Treasury's $16.3M contract for tax calculator solutions awarded to ATI Government Solutions LLC

Contract Overview

Contract Amount: $16,271,373 ($16.3M)

Contractor: ATI Government Solutions LLC

Awarding Agency: Department of the Treasury

Start Date: 2024-07-14

End Date: 2025-10-30

Contract Duration: 473 days

Daily Burn Rate: $34.4K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: JOINT ENTERPRISE TAX ENTERPRISE TAX CALCULATOR SOLUTION (JETCS)

Place of Performance

Location: FREDERICK, FREDERICK County, MARYLAND, 21701

State: Maryland Government Spending

Plain-Language Summary

Department of the Treasury obligated $16.3 million to ATI GOVERNMENT SOLUTIONS LLC for work described as: JOINT ENTERPRISE TAX ENTERPRISE TAX CALCULATOR SOLUTION (JETCS) Key points: 1. Contract awarded on a firm-fixed-price basis, indicating clear cost expectations. 2. Duration of 473 days suggests a medium-term project. 3. The contract is for Computer Systems Design Services, a critical area for tax administration. 4. Awarded to a single vendor, raising questions about competitive pricing. 5. No small business set-aside, potentially limiting opportunities for smaller firms. 6. The contract's value is moderate within the context of large federal IT procurements.

Value Assessment

Rating: fair

The contract value of $16.3 million for 473 days of Computer Systems Design Services appears to be within a reasonable range for federal IT projects of this nature. However, without specific details on the scope of work and deliverables, a precise value-for-money assessment is challenging. Benchmarking against similar tax system development or maintenance contracts would provide a clearer picture of whether the pricing is competitive.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning it was not openly competed. This approach is typically used when only one vendor possesses the necessary qualifications, proprietary technology, or when urgent circumstances prevent a competitive process. The lack of competition means that pricing and service levels were not tested against market alternatives.

Taxpayer Impact: Sole-source awards can sometimes lead to higher costs for taxpayers as the government does not benefit from the price reductions typically achieved through competitive bidding.

Public Impact

The primary beneficiaries are the Internal Revenue Service (IRS) and potentially taxpayers through improved tax calculation systems. Services delivered include computer systems design, likely focused on enhancing or maintaining tax calculation software. The geographic impact is primarily within the IRS's operational footprint, likely concentrated in Maryland where the contractor is located. Workforce implications may involve specialized IT professionals within ATI Government Solutions LLC.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in suboptimal pricing.
Potential for vendor lock-in due to sole-source award.
Scope creep could increase costs beyond the initial $16.3M if not managed tightly.

Positive Signals

Firm-fixed-price contract provides cost certainty.
Award to a single vendor may indicate specialized expertise required for the task.
Contract duration allows for focused development and implementation.

Sector Analysis

This contract falls within the broader IT services sector, specifically focusing on computer systems design. The federal government is a significant consumer of such services, particularly for modernizing and maintaining complex systems like those used for tax administration. The market for specialized tax software development is competitive, but specific legacy system integration or unique requirements can sometimes lead to sole-source awards.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. This means that opportunities for small businesses to participate in this specific contract are limited, and the full value of the contract will likely go to the prime contractor, ATI Government Solutions LLC.

Oversight & Accountability

Oversight for this contract will be managed by the Department of the Treasury's Internal Revenue Service. Accountability measures will be tied to the firm-fixed-price contract terms and performance milestones. Transparency is limited due to the sole-source nature of the award, but contract details should be publicly available through federal procurement databases.

Related Government Programs

IRS Taxpayer Data Management Systems
Federal Tax Software Development Contracts
Government IT Modernization Programs

Risk Flags

Sole-source award limits competition.
Potential for cost overruns if scope is not well-defined.
Lack of small business participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $16.3 million to ATI GOVERNMENT SOLUTIONS LLC. JOINT ENTERPRISE TAX ENTERPRISE TAX CALCULATOR SOLUTION (JETCS)

Who is the contractor on this award?

The obligated recipient is ATI GOVERNMENT 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 $16.3 million.

What is the period of performance?

Start: 2024-07-14. End: 2025-10-30.

What specific tax calculation functionalities will this contract address?

The provided data indicates the contract is for 'JOINT ENTERPRISE TAX ENTERPRISE TAX CALCULATOR SOLUTION (JETCS)' and falls under 'Computer Systems Design Services'. While the exact functionalities are not detailed, it strongly suggests the contract aims to develop, enhance, or maintain the software responsible for calculating federal taxes. This could encompass areas like income tax, payroll tax, or other tax liabilities, potentially involving updates for new legislation, improved accuracy, or integration with other IRS systems. The 'Enterprise' aspect implies a system-wide solution rather than a niche application.

How does the $16.3 million contract value compare to similar federal tax system development projects?

Benchmarking the $16.3 million contract value requires comparing it to similar federal IT projects, particularly those involving tax system development or maintenance. Large-scale federal IT projects can range from tens of millions to billions of dollars. For a project spanning approximately 1.5 years (473 days) and focused on tax calculation solutions, $16.3 million appears to be a moderate investment. However, without knowing the specific scope, complexity, and number of users or systems impacted, a direct comparison is difficult. Sole-source awards, like this one, often lack the price discovery that comes from competitive bidding, making value assessment more reliant on internal government cost estimates and historical data for similar, albeit potentially competed, projects.

What are the risks associated with a sole-source award for critical tax systems?

Sole-source awards for critical systems like tax calculators carry inherent risks. The primary risk is a lack of competitive pressure, which can lead to inflated prices and potentially less innovation compared to a competed contract. There's also a risk of vendor lock-in, where the government becomes overly reliant on a single provider, making future transitions or renegotiations more difficult and costly. Furthermore, without multiple bidders, the government has fewer options if the chosen contractor underperforms or faces financial instability. Ensuring robust contract management and performance monitoring is crucial to mitigate these risks.

What is ATI Government Solutions LLC's track record with the IRS or similar federal agencies?

Information regarding ATI Government Solutions LLC's specific track record with the IRS or similar agencies is not provided in the abbreviated data. A comprehensive analysis would require reviewing their past performance on federal contracts, including client satisfaction, adherence to schedules and budgets, and the quality of deliverables. Federal procurement databases (like SAM.gov or FPDS) would typically contain records of their awarded contracts, which could be analyzed for relevant experience in IT services, particularly within the tax or financial sectors. Their performance history is a key factor in assessing the risk associated with this sole-source award.

What are the potential performance implications of a firm-fixed-price contract for this type of service?

A firm-fixed-price (FFP) contract structure for computer systems design services like the JETCS project implies that the contractor, ATI Government Solutions LLC, is obligated to complete the work for a predetermined price. This shifts most of the risk to the contractor regarding cost overruns. For the government, an FFP contract offers budget certainty. However, if the scope of work is not clearly defined or if unforeseen technical challenges arise, the contractor may be incentivized to cut corners on quality or scope to maintain profitability, or conversely, seek change orders that could increase the overall cost. Effective government oversight is essential to ensure the defined scope is met with adequate quality.

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: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 47 E SOUTH ST, UNIT 002, FREDERICK, MD, 21701

Business Categories: 8(a) Program Participant, American Indian Owned Business, Category Business, Government, Native American Tribal Government, Limited Liability Corporation, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Tribally Owned Firm, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $16,345,975

Exercised Options: $16,271,373

Current Obligation: $16,271,373

Actual Outlays: $16,271,373

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline