Treasury's IRS Spends $18.5M on Verizon Program Management & Engineering Services
Contract Overview
Contract Amount: $18,471,225 ($18.5M)
Contractor: Verizon Business Network Services LLC
Awarding Agency: Department of the Treasury
Start Date: 2012-02-02
End Date: 2020-09-30
Contract Duration: 3,163 days
Daily Burn Rate: $5.8K/day
Competition Type: COMPETED UNDER SAP
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: VERIZON PROGRAM MGMT&ENGINEERING SVCS
Place of Performance
Location: ATLANTA, FULTON County, GEORGIA, 30308
State: Georgia Government Spending
Plain-Language Summary
Department of the Treasury obligated $18.5 million to VERIZON BUSINESS NETWORK SERVICES LLC for work described as: VERIZON PROGRAM MGMT&ENGINEERING SVCS Key points: 1. Significant contract value of $18.5 million over 8 years. 2. Competed under SAP, indicating a structured procurement process. 3. No small business participation noted, potentially limiting broader economic impact. 4. Services fall under 'Other Computer Related Services', a broad category.
Value Assessment
Rating: fair
The contract value of $18.5M over 8 years averages $2.3M annually. Benchmarking against similar IT program management contracts is difficult without more specific service details, but the duration suggests a potentially fair price for ongoing support.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was competed under SAP (Simplified Acquisition Procedures), suggesting a competitive process for acquisitions below certain thresholds. This method generally aims for price discovery through multiple quotes.
Taxpayer Impact: Taxpayers funded $18.5 million for these services. While competed, the specific value for money is hard to ascertain without detailed performance metrics.
Public Impact
Ensures critical IT infrastructure and program management for the IRS. Supports the operational efficiency of tax collection and processing systems. Potential for modernization and improved service delivery through engineering expertise.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of small business participation.
- Broad service category may obscure specific cost drivers.
- Long contract duration could lead to price creep if not managed.
Positive Signals
- Competed under SAP, suggesting a degree of market testing.
- Firm Fixed Price contract type helps control costs.
- Long-term engagement implies a need for stable, reliable services.
Sector Analysis
The IT services sector is vast, with program management and engineering being crucial for large government agencies like the IRS. Spending benchmarks vary widely based on the complexity and scope of services.
Small Business Impact
The contract explicitly states no small business participation (sb: false). This indicates that the prime contractor, Verizon, did not subcontract to small businesses for this specific award, potentially missing opportunities to leverage smaller, specialized firms.
Oversight & Accountability
The contract was awarded under SAP, which has its own set of oversight requirements. The long duration necessitates ongoing performance monitoring by the IRS to ensure value and accountability.
Related Government Programs
- Other Computer Related Services
- Department of the Treasury Contracting
- Internal Revenue Service Programs
Risk Flags
- Lack of small business participation.
- Broad service category (NAICS 541519).
- Long contract duration (8 years).
- Limited detail on specific services and performance outcomes.
Tags
other-computer-related-services, department-of-the-treasury, ga, bpa-call, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of the Treasury awarded $18.5 million to VERIZON BUSINESS NETWORK SERVICES LLC. VERIZON PROGRAM MGMT&ENGINEERING SVCS
Who is the contractor on this award?
The obligated recipient is VERIZON BUSINESS NETWORK SERVICES 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 $18.5 million.
What is the period of performance?
Start: 2012-02-02. End: 2020-09-30.
What specific program management and engineering services were provided, and how did they contribute to the IRS's mission?
The provided data lacks specifics on the exact services rendered. However, program management and engineering services for the IRS likely encompass IT infrastructure support, software development lifecycle management, cybersecurity enhancements, and operational efficiency improvements for tax systems. These are critical for maintaining taxpayer data integrity and facilitating tax administration.
Given the $18.5M spend over 8 years, what was the cost-effectiveness compared to alternative solutions or internal capabilities?
Assessing cost-effectiveness requires detailed performance metrics and comparison against industry benchmarks for similar IT program management services. The firm fixed price structure offers some cost control, but without data on service outcomes and potential internal capabilities, a definitive cost-effectiveness judgment is challenging. The annual average of $2.3M suggests a significant investment.
How effectively did the SAP competition process ensure fair pricing and optimal service delivery for these complex IT services?
SAP competition aims to ensure fair pricing by soliciting multiple quotes from qualified vendors. However, the effectiveness depends on the clarity of the requirement, the number of responsive bidders, and the government's negotiation strategy. For complex IT services, ensuring true price discovery and optimal service delivery under SAP requires diligent oversight and well-defined performance standards.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: COMPETED UNDER SAP
Solicitation Procedures: SIMPLIFIED ACQUISITION
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Verizon Communications Inc
Address: 22001 LOUDOUN COUNTY PKWY, ASHBURN, VA, 20147
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $18,471,225
Exercised Options: $18,471,225
Current Obligation: $18,471,225
Actual Outlays: $2,316,226
Contract Characteristics
Commercial Item: COMMERCIAL ITEM
Parent Contract
Parent Award PIID: TIRNO10S00001
IDV Type: BPA
Timeline
Start Date: 2012-02-02
Current End Date: 2020-09-30
Potential End Date: 2023-05-31 16:10:59
Last Modified: 2022-04-02
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