

Address: 40 WINSOME LN, FREDERICKSBURG, VA, 07

Business Categories: Category Business, Small Business, Woman Owned Business

Financial Breakdown

Contract Ceiling: $47,548,380

Exercised Options: $47,518,830

Current Obligation: $44,216,736

Parent Contract

Parent Award PIID: TIRNO06D00024

IDV Type: IDC

Timeline