Treasury's $226M IRS IT Contract with Booz Allen Hamilton Faces Scrutiny Over Value and Competition
Contract Overview
Contract Amount: $225,980,061 ($226.0M)
Contractor: Booz Allen Hamilton Inc.
Awarding Agency: Department of the Treasury
Start Date: 2006-08-22
End Date: 2014-08-01
Contract Duration: 2,901 days
Daily Burn Rate: $77.9K/day
Competition Type: COMPETITIVE DELIVERY ORDER
Number of Offers Received: 6
Pricing Type: COST PLUS FIXED FEE
Sector: IT
Official Description: TTS #2077 - BAH TIPSS 3
Place of Performance
Location: NEW CARROLLTON, PRINCE GEORGE'S County, MARYLAND, 20784
State: Maryland Government Spending
Plain-Language Summary
Department of the Treasury obligated $226.0 million to BOOZ ALLEN HAMILTON INC. for work described as: TTS #2077 - BAH TIPSS 3 Key points: 1. The contract awarded to Booz Allen Hamilton for IT services represents a significant investment by the IRS. 2. Competition for this contract was competitive, but the pricing structure warrants further examination. 3. Potential risks include cost overruns and the long-term effectiveness of the IT solutions. 4. The IT sector is dynamic, and ensuring value for money in long-term contracts is crucial.
Value Assessment
Rating: fair
The Cost Plus Fixed Fee structure can lead to cost overruns if not managed tightly. Benchmarking against similar IT system design contracts is difficult without more granular data, but the total award value is substantial.
Cost Per Unit: N/A
Competition Analysis
Competition Level: unknown
The contract was awarded via a competitive delivery order, indicating some level of price discovery. However, the specific details of the competition and the resulting price negotiation are not fully detailed.
Taxpayer Impact: Taxpayer funds totaling over $225 million were allocated. Ensuring efficient and effective use of these funds is paramount for public trust.
Public Impact
IRS taxpayers may experience impacts from the IT systems developed or maintained under this contract. The effectiveness of these IT systems could influence the efficiency of tax collection and taxpayer services. Transparency in IT spending is vital for public confidence in government operations.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee pricing can incentivize higher costs.
- Long contract duration may not adapt to evolving IT needs.
- Limited insight into specific performance metrics and outcomes.
Positive Signals
- Awarded through a competitive process.
- Significant investment in critical IRS IT infrastructure.
Sector Analysis
This contract falls within the Computer Systems Design Services sector, a critical area for government operations. Benchmarks for IT services vary widely based on complexity and scope, but large-scale system design contracts often exceed tens of millions.
Small Business Impact
The data does not indicate any specific provisions or awards made to small businesses under this contract. Further analysis would be needed to determine if small business participation was a factor.
Oversight & Accountability
Oversight of this contract would typically involve the Department of the Treasury and the IRS's contracting officers. Regular performance reviews and audits are essential to ensure accountability and value for taxpayer money.
Related Government Programs
- Computer Systems Design Services
- Department of the Treasury Contracting
- Internal Revenue Service Programs
Risk Flags
- Cost Plus Fixed Fee pricing can lead to cost overruns.
- Long contract duration may result in outdated technology.
- Lack of detailed performance metrics makes value assessment difficult.
- Potential for scope creep without strict management.
Tags
computer-systems-design-services, department-of-the-treasury, md, do, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of the Treasury awarded $226.0 million to BOOZ ALLEN HAMILTON INC.. TTS #2077 - BAH TIPSS 3
Who is the contractor on this award?
The obligated recipient is BOOZ ALLEN HAMILTON 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 $226.0 million.
What is the period of performance?
Start: 2006-08-22. End: 2014-08-01.
What specific IT systems or services were delivered under this contract, and how did they improve IRS operations or taxpayer services?
The contract was for Computer Systems Design Services (NAICS 541512). While the exact systems are not detailed, such services typically involve the design, development, integration, and maintenance of complex IT infrastructure and software solutions. Improvements could range from enhanced data processing capabilities to modernized taxpayer portals, aiming for greater efficiency and security in IRS operations.
Given the Cost Plus Fixed Fee structure, what mechanisms were in place to control costs and ensure the government received fair value?
Cost Plus Fixed Fee contracts require robust oversight to manage costs. Mechanisms typically include detailed cost reporting, regular audits of expenditures, and clear definition of the fixed fee. The government's contracting officers are responsible for scrutinizing costs, ensuring they are reasonable and allocable, and negotiating any necessary adjustments to prevent excessive spending.
How effectively did the competitive delivery order process ensure the best possible pricing and technical solution for the IRS?
A competitive delivery order implies that multiple vendors were considered, which generally leads to better pricing and solutions than a sole-source award. However, the 'best' outcome depends on the evaluation criteria used, the clarity of the requirements, and the rigor of the negotiation process. Without access to the evaluation details, it's difficult to definitively assess the effectiveness of the price discovery.
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: 6
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Booz Allen Hamilton Holding Corporation (UEI: 964725688)
Address: 1953 GALLOWS RD STE 600, VIENNA, VA, 11
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $226,001,495
Exercised Options: $226,001,495
Current Obligation: $225,980,061
Parent Contract
Parent Award PIID: TIRNO06D00026
IDV Type: IDC
Timeline
Start Date: 2006-08-22
Current End Date: 2014-08-01
Potential End Date: 2014-08-01 00:00:00
Last Modified: 2014-09-09
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