IRS awards $26.2M for mobile devices and wireless services to T-Mobile USA

Contract Overview

Contract Amount: $26,228,163 ($26.2M)

Contractor: T-Mobile USA, Inc.

Awarding Agency: Department of the Treasury

Start Date: 2022-09-30

End Date: 2026-09-29

Contract Duration: 1,460 days

Daily Burn Rate: $18.0K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IRS BASELINE REQUIREMENT FOR SMARTPHONES, HOTSPOTS, AND TABLETS.

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20224

State: District of Columbia Government Spending

Plain-Language Summary

Department of the Treasury obligated $26.2 million to T-MOBILE USA, INC. for work described as: IRS BASELINE REQUIREMENT FOR SMARTPHONES, HOTSPOTS, AND TABLETS. Key points: 1. Value for money appears reasonable given the scale of the requirement for essential communication tools. 2. Full and open competition suggests a competitive pricing environment was leveraged. 3. The contract duration of four years provides stability for the agency's mobile needs. 4. Performance is tied to the delivery of smartphones, hotspots, and tablets for IRS operations. 5. This spending falls within the broader category of telecommunications and IT infrastructure for federal agencies. 6. The firm-fixed-price structure shifts cost risk to the contractor.

Value Assessment

Rating: good

The contract value of $26.2 million over four years for mobile devices and wireless services for the IRS appears to be within a reasonable range for a federal agency of its size. Benchmarking against similar large-scale federal telecommunications contracts suggests that the per-user cost, while not explicitly detailed here, is likely competitive due to the full and open competition. The firm-fixed-price nature of the award provides cost certainty for the government, although it may limit flexibility if needs change significantly.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. While the number of bidders is not specified, this procurement method generally fosters a competitive environment, which is expected to drive down prices and encourage innovation. The IRS leveraged the Federal Acquisition Regulation's provisions for competitive bidding to secure these services.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically leads to more favorable pricing and a wider selection of services compared to sole-source or limited competition awards.

Public Impact

IRS employees will benefit from access to essential mobile communication tools, enhancing operational efficiency. Services delivered include the provision of smartphones, hotspots, and tablets. The geographic impact is national, supporting IRS operations across the District of Columbia and potentially nationwide. Workforce implications include equipping IRS personnel with the necessary technology to perform their duties effectively.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if device management and service plans are not carefully structured.
Ensuring device security and data privacy across a large mobile fleet requires robust management.
The fixed-price nature might disincentivize the contractor from offering cost savings if efficiencies are found.

Positive Signals

Leveraging a major carrier like T-Mobile suggests access to a robust and widespread network.
The firm-fixed-price contract provides budget predictability for the IRS.
Awarding under full and open competition indicates a commitment to achieving best value through market forces.

Sector Analysis

This contract falls within the telecommunications and wireless services sector, a critical component of modern IT infrastructure for government agencies. The market is dominated by a few large carriers, but competition for large federal contracts is often robust. Spending on mobile devices and services is a common requirement across many federal departments, supporting field operations, remote work, and general communication. Comparable spending benchmarks would typically look at per-user costs for similar device types and service plans across agencies.

Small Business Impact

This contract does not appear to have a specific small business set-aside. Given the scale and nature of the award to a large telecommunications provider, the primary focus is likely on meeting the IRS's core requirements. Subcontracting opportunities for small businesses may exist within the broader ecosystem of device procurement, accessory provision, or specialized support services, but this is not explicitly detailed in the award information.

Oversight & Accountability

Oversight for this contract will likely be managed by the contracting officer and the IRS's IT and procurement departments. Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of specified devices and services. Transparency is facilitated through federal procurement databases where contract awards are published. The Inspector General for the Treasury Department may have jurisdiction for audits and investigations related to the expenditure of these funds.

Related Government Programs

Federal Information Technology Acquisition Reform Act (FITARA) related spending
General Services Administration (GSA) Schedule contracts for telecommunications
IRS IT Modernization initiatives
Wireless communication services for federal agencies

Risk Flags

Potential for cost overruns if usage exceeds projections not fully captured by fixed pricing.
Dependence on a single provider for critical communication infrastructure.
Security vulnerabilities associated with mobile devices and networks.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $26.2 million to T-MOBILE USA, INC.. IRS BASELINE REQUIREMENT FOR SMARTPHONES, HOTSPOTS, AND TABLETS.

Who is the contractor on this award?

The obligated recipient is T-MOBILE USA, 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 $26.2 million.

What is the period of performance?

Start: 2022-09-30. End: 2026-09-29.

What is the historical spending pattern for mobile devices and wireless services at the IRS?

Analyzing historical spending for mobile devices and wireless services at the IRS is crucial for understanding trends and justifying current expenditures. While specific historical data for this exact contract is not provided, federal agencies typically have ongoing needs for such services. Past contracts may have been with different providers or structured differently, potentially involving older technologies or different service level agreements. Examining annual IT budgets and procurement records for the IRS over the past 5-10 years would reveal the scale and evolution of their investment in mobile technology. This analysis could highlight increases or decreases in spending, shifts in technology adoption (e.g., from basic phones to smartphones and hotspots), and the impact of competitive bidding on overall costs over time. Understanding this history provides context for the current $26.2 million award, allowing for a comparison of cost-effectiveness and strategic alignment with previous investments.

How does the per-unit cost of devices and services compare to other federal agencies or the commercial market?

A key aspect of assessing value for money is comparing the per-unit cost of smartphones, hotspots, and tablets, along with their associated wireless service plans, against benchmarks. For federal agencies, this involves consulting data from similar large-scale telecommunications contracts awarded by other departments or through government-wide acquisition vehicles like GSA Schedules. The Federal Procurement Data System (FPDS) can be a valuable resource for identifying comparable awards. In the commercial market, pricing varies significantly based on device models, data allowances, and contract terms (e.g., individual plans vs. large enterprise agreements). Given that T-Mobile USA is a major commercial provider, their pricing for the IRS is likely influenced by their standard enterprise offerings. A thorough analysis would involve isolating the cost per device and per month of service, factoring in any volume discounts or specific service level requirements mandated by the IRS, and then comparing these figures to publicly available commercial rates and similar federal contract awards to determine if the IRS is receiving a competitive price.

What are the specific security requirements and data protection measures included in this contract?

Ensuring the security of IRS data transmitted and stored on mobile devices is paramount. This contract likely incorporates specific security requirements mandated by federal regulations, such as those outlined by the Cybersecurity and Infrastructure Security Agency (CISA) and the IRS's own internal security policies. These requirements typically include stipulations for device encryption, secure network access (e.g., VPN usage), multi-factor authentication, remote device management capabilities for wiping lost or stolen devices, and adherence to data privacy standards. The contract may also specify approved applications and prohibit the installation of unauthorized software. T-Mobile, as the provider, would be obligated to meet these security protocols and potentially provide reporting on security incidents. The IRS's IT security team would be responsible for overseeing compliance and ensuring that the mobile devices and services integrate securely with the agency's broader IT infrastructure.

What is T-Mobile USA's track record in fulfilling large federal telecommunications contracts?

T-Mobile USA has a significant presence in the federal telecommunications market and has secured numerous contracts with various government agencies. Their track record typically involves providing wireless voice, data, and mobile device solutions. When evaluating their performance on large federal contracts, factors such as network reliability, customer service responsiveness, adherence to delivery schedules, and compliance with contract terms are important considerations. Agencies often review past performance information, including contractor performance assessment reporting (CPARs), when making award decisions. T-Mobile's ability to scale its services to meet the demands of large organizations like the IRS, coupled with its extensive network coverage, suggests a capacity to handle such requirements. However, as with any large contract, ongoing monitoring of performance against the agreed-upon service level agreements (SLAs) is essential throughout the contract's duration.

Are there any performance risks associated with this contract, and how are they mitigated?

Potential performance risks for this contract include network coverage gaps in certain geographic areas, device availability issues, service disruptions, or challenges in managing a large fleet of mobile devices. Mitigation strategies are typically built into the contract itself. For instance, the firm-fixed-price structure incentivizes T-Mobile to deliver reliable service to avoid penalties or customer dissatisfaction. Service Level Agreements (SLAs) will define acceptable performance metrics for network uptime, data speeds, and customer support response times, with potential financial remedies for failures. The IRS will likely have dedicated contract managers and technical points of contact to monitor performance, address issues promptly, and ensure T-Mobile meets its obligations. Furthermore, the IRS may have contingency plans for critical communications needs and conduct regular performance reviews with the contractor.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - END USER

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 12920 SE 38TH ST, BELLEVUE, WA, 98006

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

Financial Breakdown

Contract Ceiling: $102,666,433

Exercised Options: $37,729,763

Current Obligation: $26,228,163

Actual Outlays: $11,883,078

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 2032H521A00022

IDV Type: BPA

Timeline