Treasury's IRS contract with The CBE Group, Inc. for tax collection services awarded $52.6M over 5 years

Contract Overview

Contract Amount: $52,607,729 ($52.6M)

Contractor: THE CBE Group, Inc.

Awarding Agency: Department of the Treasury

Start Date: 2016-09-23

End Date: 2021-09-22

Contract Duration: 1,825 days

Daily Burn Rate: $28.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::CL::IGF FOR CLOSELY ASSOCIATED - TAX COLLECTION SERVICES PURSUANT TO THE FIXING AMERICA'S SURFACE TRANSPORTATION ACT

Place of Performance

Location: CEDAR FALLS, BLACK HAWK County, IOWA, 50613

State: Iowa Government Spending

Plain-Language Summary

Department of the Treasury obligated $52.6 million to THE CBE GROUP, INC. for work described as: IGF::CL::IGF FOR CLOSELY ASSOCIATED - TAX COLLECTION SERVICES PURSUANT TO THE FIXING AMERICA'S SURFACE TRANSPORTATION ACT Key points: 1. Contract value of $52.6M over five years suggests a significant investment in tax collection services. 2. The contract was awarded through full and open competition, indicating a potentially competitive bidding process. 3. The fixed-price contract type may offer cost certainty for the government, but could limit flexibility. 4. The duration of 1825 days (5 years) provides a stable, long-term engagement for the contractor. 5. The North American Industry Classification System (NAICS) code 541211 points to accounting services, specifically certified public accountants. 6. The contract was awarded as a delivery order, suggesting it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle.

Value Assessment

Rating: fair

Benchmarking the value of this contract requires more granular data on the specific services provided and the volume of tax debt collected. However, a $52.6 million award over five years for tax collection services, averaging over $10 million annually, appears to be within a reasonable range for large-scale government contracts of this nature. Without comparable contract data for similar tax collection efforts or detailed performance metrics, a precise value-for-money assessment is challenging. The fixed-price nature of the contract provides some cost predictability.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' suggesting that all responsible sources were permitted to submit bids. The presence of 4 bids indicates a degree of competition, which is generally positive for price discovery and ensuring the government receives competitive pricing. However, the specific number of bidders (4) in relation to the total number of potential qualified firms in the market would provide a clearer picture of the actual competitive intensity.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down costs through a competitive bidding process, leading to more efficient use of public funds.

Public Impact

Taxpayers who owe back taxes are the primary beneficiaries, as this contract facilitates the collection of delinquent debts. The services delivered include the collection of delinquent federal taxes, aiming to improve government revenue. The contract's geographic impact is national, covering the collection of federal tax debts across the United States. The contract supports a workforce within The CBE Group, Inc., likely involving collection agents and administrative staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for aggressive collection tactics impacting taxpayer relations.
Dependence on a single contractor for a critical revenue-generating function.
Performance metrics and oversight are crucial to ensure fair and effective collection.

Positive Signals

Awarded through full and open competition, suggesting a competitive process.
Fixed-price contract provides cost certainty for the government.
Long-term contract duration (5 years) offers stability for service delivery.

Sector Analysis

The tax collection services sector is a critical component of government finance, ensuring revenue streams are maintained. This contract falls within the broader professional, scientific, and technical services industry, specifically related to accounting and collections. The market for federal tax collection services can be competitive, with specialized firms vying for government contracts. The size of this contract, $52.6 million over five years, positions it as a significant award within this niche, likely reflecting the scale and complexity of the IRS's collection needs.

Small Business Impact

The data indicates that small business participation was not a specific set-aside for this contract (ss: false, sb: false). This suggests that the primary award was made to a large business. There is no explicit information on subcontracting plans for small businesses within the provided data. Therefore, the direct impact on the small business ecosystem from this specific contract award appears limited, unless The CBE Group, Inc. voluntarily engages small businesses as subcontractors.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program managers within the IRS. The contract's performance would be monitored against established metrics and terms. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse related to the contract. Transparency is generally maintained through contract award databases and public reporting, though specific operational details of collection activities may be sensitive.

Related Government Programs

IRS Debt Collection Programs
Federal Tax Enforcement
Government Revenue Assurance Services
Accounts Receivable Management Contracts

Risk Flags

Potential for aggressive collection practices
Dependence on contractor performance for revenue recovery
Need for robust oversight to ensure compliance and fairness

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $52.6 million to THE CBE GROUP, INC.. IGF::CL::IGF FOR CLOSELY ASSOCIATED - TAX COLLECTION SERVICES PURSUANT TO THE FIXING AMERICA'S SURFACE TRANSPORTATION ACT

Who is the contractor on this award?

The obligated recipient is THE CBE GROUP, 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 $52.6 million.

What is the period of performance?

Start: 2016-09-23. End: 2021-09-22.

What is the historical spending pattern for tax collection services by the IRS, and how does this contract compare?

Historical spending on tax collection services by the IRS can fluctuate based on legislative changes, economic conditions, and enforcement priorities. While specific historical dollar amounts for similar contracts are not provided in this data snippet, the $52.6 million award over five years ($10.52 million annually on average) represents a substantial, ongoing investment. To compare effectively, one would need to analyze IRS budget allocations for contracted collection services over previous fiscal years and identify comparable contract vehicles, considering factors like inflation, scope of services, and the number of bidders. This contract's value suggests a significant portion of the IRS's outsourced collection efforts are consolidated under this agreement.

What specific types of taxes or debts is The CBE Group, Inc. authorized to collect under this contract?

The contract description mentions 'TAX COLLECTION SERVICES PURSUANT TO THE FIXING AMERICA'S SURFACE TRANSPORTATION ACT.' While the Act itself focuses on transportation infrastructure, the contract's purpose is broader tax collection. Typically, IRS contracts for debt collection services cover a range of delinquent federal taxes, including income tax, employment tax, and excise tax liabilities. The specific scope would be detailed in the contract's statement of work, outlining which types of debts, age of debt, and taxpayer segments are assigned to the contractor. Without the full contract details, it's assumed to cover a broad spectrum of federal tax delinquencies.

What are the performance metrics and key performance indicators (KPIs) used to evaluate The CBE Group, Inc.'s effectiveness?

Performance metrics for tax collection contracts typically focus on key indicators such as the amount of debt collected (dollars recovered), the cost per dollar collected, taxpayer satisfaction or complaint rates, compliance with legal and ethical collection standards, and timely reporting. The IRS would establish specific KPIs within the contract's Performance Work Statement (PWS). Success would be measured by the contractor's ability to recover delinquent taxes efficiently and effectively while adhering to all relevant regulations and maintaining taxpayer rights. Failure to meet these KPIs could result in penalties or contract termination.

How does the pricing structure (Firm Fixed Price) impact the government's risk and the contractor's incentive?

A Firm Fixed Price (FFP) contract structure means the contractor, The CBE Group, Inc., is obligated to complete the work for a predetermined price, regardless of the actual costs incurred. This shifts the cost risk primarily to the contractor. For the government, FFP offers budget certainty and predictability. It incentivizes the contractor to control costs and operate efficiently to maximize profit. However, it can also disincentivize scope changes or additional work not initially defined, potentially requiring contract modifications if the IRS needs to adjust the services provided. For tax collection, FFP aligns the contractor's incentive with efficient recovery.

What is the track record of The CBE Group, Inc. with government contracts, particularly with the IRS or similar agencies?

The CBE Group, Inc. has a history of performing government contracts, including work with federal agencies. Information available through public contract databases often details past performance, including contract values, agencies served, and contract types. A thorough review would involve examining their performance on previous IRS contracts or similar debt collection agreements with other federal bodies. Key aspects to assess would include their history of meeting performance targets, any past performance issues or disputes, and their overall reputation for reliability and compliance in handling sensitive government functions like tax collection.

What is the potential impact of this contract on the overall efficiency and effectiveness of federal tax collection?

This contract represents a significant portion of the IRS's strategy for collecting delinquent taxes through external partners. Its effectiveness hinges on the contractor's ability to locate, contact, and secure payment from delinquent taxpayers efficiently and compliantly. A well-executed contract can significantly boost revenue recovery, reduce the burden on internal IRS resources, and ensure fairness in the tax system by collecting owed funds. Conversely, poor performance could lead to lost revenue, increased taxpayer complaints, and potential damage to the IRS's reputation. The scale of this award suggests it's intended to make a material positive impact on collection rates.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Accounting, Tax Preparation, Bookkeeping, and Payroll Services › Offices of Certified Public Accountants

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: TIRNO16Q00085

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1309 TECHNOLOGY PKWY, CEDAR FALLS, IA, 50613

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

Financial Breakdown

Contract Ceiling: $162,095,342

Exercised Options: $52,607,729

Current Obligation: $52,607,729

Actual Outlays: $39,126,140

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: GS23F0230P

IDV Type: FSS

Timeline