Treasury's $104.7M IT contract for Masterfile System Programming Support awarded to Maximus Federal Services

Contract Overview

Contract Amount: $104,705,652 ($104.7M)

Contractor: Maximus Federal Services, Inc.

Awarding Agency: Department of the Treasury

Start Date: 2021-06-01

End Date: 2026-05-31

Contract Duration: 1,825 days

Daily Burn Rate: $57.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: LABOR HOURS

Sector: IT

Official Description: MASTERFILE SYSTEM PROGRAMMING SUPPORT SERVICES COVID-19

Place of Performance

Location: FALLS CHURCH, FAIRFAX County, VIRGINIA, 22042

State: Virginia Government Spending

Plain-Language Summary

Department of the Treasury obligated $104.7 million to MAXIMUS FEDERAL SERVICES, INC. for work described as: MASTERFILE SYSTEM PROGRAMMING SUPPORT SERVICES COVID-19 Key points: 1. Contract value represents a significant investment in critical IT infrastructure for the IRS. 2. The full and open competition suggests a robust market for these specialized services. 3. Performance period spans five years, indicating a long-term need for system support. 4. The contract type, labor hours, suggests flexibility in addressing evolving system requirements. 5. Awarded to a single vendor, Maximus Federal Services, highlighting their specialized capabilities. 6. The contract is categorized under Computer Systems Design Services, a key sector for government operations.

Value Assessment

Rating: good

The contract's value of $104.7 million over five years for IT programming support appears reasonable given the scope and duration. Benchmarking against similar large-scale IT support contracts for federal agencies suggests that pricing is likely competitive, especially considering the full and open competition. The labor hours contract type allows for flexibility, which can be cost-effective if managed efficiently, preventing overspending on fixed-scope services that might change.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, indicating that multiple qualified vendors had the opportunity to bid. The specific number of bidders is not provided, but the competitive process is designed to foster price discovery and ensure the government receives the best value. A broad competition generally leads to more favorable pricing and a wider selection of technical solutions.

Taxpayer Impact: Taxpayers benefit from a competitive process that drives down costs and ensures the government secures high-quality IT services at a fair price, maximizing the return on public funds invested in essential systems.

Public Impact

The primary beneficiaries are the Internal Revenue Service (IRS) and its operational efficiency, ensuring the continued functioning of critical tax systems. Services delivered include programming support for the Masterfile System, crucial for tax administration and data management. The geographic impact is national, supporting IRS operations across the United States. Workforce implications include the potential for specialized IT jobs within Maximus Federal Services and indirectly supporting IRS personnel who rely on the system.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if system knowledge becomes highly concentrated with Maximus.
Risk of cost overruns if labor hour tracking and management are not rigorous.
Dependence on a single vendor for critical system programming could pose continuity risks.
Scope creep is a common risk in long-term IT support contracts.
Ensuring adequate knowledge transfer and documentation is crucial for future system evolution.

Positive Signals

Awarded via full and open competition, suggesting strong market validation.
Long-term contract (5 years) provides stability for system development and support.
Focus on a specific, critical system (Masterfile) indicates targeted investment.
Maximus Federal Services is a known entity in government IT contracting.
Labor hours contract type allows for adaptive support to evolving needs.

Sector Analysis

This contract falls within the Computer Systems Design Services sector, a vital component of the government's IT infrastructure. This sector is characterized by high demand for specialized skills in software development, system integration, and IT support. The market size for government IT services is substantial, with agencies continually investing in modernizing and maintaining complex systems like the IRS's Masterfile System. This contract represents a significant portion of spending within this niche, reflecting the critical nature of the services provided.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb: false'. While Maximus Federal Services is a large business, the contract does not explicitly mention subcontracting goals for small businesses. Therefore, the direct impact on the small business ecosystem is likely minimal unless Maximus voluntarily engages small businesses for specialized support. Further analysis of subcontracting plans would be needed to fully assess the impact.

Oversight & Accountability

Oversight for this contract will likely be managed by the contracting officers and program managers within the IRS and the Department of the Treasury. Accountability measures are typically embedded in the contract terms, including performance metrics, reporting requirements, and service level agreements. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

IRS Taxpayer Systems Modernization
Federal IT Modernization Programs
Government Core IT Infrastructure Support
Financial Management Systems Support
Data Management and Analytics Services

Risk Flags

Potential for vendor lock-in
Reliance on labor hours can lead to cost overruns if not managed
Knowledge transfer and retention risks
Long-term dependence on a single provider for critical infrastructure

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $104.7 million to MAXIMUS FEDERAL SERVICES, INC.. MASTERFILE SYSTEM PROGRAMMING SUPPORT SERVICES COVID-19

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 $104.7 million.

What is the period of performance?

Start: 2021-06-01. End: 2026-05-31.

What is the historical spending pattern for Masterfile System Programming Support Services at the IRS?

Historical spending data for this specific contract line item is not directly available in the provided snippet. However, the award of a $104.7 million, five-year contract suggests a sustained and significant investment in the Masterfile System. Agencies like the IRS typically have ongoing needs for IT support, maintenance, and upgrades for core systems. Previous contracts for similar services would likely show consistent, substantial funding allocated to ensure the system's operational integrity and to adapt to evolving tax laws and technological advancements. Analyzing past contract awards for IRS IT support, particularly for critical systems, would reveal trends in annual spending and the types of services procured.

How does the awarded amount compare to similar IT support contracts for large federal agencies?

The $104.7 million contract value over five years, averaging approximately $20.9 million annually, is substantial but falls within the typical range for large-scale IT programming support contracts awarded to major federal agencies. For instance, contracts supporting critical financial, logistical, or citizen-facing systems at agencies like the Department of Defense, Social Security Administration, or Department of Health and Human Services often range from tens to hundreds of millions of dollars over similar or longer periods. The full and open competition suggests the pricing is market-driven. Benchmarking against contracts for comparable services (e.g., enterprise resource planning support, large database management, custom software development) would provide a more precise comparison, but the scale appears consistent with the needs of a major agency like the IRS.

What are the key performance indicators (KPIs) likely used to evaluate Maximus Federal Services' performance?

Key performance indicators for this contract would likely focus on system availability, response times for programming support, bug resolution rates, adherence to project timelines for enhancements, and overall system stability. Specific metrics might include uptime percentages for the Masterfile System, average time to resolve critical bugs, successful deployment rates for new code, and user satisfaction scores from IRS personnel. The contract's labor hours structure also implies that efficient resource utilization and accurate time reporting would be monitored. Performance would be assessed against established Service Level Agreements (SLAs) outlined in the contract.

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

Maximus Federal Services has a significant track record in providing IT and administrative support services to various federal agencies, including the IRS. They are known for handling large-scale government contracts, often involving complex IT systems and data management. Their experience with the IRS likely includes previous support for tax systems or related administrative functions. A review of their contract history would reveal their performance on similar IT programming, system design, and maintenance contracts, including their ability to meet deadlines, manage budgets, and deliver quality services. Their presence in the federal IT landscape suggests a capacity to handle contracts of this magnitude.

What are the potential risks associated with relying on a single vendor for this critical IT system support?

The primary risk of relying on a single vendor, Maximus Federal Services, for the Masterfile System's programming support is vendor lock-in, which can limit future flexibility and potentially lead to higher costs if competition is stifled. There's also a risk associated with knowledge concentration; if key personnel leave Maximus, institutional knowledge about the system could be lost, impacting continuity. Dependence on one vendor can also create vulnerabilities if the vendor experiences financial instability or strategic shifts. Furthermore, the government may have less leverage in negotiating future contract renewals or scope changes. Mitigating these risks requires strong contract management, clear documentation requirements, and potentially planning for future transitions.

How does this contract contribute to the IRS's overall IT modernization goals?

This contract directly supports the IRS's ongoing efforts to maintain and enhance its critical IT infrastructure, specifically the Masterfile System, which is foundational to tax administration. While modernization often implies replacing legacy systems, robust programming support is essential for keeping existing systems functional, secure, and adaptable to new requirements (e.g., changes in tax law, new reporting mandates). This contract ensures the core system remains operational and can be updated incrementally, preventing disruptions while the IRS pursues broader modernization initiatives. It bridges the gap between current operational needs and future system architectures.

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: 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: $104,962,453

Exercised Options: $104,705,652

Current Obligation: $104,705,652

Actual Outlays: $92,078,597

Subaward Activity

Number of Subawards: 15

Total Subaward Amount: $26,280,698

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 47QTCK18D0044

IDV Type: GWAC

Timeline