Treasury's $2.9M cyber audit contract awarded to ITC Federal, LLC, for accounting services

Contract Overview

Contract Amount: $2,895,966 ($2.9M)

Contractor: ITC Federal, LLC

Awarding Agency: Department of the Treasury

Start Date: 2020-09-30

End Date: 2024-03-31

Contract Duration: 1,278 days

Daily Burn Rate: $2.3K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: CYBER SECURITY AUDIT REMEDIATION AND AUDIT READINESS

Place of Performance

Location: LANHAM, PRINCE GEORGES County, MARYLAND, 20703

State: Maryland Government Spending

Plain-Language Summary

Department of the Treasury obligated $2.9 million to ITC FEDERAL, LLC for work described as: CYBER SECURITY AUDIT REMEDIATION AND AUDIT READINESS Key points: 1. Contract value appears reasonable given the duration and scope of cyber audit remediation and readiness services. 2. Full and open competition was utilized, suggesting a competitive bidding process that should drive value. 3. The contract's fixed-price nature helps mitigate cost overrun risks for the government. 4. Performance period spans over three years, indicating a need for sustained support in cybersecurity audit readiness. 5. This contract falls within the 'Other Accounting Services' NAICS code, a common area for federal IT and security support. 6. The award was a delivery order under a larger contract vehicle, a standard procurement method.

Value Assessment

Rating: good

The contract's total value of approximately $2.9 million over roughly 3.5 years suggests a moderate annual spend. Benchmarking against similar cyber audit readiness contracts is challenging without more specific service details. However, the firm-fixed-price structure indicates that the contractor assumes the risk for cost overruns, which is generally favorable for the government. The number of bids received (though not explicitly stated for this delivery order, the parent contract was competed) would provide further context on pricing competitiveness.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating that while the initial solicitation was broad, specific sources may have been excluded later in the process, or it refers to a specific type of full and open competition. The presence of 4 bids suggests a reasonable level of competition for this specific delivery order. This level of competition is generally expected to lead to fair market pricing.

Taxpayer Impact: A competitive bidding process helps ensure that taxpayer dollars are used efficiently by driving down costs through market forces.

Public Impact

The Internal Revenue Service (IRS) benefits from enhanced cybersecurity audit readiness and remediation. Services delivered include support for audit remediation and ensuring audit readiness, crucial for maintaining compliance. The contract's geographic impact is primarily within Maryland, where the contractor is located, but the services support federal operations nationwide. Workforce implications include potential support roles for cybersecurity and auditing professionals within ITC Federal, LLC.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if remediation efforts are more extensive than initially anticipated.
Reliance on a single contractor for critical audit readiness functions could pose a risk if performance falters.

Positive Signals

Firm-fixed-price contract structure limits the government's financial exposure to cost overruns.
Awarded under a competitive process, suggesting a baseline level of quality and fair pricing.
Longer performance period allows for sustained focus on critical cybersecurity audit functions.

Sector Analysis

This contract falls within the broader cybersecurity and IT services sector, specifically focusing on audit readiness and remediation. The market for these services is robust, driven by increasing cyber threats and stringent regulatory requirements for government agencies. Comparable spending benchmarks would typically be found within IT professional services or specialized audit support categories. The NAICS code 541219 (Other Accounting Services) is a broad category that encompasses these specialized support functions.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses (ss: false, sb: false). While ITC Federal, LLC may be a small business itself, the procurement method did not mandate small business participation. Subcontracting opportunities for small businesses are not explicitly detailed in this award data but are common in larger federal contracts.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program managers within the IRS. Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of specified services. Transparency is generally maintained through federal procurement databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Federal Cybersecurity Programs
IT Audit and Compliance Services
Government Accounting and Financial Services
Cybersecurity Remediation Contracts

Risk Flags

Contract Duration
Scope Definition
Contractor Performance Risk

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $2.9 million to ITC FEDERAL, LLC. CYBER SECURITY AUDIT REMEDIATION AND AUDIT READINESS

Who is the contractor on this award?

The obligated recipient is ITC FEDERAL, 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 $2.9 million.

What is the period of performance?

Start: 2020-09-30. End: 2024-03-31.

What is the track record of ITC Federal, LLC in performing similar cybersecurity audit remediation and readiness services for federal agencies?

Assessing the track record of ITC Federal, LLC requires a deeper dive into their past performance on federal contracts. While this specific award indicates they were selected for cyber security audit remediation and audit readiness services by the IRS, it doesn't detail their success rate or client satisfaction on prior engagements. Information on past performance, including any awards, past due performance issues, or contract terminations, would typically be available through sources like the Contractor Performance Assessment Reporting System (CPARS). Without access to CPARS data or a more comprehensive contract history, it's difficult to definitively assess their expertise and reliability in this specialized area. However, the fact that they were awarded this delivery order under a competed contract suggests they met the initial qualification criteria.

How does the pricing of this contract compare to similar cybersecurity audit readiness contracts awarded by the federal government?

Directly comparing the pricing of this $2.9 million contract to similar cybersecurity audit readiness contracts is challenging without detailed service level agreements and scope of work for comparable awards. The value is spread over approximately 3.5 years, making the annual spend around $830,000. Factors influencing price include the complexity of the IRS's systems, the specific audit frameworks required, the level of remediation needed, and the contractor's overhead and profit margins. Generally, firm-fixed-price contracts aim for competitive pricing through open competition. To benchmark effectively, one would need to identify contracts with similar objectives (e.g., audit readiness, vulnerability assessment, remediation support) for agencies of comparable size and complexity, and analyze their total contract values, durations, and the specific services rendered.

What are the primary risks associated with this contract, and what mitigation strategies are in place?

The primary risks associated with this contract include potential scope creep, where the required remediation efforts exceed initial estimates, leading to potential cost or schedule overruns (though mitigated by FFP). Another risk is contractor performance failure; if ITC Federal, LLC underperforms, the IRS's audit readiness could be compromised. Dependence on a single vendor for critical functions also presents a risk. Mitigation strategies include the firm-fixed-price (FFP) structure, which shifts cost overrun risk to the contractor. The IRS's contracting officer and program managers provide oversight, monitoring performance against contract deliverables. Clear performance standards and potential remedies for non-performance are typically outlined in the contract terms. Furthermore, the competitive nature of the initial award suggests a baseline level of capability.

How effective is the IRS in managing cybersecurity audit readiness, and does this contract contribute significantly to that effectiveness?

The effectiveness of the IRS in managing cybersecurity audit readiness is a complex issue influenced by numerous factors, including budget, staffing, technology, and evolving threat landscapes. This contract, valued at $2.9 million over 3.5 years, is intended to bolster the IRS's capabilities by providing specialized support for audit remediation and readiness. Its contribution to overall effectiveness depends on the quality of services delivered by ITC Federal, LLC and how well these services integrate with the IRS's internal processes and other cybersecurity initiatives. Positive outcomes would include successful remediation of audit findings, improved compliance posture, and enhanced preparedness for future audits. Measuring this effectiveness would involve tracking key performance indicators (KPIs) related to audit findings, remediation timelines, and successful audit outcomes.

What are the historical spending patterns for cybersecurity audit services at the IRS or Treasury Department?

Analyzing historical spending patterns for cybersecurity audit services at the IRS or Treasury Department would provide valuable context for this $2.9 million contract. Without specific historical data, it's difficult to determine if this award represents an increase, decrease, or stable level of investment in these services. Trends in federal cybersecurity spending, driven by executive orders, congressional mandates, and increasing cyber threats, suggest a general upward trajectory in this area across government. To understand IRS-specific patterns, one would need to examine prior fiscal year obligations for similar NAICS codes (like 541219, 541512, 541519) related to cybersecurity, IT audit, and compliance support. This analysis would reveal if the IRS has consistently contracted for such services or if this represents a new or expanded effort.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Accounting, Tax Preparation, Bookkeeping, and Payroll Services › Other Accounting Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4114 LEGATO RD STE 850, FAIRFAX, VA, 22033

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

Financial Breakdown

Contract Ceiling: $2,895,966

Exercised Options: $2,895,966

Current Obligation: $2,895,966

Actual Outlays: $2,895,966

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 47QRAD18D000M

IDV Type: IDC

Timeline