Accenture Federal Services LLC awarded $46.9M for IRS Portal Application Services, with a 1275-day duration

Contract Overview

Contract Amount: $46,944,158 ($46.9M)

Contractor: Accenture Federal Services LLC

Awarding Agency: Department of the Treasury

Start Date: 2018-12-03

End Date: 2022-05-31

Contract Duration: 1,275 days

Daily Burn Rate: $36.8K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: WORK REQUEST (WR)1001 AND 1004 WILL SUPPORT PORTAL APPLICATION SERVICES FROM 12/3/2018 - 12/2/2019. WR 1003 AND 1004 POP IS FROM 3/1/2019 - 12/2/2019. WR 1005

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22203

State: Virginia Government Spending

Plain-Language Summary

Department of the Treasury obligated $46.9 million to ACCENTURE FEDERAL SERVICES LLC for work described as: WORK REQUEST (WR)1001 AND 1004 WILL SUPPORT PORTAL APPLICATION SERVICES FROM 12/3/2018 - 12/2/2019. WR 1003 AND 1004 POP IS FROM 3/1/2019 - 12/2/2019. WR 1005 Key points: 1. Contract awarded to a single vendor, Accenture Federal Services LLC, for IT services. 2. The contract spans over three years, indicating a long-term need for portal application support. 3. Services include computer systems design, suggesting a focus on maintaining and enhancing IRS digital platforms. 4. The contract was awarded under full and open competition, implying a broad search for qualified bidders. 5. The total value of $46.9M is spread across multiple work requests and delivery orders. 6. The contract type is Time and Materials, which can pose budget control challenges if not managed closely. 7. The primary agency is the Department of the Treasury, specifically the Internal Revenue Service (IRS).

Value Assessment

Rating: fair

The total award of $46.9M over approximately 3.5 years for portal application services appears to be within a reasonable range for complex IT support. However, without specific benchmarks for similar IRS portal maintenance contracts or detailed breakdowns of labor categories and rates, a precise value-for-money assessment is difficult. The Time and Materials (T&M) contract type introduces a risk of cost overruns if not diligently managed and monitored against established ceilings or performance metrics. Benchmarking against industry standards for IT system design and maintenance services would be necessary for a more definitive evaluation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that the IRS sought proposals from all responsible sources. The number of bidders is not specified in the provided data, but the 'full and open' designation implies a competitive process was intended. This approach generally leads to better price discovery and a wider selection of qualified vendors, potentially resulting in more favorable terms for the government compared to sole-source or limited competition awards.

Taxpayer Impact: A full and open competition process is beneficial for taxpayers as it increases the likelihood of securing services at competitive prices and ensures that the government is not limited to a single provider, which could lead to inflated costs.

Public Impact

Taxpayers benefit from improved and maintained IRS portal applications, facilitating easier access to tax information and services. The contract supports the ongoing operation and enhancement of critical digital infrastructure for tax administration. Services are delivered primarily to the Internal Revenue Service, impacting its operational efficiency. The contract's geographic impact is likely nationwide, given the IRS's role in serving all US taxpayers. Workforce implications may include IT professionals employed by Accenture Federal Services LLC, contributing to the IT services sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The Time and Materials (T&M) contract type can lead to cost overruns if not closely monitored, as it pays for direct labor hours and indirect costs at specified rates.
Lack of specific performance metrics or clear deliverables in the provided data makes it difficult to assess the contractor's performance against expectations.
The extended duration of the contract (over 3 years) requires ongoing vigilance to ensure continued value and alignment with evolving IRS needs.

Positive Signals

Awarded under full and open competition, indicating a robust selection process that likely yielded competitive pricing.
The contract supports critical IT infrastructure for the IRS, suggesting a commitment to modernizing tax administration services.
Accenture Federal Services LLC is a large, established federal contractor with a significant track record in IT services, implying a level of reliability.

Sector Analysis

This contract falls within the Computer Systems Design Services sector (NAICS 541512), a significant segment of the IT services market. This sector encompasses businesses that design, develop, and support IT infrastructure and applications. The total federal spending on IT services is in the tens of billions annually, with a substantial portion allocated to system design, integration, and maintenance. This contract represents a portion of the IRS's investment in maintaining and improving its digital service delivery capabilities, aligning with broader government initiatives to modernize IT systems.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). As a large contract awarded to a major IT services provider, it is unlikely to have significant direct subcontracting opportunities for small businesses unless specifically mandated or pursued by the prime contractor. The focus on a large, established vendor may limit direct participation of small businesses in this specific contract, though they may compete for other, smaller IT service contracts within the IRS or Treasury.

Oversight & Accountability

Oversight for this contract would primarily reside with the contracting officers and program managers within the IRS and the Department of the Treasury. The contract's Time and Materials nature necessitates close monitoring of labor hours, rates, and expenditures to ensure compliance with the contract terms and prevent cost overruns. Transparency is typically managed through contract reporting mechanisms and performance reviews. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected or identified during the contract's performance.

Related Government Programs

IRS IT Modernization Initiatives
Federal Cloud Computing Strategy
Digital Government Services
IT Services for Financial Agencies
Computer Systems Design Services Contracts

Risk Flags

Time and Materials contract type requires close monitoring to prevent cost overruns.
Extended contract duration may lead to technology obsolescence or evolving requirements.
Lack of detailed performance metrics in provided data hinders assessment of contractor performance.
Potential for vendor lock-in over the contract's lifespan.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $46.9 million to ACCENTURE FEDERAL SERVICES LLC. WORK REQUEST (WR)1001 AND 1004 WILL SUPPORT PORTAL APPLICATION SERVICES FROM 12/3/2018 - 12/2/2019. WR 1003 AND 1004 POP IS FROM 3/1/2019 - 12/2/2019. WR 1005

Who is the contractor on this award?

The obligated recipient is ACCENTURE FEDERAL SERVICES LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $46.9 million.

What is the period of performance?

Start: 2018-12-03. End: 2022-05-31.

What is the historical spending pattern for portal application services at the IRS, and how does this award compare?

Analyzing historical spending for IRS portal application services requires access to detailed IRS budget data and contract databases beyond the scope of this single award. However, the IRS has consistently invested heavily in IT infrastructure to manage tax administration and taxpayer services. Recent years have seen increased focus on modernization and digital transformation, suggesting that spending on services like portal application support would be substantial and potentially growing. This $46.9M award over approximately 3.5 years represents a significant, but not necessarily anomalous, investment for maintaining and enhancing critical taxpayer-facing digital platforms. Without comparative data on previous contracts for similar services or overall IT budgets, it's challenging to definitively state if this award is higher or lower than historical norms, but it aligns with the trend of substantial IT investments in large federal agencies.

How does the Time and Materials (T&M) contract type impact cost control and value for money for this IRS contract?

The Time and Materials (T&M) contract type, used for this IRS portal application services award, pays the contractor for direct labor hours at specified hourly rates and for the actual cost of materials. While offering flexibility for evolving requirements, T&M contracts carry inherent risks for cost control. The government pays for the time and materials consumed, making it crucial for contracting officers to establish clear ceilings, monitor labor hours diligently, and ensure that the work performed is efficient and necessary. For this $46.9M award, effective oversight is paramount to ensure that the final cost reflects genuine effort and market-competitive rates, rather than potential inefficiencies. Value for money is maximized when the flexibility of T&M is balanced with stringent performance management and cost tracking to prevent scope creep and ensure deliverables are met within budget expectations.

What is Accenture Federal Services LLC's track record with the IRS and similar federal IT contracts?

Accenture Federal Services LLC is a major federal contractor with a substantial history of providing IT and professional services across various government agencies, including the Department of the Treasury and the IRS. They have been involved in numerous large-scale IT projects, system implementations, and modernization efforts. Their track record with the IRS likely includes support for financial systems, tax processing, and taxpayer services. While specific performance details for past IRS contracts are not provided here, Accenture's continued success in winning large federal contracts suggests a generally positive performance history and capability to meet complex government requirements. However, a comprehensive assessment would involve reviewing past performance evaluations and any documented issues or successes on prior engagements.

What are the potential risks associated with a 3.5-year IT services contract for portal applications?

A 3.5-year IT services contract for portal applications carries several potential risks. Firstly, technology evolves rapidly; the systems and requirements defined at the start of the contract may become outdated or insufficient by its end, requiring significant adaptation or scope changes. Secondly, the Time and Materials (T&M) nature of this contract, as indicated, poses a risk of cost overruns if not meticulously managed, potentially exceeding the $46.9M ceiling. Thirdly, vendor lock-in can become a concern, making it difficult to transition to new solutions or providers later. Finally, ensuring consistent service quality and performance over an extended period requires robust oversight and clear performance metrics, which are not detailed here. The IRS must actively manage these risks through vigilant contract administration and performance monitoring.

How does the 'Computer Systems Design Services' classification (NAICS 541512) inform our understanding of this contract's scope?

The classification of 'Computer Systems Design Services' (NAICS 541512) indicates that this contract primarily involves providing expertise in designing, developing, and implementing computer systems. For the IRS portal applications, this likely encompasses activities such as analyzing user needs, designing software architecture, integrating hardware and software components, and potentially overseeing the implementation of new features or system upgrades. It suggests a focus on the technical architecture and functional design of the portal, rather than just routine maintenance or basic IT support. This classification implies that Accenture Federal Services LLC is expected to bring specialized knowledge in creating efficient, scalable, and secure IT solutions tailored to the IRS's operational requirements for its taxpayer-facing portals.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: Accenture Public Limited Company

Address: 800 NORTH GLEBE RD #300, ARLINGTON, VA, 22203

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

Financial Breakdown

Contract Ceiling: $49,527,026

Exercised Options: $46,944,158

Current Obligation: $46,944,158

Actual Outlays: $37,448,824

Subaward Activity

Number of Subawards: 109

Total Subaward Amount: $6,382,354

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: TIRNO17D00004

IDV Type: IDC

Timeline