Treasury's IRS Spends $26.1M on Application Development and IT Support for IRIS System
Contract Overview
Contract Amount: $26,114,798 ($26.1M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of the Treasury
Start Date: 2017-03-08
End Date: 2021-09-07
Contract Duration: 1,644 days
Daily Burn Rate: $15.9K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: IGF::OT::IGF FOR OTHER FUNCTIONS - APPLICATION DEVELOPMENT-SUBMISSION PROCESSING, INFORMATION RETURN INTAKE SYSTEM (IRIS), TECHNICAL LABOR AND SME SUPPORT CYRBYME-NA
Place of Performance
Location: LANHAM, PRINCE GEORGES County, MARYLAND, 20706
State: Maryland Government Spending
Plain-Language Summary
Department of the Treasury obligated $26.1 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: IGF::OT::IGF FOR OTHER FUNCTIONS - APPLICATION DEVELOPMENT-SUBMISSION PROCESSING, INFORMATION RETURN INTAKE SYSTEM (IRIS), TECHNICAL LABOR AND SME SUPPORT CYRBYME-NA Key points: 1. Contract awarded to Northrop Grumman Systems Corporation for application development and technical support. 2. The contract covers the Information Return Intake System (IRIS), crucial for tax submissions. 3. Spending is concentrated in Maryland, indicating a specific geographic focus for this service. 4. The contract duration of 1644 days suggests a long-term need for these IT services.
Value Assessment
Rating: good
The $26.1 million contract value appears reasonable for a multi-year IT support and development project of this nature. Benchmarking against similar application development and maintenance contracts for large government systems would provide a more precise assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a robust price discovery process. This method typically leads to more competitive pricing as multiple vendors have the opportunity to bid.
Taxpayer Impact: The use of full and open competition is generally beneficial for taxpayers, as it promotes efficiency and cost-effectiveness in government spending.
Public Impact
Taxpayer data processing relies on the IRIS system, making its development and support critical for IRS operations. Efficient information intake systems directly impact the IRS's ability to process tax returns and manage revenue. The contract's duration suggests ongoing reliance on these services, highlighting the importance of system stability and performance.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for vendor lock-in despite initial competition.
- Reliance on a single vendor for critical system support.
- Scope creep could increase costs beyond initial estimates.
Positive Signals
- Awarded through full and open competition.
- Firm Fixed Price contract type limits cost overruns.
- Long-term contract provides stability for essential IRS functions.
Sector Analysis
This contract falls within the IT services sector, specifically application development and technical support. Spending benchmarks for similar government IT contracts vary widely based on complexity and duration, but $26.1 million over four years for a critical system is within a common range.
Small Business Impact
The data does not indicate any specific provisions or set-asides for small businesses in this contract. The prime contractor, Northrop Grumman, is a large corporation, suggesting limited direct opportunities for small businesses unless they are subcontractors.
Oversight & Accountability
The contract was awarded by the Department of the Treasury's Internal Revenue Service. Oversight would typically involve contract officers and program managers ensuring performance and adherence to terms, with potential for IG reviews.
Related Government Programs
- Other Computer Related Services
- Department of the Treasury Contracting
- Internal Revenue Service Programs
Risk Flags
- Contract awarded to a large, established defense contractor.
- Long contract duration (1644 days).
- Specific system support (IRIS) indicates critical function.
- No explicit mention of small business participation.
- Potential for vendor lock-in over time.
Tags
other-computer-related-services, department-of-the-treasury, md, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of the Treasury awarded $26.1 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. IGF::OT::IGF FOR OTHER FUNCTIONS - APPLICATION DEVELOPMENT-SUBMISSION PROCESSING, INFORMATION RETURN INTAKE SYSTEM (IRIS), TECHNICAL LABOR AND SME SUPPORT CYRBYME-NA
Who is the contractor on this award?
The obligated recipient is NORTHROP GRUMMAN SYSTEMS CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of the Treasury (Internal Revenue Service).
What is the total obligated amount?
The obligated amount is $26.1 million.
What is the period of performance?
Start: 2017-03-08. End: 2021-09-07.
What is the specific functionality of the IRIS system and how critical is it to the IRS's core mission?
The Information Return Intake System (IRIS) is crucial for the IRS's mission as it handles the submission and processing of information returns, such as W-2s and 1099s. This system is vital for accurate tax collection and enforcement, ensuring that income reported by third parties aligns with taxpayer filings. Its efficient operation directly impacts the IRS's ability to identify discrepancies and manage taxpayer accounts effectively.
What are the potential risks associated with relying on Northrop Grumman for long-term support of the IRIS system?
Potential risks include vendor lock-in, where the IRS becomes overly dependent on Northrop Grumman's expertise and proprietary knowledge, making future transitions difficult or costly. There's also a risk of reduced innovation if the vendor prioritizes maintaining the status quo over introducing improvements. Furthermore, any performance issues or security breaches by the vendor could have significant operational and reputational consequences for the IRS.
How does the firm fixed price contract structure impact the overall effectiveness and value for money in this IT support contract?
The Firm Fixed Price (FFP) structure is intended to provide cost certainty for the government, making the $26.1 million budget predictable. This structure incentivizes the contractor to control costs and perform efficiently to maximize profit. For effectiveness, it ensures the IRS receives the defined services within budget, but it may limit flexibility for scope changes or incorporating new technological advancements without formal contract modifications, potentially impacting long-term system evolution.
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: RTPP 4323
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 4807 STONECROFT BLVD, CHANTILLY, VA, 20151
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $58,614,677
Exercised Options: $32,021,357
Current Obligation: $26,114,798
Actual Outlays: $13,403,787
Subaward Activity
Number of Subawards: 100
Total Subaward Amount: $61,118,520
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: TIRNO11D00027
IDV Type: IDC
Timeline
Start Date: 2017-03-08
Current End Date: 2021-09-07
Potential End Date: 2021-09-07 18:08:29
Last Modified: 2022-09-14
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