IRS spent $42.6M to upgrade 77,733 desktops from Windows XP to Windows 7

Contract Overview

Contract Amount: $42,597,544 ($42.6M)

Contractor: Iron BOW Technologies, LLC

Awarding Agency: Department of the Treasury

Start Date: 2013-05-09

End Date: 2014-11-08

Contract Duration: 548 days

Daily Burn Rate: $77.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: LABOR HOURS

Sector: IT

Official Description: IGF::OT::IGF CONTRACTOR SUPPORT TO UPGRADE ALL IRS DESKTOPS OPERATING SYSTEMS FROM MICROSOFT WINDOWS XP TO MICROSOFT WINDOWS 7.

Place of Performance

Location: LANHAM, PRINCE GEORGE'S County, MARYLAND, 20706, UNITED STATES OF AMERICA

State: Maryland Government Spending

Plain-Language Summary

Department of the Treasury obligated $42.6 million to IRON BOW TECHNOLOGIES, LLC for work described as: IGF::OT::IGF CONTRACTOR SUPPORT TO UPGRADE ALL IRS DESKTOPS OPERATING SYSTEMS FROM MICROSOFT WINDOWS XP TO MICROSOFT WINDOWS 7. Key points: 1. The contract aimed to modernize critical IRS infrastructure, replacing an outdated operating system. 2. The project was awarded under full and open competition, suggesting a competitive bidding process. 3. The duration of the contract was approximately 18 months, indicating a focused upgrade timeline. 4. The contract was a labor-hour type, which can be flexible but requires careful monitoring of effort. 5. The total value of $42.6 million for 77,733 desktops translates to approximately $547 per unit. 6. The contract was awarded to a single vendor, Iron Bow Technologies, LLC.

Value Assessment

Rating: fair

The per-unit cost of approximately $547 for this desktop operating system upgrade appears to be on the higher end when compared to typical IT hardware refresh cycles or software deployment projects of similar scale. While the specific scope of services (e.g., labor, licensing, support) is not fully detailed, the price warrants scrutiny against industry benchmarks for OS deployment. The value proposition hinges on the critical need to move away from an unsupported OS like Windows XP, which carried significant security risks.

Cost Per Unit: $547 per desktop

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. This suggests a robust bidding environment, which typically leads to better price discovery and potentially more competitive pricing for the government. The fact that it was competed openly is a positive sign for value for money.

Taxpayer Impact: Taxpayers benefit from a competitive process that should have driven down costs compared to a sole-source award. The open competition increases the likelihood that the IRS received a fair market price for the services rendered.

Public Impact

IRS employees benefited from an upgraded and more secure operating system, improving productivity and reducing cybersecurity risks. The services delivered included the deployment of Microsoft Windows 7 across a significant portion of the IRS's desktop fleet. The geographic impact is nationwide, as the IRS operates across all states and territories. Workforce implications include IT support staff involved in the deployment and end-users adapting to the new operating system.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if labor hours were not managed effectively.
Risk associated with the transition from an end-of-life OS (Windows XP) to a new one, including compatibility issues.
Dependence on a single contractor (Iron Bow Technologies) for the entire upgrade project.

Positive Signals

Addressed a critical cybersecurity vulnerability by moving off Windows XP.
Completed within a defined timeframe, indicating project management effectiveness.
Awarded through full and open competition, suggesting a fair process.

Sector Analysis

This contract falls within the IT services sector, specifically focusing on operating system deployment and IT infrastructure modernization. The market for such services is large and competitive, with numerous vendors capable of performing large-scale OS upgrades. The IRS's spending on desktop upgrades is a recurring need for large federal agencies aiming to maintain secure and efficient IT environments. Benchmarks for similar large-scale OS deployments can vary widely based on scope, labor rates, and included software/hardware.

Small Business Impact

The contract was not set aside for small businesses, and the data does not indicate any subcontracting requirements for small businesses. This suggests that the primary award went to a large business, and the direct impact on the small business ecosystem through this specific contract is likely minimal unless Iron Bow Technologies engaged small businesses as subcontractors without it being explicitly noted in the provided data.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Treasury's Inspector General, with specific program management oversight by the IRS. Accountability measures would include adherence to the labor-hour contract terms, delivery schedules, and performance standards. Transparency is generally achieved through contract award databases and reporting requirements, though detailed performance metrics are not provided here.

Related Government Programs

IRS IT Modernization Initiatives
Federal Desktop Computer Procurement
Operating System Deployment Services
Cybersecurity Infrastructure Upgrades

Risk Flags

Potential for cost overruns due to labor-hour contract type.
Security risks associated with extending OS upgrade past end-of-support date.
High per-unit cost compared to industry benchmarks.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $42.6 million to IRON BOW TECHNOLOGIES, LLC. IGF::OT::IGF CONTRACTOR SUPPORT TO UPGRADE ALL IRS DESKTOPS OPERATING SYSTEMS FROM MICROSOFT WINDOWS XP TO MICROSOFT WINDOWS 7.

Who is the contractor on this award?

The obligated recipient is IRON BOW TECHNOLOGIES, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $42.6 million.

What is the period of performance?

Start: 2013-05-09. End: 2014-11-08.

What was the specific scope of work covered by the $42.6 million contract for IRS desktop upgrades?

The contract, awarded to Iron Bow Technologies, LLC, focused on upgrading all IRS desktops from the outdated Microsoft Windows XP operating system to Microsoft Windows 7. The scope likely included the procurement of necessary software licenses, the labor required for installation and configuration, potential data migration, testing, and post-deployment support. Given it was a labor-hour contract, the primary cost driver was the time spent by technicians and project managers performing these tasks across approximately 77,733 workstations nationwide over an 18-month period.

How does the per-unit cost of $547 compare to similar federal IT upgrade contracts?

The per-unit cost of approximately $547 for this Windows XP to Windows 7 upgrade is relatively high when compared to standard IT refresh cycles or software deployments. While Windows 7 was a significant upgrade from XP, especially in terms of security, the cost per seat for OS deployment projects often ranges from $100 to $300, depending on whether it includes hardware, software licenses, and the complexity of the deployment. The higher cost here may be attributed to the labor-intensive nature of upgrading from a legacy system like XP, potential complexities within the IRS's unique IT environment, and the specific labor rates negotiated under the contract.

What were the primary risks associated with upgrading from Windows XP, and how were they mitigated?

The primary risk of upgrading from Windows XP was the inherent insecurity of an unsupported operating system, making IRS systems vulnerable to malware, ransomware, and data breaches. Mitigation involved a comprehensive deployment plan, likely including pilot testing, phased rollouts, and robust cybersecurity measures during the transition. The contract's focus on upgrading to Windows 7 aimed to address these risks by moving to a more modern and supported platform. However, the transition itself carried risks such as application compatibility issues with Windows 7 and potential disruptions to user productivity, which would have been managed through thorough testing and user support.

What was the track record of Iron Bow Technologies, LLC, in handling large federal IT infrastructure projects prior to this contract?

While specific details on Iron Bow Technologies' track record prior to this 2013 contract are not provided in the data, the company has a history of securing significant federal IT contracts. Their ability to win a large, full-and-open competition award from the IRS suggests they possessed the necessary technical capabilities, financial stability, and past performance credentials required by the government. Companies winning such contracts typically demonstrate experience in large-scale deployments, cybersecurity, and IT modernization for federal agencies.

How did the 'labor hours' contract type influence the cost and management of this upgrade project?

A 'labor hours' contract type means the government pays for the direct labor hours expended by the contractor at specified fixed hourly rates, plus applicable overhead and profit. This type of contract offers flexibility, allowing for adjustments in the amount of labor used based on project needs. However, it also places a significant burden on the government to closely monitor contractor effort to prevent overcharging and ensure efficiency. For this IRS upgrade, it meant the final cost was directly tied to the hours worked by Iron Bow's technicians, making effective project management and oversight crucial for controlling the $42.6 million expenditure.

What is the significance of the contract's end date (November 8, 2014) relative to the end-of-support for Windows XP?

Microsoft officially ended support for Windows XP on April 8, 2014. The contract's end date of November 8, 2014, indicates that the upgrade project extended approximately seven months beyond the official end-of-support for Windows XP. While the IRS aimed to complete the upgrade within the contract period, this overlap suggests that either the project experienced delays, or a portion of the upgrade work, including final clean-up or support, continued after the OS was officially unsupported. This extended period post-end-of-support could have presented residual security risks if not managed meticulously.

Industry Classification

NAICS: Manufacturing › Computer and Peripheral Equipment Manufacturing › Electronic Computer Manufacturing

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: LABOR HOURS (Z)

Evaluated Preference: NONE

Contractor Details

Address: 4800 WESTFIELDS BLVD, CHANTILLY, VA, 20151

Business Categories: Black American Owned Business, Category Business, Limited Liability Corporation, Minority Owned Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $42,703,694

Exercised Options: $42,703,694

Current Obligation: $42,597,544

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS35F0251V

IDV Type: FSS

Timeline