Treasury's $19M TaxSlayer software contract awarded to Rhodes Computer Services for IRS operations
Contract Overview
Contract Amount: $19,007,600 ($19.0M)
Contractor: Rhodes Computer Services, LLC
Awarding Agency: Department of the Treasury
Start Date: 2022-10-25
End Date: 2026-10-20
Contract Duration: 1,456 days
Daily Burn Rate: $13.1K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: TAXSLAYER SOFTWARE & MAINTENANCE
Place of Performance
Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20010
Plain-Language Summary
Department of the Treasury obligated $19.0 million to RHODES COMPUTER SERVICES, LLC for work described as: TAXSLAYER SOFTWARE & MAINTENANCE Key points: 1. Value for money appears reasonable given the firm-fixed-price structure and duration. 2. Full and open competition suggests a competitive bidding process. 3. Risk indicators are moderate, with a long contract duration and potential for scope creep. 4. Performance context is critical for IRS operations, impacting taxpayer services. 5. Sector positioning is within the software publishing industry, supporting government IT needs.
Value Assessment
Rating: good
The contract's total value of $19,007,600 over approximately four years suggests a per-year cost of roughly $4.75 million. This appears to be a standard range for enterprise software maintenance and support contracts of this nature. Benchmarking against similar IRS software contracts would provide a more precise value assessment, but the firm-fixed-price nature offers cost certainty.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that multiple vendors were likely invited to bid. The specific number of bidders is not provided, but this procurement method generally fosters price discovery and encourages competitive pricing. The agency's choice of this method suggests confidence in market availability of qualified vendors.
Taxpayer Impact: Taxpayers benefit from full and open competition as it typically leads to more competitive pricing, potentially reducing the overall cost to the government and, by extension, taxpayer funds.
Public Impact
Taxpayers benefit from the continued availability and maintenance of the TaxSlayer software, ensuring efficient tax filing processes. IRS operations are supported, enabling the agency to perform its core functions related to tax administration. The contract impacts the IT sector by providing revenue to Rhodes Computer Services, LLC. Workforce implications are primarily within the contractor's organization, requiring skilled personnel for software maintenance and support.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration (over 4 years) could lead to vendor lock-in or reduced flexibility.
- Reliance on a single vendor for critical software maintenance may pose risks if the vendor faces financial or operational challenges.
- Potential for scope creep if requirements evolve significantly beyond the initial contract terms.
Positive Signals
- Firm-fixed-price contract provides cost predictability for the government.
- Awarded under full and open competition, suggesting a robust selection process.
- Contract supports essential IRS functions, indicating strategic importance.
Sector Analysis
This contract falls within the Software Publishers industry (NAICS 511210), which includes establishments primarily engaged in computer software publishing or involved in computer software publishing and reproduction. The government's IT spending is a significant portion of the overall market, with agencies increasingly relying on specialized software for operations. Comparable spending benchmarks for enterprise software maintenance and support contracts can vary widely based on complexity and user base, but this $19 million award is substantial for a single software product over its lifecycle.
Small Business Impact
The provided data indicates that small business participation (ss and sb fields) is false for this contract. This suggests that the prime contractor, Rhodes Computer Services, LLC, is not a small business, and there is no explicit small business set-aside. Further analysis would be needed to determine if subcontracting opportunities exist for small businesses within this contract.
Oversight & Accountability
Oversight for this contract would typically be managed by the contracting officer and the relevant program office within the IRS. Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of specified software maintenance and support. Transparency is generally facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.
Related Government Programs
- IRS Taxpayer Services
- Government IT Modernization
- Software Licensing and Maintenance
- Federal Financial Management Systems
Risk Flags
- Long-term contract duration
- Reliance on single vendor for critical software
- Potential for evolving requirements
Tags
taxation, software-maintenance, irs, department-of-the-treasury, firm-fixed-price, full-and-open-competition, it-services, rhodes-computer-services-llc, delivery-order, district-of-columbia
Frequently Asked Questions
What is this federal contract paying for?
Department of the Treasury awarded $19.0 million to RHODES COMPUTER SERVICES, LLC. TAXSLAYER SOFTWARE & MAINTENANCE
Who is the contractor on this award?
The obligated recipient is RHODES COMPUTER SERVICES, 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 $19.0 million.
What is the period of performance?
Start: 2022-10-25. End: 2026-10-20.
What is the track record of Rhodes Computer Services, LLC in performing similar government contracts?
Information regarding Rhodes Computer Services, LLC's specific track record on similar government contracts is not detailed in the provided data. A comprehensive assessment would require reviewing their past performance evaluations, contract history, and any reported issues or successes on previous federal awards. Agencies typically consider past performance as a key factor in the source selection process. Without access to detailed performance data, it is difficult to definitively assess their capabilities and reliability for this specific TaxSlayer software maintenance contract.
How does the pricing of this contract compare to similar software maintenance agreements for tax administration software?
Direct comparison of pricing for this $19 million, four-year contract for TaxSlayer software maintenance is challenging without access to specific benchmark data for comparable systems. However, the firm-fixed-price (FFP) award structure is generally favorable for the government, as it shifts most of the cost risk to the contractor. The annual cost averages around $4.75 million. To assess value, one would need to compare this to the cost of maintaining similar-scale tax software solutions used by other government agencies or large private sector entities, considering factors like the number of users, complexity of the software, and scope of support services.
What are the primary risks associated with this contract, and how are they being mitigated?
Key risks include potential vendor lock-in due to the long contract duration, the possibility of the contractor failing to provide adequate support, and the risk of evolving software requirements not being fully captured. Mitigation strategies likely include robust performance monitoring by the IRS, clear service level agreements (SLAs) within the contract, and the initial full and open competition process which aimed to select a capable vendor. The FFP structure also incentivizes the contractor to manage costs effectively. However, the long-term nature necessitates ongoing vigilance to ensure continued value and alignment with IRS needs.
How effective is the TaxSlayer software in supporting the IRS's mission, and does this contract ensure its continued effectiveness?
The effectiveness of the TaxSlayer software is crucial for the IRS's ability to process tax filings efficiently and accurately. This contract ensures the continued availability and maintenance of the software, which is vital for ongoing operations. The IRS's decision to award this contract implies that the software is considered effective and necessary. Continued effectiveness will depend on the quality of maintenance and support provided by Rhodes Computer Services, LLC, and the IRS's ability to manage the contract and adapt to any necessary software updates or enhancements over the contract period.
What are the historical spending patterns for TaxSlayer software maintenance or similar IRS software systems?
Historical spending data for this specific TaxSlayer software maintenance contract is not provided. However, understanding past spending on similar IRS software systems or previous contracts for TaxSlayer would offer valuable context. Agencies often have multi-year contracts for critical software, and spending can fluctuate based on contract renewals, scope changes, and market pricing. Analyzing historical data would reveal trends in cost, contract duration, and vendor stability, helping to contextualize the current $19 million award and assess whether it represents an increase, decrease, or stable spending level compared to previous periods.
What is the potential impact of this contract on the broader government IT landscape and software market?
This contract contributes to the overall government IT spending within the software publishing and maintenance sector. Awards of this size to specific vendors can influence market dynamics, potentially signaling demand for certain types of software or support services. For Rhodes Computer Services, LLC, this represents a significant revenue stream and a key government client. In the broader market, it underscores the ongoing need for robust, reliable software solutions to support essential government functions like tax administration. It also highlights the competitive nature of government IT procurement, especially when full and open competition is employed.
Industry Classification
NAICS: Information › Software Publishers › Software Publishers
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: NEGOTIATED PROPOSAL/QUOTE
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 3003 ALLEN DR, EVANS, GA, 30809
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $19,007,600
Exercised Options: $19,007,600
Current Obligation: $19,007,600
Actual Outlays: $19,007,600
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: 2032H521D00002
IDV Type: IDC
Timeline
Start Date: 2022-10-25
Current End Date: 2026-10-20
Potential End Date: 2026-10-20 07:05:32
Last Modified: 2025-12-22
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