Treasury's IRS Spends $130M on ACA IS&R Support Services with Insysco, Inc

Contract Overview

Contract Amount: $130,446,935 ($130.4M)

Contractor: Insysco, Inc.

Awarding Agency: Department of the Treasury

Start Date: 2015-03-28

End Date: 2020-09-27

Contract Duration: 2,010 days

Daily Burn Rate: $64.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: IGF::CT::IGF FOR CRITICAL FUNCTIONS - ACA INFORMATION SHARING AND REPORTING (IS&R) SUPPORT SERVICES

Place of Performance

Location: FREDERICKSBURG, FREDERICKSBURG CITY County, VIRGINIA, 22401

State: Virginia Government Spending

Plain-Language Summary

Department of the Treasury obligated $130.4 million to INSYSCO, INC. for work described as: IGF::CT::IGF FOR CRITICAL FUNCTIONS - ACA INFORMATION SHARING AND REPORTING (IS&R) SUPPORT SERVICES Key points: 1. Significant investment in critical ACA information sharing and reporting. 2. Contract awarded via full and open competition, suggesting market engagement. 3. Potential risk associated with cost-plus fixed-fee contract type. 4. IT services sector, specifically computer related services.

Value Assessment

Rating: fair

The contract's cost-plus-fixed-fee structure can incentivize cost overruns. Benchmarking against similar IT support contracts is difficult without more granular cost data.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

Awarded through full and open competition, indicating a competitive bidding process. However, the cost-plus-fixed-fee pricing structure may not guarantee the most cost-effective outcome.

Taxpayer Impact: Taxpayers bear the cost of this significant IT support contract, with potential for inefficiency due to the contract type.

Public Impact

Ensures continued operation of critical ACA reporting systems. Supports the IRS's tax administration and compliance functions. Potential for increased costs if contractor inefficiencies are not managed.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contract type.
Lack of small business participation.
Long contract duration.

Positive Signals

Awarded via full and open competition.
Supports critical government functions.

Sector Analysis

This contract falls within the IT services sector, specifically 'Other Computer Related Services'. Spending benchmarks for similar ACA-related IT support services are not readily available but are generally substantial given the complexity.

Small Business Impact

The contract data indicates no small business participation. This suggests that larger firms were either the primary bidders or that opportunities for small businesses were not effectively leveraged.

Oversight & Accountability

The contract was awarded via full and open competition, which provides a degree of oversight. However, the cost-plus-fixed-fee structure requires diligent monitoring to ensure cost control and accountability.

Related Government Programs

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

Risk Flags

Cost-plus-fixed-fee pricing.
No small business participation.
Long contract duration (5 years).
Potential for scope creep without strict management.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $130.4 million to INSYSCO, INC.. IGF::CT::IGF FOR CRITICAL FUNCTIONS - ACA INFORMATION SHARING AND REPORTING (IS&R) SUPPORT SERVICES

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 $130.4 million.

What is the period of performance?

Start: 2015-03-28. End: 2020-09-27.

How effectively did the full and open competition process ensure competitive pricing for a cost-plus-fixed-fee contract?

While full and open competition is a positive indicator, the cost-plus-fixed-fee structure inherently shifts some pricing risk to the government. Effective price discovery relies heavily on the government's ability to negotiate a fair fixed fee and rigorously monitor contractor performance and costs throughout the contract's lifecycle to prevent inefficiencies from inflating the final price.

What are the primary risks associated with the cost-plus-fixed-fee contract type for these ACA support services?

The primary risk is the potential for contractor inefficiency, as the contractor is reimbursed for all allowable costs plus a fixed fee. This can reduce the incentive to control costs compared to fixed-price contracts. The government bears the risk of cost overruns, necessitating robust oversight to ensure value for money and prevent unnecessary expenditure of taxpayer funds.

How does the lack of small business participation impact the overall effectiveness and innovation of this contract?

The absence of small business participation may limit the diversity of innovative solutions and potentially increase costs if larger contractors have higher overhead. It also represents a missed opportunity to foster growth within the small business sector, which often brings specialized expertise and agility to government contracting.

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: 1

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: $149,616,756

Exercised Options: $149,616,756

Current Obligation: $130,446,935

Actual Outlays: $28,868,952

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