Treasury's IRS awards $1.18M contract for expert witness services, raising questions about competition and value

Contract Overview

Contract Amount: $118,825 ($118.8K)

Contractor: Seth Blumsack

Awarding Agency: Department of the Treasury

Start Date: 2025-01-28

End Date: 2030-01-27

Contract Duration: 1,825 days

Daily Burn Rate: $65/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: LABOR HOURS

Sector: Other

Official Description: EXPERT WITNESS SERVICES

Place of Performance

Location: DECATUR, DEKALB County, GEORGIA, 30033

State: Georgia Government Spending

Plain-Language Summary

Department of the Treasury obligated $118,825 to SETH BLUMSACK for work described as: EXPERT WITNESS SERVICES Key points: 1. Contract awarded on a sole-source basis, limiting potential cost savings from competition. 2. The duration of the contract (5 years) suggests a long-term need for these specialized services. 3. The service category, 'All Other Professional, Scientific, and Technical Services,' is broad and requires further scrutiny. 4. The contract type is a Purchase Order, which can be less formal than other contract types. 5. The award is for labor hours, indicating a focus on personnel time rather than fixed deliverables. 6. The contract is notated as 'NOT COMPETED UNDER SAP,' suggesting it may have bypassed standard competitive procedures for smaller procurements.

Value Assessment

Rating: questionable

Benchmarking the value of expert witness services is challenging without specific deliverables or comparable contracts. However, the sole-source nature of this award, coupled with a 5-year term, suggests a potential lack of competitive pressure to drive down costs. The IRS should ensure that the hourly rates are aligned with market standards for similar expertise. Without more detailed information on the scope of work and the specific qualifications of the expert, a definitive value assessment is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not openly competed. This approach is typically used when only one source is capable of meeting the requirement. The lack of competition means that the IRS did not benefit from the price discovery that occurs in a competitive bidding process, potentially leading to higher costs than if multiple vendors had vied for the contract.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. The IRS should have a strong justification for not seeking multiple quotes or proposals.

Public Impact

The Internal Revenue Service (IRS) will benefit from specialized expert witness services. These services are likely to support litigation, investigations, or complex tax cases. The geographic impact is national, as IRS legal and enforcement actions can occur anywhere. The contract supports a specific professional service role, with potential implications for legal and financial expertise within the government.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition.
Long contract duration (5 years) may not reflect evolving needs or market rates.
Lack of detailed scope of work makes value assessment difficult.
Awarded under 'NOT COMPETED UNDER SAP' could indicate bypassed standard procedures.

Positive Signals

Procurement of specialized expertise essential for IRS operations.
Contract awarded to a specific expert (SETH BLUMSACK) suggesting targeted skill acquisition.
Purchase Order format allows for flexibility in tasking.

Sector Analysis

The professional, scientific, and technical services sector is vast, encompassing a wide range of specialized expertise. Expert witness services fall under this umbrella, often supporting legal proceedings, regulatory compliance, and complex problem-solving. The market for such services is driven by demand from government agencies, corporations, and law firms. Benchmarking specific expert witness contract values is difficult due to the highly specialized and often unique nature of the services required.

Small Business Impact

This contract does not appear to have a small business set-aside component (ss=false, sb=false). As a sole-source award, it is unlikely that subcontracting opportunities for small businesses were a primary consideration in the award process. The focus is on securing a specific expert's services rather than fostering broader small business participation.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Treasury's Inspector General and the IRS's internal audit and compliance functions. The use of a Purchase Order may involve less stringent documentation requirements compared to larger, more formal contracts. Transparency could be enhanced by making the justification for the sole-source award publicly available.

Related Government Programs

Legal Services
Professional Services
Consulting Services
Expert Witness Services
Government Contracting

Risk Flags

Sole-source award lacks competition.
Long contract duration may not be optimal.
Lack of detailed scope of work.
Potential for higher costs due to non-competitive nature.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $118,825 to SETH BLUMSACK. EXPERT WITNESS SERVICES

Who is the contractor on this award?

The obligated recipient is SETH BLUMSACK.

Which agency awarded this contract?

Awarding agency: Department of the Treasury (Internal Revenue Service).

What is the total obligated amount?

The obligated amount is $118,825.

What is the period of performance?

Start: 2025-01-28. End: 2030-01-27.

What is the specific expertise of Seth Blumsack that necessitates a sole-source award?

The provided data does not detail the specific expertise of Seth Blumsack. However, for a sole-source award to be justified, the contracting agency (IRS in this case) must demonstrate that only this particular individual or entity possesses the unique skills, knowledge, or qualifications essential for the required task. This could involve highly specialized technical knowledge, proprietary information, or a proven track record in a niche area relevant to IRS operations, such as complex financial forensics, specific tax law interpretation, or advanced data analysis pertinent to tax fraud investigations. The justification would typically be documented in a Justification for Other Than Full and Open Competition (JOFOC).

How does the $1.18M contract value compare to similar expert witness contracts awarded by the IRS or other federal agencies?

Direct comparison of the $1.18M contract value is difficult without knowing the specific scope of services and duration. Expert witness fees can vary dramatically based on the complexity of the case, the expert's reputation, and the time commitment required. Contracts for expert witnesses can range from a few thousand dollars for consultation on a single issue to millions for long-term support on high-profile litigation. The 5-year duration of this contract ($1.18M total) suggests an average annual value of approximately $236,000. This figure needs to be assessed against the specific demands of the IRS's needs. Without more granular data on the services rendered and the market rates for comparable expertise, it's challenging to definitively state if this represents a competitive or inflated price.

What are the primary risks associated with awarding a 5-year contract on a sole-source basis for expert witness services?

The primary risks associated with a sole-source, 5-year contract for expert witness services include: 1. **Cost Overruns:** Without competitive bidding, there's a reduced incentive for the contractor to offer the most cost-effective solution. The IRS may end up paying more than necessary over the contract's life. 2. **Lack of Innovation/Stagnation:** A sole-source provider may become complacent, potentially leading to outdated methodologies or a lack of proactive problem-solving compared to a competitive environment where providers strive to offer cutting-edge solutions. 3. **Dependency and Lock-in:** The IRS becomes heavily reliant on this specific expert, making it difficult and potentially costly to switch providers if performance issues arise or if needs change significantly. 4. **Limited Market Insight:** The agency may lose touch with broader market trends and available expertise, potentially missing out on more suitable or cost-effective options that emerge over the 5-year period. 5. **Potential for Perceived Bias:** Sole-source awards can sometimes raise concerns about fairness and objectivity, although this is more of a reputational risk than a direct performance risk.

What performance metrics or oversight mechanisms are likely in place to ensure the effectiveness of these expert witness services?

Given the nature of expert witness services, performance metrics might focus on the quality and timeliness of reports, the clarity and effectiveness of testimony, adherence to deadlines, and the expert's ability to support the IRS's legal or investigative objectives. Oversight would likely involve regular reviews by the contracting officer's representative (COR) or the legal team utilizing the expert. The IRS's Office of Chief Counsel or equivalent would be responsible for monitoring the expert's contribution to case outcomes. Formal performance evaluations might be conducted periodically, especially if the contract includes options for extension or renewal. The Inspector General's office could also conduct audits to ensure compliance and value for money.

How does this contract align with the IRS's overall spending patterns for professional and technical services?

The IRS, like many large federal agencies, procures a significant volume of professional and technical services annually to support its diverse mission, which includes tax administration, enforcement, and taxpayer services. Spending on expert witnesses is a component of its broader legal and investigative support budget. While specific figures for expert witness services are not detailed here, the IRS's total spending on services can run into billions of dollars. This $1.18M contract, while substantial for a single award, likely represents a small fraction of the IRS's overall service procurement. Its alignment depends on whether such sole-source awards for specialized expertise are a common practice within the agency for specific needs, or if this is an outlier.

What is the historical spending trend for expert witness services at the IRS, and does this contract represent an increase or decrease?

The provided data does not include historical spending trends for expert witness services at the IRS. To determine if this $1.18M contract represents an increase or decrease, a comprehensive analysis of past IRS procurements for similar services over several fiscal years would be necessary. This would involve searching federal procurement databases (like FPDS or USASpending) for contracts categorized under expert witness services, legal support, or related professional services awarded to the IRS. Without this historical context, it is impossible to ascertain whether this contract is indicative of a growing reliance on external experts, a stable demand, or a reduction in such procurements.

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 UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Offers Received: 1

Pricing Type: LABOR HOURS (Z)

Evaluated Preference: NONE

Contractor Details

Address: 146 FIREFLY LN, SPRING MILLS, PA, 16875

Business Categories: Category Business, Self-Certified Small Disadvantaged Business, Small Business, Sole Proprietorship, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $118,825

Exercised Options: $118,825

Current Obligation: $118,825

Actual Outlays: $36,375

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Timeline