IRS Spends $103.8M on IT Support for Key Programs, Including ACA and FATCA

Contract Overview

Contract Amount: $103,832,857 ($103.8M)

Contractor: Deloitte Consulting LLP

Awarding Agency: Department of the Treasury

Start Date: 2015-12-17

End Date: 2021-04-29

Contract Duration: 1,960 days

Daily Burn Rate: $53.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::CT::IGF FOR CRITICAL FUNCTIONS - INFORMATION RETURNS SYSTEM MODERNIZATION AND DELIVERY MANAGEMENT QUALITY ASSURANCE PROGRAM PLANNING AND MANAGEMENT SUPPORT AROUND THE MAJOR PROGRAMS AFFECTING THE IRS INCLUDING INFORMATION RETURNS SYSTEM MODERNIZATION (IRSM), AFFORDABLE CARE ACT (ACA), FOREIGN ACCOUNT TAX COMPLIANCE ACT (FATCA), AND CUSTOMER ACCOUNT DATA ENGINE (CADE) 2.

Place of Performance

Location: LANHAM, PRINCE GEORGES County, MARYLAND, 20706

State: Maryland Government Spending

Plain-Language Summary

Department of the Treasury obligated $103.8 million to DELOITTE CONSULTING LLP for work described as: IGF::CT::IGF FOR CRITICAL FUNCTIONS - INFORMATION RETURNS SYSTEM MODERNIZATION AND DELIVERY MANAGEMENT QUALITY ASSURANCE PROGRAM PLANNING AND MANAGEMENT SUPPORT AROUND THE MAJOR PROGRAMS AFFECTING THE IRS INCLUDING INFORMATION RETURNS SYSTEM MODERNIZATION (IRSM), AFFORDABLE CARE… Key points: 1. Significant investment in IT modernization and program management for critical IRS functions. 2. Deloitte Consulting LLP secured a large contract for comprehensive support. 3. Contract duration spans over five years, indicating long-term needs. 4. Focus on IRSM, ACA, FATCA, and CADE highlights modernization efforts.

Value Assessment

Rating: good

The contract value of $103.8M over approximately 5 years suggests a substantial but potentially reasonable investment for comprehensive IT program support. Benchmarking against similar large-scale IT modernization and management contracts would be necessary for a definitive assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which is a positive indicator for price discovery and achieving a fair market price. The existence of multiple bids (no: 2) further supports competitive pricing.

Taxpayer Impact: The competitive award process aims to ensure taxpayer dollars are used efficiently for essential IT services.

Public Impact

Modernization of IRS systems impacts taxpayer services and data security. Support for ACA and FATCA compliance ensures continued adherence to federal regulations. Efficient IT management can lead to cost savings and improved agency operations. Reliable IT infrastructure is crucial for tax collection and economic stability.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep in long-term IT projects.
Reliance on a single vendor for critical IT functions.
Ensuring continued relevance and effectiveness of IT solutions over time.

Positive Signals

Awarded through full and open competition.
Focus on modernization of critical systems.
Experienced contractor with a strong track record.

Sector Analysis

This contract falls within the IT services sector, specifically focusing on computer systems design and related services. The value is significant, reflecting the complexity and importance of the IRS's IT infrastructure and modernization efforts.

Small Business Impact

The data indicates this contract was not awarded to small businesses (sb: false). While large contracts often go to prime contractors, opportunities for small businesses may exist further down the subcontracting chain.

Oversight & Accountability

The contract was awarded by the Department of the Treasury's Internal Revenue Service. Oversight would typically involve program managers ensuring deliverables meet requirements and financial accountability is maintained.

Related Government Programs

Other Computer Related Services
Department of the Treasury Contracting
Internal Revenue Service Programs

Risk Flags

Long contract duration increases risk of obsolescence or changing requirements.
High contract value necessitates rigorous oversight.
Dependence on a single vendor for critical IT functions.
Potential for scope creep impacting budget and timeline.
Lack of direct small business participation as prime contractor.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $103.8 million to DELOITTE CONSULTING LLP. IGF::CT::IGF FOR CRITICAL FUNCTIONS - INFORMATION RETURNS SYSTEM MODERNIZATION AND DELIVERY MANAGEMENT QUALITY ASSURANCE PROGRAM PLANNING AND MANAGEMENT SUPPORT AROUND THE MAJOR PROGRAMS AFFECTING THE IRS INCLUDING INFORMATION RETURNS SYSTEM MODERNIZATION (IRSM), AFFORDABLE CARE ACT (ACA), FOREIGN ACCOUNT TAX COMPLIANCE ACT (FATCA), AND CUSTOMER ACCOUNT DATA ENGINE (CADE) 2.

Who is the contractor on this award?

The obligated recipient is DELOITTE CONSULTING 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 $103.8 million.

What is the period of performance?

Start: 2015-12-17. End: 2021-04-29.

What specific metrics are used to measure the success of the Information Returns System Modernization (IRSM) and other supported programs under this contract?

Success metrics likely include system uptime, data accuracy rates, processing times for tax forms, user satisfaction scores from IRS personnel, and successful integration of new features. The contract's performance work statement would detail these KPIs, ensuring the contractor meets defined objectives for modernization and quality assurance.

How does the IRS ensure that the $103.8M spent on this contract provides value for money, considering the long duration and the critical nature of the systems supported?

Value for money is pursued through the initial full and open competition, aiming for competitive pricing. Ongoing oversight, performance reviews against defined metrics, and potential for contract modifications based on evolving needs help ensure continued value. Benchmarking against industry standards and periodic re-evaluations of the contract's scope and cost are also crucial.

What are the primary risks associated with relying on Deloitte Consulting LLP for modernization and quality assurance of critical IRS IT systems, and how are they mitigated?

Risks include vendor lock-in, potential for cost overruns if requirements change significantly, and the impact of any performance issues on taxpayer services. Mitigation strategies involve clear contract terms, robust oversight, phased delivery, performance incentives, and contingency planning for critical system failures or transitions.

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

Solicitation ID: 4247

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Deloitte Financial Advisory Services LLP (UEI: 216754602)

Address: 1725 DUKE ST, ALEXANDRIA, VA, 22314

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

Financial Breakdown

Contract Ceiling: $105,637,802

Exercised Options: $104,965,933

Current Obligation: $103,832,857

Actual Outlays: $29,654,658

Subaward Activity

Number of Subawards: 11

Total Subaward Amount: $15,681,181

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: TIRNO11D00016

IDV Type: IDC

Timeline