Treasury's $8.3M IT services contract awarded to TECHNOLOGENT SOLUTIONS, LLC raises value concerns

Contract Overview

Contract Amount: $8,299,975 ($8.3M)

Contractor: Technologent Solutions, LLC

Awarding Agency: Department of the Treasury

Start Date: 2024-09-23

End Date: 2026-09-22

Contract Duration: 729 days

Daily Burn Rate: $11.4K/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IRDB 8412

Place of Performance

Location: CHANTILLY, FAIRFAX County, VIRGINIA, 20151

State: Virginia Government Spending

Plain-Language Summary

Department of the Treasury obligated $8.3 million to TECHNOLOGENT SOLUTIONS, LLC for work described as: IRDB 8412 Key points: 1. Contract value appears high relative to duration and service type. 2. Limited competition raises questions about price discovery and potential overpayment. 3. Lack of small business set-aside may limit broader economic participation. 4. Contract duration of two years is standard for IT services. 5. Service category 'Other Computer Related Services' is broad, requiring further definition of deliverables. 6. Geographic concentration in Virginia may indicate regional IT market dynamics.

Value Assessment

Rating: questionable

The contract's total value of $8.3 million over two years, averaging approximately $415,000 per month, seems high for 'Other Computer Related Services' without specific details on the scope of work. Benchmarking against similar IT service contracts for the IRS or Treasury, especially those with firm-fixed-price structures, is crucial. Given the limited competition, it is difficult to definitively assess if the pricing reflects fair market value or if there is potential for overpayment. Further analysis of the specific services rendered and their complexity is needed to provide a more precise value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed under SAP (Simplified Acquisition Procedures), indicating it was likely procured through a sole-source or limited competition justification. The absence of a broad competition means that multiple vendors were not given the opportunity to bid, which can hinder price discovery and potentially lead to higher costs for the government. The specific reasons for this procurement approach (e.g., unique capabilities, urgent need) are not detailed but are critical for understanding the competitive landscape.

Taxpayer Impact: The lack of open competition means taxpayers may not be receiving the most cost-effective solution. Without multiple bids, the government may have paid a premium compared to what a competitive process would have yielded.

Public Impact

The primary beneficiary is TECHNOLOGENT SOLUTIONS, LLC, which receives a significant federal contract. The contract is expected to deliver 'Other Computer Related Services' to the Internal Revenue Service. The geographic impact is concentrated in Virginia, where the contractor is located. The contract may have implications for the IT workforce, potentially creating or sustaining jobs within TECHNOLOGENT SOLUTIONS, LLC.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competitive bidding may result in inflated costs for taxpayers.
The broad service category 'Other Computer Related Services' lacks specificity, making performance monitoring and value assessment challenging.
Sole-source awards can limit opportunities for other qualified vendors, including small businesses.

Positive Signals

The contract is awarded to a single entity, potentially allowing for focused service delivery and streamlined communication.
The firm-fixed-price structure provides cost certainty for the government, assuming the scope of work is well-defined.
The contract duration of two years allows for continuity of services.

Sector Analysis

The IT services sector is highly competitive, with a wide range of companies offering specialized and general computer-related services. Federal spending in this area is substantial, supporting various government functions from cybersecurity to data management. This contract, categorized under NAICS code 541519 (Other Computer Related Services), falls into a broad segment of the IT market. Comparable spending benchmarks for similar services within the federal government would typically involve analyzing contracts for IT consulting, system integration, and technical support, often awarded through competitive processes.

Small Business Impact

This contract does not appear to have a small business set-aside, as indicated by 'sb': false. Furthermore, the contractor, TECHNOLOGENT SOLUTIONS, LLC, is not flagged as a small business. This means that opportunities for small businesses to participate in this contract, either as prime contractors or through subcontracting, may be limited unless explicitly included in the contract's terms. The absence of a small business focus could reduce the overall economic impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Treasury's contracting officers and program managers. Accountability measures are typically embedded in the contract's performance work statement and delivery schedules. Transparency regarding the specific services and performance metrics would depend on the IRS's reporting practices and any public disclosures made. The Inspector General for the Department of the Treasury would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

IRS IT Modernization Programs
Treasury Department IT Infrastructure Support
Federal Civilian Agency IT Services Contracts
Other Computer Related Services Contracts

Risk Flags

Sole-source award
Lack of competition
Broad service category definition
Potential for high per-unit cost

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $8.3 million to TECHNOLOGENT SOLUTIONS, LLC. IRDB 8412

Who is the contractor on this award?

The obligated recipient is TECHNOLOGENT 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 $8.3 million.

What is the period of performance?

Start: 2024-09-23. End: 2026-09-22.

What is the specific nature of the 'Other Computer Related Services' being provided under this contract?

The provided data categorizes the contract under NAICS code 541519, 'Other Computer Related Services.' This is a broad category that can encompass a wide range of IT support, consulting, and technical services not specifically classified under other IT-related NAICS codes. Without a detailed Statement of Work (SOW) or Performance Work Statement (PWS), it is impossible to ascertain the precise services. These could range from IT strategy and planning, system integration, network management, cybersecurity consulting, to specialized software development or support. The lack of specificity in the service description makes it challenging to benchmark costs accurately or assess the contractor's performance against defined deliverables.

How does the $8.3 million contract value compare to similar IT services contracts awarded by the IRS or Treasury?

Benchmarking this $8.3 million contract requires comparing it to similar IT services contracts awarded by the IRS or Treasury, particularly those with a firm-fixed-price structure and a two-year duration. The average monthly cost of approximately $345,833 ($8.3M / 24 months) needs to be evaluated against the complexity and criticality of the services rendered. Contracts for comparable 'Other Computer Related Services' that were competitively bid might offer a more reliable price point. Given this contract was not competed under SAP and appears to be sole-source, its pricing may not reflect the most advantageous market rates. A detailed analysis of contract databases and agency procurement histories would be necessary to establish a robust comparison.

What are the potential risks associated with awarding this contract on a sole-source basis?

Awarding this contract on a sole-source basis carries several potential risks. Primarily, it limits the government's ability to secure the best possible price due to the absence of competitive pressure. This can lead to overpayment and inefficient use of taxpayer funds. Secondly, it restricts the opportunity for other qualified vendors, including small businesses, to compete for and win federal contracts, potentially stifling innovation and market diversity. Lastly, a sole-source award might indicate a lack of adequate market research or planning, or it could be driven by specific, potentially non-competitive, circumstances that warrant closer scrutiny to ensure the government's best interests are served.

What is TECHNOLOGENT SOLUTIONS, LLC's track record with federal contracts, particularly with the IRS or Treasury?

Information regarding TECHNOLOGENT SOLUTIONS, LLC's track record with federal contracts, specifically with the IRS or Treasury, is not provided in the initial data. A comprehensive assessment would require examining their past performance on similar contracts, including contract values, duration, services provided, and any performance ratings or past performance evaluations. Understanding their history of delivering on time, within budget, and meeting quality standards is crucial for evaluating the risk associated with this current award. A review of contract databases like FPDS-NG or SAM.gov could provide insights into their federal contracting history.

What are the implications of the contract's firm-fixed-price (FFP) type for cost control and risk management?

The firm-fixed-price (FFP) contract type offers significant advantages for cost control and risk management from the government's perspective. Under an FFP contract, the price is set and not subject to adjustment based on the contractor's cost experience. This provides budget certainty for the government. The risk of cost overruns is primarily borne by the contractor. However, for an FFP contract to be effective, the scope of work must be clearly and precisely defined. If the scope is ambiguous or changes frequently, it can lead to disputes, change orders, or the contractor potentially cutting corners to maintain profitability, which could impact quality or timely delivery.

How does the contract's duration of 729 days (approximately 2 years) align with typical IT service contract lifecycles?

A contract duration of 729 days, which is approximately two years, is a common and often appropriate timeframe for many IT service contracts. This duration allows for a reasonable period to establish service delivery, achieve project milestones, and realize the benefits of the services provided, without locking the government into an excessively long commitment. Shorter durations might be suitable for specific, time-bound projects, while longer durations (often with option periods) might be used for large-scale, ongoing support or modernization efforts. For 'Other Computer Related Services,' a two-year term suggests a need for sustained support or development that is not necessarily a short-term engagement but also not a multi-year strategic overhaul.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services

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

Competition & Pricing

Extent Competed: NOT COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: 2032H5-24-Q-00191

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 14100 PARKE LONG COURT, CHANTILLY, VA, 20151

Business Categories: Alaskan Native Corporation Owned Firm, Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Minority Owned Business, Native American Owned Business, SBA Certified 8 a Joint Venture, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $8,299,975

Exercised Options: $8,299,975

Current Obligation: $8,299,975

Actual Outlays: $5,532,858

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $4,994,778

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline