Treasury's $16.7M Digitalization Contract Awarded to VASTEC INC for Tax Return Processing

Contract Overview

Contract Amount: $16,665,304 ($16.7M)

Contractor: Vastec Inc

Awarding Agency: Department of the Treasury

Start Date: 2025-09-15

End Date: 2026-09-14

Contract Duration: 364 days

Daily Burn Rate: $45.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 8

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: DIGITALIZATION-AS-A-SERVICE, DIGITALIZING PAPER TAX AND INFORMATION RETURNS.

Place of Performance

Location: TAMPA, HILLSBOROUGH County, FLORIDA, 33602

State: Florida Government Spending

Plain-Language Summary

Department of the Treasury obligated $16.7 million to VASTEC INC for work described as: DIGITALIZATION-AS-A-SERVICE, DIGITALIZING PAPER TAX AND INFORMATION RETURNS. Key points: 1. The contract aims to digitize paper tax and information returns, a crucial step for modernizing IRS operations. 2. VASTEC INC secured this award under full and open competition, indicating a competitive bidding process. 3. The primary risk lies in the successful execution of the digitalization process and data integrity. 4. This falls within the IT sector, specifically Computing Infrastructure Providers, Data Processing, and Web Hosting.

Value Assessment

Rating: good

The award amount of $16.7M for a 364-day duration appears reasonable given the scope of digitalizing tax and information returns. Benchmarking against similar large-scale data processing and digitization contracts would provide a more precise assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through full and open competition, suggesting that multiple vendors had the opportunity to bid. This method generally promotes competitive pricing and ensures the government receives the best value.

Taxpayer Impact: By digitizing paper returns, the IRS can improve efficiency, reduce storage costs, and enhance data accessibility, leading to potential long-term taxpayer savings through streamlined processes.

Public Impact

Improved taxpayer services through faster processing and easier access to information. Enhanced data security and reduced risk of physical document loss or damage. Potential for more efficient tax collection and fraud detection through better data analytics.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Data security and privacy during the digitalization process.
Scalability of VASTEC's solution to handle the IRS's volume of returns.
Potential for vendor lock-in if the system is not designed for interoperability.

Positive Signals

Modernization of critical IRS infrastructure.
Leveraging advanced technology for improved government services.
Potential for cost savings through automation and efficiency gains.

Sector Analysis

This contract falls under the IT sector, specifically focusing on data processing and hosting services. Spending in this area is significant as government agencies increasingly adopt digital solutions to improve efficiency and service delivery.

Small Business Impact

While VASTEC INC is the prime contractor, the contract details do not specify any subcontracting goals for small businesses. Further analysis would be needed to determine the extent of small business participation.

Oversight & Accountability

The IRS, as part of the Department of the Treasury, is subject to various oversight mechanisms, including congressional reviews and internal audits, to ensure contract compliance and effective use of funds.

Related Government Programs

Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services
Department of the Treasury Contracting
Internal Revenue Service Programs

Risk Flags

Potential for data breaches or security vulnerabilities.
Risk of project delays impacting IRS operations.
Challenges in ensuring data accuracy and integrity during conversion.
Dependence on a single vendor for a critical function.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $16.7 million to VASTEC INC. DIGITALIZATION-AS-A-SERVICE, DIGITALIZING PAPER TAX AND INFORMATION RETURNS.

Who is the contractor on this award?

The obligated recipient is VASTEC 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 $16.7 million.

What is the period of performance?

Start: 2025-09-15. End: 2026-09-14.

What is the projected long-term cost savings associated with this digitalization effort compared to maintaining paper-based systems?

The long-term cost savings are expected to stem from reduced physical storage needs, faster processing times leading to quicker revenue collection, and improved data analytics capabilities for fraud detection and compliance. While initial investment is significant, the efficiency gains and error reduction in a digital system should outweigh the costs of manual processing and storage over time.

What are the specific data security protocols in place to protect sensitive taxpayer information during the digitalization and storage phases?

The contract likely mandates adherence to stringent federal data security standards, such as NIST guidelines, including encryption, access controls, and regular security audits. VASTEC INC must demonstrate robust measures to prevent unauthorized access, data breaches, and ensure compliance with privacy regulations throughout the digitalization lifecycle.

How will the success of this digitalization project be measured, and what are the key performance indicators (KPIs)?

Success will likely be measured by KPIs such as the percentage of paper returns successfully digitized, data accuracy rates, processing time reduction, system uptime, and user satisfaction from IRS personnel. Performance metrics will be defined in the contract's statement of work to ensure the project meets its objectives.

Industry Classification

NAICS: Information › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 2023H2-25-Q-00048

Offers Received: 8

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1101 CHANNELSIDE DR, TAMPA, FL, 33602

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

Financial Breakdown

Contract Ceiling: $408,164,245

Exercised Options: $65,941,217

Current Obligation: $16,665,304

Actual Outlays: $382,763

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: GS03F0154V

IDV Type: FSS

Timeline