MAXIMUS FEDERAL SERVICES awarded $172M for IT systems design, with 3 delivery orders over 2007 days

Contract Overview

Contract Amount: $172,331,594 ($172.3M)

Contractor: Maximus Federal Services, Inc.

Awarding Agency: Department of the Treasury

Start Date: 2019-09-27

End Date: 2025-03-26

Contract Duration: 2,007 days

Daily Burn Rate: $85.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: LABOR HOURS

Sector: IT

Official Description: ITSI

Place of Performance

Location: LANHAM, PRINCE GEORGES County, MARYLAND, 20706

State: Maryland Government Spending

Plain-Language Summary

Department of the Treasury obligated $172.3 million to MAXIMUS FEDERAL SERVICES, INC. for work described as: ITSI Key points: 1. Value for money appears fair given the contract duration and scope. 2. Competition was robust, suggesting potential for competitive pricing. 3. Risk indicators are moderate, with a long performance period. 4. Performance context shows a long-standing contract with multiple delivery orders. 5. Sector positioning is within IT services, a critical area for government operations.

Value Assessment

Rating: fair

The total award amount of $172.3 million over approximately 5.5 years (September 2019 to March 2025) for computer systems design services suggests a moderate annual spend. Benchmarking against similar large-scale IT system design contracts is challenging without more granular data on the specific services rendered. However, the duration and the number of delivery orders (3) indicate a sustained need and potentially phased delivery, which can be cost-effective if managed well. The contract type (Labor Hours) allows for flexibility but requires diligent oversight to control costs.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. The presence of 3 delivery orders suggests that the initial award was significant enough to warrant multiple taskings or phases. A full and open competition generally fosters a competitive environment, which can lead to better pricing and innovation for the government. The specific number of bidders is not provided, but the category implies a healthy level of interest.

Taxpayer Impact: Taxpayers benefit from a competitive process that is intended to drive down costs and ensure the government receives the best value for its investment in critical IT systems.

Public Impact

Federal employees and taxpayers benefit from improved internal revenue systems. Services delivered include computer systems design, crucial for modernizing tax administration. Geographic impact is national, supporting the IRS's nationwide operations. Workforce implications include potential support roles for IT professionals and contractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (2007 days) increases the risk of scope creep and cost overruns if not managed tightly.
Labor hour contract type can lead to unpredictable costs if not monitored closely for efficiency.
Dependence on a single contractor for critical IT systems design over an extended period could pose a risk if performance falters.

Positive Signals

Awarded through full and open competition, suggesting a competitive pricing environment.
Multiple delivery orders indicate a sustained and potentially evolving need, suggesting the contractor is meeting requirements.
The contract supports essential IRS functions, indicating a high-priority service delivery.

Sector Analysis

This contract falls within the broader IT services sector, specifically focusing on computer systems design. This sector is characterized by rapid technological advancements and a high demand for specialized skills. Government spending in this area is substantial, as agencies rely heavily on IT infrastructure for operations, data management, and service delivery. Comparable spending benchmarks would typically involve looking at other large-scale IT modernization or system design contracts within federal agencies, particularly those focused on financial or administrative systems.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (sb: false). There is no explicit information on subcontracting plans or performance. Without specific set-aside requirements or mandated subcontracting goals, the direct impact on the small business ecosystem is likely limited unless the prime contractor voluntarily engages small businesses.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Treasury and the Internal Revenue Service's contracting and program management offices. Given the IT focus and potential for significant expenditure, Inspector General oversight is probable to ensure accountability and prevent fraud, waste, and abuse. Transparency is facilitated through contract award databases, though detailed performance metrics and spending breakdowns may be less publicly accessible.

Related Government Programs

IRS IT Modernization Programs
Federal Civilian IT Services Contracts
Computer Systems Design and Related Services

Risk Flags

Long contract duration may increase risk of scope creep.
Labor hour contract type requires diligent oversight to control costs.
Potential for vendor lock-in if systems become highly specialized.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $172.3 million to MAXIMUS FEDERAL SERVICES, INC.. ITSI

Who is the contractor on this award?

The obligated recipient is MAXIMUS FEDERAL SERVICES, 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 $172.3 million.

What is the period of performance?

Start: 2019-09-27. End: 2025-03-26.

What is the historical spending trend for this specific contract vehicle or similar services provided by MAXIMUS FEDERAL SERVICES to the IRS?

Analyzing historical spending for this contract vehicle reveals a total award value of $172,331,594.38, spanning from September 27, 2019, to March 26, 2025. This duration of approximately 5.5 years, encompassing 2007 days, suggests a consistent and significant investment in computer systems design services. The contract has seen 3 delivery orders, indicating phased or ongoing work. Without access to prior contract data for MAXIMUS FEDERAL SERVICES with the IRS for similar services, a direct trend comparison is limited. However, the substantial award amount suggests a long-term, high-value relationship for critical IT infrastructure support within the IRS.

How does the awarded amount compare to the estimated value or initial solicitation for these computer systems design services?

The provided data indicates a total award value of $172,331,594.38. However, the initial solicitation value or estimated cost for these computer systems design services is not detailed in the provided data. To assess how the awarded amount compares to the initial estimates, one would need to consult the original contract solicitation documents (e.g., Request for Proposal - RFP) and any subsequent modifications or funding actions. A significant difference between the awarded value and the initial estimate could indicate changes in scope, market fluctuations, or negotiation outcomes. Without this comparative data, it's difficult to definitively state if the contract was awarded at, above, or below initial expectations.

What are the key performance indicators (KPIs) used to measure the success of MAXIMUS FEDERAL SERVICES in delivering computer systems design services under this contract?

The provided data does not explicitly list the Key Performance Indicators (KPIs) for this contract. Typically, for computer systems design services, KPIs might include metrics related to system uptime, performance efficiency, bug resolution rates, adherence to project timelines, successful integration of new features, user satisfaction, and compliance with security standards. The contract type (Labor Hours) suggests that monitoring the efficiency and effectiveness of the labor hours utilized would be crucial. Effective oversight would involve regular performance reviews, milestone tracking, and potentially independent testing to ensure the delivered systems meet the IRS's operational and technical requirements.

What is the risk profile associated with MAXIMUS FEDERAL SERVICES as a contractor for this type of IT service, based on past performance?

The provided data does not include specific past performance ratings or a detailed risk profile for MAXIMUS FEDERAL SERVICES on this particular contract. However, the contract's duration (2007 days) and the issuance of multiple delivery orders suggest a degree of sustained engagement and likely satisfactory performance to date, as agencies typically do not continue awarding work to underperforming contractors. A comprehensive risk assessment would require reviewing contractor performance evaluations (e.g., CPARS reports), any past disputes or contract terminations, and the contractor's financial stability. Without this detailed information, the risk profile remains general.

How does the pricing structure (Labor Hours) impact the overall cost-effectiveness and predictability of this contract?

The 'Labor Hours' (pt: LABOR HOURS) contract type means the government pays for the actual hours worked by contractor personnel at pre-negotiated hourly rates. This structure offers flexibility, allowing the scope of work to adapt as needs evolve, which can be beneficial for complex IT projects where requirements may change. However, it introduces less cost predictability compared to fixed-price contracts. The overall cost-effectiveness hinges heavily on robust government oversight to ensure efficient labor utilization, prevent overstaffing, and manage the total hours worked effectively. Without strong management, labor hour contracts can become more expensive than anticipated if tasks take longer than expected or if rates are high.

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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 3

Pricing Type: LABOR HOURS (Z)

Evaluated Preference: NONE

Contractor Details

Address: 1600 TYSONS BLVD STE 300, MC LEAN, VA, 22102

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

Financial Breakdown

Contract Ceiling: $180,794,151

Exercised Options: $172,331,594

Current Obligation: $172,331,594

Actual Outlays: $171,182,966

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: 47QTCK18D0044

IDV Type: GWAC

Timeline