IRS Spends $23.9M on Xerox Managed Print Services, Awarded Without Competition

Contract Overview

Contract Amount: $23,921,827 ($23.9M)

Contractor: Xerox Corporation

Awarding Agency: Department of the Treasury

Start Date: 2024-06-01

End Date: 2027-01-31

Contract Duration: 974 days

Daily Burn Rate: $24.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: XEROX MANAGED PRINT SERVICES (MPS) CONTRACT 2032H5-24-C-00041 FOR BASE YEAR - POP 06/01/2024 THRU 02/28/2025

Place of Performance

Location: LANHAM, PRINCE GEORGES County, MARYLAND, 20706

State: Maryland Government Spending

Plain-Language Summary

Department of the Treasury obligated $23.9 million to XEROX CORPORATION for work described as: XEROX MANAGED PRINT SERVICES (MPS) CONTRACT 2032H5-24-C-00041 FOR BASE YEAR - POP 06/01/2024 THRU 02/28/2025 Key points: 1. The IRS awarded a $23.9 million contract for Managed Print Services to Xerox Corporation. 2. The contract was not competed, raising questions about potential price discovery. 3. The service category is Commercial Printing, with a base year running from June 2024 to February 2025. 4. This spending falls under the Department of the Treasury, specifically the Internal Revenue Service.

Value Assessment

Rating: questionable

The contract is firm-fixed-price, which can offer cost certainty. However, without competition, it's difficult to assess if the pricing is optimal or reflects market rates for managed print services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was not competed, indicating a sole-source award. This limits price discovery and may prevent the government from obtaining the best possible value through competitive bidding.

Taxpayer Impact: The lack of competition for a significant contract like this could result in taxpayers paying more than necessary for managed print services.

Public Impact

Taxpayers may be overpaying for essential printing services due to the absence of competitive bidding. The IRS relies on Xerox for critical document management and printing infrastructure. This contract highlights potential inefficiencies in government procurement processes for standard services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Potential for overpayment
Limited transparency in pricing

Positive Signals

Firm-fixed-price contract provides cost certainty
Established vendor (Xerox) likely has existing infrastructure

Sector Analysis

Managed print services are common across government agencies to streamline document output and reduce costs. Benchmarks for such contracts vary widely based on scope and volume, but competitive bidding is key to achieving favorable rates.

Small Business Impact

This contract was awarded to Xerox Corporation, a large business. There is no indication that small businesses were involved in this specific procurement, missing an opportunity for small business participation.

Oversight & Accountability

The non-competitive nature of this award warrants scrutiny from oversight bodies to ensure the IRS obtained fair value and followed appropriate procurement regulations. A review of the justification for the sole-source award is recommended.

Related Government Programs

Commercial Printing (except Screen and Books)
Department of the Treasury Contracting
Internal Revenue Service Programs

Risk Flags

Lack of Competition
Potential for Overpricing
Limited Small Business Participation
Questionable Value for Taxpayer Dollars

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $23.9 million to XEROX CORPORATION. XEROX MANAGED PRINT SERVICES (MPS) CONTRACT 2032H5-24-C-00041 FOR BASE YEAR - POP 06/01/2024 THRU 02/28/2025

Who is the contractor on this award?

The obligated recipient is XEROX CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of the Treasury (Internal Revenue Service).

What is the total obligated amount?

The obligated amount is $23.9 million.

What is the period of performance?

Start: 2024-06-01. End: 2027-01-31.

What was the justification for awarding this significant managed print services contract to Xerox on a sole-source basis, and were alternative solutions or competitive approaches considered?

The provided data indicates the contract was 'NOT COMPETED'. A thorough review would require access to the contract file to understand the specific justification (e.g., urgency, unique capabilities, prior investment). Without this, it's impossible to definitively state why competition was bypassed, but it raises concerns about whether the government received the best possible value or if a more competitive process could have yielded savings.

How does the per-unit cost or overall pricing of this Xerox MPS contract compare to similar government or commercial contracts for managed print services, considering the lack of competitive benchmark

Directly comparing pricing is challenging without detailed service level agreements and usage data. However, the absence of competition inherently prevents establishing a market-based benchmark. A comparative analysis against publicly available data for similar-sized MPS contracts, adjusted for scope and service levels, would be necessary to identify potential overpricing. The $23.9M value for a 9-month base period suggests a significant operational cost.

What is the potential impact on IRS operational efficiency and taxpayer service delivery if the managed print services provided by Xerox are not cost-effective or meet performance expectations?

If the services are not cost-effective, taxpayers indirectly bear the burden through potentially higher operational costs within the IRS. If performance expectations are not met, it could lead to disruptions in critical IRS functions, such as processing tax documents, issuing refunds, or communicating with taxpayers, ultimately impacting service delivery and potentially leading to delays or errors.

Industry Classification

NAICS: Manufacturing › Printing and Related Support Activities › Commercial Printing (except Screen and Books)

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1800 M ST NW STE 500N, WASHINGTON, DC, 20036

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $65,411,582

Exercised Options: $35,947,221

Current Obligation: $23,921,827

Actual Outlays: $13,439,360

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline