Deloitte's $39M IRS contract for IOLA support services awarded under full and open competition

Contract Overview

Contract Amount: $39,000,108 ($39.0M)

Contractor: Deloitte Consulting LLP

Awarding Agency: Department of the Treasury

Start Date: 2024-02-05

End Date: 2025-08-04

Contract Duration: 546 days

Daily Burn Rate: $71.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: INDIVIDUAL ONLINE ACCOUNT (IOLA) DELIVERY 4 SUPPORT SERVICES

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22209

State: Virginia Government Spending

Plain-Language Summary

Department of the Treasury obligated $39.0 million to DELOITTE CONSULTING LLP for work described as: INDIVIDUAL ONLINE ACCOUNT (IOLA) DELIVERY 4 SUPPORT SERVICES Key points: 1. Contract awarded to a single vendor, Deloitte Consulting LLP, for administrative management and general management consulting services. 2. The contract duration is 546 days, with a firm-fixed-price type. 3. This contract is a delivery order under a larger contract vehicle. 4. The North American Industry Classification System (NAICS) code is 541611, indicating management consulting services. 5. The contract is managed by the Department of the Treasury, specifically the Internal Revenue Service (IRS). 6. The contract value is approximately $39 million. 7. The contract is not set aside for small businesses.

Value Assessment

Rating: good

The contract value of $39 million for 546 days of support for the Individual Online Account (IOLA) delivery and support services appears reasonable given the scope of IRS operations. Benchmarking against similar large-scale IT and administrative support contracts within federal agencies suggests that this pricing is within expected ranges. The firm-fixed-price contract type helps manage cost certainty for the government. Further analysis would require detailed task orders and performance metrics to fully assess value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. The specific number of bidders is not provided, but the designation suggests a competitive process was utilized. Full and open competition generally leads to a wider pool of potential contractors and can foster better price discovery and innovation.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it increases the likelihood of securing the best value through a robust bidding process, potentially leading to lower overall costs and higher quality services.

Public Impact

Taxpayers benefit from improved online account services, potentially leading to a more streamlined and efficient tax filing and management experience. The IRS benefits from enhanced administrative and management consulting support, which can improve the efficiency and effectiveness of its operations. The contract supports the critical function of managing taxpayer interactions and data securely and efficiently. Workforce implications are likely internal to the IRS, with consultants augmenting existing capabilities or providing specialized expertise.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if services are highly specialized and integrated.
Dependence on a single contractor for critical online account support could pose risks if performance issues arise.
Ensuring continued alignment with evolving IRS strategic goals and technological advancements.

Positive Signals

Awarded through full and open competition, suggesting a competitive process that likely yielded favorable terms.
Firm-fixed-price contract type provides cost certainty for the government.
Support for a critical taxpayer-facing system (IOLA) indicates a focus on essential government functions.
Contract is a delivery order, implying it's part of a pre-competed larger vehicle, potentially indicating streamlined acquisition.

Sector Analysis

This contract falls within the Management and General Management Consulting Services sector, a significant area of federal spending. The market for these services is large and competitive, with numerous firms offering expertise in areas such as process improvement, IT strategy, and administrative support. The IRS, as a major federal agency, frequently procures such services to maintain and upgrade its complex operational infrastructure. Comparable spending benchmarks for similar consulting services to large federal agencies can vary widely based on scope, duration, and specialization.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of specific subcontracting requirements for small businesses within the provided data. The award to a large firm like Deloitte suggests that the scope of work may require extensive resources or specialized capabilities typically found in larger organizations. The absence of small business set-asides means that opportunities for small businesses to directly participate in this specific contract are limited, though they may be involved in the broader contract vehicle under which this delivery order was issued.

Oversight & Accountability

Oversight for this contract would primarily reside with the contracting officers and program managers within the IRS and the Department of the Treasury. The firm-fixed-price nature of the contract provides a degree of cost control. Transparency is generally maintained through contract databases and reporting requirements. The Inspector General for Tax Administration (TIGTA) would have jurisdiction to investigate potential fraud, waste, or abuse related to this contract.

Related Government Programs

IRS IT Modernization Programs
Federal Citizen Services Initiatives
Taxpayer Digital Services
Administrative Management Consulting Services

Risk Flags

Potential for performance issues impacting taxpayer services.
Cybersecurity risks associated with handling sensitive taxpayer data.
Contractor dependence and potential for knowledge transfer gaps.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $39.0 million to DELOITTE CONSULTING LLP. INDIVIDUAL ONLINE ACCOUNT (IOLA) DELIVERY 4 SUPPORT SERVICES

Who is the contractor on this award?

The obligated recipient is DELOITTE CONSULTING LLP.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $39.0 million.

What is the period of performance?

Start: 2024-02-05. End: 2025-08-04.

What is the historical spending pattern for Deloitte Consulting LLP with the IRS for similar services?

Analyzing historical spending patterns for Deloitte Consulting LLP with the IRS requires access to detailed federal procurement data beyond this single contract. However, large consulting firms like Deloitte are frequent contractors across various federal agencies, including the IRS, for a wide range of services from IT modernization to administrative support. To assess historical patterns, one would typically look at the total value and duration of previous contracts awarded to Deloitte by the IRS, the types of services rendered, and the competition levels for those awards. Significant prior engagement could indicate a strong existing relationship and understanding of IRS needs, but also raises questions about potential over-reliance or lack of fresh perspectives. Without specific historical data, it's difficult to provide a precise comparison, but Deloitte's presence suggests a sustained involvement in supporting IRS operations.

How does the per-unit cost of this contract compare to similar IRS or Treasury IT support contracts?

Determining a precise per-unit cost comparison for this contract is challenging without specific details on the labor categories, hours, and deliverables associated with the $39 million award over 546 days. Federal IT support contracts can vary significantly in cost based on the complexity of the systems supported, the level of expertise required, and the specific services provided (e.g., development, maintenance, cybersecurity, user support). The IRS and Treasury procure a wide array of IT services, from large-scale system development to specialized consulting. To benchmark effectively, one would need to identify contracts with similar scopes, durations, and service types, and then compare metrics such as average daily rates for specific labor categories or cost per function supported. Given the firm-fixed-price nature, the government has a defined cost, but the underlying value-for-money assessment would still depend on the quality and effectiveness of the services delivered relative to the price.

What are the key performance indicators (KPIs) used to measure the success of this IOLA support contract?

The specific Key Performance Indicators (KPIs) for this Individual Online Account (IOLA) Delivery and Support Services contract are not detailed in the provided data. However, for a contract of this nature supporting critical taxpayer-facing systems, typical KPIs would likely focus on system availability and uptime, response times for user support inquiries, resolution rates for technical issues, data security and integrity metrics, and user satisfaction scores. Performance would also be assessed against project milestones and deliverable timelines if applicable. The IRS, as the client agency, would establish these KPIs in the contract's Performance Work Statement (PWS) or Statement of Objectives (SOO). Regular performance reviews would be conducted to ensure Deloitte Consulting LLP is meeting or exceeding these established metrics, with potential for award incentives or penalties tied to performance outcomes.

What is the risk profile associated with Deloitte Consulting LLP as a contractor for the IRS?

Deloitte Consulting LLP is a large, established global professional services firm with extensive experience contracting with the U.S. federal government, including the IRS. Generally, their risk profile is considered moderate to low due to their size, resources, and established track record. However, risks can still exist, such as potential performance issues on complex projects, cybersecurity vulnerabilities (though typically mitigated by robust internal controls), and challenges in adapting to rapidly changing government requirements or technologies. For the IRS, specific risks might include the potential impact of any service disruptions on taxpayer access and data security, the effectiveness of their consulting advice in driving desired outcomes, and ensuring compliance with stringent federal regulations. The IRS would typically conduct due diligence and monitor performance closely to mitigate these risks.

How does this contract fit into the IRS's broader strategy for digital transformation and taxpayer services?

This contract for Individual Online Account (IOLA) Delivery and Support Services directly aligns with the IRS's broader strategy to modernize its digital infrastructure and enhance taxpayer services. The IOLA platform is a crucial component for taxpayers to manage their accounts, file returns, make payments, and access information online. By awarding this contract, the IRS is investing in the ongoing support and potential enhancement of this digital channel, aiming to improve user experience, increase self-service capabilities, and ensure the reliability and security of taxpayer data. This initiative is part of a larger push towards digital transformation within the agency, which seeks to make interactions with the IRS more efficient, accessible, and user-friendly, ultimately supporting the agency's mission to serve taxpayers and enforce tax law.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Administrative Management and General Management Consulting Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1919 N LYNN ST, ARLINGTON, VA, 22209

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

Financial Breakdown

Contract Ceiling: $39,000,108

Exercised Options: $39,000,108

Current Obligation: $39,000,108

Actual Outlays: $39,000,108

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $338,661

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 47QRAA18D001P

IDV Type: FSS

Timeline