Treasury's $23.6M FATCA contract with Accenture shows strong competition and IT service delivery

Contract Overview

Contract Amount: $23,624,639 ($23.6M)

Contractor: Accenture LLP

Awarding Agency: Department of the Treasury

Start Date: 2016-05-22

End Date: 2018-09-30

Contract Duration: 861 days

Daily Burn Rate: $27.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: IGF::OT::IGF FOR OTHER FUNCTIONS - FOREIGN ACCOUNT TAX COMPLIANCE ACT (FATCA) SUBMISSION PROCESSING AND FATCA ENTERPRISE DATABASE. CYRBYME-C

Place of Performance

Location: GLENARDEN, PRINCE GEORGES County, MARYLAND, 20706

State: Maryland Government Spending

Plain-Language Summary

Department of the Treasury obligated $23.6 million to ACCENTURE LLP for work described as: IGF::OT::IGF FOR OTHER FUNCTIONS - FOREIGN ACCOUNT TAX COMPLIANCE ACT (FATCA) SUBMISSION PROCESSING AND FATCA ENTERPRISE DATABASE. CYRBYME-C Key points: 1. Contract awarded via full and open competition, indicating a robust bidding process. 2. Accenture's performance on this contract warrants review against similar IT service engagements. 3. The contract's duration and delivery order structure suggest a phased approach to service delivery. 4. IT services for foreign account tax compliance represent a critical function for revenue collection. 5. The use of a Cost Plus Fixed Fee pricing structure requires careful monitoring of costs. 6. Small business participation was not a stated requirement, potentially limiting broader economic impact.

Value Assessment

Rating: good

The contract value of $23.6 million over approximately two years for IT services related to FATCA submission processing and database management appears reasonable given the specialized nature of the work. Benchmarking against similar large-scale IT service contracts for tax compliance or financial data management would provide a more precise value-for-money assessment. The Cost Plus Fixed Fee (CPFF) structure necessitates diligent oversight to ensure costs remain within reasonable bounds and that the fixed fee adequately compensates the contractor for the defined scope.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple qualified vendors had the opportunity to bid. With three bidders identified, this level of competition is generally positive for price discovery and ensuring the government receives competitive pricing. The specific details of the bidding process, including the number of proposals received and the evaluation criteria, would further illuminate the effectiveness of the competition.

Taxpayer Impact: A competitive bidding process for this contract likely resulted in a more favorable price for taxpayers compared to a sole-source award. It also signals that the government sought the best value from a range of qualified providers.

Public Impact

Benefits the Department of the Treasury by ensuring compliance with the Foreign Account Tax Compliance Act (FATCA). Delivers essential IT services for processing FATCA submissions and managing the FATCA enterprise database. Supports U.S. efforts to combat offshore tax evasion and improve international tax transparency. Impacts financial institutions globally that are required to report on the assets held by U.S. persons. Contributes to the efficient operation of the Internal Revenue Service's tax administration functions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns given the CPFF pricing structure if not rigorously managed.
Dependence on a single contractor for critical FATCA data processing and database maintenance.
Scope creep could increase costs beyond initial projections without strict change control.

Positive Signals

Awarded through full and open competition, indicating a competitive market for these services.
Accenture is a large, established IT services provider with significant experience.
The contract addresses a critical government function related to tax compliance and revenue.

Sector Analysis

This contract falls within the broader Information Technology (IT) services sector, specifically focusing on IT consulting and systems integration for government functions. The market for such services is large and competitive, with numerous firms capable of supporting complex government IT needs. The FATCA initiative itself represents a significant global effort to enhance tax transparency, requiring robust IT infrastructure and data management capabilities, for which government spending is substantial.

Small Business Impact

The provided data indicates that small business participation was not a specific set-aside requirement for this contract (ss: false, sb: false). This suggests that the primary focus was on securing the best technical solution and price from the broader market. While large prime contractors like Accenture often utilize small business subcontractors, the absence of a set-aside means there's no direct mandate for small business involvement, potentially limiting subcontracting opportunities for smaller firms in this specific award.

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. The Cost Plus Fixed Fee (CPFF) structure necessitates close monitoring of expenditures against the fixed fee and the defined scope of work to prevent cost overruns. Transparency is generally maintained through contract reporting mechanisms, and any significant issues or potential fraud could fall under the jurisdiction of the Treasury Inspector General.

Related Government Programs

Foreign Account Tax Compliance Act (FATCA)
Taxpayer Data Management Systems
Financial Data Reporting Systems
IT Consulting Services
Government Database Management

Risk Flags

Cost Plus Fixed Fee pricing requires diligent oversight to manage expenditures.
Potential for scope creep impacting budget and timeline.
Dependence on contractor for critical financial data processing.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $23.6 million to ACCENTURE LLP. IGF::OT::IGF FOR OTHER FUNCTIONS - FOREIGN ACCOUNT TAX COMPLIANCE ACT (FATCA) SUBMISSION PROCESSING AND FATCA ENTERPRISE DATABASE. CYRBYME-C

Who is the contractor on this award?

The obligated recipient is ACCENTURE LLP.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $23.6 million.

What is the period of performance?

Start: 2016-05-22. End: 2018-09-30.

What is Accenture's track record with the Department of the Treasury and the IRS on similar IT service contracts?

Accenture LLP is a major global IT services and consulting firm with extensive experience working with government agencies, including the Department of the Treasury and the IRS. While specific details on their performance for this particular FATCA contract are not provided in the summary data, their general track record involves large-scale IT modernization, data management, and system integration projects. A deeper dive would involve reviewing past performance evaluations, any contract disputes, and the successful delivery of similar complex IT solutions for tax administration or financial regulatory compliance. Their history suggests a capacity for handling substantial government IT contracts, but also necessitates scrutiny regarding cost control and adherence to project timelines.

How does the $23.6 million contract value compare to other FATCA-related IT spending by the Treasury?

The provided data indicates a contract value of $23.6 million for FATCA submission processing and database management. To assess if this is comparable, one would need to analyze historical and ongoing spending by the Department of the Treasury and the IRS on FATCA-related IT initiatives. This would involve looking at the total IT budget allocated to FATCA, the number and value of other contracts awarded for similar services (e.g., data analytics, system maintenance, compliance reporting tools), and the duration of those contracts. Without this comparative data, it's difficult to definitively state whether $23.6 million represents high, low, or average spending for this specific function within the broader FATCA program.

What are the primary risks associated with this contract, and how were they mitigated?

Key risks associated with this contract include potential cost overruns due to the Cost Plus Fixed Fee (CPFF) structure, which requires careful financial oversight. Another risk is the potential for scope creep, where project requirements expand beyond the original agreement, leading to increased costs and delays. Technical risks, such as system integration challenges or data security vulnerabilities, are also inherent in large IT projects. Mitigation strategies would typically involve robust contract management, detailed performance metrics, regular progress reviews, strict change control processes, and adherence to cybersecurity best practices. The government's contracting officer and technical team would be responsible for actively monitoring and managing these risks throughout the contract's lifecycle.

How effective has the IT service delivery been in supporting the IRS's FATCA compliance goals?

The effectiveness of the IT service delivery under this contract in supporting the IRS's FATCA compliance goals can be assessed by examining key performance indicators (KPIs) related to submission processing rates, database accuracy and accessibility, and the timeliness of data analysis. Success would be measured by the system's ability to efficiently handle the volume of foreign financial institution reports, maintain data integrity, and provide actionable intelligence to combat offshore tax evasion. Without specific performance reports or audits related to this contract, a definitive assessment of its effectiveness is not possible from the provided data alone. However, the continued operation and renewal of such contracts often imply a level of satisfactory performance.

What has been the historical spending trend for FATCA-related IT services at the Treasury?

The provided data focuses on a single contract awarded in 2016. To understand historical spending trends for FATCA-related IT services at the Treasury, a broader analysis of contract databases (like FPDS or USASpending) would be necessary. This would involve querying for all contracts awarded by the Department of the Treasury and the IRS related to FATCA over multiple fiscal years. Examining the total annual spending, the number of contracts awarded, the types of services procured (e.g., software development, maintenance, cloud services, consulting), and the primary contractors involved would reveal trends in investment and evolving IT needs for FATCA compliance over time.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services

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: 3

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Accenture Public Limited Company (UEI: 985015354)

Address: 11951 FREEDOM DR STE 1000, RESTON, VA, 20190

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

Financial Breakdown

Contract Ceiling: $25,713,938

Exercised Options: $23,788,218

Current Obligation: $23,624,639

Subaward Activity

Number of Subawards: 29

Total Subaward Amount: $2,773,171

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: TIRNO11D00007

IDV Type: IDC

Timeline