Treasury's Terrorist Risk Insurance Program Claims System contract awarded to Insurance Services Office, Inc. for $2.87M

Contract Overview

Contract Amount: $2,873,775 ($2.9M)

Contractor: Insurance Services Office, Inc.

Awarding Agency: Department of the Treasury

Start Date: 2023-04-05

End Date: 2027-04-04

Contract Duration: 1,460 days

Daily Burn Rate: $2.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: TERRORIST RISK INSURANCE PROGRAM CLAIMS SYSTEM

Place of Performance

Location: JERSEY CITY, HUDSON County, NEW JERSEY, 07310

State: New Jersey Government Spending

Plain-Language Summary

Department of the Treasury obligated $2.9 million to INSURANCE SERVICES OFFICE, INC. for work described as: TERRORIST RISK INSURANCE PROGRAM CLAIMS SYSTEM Key points: 1. Contract aims to modernize critical claims processing infrastructure. 2. Sole awardee suggests potential for specialized expertise or limited market. 3. Fixed-price contract structure provides cost certainty. 4. Long-term duration indicates a need for sustained system support. 5. Geographic location in New Jersey may impact local economic activity. 6. Focus on insurance administration aligns with the program's core function.

Value Assessment

Rating: good

The contract value of $2.87 million over four years for a claims system appears reasonable, especially considering the specialized nature of terrorist risk insurance. Benchmarking against similar government IT system development or maintenance contracts would provide a clearer picture of value for money. The firm fixed-price structure helps control costs, but the absence of detailed performance metrics makes a definitive value assessment challenging without further data.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of only one awardee, however, raises questions about the level of actual competition achieved. It's possible that only one firm possessed the highly specialized capabilities required for this unique system, or that other potential bidders were deterred by contract requirements or perceived market dynamics.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages competitive pricing. However, if only one viable bidder emerged, the potential for cost savings may have been limited.

Public Impact

Benefits the Department of the Treasury by providing a modernized claims system. Ensures efficient processing of claims related to terrorist risk insurance. Supports the stability of the insurance market by facilitating timely payouts. Impacts insurance providers and policyholders who may file claims. Workforce implications include potential need for specialized IT and claims processing personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in due to specialized system development.
Reliance on a single contractor for critical claims processing infrastructure.
Limited transparency into the competitive bidding process beyond the awardee.

Positive Signals

Firm fixed-price contract provides budget predictability.
Awarded through full and open competition, suggesting initial market outreach.
Long-term contract duration allows for system stability and evolution.

Sector Analysis

This contract falls within the broader financial services and insurance technology sector. The market for specialized insurance administration systems, particularly those dealing with unique risks like terrorism, is relatively niche. Comparable spending might include other government IT modernization efforts or large-scale claims processing system procurements within agencies like FEMA or the SBA, though direct comparisons are difficult due to the specific nature of terrorist risk insurance.

Small Business Impact

There is no indication of a small business set-aside for this contract, nor is there information suggesting significant subcontracting opportunities for small businesses. The nature of the specialized IT system development and maintenance may favor larger, established firms with specific expertise in insurance administration and risk management.

Oversight & Accountability

Oversight is likely managed by the Department of the Treasury's program officials responsible for the Terrorist Risk Insurance Program. Accountability measures would be tied to contract performance clauses and deliverables. Transparency is facilitated by the contract award notice, but detailed operational oversight mechanisms are not publicly specified. Inspector General jurisdiction would apply to potential fraud, waste, or abuse.

Related Government Programs

Terrorist Risk Insurance Program
Federal Insurance Programs
Government IT Modernization
Insurance Claims Processing Systems

Risk Flags

Potential for vendor lock-in
Reliance on a single provider for critical system
Cybersecurity risks associated with sensitive data

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $2.9 million to INSURANCE SERVICES OFFICE, INC.. TERRORIST RISK INSURANCE PROGRAM CLAIMS SYSTEM

Who is the contractor on this award?

The obligated recipient is INSURANCE SERVICES OFFICE, INC..

Which agency awarded this contract?

Awarding agency: Department of the Treasury (Departmental Offices).

What is the total obligated amount?

The obligated amount is $2.9 million.

What is the period of performance?

Start: 2023-04-05. End: 2027-04-04.

What is the track record of Insurance Services Office, Inc. with government contracts, particularly in IT system development?

Insurance Services Office, Inc. (ISO) is a well-established entity primarily known for providing data, analytics, and technology solutions to the property and casualty insurance industry. While their primary client base is private insurers, they do engage with government entities. Information on their specific track record with federal IT system development contracts, especially those of similar complexity and scale to the Terrorist Risk Insurance Program Claims System, is not readily available in public contract databases. Further investigation into their past performance on government contracts, including any awards, past performance reviews, and compliance history, would be necessary for a comprehensive assessment. Their long-standing presence in the insurance data and technology space suggests a deep understanding of the domain, which is a positive indicator for this specific contract.

How does the $2.87 million contract value compare to similar government IT system procurements?

Directly comparing the $2.87 million contract value for the Terrorist Risk Insurance Program Claims System to similar government IT procurements is challenging due to the unique nature of the program and the specialized requirements. However, for context, large-scale IT system development and modernization projects within federal agencies can range from tens of millions to billions of dollars. This contract appears to be of moderate size for a specific system enhancement or development. Factors influencing its value include the scope of work (claims processing, data management, integration), the duration (four years), and the specialized knowledge required. Without more granular data on the system's functionalities and the specific technical challenges, benchmarking against broader IT contracts provides only a general sense of scale.

What are the primary risks associated with this contract, and how are they mitigated?

Key risks include potential cost overruns if the fixed-price contract doesn't adequately account for unforeseen technical challenges, delays in system deployment impacting claims processing, and cybersecurity vulnerabilities inherent in any government IT system. Mitigation strategies likely involve robust contract management by the Treasury, clear performance metrics and milestones, regular technical reviews, and adherence to strict cybersecurity protocols mandated by federal regulations. The reliance on a single contractor, Insurance Services Office, Inc., also presents a risk of vendor lock-in or performance issues if they encounter internal difficulties. The government's mitigation would involve strong oversight and contingency planning.

How effective is the Terrorist Risk Insurance Program Claims System expected to be in fulfilling its objectives?

The effectiveness of the system hinges on its ability to accurately and efficiently process claims related to terrorist acts, which is crucial for the functioning of the Terrorist Risk Insurance Program. A modernized system is expected to improve data integrity, reduce processing times, enhance reporting capabilities, and ensure compliance with program regulations. Its success will be measured by its uptime, accuracy rates, user satisfaction (from Treasury staff and potentially insurers), and its contribution to the overall financial stability objectives of the program. The long-term contract suggests an expectation of sustained effectiveness and adaptability to evolving program needs.

What are the historical spending patterns for the Terrorist Risk Insurance Program's IT infrastructure?

Detailed historical spending specifically on the IT infrastructure for the Terrorist Risk Insurance Program is not publicly itemized in standard federal spending databases. The $2.87 million contract represents a significant investment in this specific claims system. Prior spending may have been allocated through broader IT budgets within the Department of the Treasury or through different contract vehicles for system development, maintenance, or related services. Understanding the full lifecycle cost and previous investments would require a deeper dive into Treasury's internal financial records or program-specific budget justifications, which are typically not available at this level of detail.

Industry Classification

NAICS: Finance and Insurance › Agencies, Brokerages, and Other Insurance Related Activities › Pharmacy Benefit Management and Other Third Party Administration of Insurance and Pension Funds

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 2032H323R00001

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Verisk Analytics, Inc.

Address: 545 WASHINGTON BLVD FL 14-22, JERSEY CITY, NJ, 07310

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

Financial Breakdown

Contract Ceiling: $16,829,648

Exercised Options: $4,395,278

Current Obligation: $2,873,775

Actual Outlays: $1,935,257

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline