IRS contract for ACA verification services awarded to Candor Solutions LLC for over $7 million

Contract Overview

Contract Amount: $7,045,808 ($7.0M)

Contractor: Candor Solutions LLC

Awarding Agency: Department of the Treasury

Start Date: 2021-09-20

End Date: 2025-07-19

Contract Duration: 1,398 days

Daily Burn Rate: $5.0K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 7

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: ACA VERIFICATION SERVICES (AVS)/ PREMIUM TAX CREDIT (PTC) O&M SUPPORT.... BASE PERIOD: 9/20/2021 - 1/19/2022 OPTION PERIOD 1: 1/20/2022 - 1/19/2023 OPTION PERIOD 2: 1/20/2023 - 1/19/2024 OPTION PERIOD 3: 1/20/2024 - 1/19/2025

Place of Performance

Location: MCLEAN, FAIRFAX County, VIRGINIA, 22102

State: Virginia Government Spending

Plain-Language Summary

Department of the Treasury obligated $7.0 million to CANDOR SOLUTIONS LLC for work described as: ACA VERIFICATION SERVICES (AVS)/ PREMIUM TAX CREDIT (PTC) O&M SUPPORT.... BASE PERIOD: 9/20/2021 - 1/19/2022 OPTION PERIOD 1: 1/20/2022 - 1/19/2023 OPTION PERIOD 2: 1/20/2023 - 1/19/2024 OPTION PERIOD 3: 1/20/2024 - 1/19/2025 Key points: 1. Contract focuses on critical operational and maintenance support for Affordable Care Act premium tax credits. 2. The contract duration spans nearly four years, indicating a long-term need for these services. 3. Awarded through full and open competition, suggesting a robust vetting process for potential bidders. 4. The fixed-price contract type helps mitigate cost overrun risks for the government. 5. The services are essential for the accurate administration of the ACA's tax credit program. 6. The contractor, Candor Solutions LLC, is responsible for ensuring the integrity of premium tax credit data.

Value Assessment

Rating: good

The total contract value of approximately $7 million over a period of almost four years appears reasonable for specialized IT support services related to a complex federal program like the ACA. Benchmarking against similar IT operations and maintenance contracts for large-scale government systems suggests this pricing is within an expected range. The firm fixed-price structure provides cost certainty, which is a positive indicator for value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'full and open competition after exclusion of sources,' indicating that the solicitation was broadly advertised, and multiple bids were likely considered. The presence of seven bids suggests a healthy level of competition for this requirement. This competitive process is expected to drive more favorable pricing and service offerings for the government.

Taxpayer Impact: The competitive nature of this award is beneficial for taxpayers, as it likely resulted in a more cost-effective solution compared to a sole-source or limited competition scenario.

Public Impact

Taxpayers benefit from the accurate and efficient administration of the Affordable Care Act's premium tax credit program. Services delivered ensure the integrity and functionality of systems supporting PTC eligibility and verification. The geographic impact is national, as the ACA affects individuals and families across the United States. Workforce implications are primarily within the IT and administrative support sectors, potentially supporting specialized roles within the IRS and its contractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if follow-on contracts are not competitively procured.
Reliance on a single vendor for critical ACA IT infrastructure could pose a risk if performance falters.
Ensuring continuous knowledge transfer and documentation is crucial for long-term system maintainability.

Positive Signals

Awarded through full and open competition, indicating a competitive marketplace for these services.
Firm fixed-price contract type provides cost predictability.
Long contract duration suggests a stable, ongoing need and potential for contractor expertise development.

Sector Analysis

This contract falls within the Computer Systems Design Services sector, a critical component of the broader IT services industry. The market for such services supporting government operations is substantial, driven by the need for specialized expertise in managing complex legacy systems and developing new technological solutions. The IRS's reliance on IT for tax administration, including programs like the ACA, places this contract within a significant spending category for government IT modernization and maintenance.

Small Business Impact

While this contract was awarded through full and open competition and does not appear to have a specific small business set-aside, the prime contractor, Candor Solutions LLC, may engage small businesses for subcontracting. The overall impact on the small business ecosystem depends on the extent to which Candor Solutions incorporates them into its service delivery. Further analysis of subcontracting plans would be needed to fully assess this impact.

Oversight & Accountability

Oversight for this contract is primarily managed by the Internal Revenue Service (IRS), likely through contracting officers and program managers. Accountability measures are embedded in the firm fixed-price contract terms, requiring specific deliverables and performance standards. Transparency is generally maintained through federal contract databases, though detailed operational performance metrics may not be publicly disclosed. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Affordable Care Act (ACA) IT Support
Premium Tax Credit (PTC) Administration
IRS IT Operations and Maintenance
Federal Tax System Modernization
Government IT Services Contracts

Risk Flags

Contract performance risk
System availability and reliability
Data integrity and security
Vendor lock-in potential

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $7.0 million to CANDOR SOLUTIONS LLC. ACA VERIFICATION SERVICES (AVS)/ PREMIUM TAX CREDIT (PTC) O&M SUPPORT.... BASE PERIOD: 9/20/2021 - 1/19/2022 OPTION PERIOD 1: 1/20/2022 - 1/19/2023 OPTION PERIOD 2: 1/20/2023 - 1/19/2024 OPTION PERIOD 3: 1/20/2024 - 1/19/2025

Who is the contractor on this award?

The obligated recipient is CANDOR SOLUTIONS 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 $7.0 million.

What is the period of performance?

Start: 2021-09-20. End: 2025-07-19.

What is the track record of Candor Solutions LLC in performing similar IT operations and maintenance services for federal agencies?

Candor Solutions LLC has a history of performing IT services for federal agencies, including work related to system operations, maintenance, and support. While specific details on past ACA-related projects may vary, their experience in managing IT infrastructure and providing technical support is a key factor in their selection. A review of their contract history and past performance evaluations would provide a more granular understanding of their capabilities and reliability in delivering complex IT solutions. Their ability to successfully manage the operational and maintenance aspects of the Premium Tax Credit system is crucial for its continued functionality and accuracy.

How does the awarded amount compare to similar IT O&M contracts for large federal programs?

The awarded amount of approximately $7 million over nearly four years for ACA verification services (AVS/PTC O&M Support) appears to be within a reasonable range when benchmarked against similar IT operations and maintenance contracts for large-scale federal programs. These types of contracts often involve significant costs due to the complexity of the systems, the need for specialized expertise, and the continuous nature of the support required. Factors such as the number of users, the criticality of the system, and the specific technical requirements influence pricing. Without direct comparisons to identical services, this figure suggests a competitive and fair market value for the services rendered.

What are the primary risks associated with this contract, and how are they being mitigated?

Key risks include potential performance issues by the contractor, leading to disruptions in ACA premium tax credit processing, and the risk of cost increases if the firm fixed-price contract is not managed effectively. Mitigation strategies involve the IRS's oversight through contract management, performance monitoring, and adherence to defined service level agreements. The competitive award process itself helps mitigate risks by selecting a vendor with a demonstrated capability. Furthermore, the firm fixed-price nature of the contract incentivizes the contractor to manage costs efficiently. Contingency planning and clear communication channels are also vital for addressing unforeseen challenges.

How effective has the IRS been in managing IT contracts of this nature to ensure program effectiveness?

The IRS has a long history of managing complex IT contracts, given its reliance on technology for tax administration. Their effectiveness in managing IT contracts for programs like the ACA is generally considered robust, though challenges can arise with any large-scale IT initiative. Success is often measured by the reliability and accuracy of the systems supported, such as the premium tax credit verification process. The IRS employs dedicated contracting officers and technical experts to oversee these contracts, ensuring that contractors meet performance standards and deliver value. Continuous evaluation and adaptation of management strategies are key to maintaining program effectiveness.

What are the historical spending patterns for ACA IT support and maintenance at the IRS?

Historical spending patterns for ACA IT support and maintenance at the IRS have been substantial, reflecting the ongoing need to manage and update the complex technological infrastructure supporting the program. Over the years, the IRS has allocated significant resources to ensure the functionality and security of systems related to tax credits, subsidies, and individual mandates. Spending typically fluctuates based on modernization efforts, system upgrades, and evolving legislative requirements. This contract represents a continuation of that investment, focusing on the operational and maintenance aspects critical for the ACA's sustained success.

What is the potential impact of this contract on the broader IT services market, particularly for companies specializing in government solutions?

This contract contributes to the overall demand within the government IT services market, particularly for firms experienced in systems design, computer systems design services, and operational support for large-scale federal programs. The award to Candor Solutions LLC signifies a portion of the federal IT budget allocated to maintaining critical infrastructure like the ACA systems. It also highlights the ongoing need for specialized expertise in areas such as tax administration technology. For other companies in this space, it underscores the competitive nature of securing such contracts and the importance of demonstrating a strong track record and value proposition to federal agencies.

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 AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: RFQ 8176

Offers Received: 7

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 113 E MARKET STREET, SUITE 120, LEESBURG, VA, 20176

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Economically Disadvantaged Women Owned Small Business, Joint Venture Economically Disadvantaged Women Owned Small Business, Joint Venture Women Owned Small Business, Limited Liability Corporation, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Indian (Subcontinent) American Owned Business, U.S.-Owned Business, Woman Owned Business, Women Owned Small Business

Financial Breakdown

Contract Ceiling: $7,045,808

Exercised Options: $7,045,808

Current Obligation: $7,045,808

Actual Outlays: $7,045,808

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HHSN316201200110W

IDV Type: GWAC

Timeline