Treasury's IRS Spends $17.6M on Copier Leases from Canon, Lacking Competition
Contract Overview
Contract Amount: $17,572,910 ($17.6M)
Contractor: Canon U.S.A., Inc.
Awarding Agency: Department of the Treasury
Start Date: 2017-04-01
End Date: 2019-09-30
Contract Duration: 912 days
Daily Burn Rate: $19.3K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: IGF::OT::IGF FOR OTHER FUNCTIONS - NATIONAL COPIER/MULTIFUNCTIONAL DEVICE (CMFD)
Place of Performance
Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22203
State: Virginia Government Spending
Plain-Language Summary
Department of the Treasury obligated $17.6 million to CANON U.S.A., INC. for work described as: IGF::OT::IGF FOR OTHER FUNCTIONS - NATIONAL COPIER/MULTIFUNCTIONAL DEVICE (CMFD) Key points: 1. Significant spending on office equipment rental by the IRS. 2. Sole supplier, Canon, dominates this contract. 3. Lack of competition raises concerns about potential overpricing. 4. The sector is office machinery rental and leasing.
Value Assessment
Rating: questionable
The contract value of $17.6 million for copier/multifunctional devices over 912 days appears high, especially given the lack of competition. Benchmarking against similar government or commercial leases for comparable equipment is crucial to assess if the pricing is reasonable.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded as a sole-source procurement, meaning only one vendor, Canon U.S.A., Inc., was considered. This significantly limits price discovery and competitive pressure, potentially leading to inflated costs for taxpayers.
Taxpayer Impact: The absence of competition likely resulted in higher costs than could have been achieved through a competitive bidding process, impacting taxpayer funds.
Public Impact
Taxpayers may be overpaying for essential office equipment due to a lack of competitive bidding. Government agencies rely on these devices for daily operations, making the cost impact significant. The long contract duration (912 days) locks the agency into potentially suboptimal pricing.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- High contract value
- Lack of competition
- Long contract duration
Positive Signals
- Definitive contract award
- Firm fixed price contract
Sector Analysis
The IRS, a part of the Department of the Treasury, leased office machinery and equipment. Spending benchmarks in this sector often favor competitive leasing to secure lower rates for standard equipment.
Small Business Impact
There is no indication that small businesses were involved in this contract, as it was awarded sole-source to a large corporation.
Oversight & Accountability
The sole-source nature of this award warrants scrutiny to ensure the IRS obtained the best possible value and that the pricing is justified. Further review by oversight bodies may be needed.
Related Government Programs
- Office Machinery and Equipment Rental and Leasing
- Department of the Treasury Contracting
- Internal Revenue Service Programs
Risk Flags
- Sole-source award limits competition.
- Potential for overpricing due to lack of competition.
- High contract value warrants scrutiny.
- Long contract duration may lock in unfavorable terms.
Tags
office-machinery-and-equipment-rental-an, department-of-the-treasury, va, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of the Treasury awarded $17.6 million to CANON U.S.A., INC.. IGF::OT::IGF FOR OTHER FUNCTIONS - NATIONAL COPIER/MULTIFUNCTIONAL DEVICE (CMFD)
Who is the contractor on this award?
The obligated recipient is CANON U.S.A., 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 $17.6 million.
What is the period of performance?
Start: 2017-04-01. End: 2019-09-30.
What was the justification for awarding this contract sole-source to Canon U.S.A., Inc.?
The provided data does not specify the justification for the sole-source award. Typically, sole-source contracts are justified when only one responsible source can provide the required supplies or services, or in cases of urgent need. Without this information, it's impossible to fully assess the necessity of bypassing competitive procedures.
How does the per-unit cost of these leased copiers compare to market rates for similar equipment?
The data does not provide a per-unit cost or details on the specific models leased, making direct comparison difficult. However, given the sole-source nature and the significant total value, it is highly probable that the per-unit cost is higher than what could be achieved through competitive bidding processes in the open market.
What is the potential financial risk to taxpayers due to the lack of competition in this contract?
The primary financial risk to taxpayers stems from the potential for inflated pricing. Without competitive pressure, Canon U.S.A., Inc. may have charged more than they would have under a competitive scenario. This lack of price discovery means taxpayers could be overpaying for the leased equipment over the contract's duration.
Industry Classification
NAICS: Real Estate and Rental and Leasing › Commercial and Industrial Machinery and Equipment Rental and Leasing › Office Machinery and Equipment Rental and Leasing
Product/Service Code: LEASE/RENT EQUIPMENT › LEASE OR RENTAL OF EQUIPMENT
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: TIRNO17R00008
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 4100 N. FAIRFAX DRIVE, SUITE 200, ARLINGTON, VA, 22203
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Special Designations
Financial Breakdown
Contract Ceiling: $17,572,910
Exercised Options: $17,572,910
Current Obligation: $17,572,910
Actual Outlays: $659,402
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Timeline
Start Date: 2017-04-01
Current End Date: 2019-09-30
Potential End Date: 2019-09-30 00:00:00
Last Modified: 2025-04-29
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