IRS spent over $41M on PPACA PMO support, with 3 bidders in a full and open competition

Contract Overview

Contract Amount: $41,432,870 ($41.4M)

Contractor: Insysco, Inc.

Awarding Agency: Department of the Treasury

Start Date: 2012-09-26

End Date: 2017-09-22

Contract Duration: 1,822 days

Daily Burn Rate: $22.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: IGF::CT::IGF PATIENT PROTECTION AFFORDABLE CARE ACT (PPACA) PROGRAM MANAGEMENT OFFICE (PMO) CORE SYSTEMS, COMPLIANCE DOCUMENT MATCHING AND ENTERPRISE SERVICES SUPPORT

Place of Performance

Location: LANHAM, PRINCE GEORGES County, MARYLAND, 20706

State: Maryland Government Spending

Plain-Language Summary

Department of the Treasury obligated $41.4 million to INSYSCO, INC. for work described as: IGF::CT::IGF PATIENT PROTECTION AFFORDABLE CARE ACT (PPACA) PROGRAM MANAGEMENT OFFICE (PMO) CORE SYSTEMS, COMPLIANCE DOCUMENT MATCHING AND ENTERPRISE SERVICES SUPPORT Key points: 1. The contract provided essential support for the Affordable Care Act's program management office. 2. A competitive bidding process was utilized, suggesting potential for price discovery. 3. The contract duration was substantial, indicating a long-term need for these services. 4. The fixed-fee structure, while common, requires careful monitoring to ensure value. 5. The services supported core systems and compliance, critical functions for the IRS. 6. The contract was awarded to a single vendor, INSYSCO, INC., after the competition.

Value Assessment

Rating: fair

The total contract value of over $41 million over approximately five years represents a significant investment. Benchmarking this specific type of IT support for a complex regulatory program like PPACA is challenging without more granular data on the services provided. However, the fixed-fee structure suggests that the contractor's costs were estimated upfront, and any deviations would need justification. The number of bidders (3) indicates some level of competition, which can help in achieving a reasonable price, but a more robust competition with more bidders might have yielded better value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, meaning all responsible sources were permitted to submit a bid. With three bidders participating, there was a degree of competition, which is generally positive for price discovery and ensuring the government receives competitive offers. The presence of multiple bidders suggests that the market had suppliers capable of meeting the requirements.

Taxpayer Impact: A full and open competition with multiple bidders is beneficial for taxpayers as it increases the likelihood of obtaining services at a fair market price and encourages vendors to offer their best terms.

Public Impact

The primary beneficiaries of this contract are the Internal Revenue Service and the Department of the Treasury, who received critical IT support. Services delivered included program management office support, core systems maintenance, and compliance document matching for the Affordable Care Act. The geographic impact is primarily national, given the federal nature of the IRS and the PPACA. Workforce implications include the potential for IT professionals employed by INSYSCO, INC. to support these government functions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the fixed-fee scope was not precisely managed.
Dependence on a single contractor for critical PPACA IT functions.
Risk of vendor lock-in if knowledge transfer was insufficient.

Positive Signals

Awarded through full and open competition, indicating market availability of services.
Contract supported a high-priority national initiative (Affordable Care Act).
Clear definition of services for program management and compliance.

Sector Analysis

This contract falls within the IT services sector, specifically focusing on computer systems design and related services. The market for government IT support is substantial, with agencies constantly seeking to modernize systems and ensure compliance with complex regulations. The IRS, as a large federal agency, represents a significant client for IT service providers. Comparable spending benchmarks would typically involve analyzing other large IT support contracts for federal agencies with similar regulatory or operational complexities.

Small Business Impact

There is no indication that this contract included small business set-asides or subcontracting requirements. The contract was awarded to INSYSCO, INC., and further analysis would be needed to determine if they are a small business or if they utilized small business subcontractors. Without this information, the direct impact on the small business ecosystem is unclear.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve the contracting officer's representative (COR) at the IRS, who monitors performance and ensures compliance with contract terms. Accountability measures are inherent in the fixed-fee structure, requiring the contractor to deliver specified services within the agreed-upon price. Transparency is generally facilitated through contract databases like FPDS, which provide public access to contract awards and basic details.

Related Government Programs

Affordable Care Act (ACA) Implementation
IRS IT Modernization Programs
Federal Program Management Support
Government Compliance Systems

Risk Flags

Contract duration exceeds 3 years
Contract type is Cost Plus Fixed Fee
Single award after competition

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $41.4 million to INSYSCO, INC.. IGF::CT::IGF PATIENT PROTECTION AFFORDABLE CARE ACT (PPACA) PROGRAM MANAGEMENT OFFICE (PMO) CORE SYSTEMS, COMPLIANCE DOCUMENT MATCHING AND ENTERPRISE SERVICES SUPPORT

Who is the contractor on this award?

The obligated recipient is INSYSCO, 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 $41.4 million.

What is the period of performance?

Start: 2012-09-26. End: 2017-09-22.

What was the specific nature of the 'core systems' and 'compliance document matching' services provided under this contract?

The contract details indicate support for the PPACA Program Management Office (PMO) Core Systems, Compliance Document Matching, and Enterprise Services. This likely involved maintaining and enhancing the IT infrastructure that supported the administration and compliance aspects of the Affordable Care Act. 'Core systems' could refer to databases, application servers, and network infrastructure essential for PPACA operations. 'Compliance document matching' suggests a function to verify or link submitted documents against established criteria, crucial for regulatory enforcement and data integrity. Enterprise services would encompass broader IT support, potentially including help desk, system integration, and data management necessary for the PMO's functions.

How did the pricing structure (Cost Plus Fixed Fee) compare to industry standards for similar IT support contracts at the time?

Cost Plus Fixed Fee (CPFF) contracts are common in government IT procurements, especially when the scope of work is well-defined but the exact costs are uncertain. For IT support, this structure aims to provide the contractor with cost recovery plus a fixed profit margin. Compared to industry standards, CPFF can be advantageous for the government if the fixed fee is negotiated competitively and the contractor is efficient. However, it carries a risk of cost overruns if the initial cost estimates are inaccurate, as the government is obligated to cover all allowable costs. Benchmarking requires comparing the fixed fee percentage and the total estimated costs against similar contracts for IT PMO support or compliance systems.

What were the key performance indicators (KPIs) used to evaluate INSYSCO, INC.'s performance on this contract?

Specific Key Performance Indicators (KPIs) for this contract are not detailed in the provided summary data. However, for IT support contracts involving core systems and compliance, typical KPIs would likely include system uptime and availability, response times for issue resolution, successful completion of compliance document matching tasks, adherence to security protocols, and timely delivery of project milestones. The contracting officer's representative (COR) would monitor these metrics, and performance would be formally assessed through contractor performance evaluation reports (CPARS).

Were there any significant challenges or disputes encountered during the performance of this contract?

The provided summary data does not contain information regarding specific challenges or disputes encountered during the performance of this contract. Contract performance issues, if any, would typically be documented in contractor performance evaluation reports (CPARS) or through formal contract modification records. Without access to these detailed records, it is not possible to assess the presence of significant challenges or disputes.

How does the total spending of over $41 million on this single contract compare to the IRS's overall IT spending during the contract period (2012-2017)?

To compare this contract's spending to the IRS's overall IT budget, one would need to access historical IRS IT budget data for the fiscal years 2012 through 2017. The $41.4 million represents a portion of the IRS's IT expenditure dedicated to the PPACA PMO. The IRS's total IT budget is typically in the billions of dollars annually. Therefore, this contract, while substantial in absolute terms, likely represents a specific program's IT support cost within a much larger overall IT investment by the agency. A precise comparison would require detailed IRS budget reports for the relevant period.

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: RTCP 4103

Offers Received: 3

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 3130 FAIRVIEW PARK DR STE 800, FALLS CHURCH, VA, 22042

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

Financial Breakdown

Contract Ceiling: $41,687,734

Exercised Options: $41,571,734

Current Obligation: $41,432,870

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: TIRNO11D00023

IDV Type: IDC

Timeline