Treasury's IRS awarded $114.6M contract for logistics support, raising value-for-money questions

Contract Overview

Contract Amount: $114,592,317 ($114.6M)

Contractor: URS Federal Services, Inc.

Awarding Agency: Department of the Treasury

Start Date: 2006-11-30

End Date: 2012-07-23

Contract Duration: 2,062 days

Daily Burn Rate: $55.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: REQUEST FOR PROPOSAL FOR LOGISTICS SUPPORT A-76 STUDY

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22201

State: Virginia Government Spending

Plain-Language Summary

Department of the Treasury obligated $114.6 million to URS FEDERAL SERVICES, INC. for work described as: REQUEST FOR PROPOSAL FOR LOGISTICS SUPPORT A-76 STUDY Key points: 1. The contract's value of $114.6 million over its period of performance suggests a significant investment in logistics support. 2. Competition dynamics for this contract were full and open, indicating a potentially robust market response. 3. The definitive contract type and firm fixed price structure suggest a defined scope and cost control measures. 4. Performance context is linked to an A-76 study, implying a review of government versus private sector provision of services. 5. Sector positioning is within Facilities Support Services, a critical area for government operations. 6. The contract duration of 2062 days (approximately 5.6 years) indicates a long-term commitment to the service provider.

Value Assessment

Rating: questionable

Benchmarking the value-for-money for this $114.6 million contract is challenging without detailed performance metrics and specific service deliverables. The A-76 study context suggests an effort to ensure cost-effectiveness compared to in-house provision, but the ultimate value depends on the efficiency and quality of the logistics support provided by URS Federal Services, Inc. Comparing this to similar large-scale logistics contracts would require access to detailed pricing structures and service level agreements, which are not publicly available. The firm fixed price nature aims to cap costs, but the overall value is contingent on the contractor's ability to deliver within that price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple bidders were likely considered. This approach is generally favored as it allows for the widest possible pool of potential contractors to submit proposals, theoretically leading to better pricing and service options. The number of bidders (2) is on the lower side for a full and open competition of this magnitude, which could warrant further investigation into the reasons for limited participation.

Taxpayer Impact: A full and open competition is generally beneficial for taxpayers as it fosters a competitive environment that can drive down costs and improve service quality, ensuring that government funds are used efficiently.

Public Impact

The primary beneficiaries are the agencies and personnel within the Department of the Treasury, particularly the Internal Revenue Service, who rely on efficient logistics support for their operations. The services delivered encompass a broad range of logistics support, crucial for the day-to-day functioning of the IRS. The geographic impact is likely concentrated around the IRS facilities where these logistics services are provided, primarily in Virginia. Workforce implications may include the transfer of certain government logistics functions to the private sector contractor, potentially impacting federal employees in those roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited number of bidders (2) in a full and open competition could indicate potential barriers to entry or lack of market interest.
The significant contract value raises questions about whether the most cost-effective solution was secured, despite competition.
A-76 studies can be complex and their outcomes may not always translate to optimal long-term value.
Lack of detailed public information on performance metrics makes it difficult to assess the true value for money.

Positive Signals

Awarded under full and open competition, which is a positive indicator for market engagement and potential cost savings.
The firm fixed price contract type provides cost certainty for the government.
The contract duration suggests a stable, long-term relationship, potentially leading to efficiencies through established processes.
The contractor, URS Federal Services, Inc., is a known entity in federal contracting, implying some level of established capability.

Sector Analysis

This contract falls within the Facilities Support Services sector, which is a broad category encompassing a wide range of services necessary for the operation and maintenance of government facilities. This sector is highly competitive, with numerous private sector firms offering specialized services. The market size for government facilities support is substantial, driven by the vast real estate holdings of federal agencies. This specific contract, valued at over $114 million, represents a significant portion of spending within this niche for the IRS, indicating a substantial requirement for outsourced logistics.

Small Business Impact

The data indicates that small business participation (sb) was false, and there was no indication of a small business set-aside (ss). This suggests that the contract was not specifically targeted towards small businesses. Consequently, the primary impact on the small business ecosystem would be through potential subcontracting opportunities, which are not detailed in the provided data. Without specific subcontracting plans or goals, it's difficult to assess the extent to which small businesses benefited from this large contract.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program managers within the Department of the Treasury's Internal Revenue Service. Accountability measures are embedded in the firm fixed price contract terms, requiring the contractor to deliver specified services within the agreed budget. Transparency is limited by the availability of detailed performance reports and pricing breakdowns in the public domain. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected or alleged.

Related Government Programs

Government Facilities Management Contracts
Logistics and Supply Chain Services
A-76 Studies and Outsourcing
Internal Revenue Service Operations Support
Department of the Treasury Procurement

Risk Flags

Limited Competition
Potential Value for Money Concerns
Lack of Detailed Performance Data

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $114.6 million to URS FEDERAL SERVICES, INC.. REQUEST FOR PROPOSAL FOR LOGISTICS SUPPORT A-76 STUDY

Who is the contractor on this award?

The obligated recipient is URS FEDERAL SERVICES, 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 $114.6 million.

What is the period of performance?

Start: 2006-11-30. End: 2012-07-23.

What was the specific scope of 'logistics support' covered under this contract?

The provided data does not detail the specific scope of 'logistics support.' However, given the context of an A-76 study for facilities support services, it likely encompassed a range of activities such as inventory management, warehousing, transportation coordination, mail services, and potentially fleet management or maintenance support for IRS facilities. The A-76 study itself would have defined the functions being considered for outsourcing, aiming to determine the most cost-effective method of provision, whether by government personnel or a private contractor.

How did the pricing of URS Federal Services, Inc. compare to other potential bidders or market rates for similar services?

The provided data does not include comparative pricing information. While the contract was awarded under full and open competition, the fact that only two bids were received limits the ability to definitively assess if the pricing was competitive. To compare URS Federal Services, Inc.'s pricing to market rates, one would need access to detailed cost breakdowns within the proposal and benchmark them against industry standards for similar logistics support contracts of comparable size and scope. Without this granular data, a precise value-for-money assessment based on price is not possible.

What were the key performance indicators (KPIs) established for this contract, and how was contractor performance measured?

The provided data does not specify the key performance indicators (KPIs) or the methods used for measuring contractor performance. Typically, for logistics support contracts, KPIs might include on-time delivery rates, inventory accuracy, cost savings achieved, response times for service requests, and overall customer satisfaction. Performance would likely be monitored through regular reporting by the contractor and oversight by the IRS contracting officer's representative (COR), with potential for award fees or penalties tied to performance against these KPIs.

What was the historical spending pattern for logistics support services by the IRS prior to this contract?

The provided data does not include historical spending patterns for IRS logistics support. However, the initiation of an A-76 study suggests a deliberate review of whether existing in-house logistics operations were cost-effective compared to outsourcing. The award of this $114.6 million contract indicates a significant shift towards or continuation of private sector provision for these services. Understanding historical spending would require accessing prior IRS budgets and procurement records related to logistics and facilities support.

What is the track record of URS Federal Services, Inc. in providing similar logistics support to government agencies?

URS Federal Services, Inc. (now part of AECOM) has a significant track record in providing a wide range of services to government agencies, including logistics, facilities management, and base operations support. They have held numerous large federal contracts across various departments, including defense and civilian agencies. While specific performance details for this particular IRS contract are not publicly detailed, their extensive experience suggests a capacity to handle complex logistics requirements. A deeper dive into their contract history, past performance evaluations, and any reported issues would provide a more comprehensive view of their track record.

What risks were identified during the procurement process, and how were they mitigated?

The provided data does not detail specific risks identified during the procurement process or their mitigation strategies. However, common risks in large logistics contracts include cost overruns, performance failures, security vulnerabilities, and contractor default. Given the firm fixed price structure, cost overrun risk for the government is minimized, but performance risk remains. Mitigation strategies typically involve robust contract language, clear performance standards, regular oversight, and contingency planning. The limited number of bidders might suggest potential risks related to market concentration or contractor viability.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Facilities Support Services › Facilities Support Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: AECOM (UEI: 153561212)

Address: 20501 SENECA MEADOWS PKWY STE 300, GERMANTOWN, MD, 20876

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $157,384,543

Exercised Options: $114,594,184

Current Obligation: $114,592,317

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline