IRS Chief Counsel awards $3.38M contract for expert witness services to FTI Consulting, Inc

Contract Overview

Contract Amount: $3,383,101 ($3.4M)

Contractor: FTI Consulting, Inc.

Awarding Agency: Department of the Treasury

Start Date: 2025-08-15

End Date: 2030-08-14

Contract Duration: 1,825 days

Daily Burn Rate: $1.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: LABOR HOURS

Sector: Other

Official Description: TRACS0005551 APPROVED 8/6/25. EXPERT WITNESS SERVICES ARE REQUIRED FOR LITIGATION OF A CASE BY IRS, CHIEF COUNSEL.

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20004

State: District of Columbia Government Spending

Plain-Language Summary

Department of the Treasury obligated $3.4 million to FTI CONSULTING, INC. for work described as: TRACS0005551 APPROVED 8/6/25. EXPERT WITNESS SERVICES ARE REQUIRED FOR LITIGATION OF A CASE BY IRS, CHIEF COUNSEL. Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Duration of five years suggests a long-term need for these specialized services. 3. The contract's value is moderate within the context of legal support services. 4. Services are critical for IRS litigation, indicating a high-stakes operational requirement. 5. FTI Consulting, Inc. is a known entity in providing complex consulting services. 6. The absence of a competitive process raises questions about optimal value for taxpayer funds.

Value Assessment

Rating: fair

The contract value of $3.38 million over five years for expert witness services appears reasonable for specialized litigation support. However, without a competitive bidding process, it is difficult to benchmark against market rates or determine if the best possible value was achieved. Similar contracts for expert testimony in complex legal cases can range significantly in price depending on the expertise required and the duration of engagement. The absence of competition means a direct comparison is challenging, but the price point itself does not immediately suggest overpayment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. This typically occurs when only one vendor is capable of providing the required services, or in urgent situations. The lack of competition means there were no other bidders to compare against, and the IRS Chief Counsel did not have the benefit of multiple proposals to drive down costs through a bidding war. This approach can sometimes lead to higher prices than if the contract had been competed.

Taxpayer Impact: Sole-source awards mean taxpayers may not be getting the most cost-effective solution, as the government did not explore options from multiple providers to secure the best price.

Public Impact

Taxpayers benefit indirectly through the effective prosecution and defense of tax litigation by the IRS. Expert witness services will be provided to support the IRS Chief Counsel's legal cases. The geographic impact is national, as IRS litigation can occur anywhere in the United States. The contract supports specialized legal and consulting professionals, not a broad workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Long contract duration may not account for evolving litigation needs or market changes.
Lack of transparency in the sole-source justification process.

Positive Signals

Addresses a critical need for specialized legal support for the IRS.
FTI Consulting, Inc. is a reputable firm with relevant expertise.
Contract duration provides stability for ongoing litigation support.

Sector Analysis

The legal services sector, particularly within government, relies heavily on specialized consulting firms for expert witness testimony in complex litigation. The IRS, facing a high volume of tax disputes, frequently requires such support. This contract fits within the broader professional, scientific, and technical services category, specifically focusing on litigation support. Benchmarking is difficult due to the specialized nature and sole-source award, but government spending on legal and consulting services is substantial across various agencies.

Small Business Impact

This contract does not appear to include a small business set-aside. Given the specialized nature of expert witness services for complex IRS litigation, it is likely that larger, specialized firms are typically engaged. There is no indication of subcontracting requirements for small businesses within the provided data, suggesting limited direct impact on the small business ecosystem for this specific award.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Treasury and the Internal Revenue Service's internal procurement and legal departments. Accountability measures would be tied to the performance clauses within the contract and the delivery of expert witness services as stipulated. Transparency is limited due to the sole-source nature of the award, with fewer public details available compared to competed contracts. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

IRS Litigation Support Services
Department of Justice Expert Witness Contracts
Federal Legal Counsel Support
Tax Law Expert Services

Risk Flags

Sole-source award
Lack of competition
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $3.4 million to FTI CONSULTING, INC.. TRACS0005551 APPROVED 8/6/25. EXPERT WITNESS SERVICES ARE REQUIRED FOR LITIGATION OF A CASE BY IRS, CHIEF COUNSEL.

Who is the contractor on this award?

The obligated recipient is FTI CONSULTING, 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 $3.4 million.

What is the period of performance?

Start: 2025-08-15. End: 2030-08-14.

What is FTI Consulting, Inc.'s track record with the federal government, particularly the IRS?

FTI Consulting, Inc. has a significant track record of contracts with various U.S. federal agencies, including the Department of the Treasury and the Internal Revenue Service. They are known for providing a wide range of consulting services, including financial, economic, and litigation support. Their past performance with the government often involves complex financial investigations, forensic accounting, and expert testimony in high-stakes cases. While specific details of past IRS contracts would require deeper database searches, FTI's general profile suggests they are a capable provider for the services outlined in this award. Their history indicates experience in handling sensitive and complex governmental matters, which aligns with the needs of the IRS Chief Counsel.

How does the $3.38 million value compare to similar expert witness contracts for tax litigation?

Benchmarking the $3.38 million value for expert witness services over five years is challenging without direct comparisons of similar sole-source awards for IRS litigation. However, expert witness services in complex tax cases can be very costly, with rates for highly specialized experts often running into hundreds or thousands of dollars per hour. The total value suggests a significant number of hours or a high level of expertise required over the contract's lifespan. Comparable contracts for major federal litigation support can easily reach millions of dollars, especially when involving intricate financial analysis, economic modeling, or specialized industry knowledge pertinent to tax law. The five-year duration indicates a sustained need, making the annual average expenditure around $676,000, which is substantial but not necessarily excessive for critical legal support.

What are the primary risks associated with a sole-source award for essential litigation support?

The primary risks associated with a sole-source award for essential litigation support include potential overpayment due to a lack of competitive pricing, reduced incentive for the contractor to innovate or provide exceptional service beyond the contract's minimum requirements, and a lack of transparency in the procurement process. Taxpayers may not receive the best value for their money when alternatives are not explored. Furthermore, if the sole-source provider experiences performance issues or becomes unavailable, the government faces significant disruption in critical operations, with limited immediate alternatives. The absence of competition can also mask inefficiencies or suboptimal service delivery, as there is no market pressure to improve.

How effective is expert witness testimony generally in IRS litigation, and how does this contract support that effectiveness?

Expert witness testimony is often crucial in IRS litigation, particularly in cases involving complex financial transactions, valuation disputes, accounting principles, or economic damages. It helps judges and juries understand intricate technical details that are beyond the knowledge of laypersons. This contract directly supports the effectiveness of IRS litigation by ensuring that the Chief Counsel's office has access to qualified experts who can provide credible testimony, analyze evidence, and assist in case strategy. By securing these services, the IRS aims to strengthen its position in legal disputes, potentially leading to more favorable outcomes and increased tax revenue recovery or defense. The long-term nature of the contract suggests a commitment to building robust legal support capabilities.

What is the historical spending pattern for expert witness services by the IRS Chief Counsel's office?

Historical spending patterns for expert witness services by the IRS Chief Counsel's office typically show a consistent need for such support, reflecting the complexity and volume of tax litigation. While specific aggregate data for this office's expert witness spending over many years is not provided here, it is understood that the IRS frequently engages external experts. Spending can fluctuate based on the number and complexity of cases, as well as the specific areas of expertise required. Contracts for these services can range from small, short-term engagements for specific cases to larger, multi-year agreements for ongoing litigation support, similar to the contract awarded here. The trend is generally towards utilizing specialized external expertise to augment internal capabilities.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Other Professional, Scientific, and Technical Services › All Other Professional, Scientific, and Technical Services

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: LABOR HOURS (Z)

Evaluated Preference: NONE

Contractor Details

Address: 555 12TH STREET NORTH WEST, WASHINGTON, DC, 20004

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

Financial Breakdown

Contract Ceiling: $3,383,101

Exercised Options: $3,383,101

Current Obligation: $3,383,101

Actual Outlays: $408,305

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline