Treasury's IRS awards $54.1M IT contract to Booz Allen Hamilton for COVID-19 support

Contract Overview

Contract Amount: $54,115,215 ($54.1M)

Contractor: Booz Allen Hamilton Inc

Awarding Agency: Department of the Treasury

Start Date: 2021-03-27

End Date: 2022-09-26

Contract Duration: 548 days

Daily Burn Rate: $98.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: EA CORE BRIDGE 3. CONTRACTORS PROPOSAL,4/9/2021 IBR COVID-19

Place of Performance

Location: MCLEAN, FAIRFAX County, VIRGINIA, 22102

State: Virginia Government Spending

Plain-Language Summary

Department of the Treasury obligated $54.1 million to BOOZ ALLEN HAMILTON INC for work described as: EA CORE BRIDGE 3. CONTRACTORS PROPOSAL,4/9/2021 IBR COVID-19 Key points: 1. Contract awarded to a single large business, Booz Allen Hamilton. 2. Focus on Computer Systems Design Services for IRS IT infrastructure. 3. Firm Fixed Price contract type suggests cost certainty. 4. Potential for significant taxpayer impact due to scale and IT focus.

Value Assessment

Rating: good

The contract's value of $54.1M for a 1.5-year duration appears reasonable for complex IT support services. Benchmarking against similar large-scale IT system design contracts would provide further validation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating a competitive bidding process. This method generally promotes price discovery and potentially better value for the government.

Taxpayer Impact: Taxpayer funds are being utilized for essential IT services supporting the IRS's operations, particularly in the context of COVID-19 related needs.

Public Impact

Ensures continued IT support for critical IRS functions. Aids in managing increased workloads and data processing demands. Supports the agency's response to the COVID-19 pandemic. Potential impact on taxpayer services through system reliability.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Reliance on a single large contractor for critical IT functions.
Potential for scope creep in IT projects.
Cybersecurity risks associated with sensitive IRS data.

Positive Signals

Awarded through full and open competition.
Firm Fixed Price contract type.
Supports critical government operations.

Sector Analysis

This contract falls within the IT sector, specifically Computer Systems Design Services. Spending in this area is substantial across government, supporting everything from infrastructure to specialized applications. Benchmarks vary widely based on complexity and duration.

Small Business Impact

The contract was awarded to a large business and did not indicate any specific set-asides or subcontracting requirements for small businesses. This suggests limited direct participation opportunities for SMBs on this particular award.

Oversight & Accountability

Oversight would typically be managed by the contracting officer's representative (COR) within the IRS to ensure performance standards are met. The firm fixed price nature provides some cost control, but performance monitoring is key.

Related Government Programs

Computer Systems Design Services
Department of the Treasury Contracting
Internal Revenue Service Programs

Risk Flags

Potential for vendor lock-in due to specialized IT services.
Contract duration of 1.5 years may require subsequent lengthy procurements.
Lack of explicit small business participation noted.
Cybersecurity risks inherent in handling sensitive government data.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $54.1 million to BOOZ ALLEN HAMILTON INC. EA CORE BRIDGE 3. CONTRACTORS PROPOSAL,4/9/2021 IBR COVID-19

Who is the contractor on this award?

The obligated recipient is BOOZ ALLEN HAMILTON 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 $54.1 million.

What is the period of performance?

Start: 2021-03-27. End: 2022-09-26.

What specific IT systems or services are being supported by this contract, and how critical are they to the IRS's mission, especially concerning COVID-19 operations?

This contract, 'EA CORE BRIDGE 3', likely supports essential IT infrastructure and systems crucial for the IRS's operations, particularly those impacted or amplified by the COVID-19 pandemic. This could include systems for tax processing, data management, taxpayer communication, or internal operational support. The criticality lies in ensuring these systems remain functional, secure, and capable of handling increased demands, thereby enabling the IRS to fulfill its mission effectively during a period of heightened national need.

Given the firm fixed price, what mechanisms are in place to prevent cost overruns if unforeseen technical challenges arise during the contract period?

While a firm fixed price (FFP) contract aims to establish a ceiling, unforeseen technical challenges can still impact profitability or lead to disputes. The government's primary mechanism is rigorous contract oversight, ensuring the contractor adheres to the defined scope. Change orders, if absolutely necessary and justified, would follow strict procedures. The contractor bears the risk of cost overruns due to poor performance or unforeseen technical issues within the defined scope, incentivizing efficient execution.

How does the $54.1M award compare to typical spending for similar Computer Systems Design Services contracts at the IRS or other large federal agencies?

The $54.1M award for a 1.5-year duration is substantial, reflecting the complexity and scale of IT support typically required by agencies like the IRS. Benchmarking against similar contracts for system design, integration, and maintenance services at agencies of comparable size (e.g., SSA, DHS) would be necessary for a precise comparison. However, for specialized IT services supporting critical functions, this value is within the expected range for large federal contracts.

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 › IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Booz Allen Hamilton Holding Corporation

Address: 8283 GREENSBORO DR, MCLEAN, 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: $122,323,204

Exercised Options: $109,070,328

Current Obligation: $54,115,215

Actual Outlays: $54,009,689

Subaward Activity

Number of Subawards: 8

Total Subaward Amount: $12,000,739

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: 47QTCK18D0004

IDV Type: GWAC

Timeline