Leidos Management Systems Designers, Inc. awarded $17.5M for IRS account management services

Contract Overview

Contract Amount: $17,529,401 ($17.5M)

Contractor: Leidos Management Systems Designers, Inc.

Awarding Agency: Department of the Treasury

Start Date: 2016-11-14

End Date: 2022-11-13

Contract Duration: 2,190 days

Daily Burn Rate: $8.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::OT::IGF FOR OTHER FUNCTIONS - ACCOUNT MANAGEMENT SERVICES (AMS) - CYRBYME-C

Place of Performance

Location: AUSTIN, TRAVIS County, TEXAS, 78744

State: Texas Government Spending

Plain-Language Summary

Department of the Treasury obligated $17.5 million to LEIDOS MANAGEMENT SYSTEMS DESIGNERS, INC. for work described as: IGF::OT::IGF FOR OTHER FUNCTIONS - ACCOUNT MANAGEMENT SERVICES (AMS) - CYRBYME-C Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract duration of 2190 days (6 years) indicates a long-term need for these services. 3. The firm-fixed-price contract type aims to control costs by setting a predetermined price. 4. The North American Industry Classification System (NAICS) code 541519 points to specialized IT services. 5. The contract was awarded as a delivery order, likely against a larger indefinite-delivery/indefinite-quantity (IDIQ) contract. 6. The absence of small business set-aside flags suggests the primary awardee is not a small business.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without knowing the specific services provided under account management. However, the total value of approximately $17.5 million over six years averages to about $2.9 million annually. This figure needs to be compared against similar IT account management contracts within the federal government and private sector to assess if it represents a competitive price. The firm-fixed-price structure provides cost certainty for the government, but the ultimate value depends on the quality and efficiency of the services delivered by Leidos.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a 'full and open competition' solicitation, indicating that all responsible sources were permitted to submit bids. The data shows two bids were received. While two bidders participated, the level of competition might be considered moderate. A higher number of bidders typically leads to more robust price discovery and potentially lower prices for the government. The specific details of the solicitation and evaluation criteria would provide further insight into the effectiveness of the competition.

Taxpayer Impact: The full and open competition, despite receiving only two bids, aims to ensure the government receives the best value. Taxpayers benefit from the potential for competitive pricing, though a limited number of bidders could mean less aggressive pricing than in a more crowded field.

Public Impact

The Internal Revenue Service (IRS) is the primary beneficiary, receiving account management services. These services are crucial for the efficient operation and administration of IRS systems and programs. The contract's impact is likely concentrated within the IRS's IT infrastructure and administrative functions. Workforce implications may include the employment of IT professionals and account managers by Leidos.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if services are highly specialized and difficult to transition.
Reliance on a single contractor for critical account management functions could pose operational risks.
The moderate competition level (2 bidders) might limit aggressive price negotiation.

Positive Signals

Firm-fixed-price contract type helps control costs and provides budget predictability.
Awarded through full and open competition, suggesting an effort to maximize value.
Long contract duration (6 years) allows for stability and continuity of essential services.

Sector Analysis

This contract falls within the Information Technology (IT) services sector, specifically focusing on IT management and support. The IT services market is vast and highly competitive, with numerous companies offering a wide range of solutions. The IRS, as a major federal agency, represents a significant client for IT service providers. Comparable spending benchmarks would involve analyzing other large federal IT contracts for account management, system integration, or IT support services, which often run into millions or tens of millions of dollars annually.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the primary focus was on securing the best technical and price solution from the broader market. Consequently, there are no direct subcontracting implications for small businesses mandated by a set-aside. However, the prime contractor, Leidos, may still engage small businesses as subcontractors depending on their own procurement strategies and the specific needs of the account management services.

Oversight & Accountability

Oversight for this contract would primarily reside with the contracting officers and program managers within the IRS. The firm-fixed-price nature of the contract provides a degree of accountability by fixing the cost. Transparency is facilitated through federal contract databases like FPDS-NG, where contract awards are publicly reported. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to the contract were suspected.

Related Government Programs

IRS IT Modernization Programs
Federal IT Account Management Services
Department of the Treasury IT Contracts
Large-Scale IT Service Delivery Contracts

Risk Flags

Moderate competition level may limit price discovery.
Potential for service relevance to decline over the long contract term without adaptation.
Contract awarded as a delivery order, requiring understanding of the parent IDIQ contract.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $17.5 million to LEIDOS MANAGEMENT SYSTEMS DESIGNERS, INC.. IGF::OT::IGF FOR OTHER FUNCTIONS - ACCOUNT MANAGEMENT SERVICES (AMS) - CYRBYME-C

Who is the contractor on this award?

The obligated recipient is LEIDOS MANAGEMENT SYSTEMS DESIGNERS, 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 $17.5 million.

What is the period of performance?

Start: 2016-11-14. End: 2022-11-13.

What specific account management services are included under this contract?

The provided data does not detail the specific account management services. However, typical account management functions in an IT context can include managing client relationships, overseeing service level agreements (SLAs), coordinating technical support, managing IT assets, ensuring compliance, and acting as a liaison between the client (IRS) and the service provider (Leidos). These services are critical for maintaining the operational integrity and efficiency of the IRS's IT infrastructure and systems.

How does the $17.5 million total contract value compare to similar federal IT account management contracts?

Without specific details on the scope and deliverables, a direct comparison is difficult. However, $17.5 million over six years equates to an average annual spend of approximately $2.9 million. This is a substantial amount, indicative of a significant IT support requirement. Federal IT contracts of this magnitude are common for large agencies like the IRS, especially for core functions. Benchmarking would require analyzing contracts with similar NAICS codes (e.g., 541519) and service descriptions for agencies of comparable size and complexity to determine if the pricing is competitive.

What are the potential risks associated with a six-year firm-fixed-price contract for IT account management?

A significant risk with a long-term, firm-fixed-price contract is that the contractor may face challenges in adapting to evolving technological landscapes or changing IRS requirements within the fixed price. If costs increase unexpectedly for the contractor due to unforeseen circumstances or scope creep (if not managed contractually), their profit margins could be squeezed, potentially impacting service quality. Conversely, if technology costs decrease or efficiencies are found, the government might be overpaying relative to current market rates. The IRS must maintain strong contract management to ensure services remain relevant and effective throughout the contract's life.

What is Leidos Management Systems Designers, Inc.'s track record with the IRS or similar federal agencies?

Leidos is a major government contractor with a substantial history of serving federal agencies, including the IRS and Department of Defense. Their track record typically involves large-scale IT services, systems integration, and support. While specific performance details for this particular contract are not provided, Leidos generally has experience managing complex IT programs. A deeper dive into their past performance ratings, any past disputes, or awards on similar contracts would offer a more comprehensive view of their reliability and capability in fulfilling IRS requirements.

How has federal spending on IT account management services evolved, and does this contract align with trends?

Federal spending on IT services, including account management, has generally trended upwards as agencies modernize systems and increase reliance on technology. There's also a growing emphasis on cybersecurity and cloud migration, which influences the nature of account management. This contract, awarded in 2016 and ending in 2022, reflects a period of sustained investment in IT infrastructure. Its alignment with current trends would depend on whether the services evolved to incorporate newer technologies and security protocols, which is not detailed in the provided data.

What does the limited number of bidders (2) suggest about the market for these specific IT account management services?

A limited number of bidders, such as two in this case, can suggest several market dynamics. It might indicate that the market for this specific type of specialized IT account management service is concentrated among a few large, capable providers. Alternatively, it could imply that the solicitation requirements were highly specific, or the contract value, while substantial, did not attract a wider range of competitors. This could potentially reduce competitive pressure on pricing compared to a more crowded field, although the 'full and open' nature suggests an attempt to cast a wide net.

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 4274

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2677 PROSPERITY AVE STE 700, FAIRFAX, VA, 22031

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

Financial Breakdown

Contract Ceiling: $24,210,142

Exercised Options: $18,543,709

Current Obligation: $17,529,401

Actual Outlays: $7,697,767

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: TIRNO11D00024

IDV Type: IDC

Timeline