Treasury's $90.4M MEF Contract Awarded to IBM for Computer Systems Design Services
Contract Overview
Contract Amount: $90,374,192 ($90.4M)
Contractor: International Business Machines Corporation
Awarding Agency: Department of the Treasury
Start Date: 2024-06-30
End Date: 2027-03-29
Contract Duration: 1,002 days
Daily Burn Rate: $90.2K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: MODERNIZED E-FILE (MEF)
Place of Performance
Location: BETHESDA, MONTGOMERY County, MARYLAND, 20817
State: Maryland Government Spending
Plain-Language Summary
Department of the Treasury obligated $90.4 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: MODERNIZED E-FILE (MEF) Key points: 1. IBM secures a significant contract for the Modernized E-File system. 2. The award is part of a larger strategy to enhance tax processing. 3. Potential risks include vendor lock-in and the need for continuous system updates. 4. The IT sector sees substantial government investment in modernization efforts.
Value Assessment
Rating: good
The contract value of $90.4M over approximately 3 years appears reasonable for a complex IT modernization project. Benchmarking against similar large-scale government IT contracts would provide a more precise assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a competitive bidding process that likely led to a fair price discovery. The use of a delivery order under an existing contract structure needs further review for its competitive implications.
Taxpayer Impact: Taxpayers benefit from an efficient and modernized e-file system, potentially leading to faster processing and improved services. The competitive award process aims to ensure taxpayer funds are used effectively.
Public Impact
Improved efficiency and accuracy in tax filing for millions of Americans. Enhanced data security and privacy for sensitive taxpayer information. Potential for new features and services to be rolled out through the modernized system.
Waste & Efficiency Indicators
Waste Risk Score: 75 / 10
Warning Flags
- Reliance on a single vendor for critical infrastructure.
- Potential for cost overruns if scope creep occurs.
- Ensuring adequate cybersecurity measures are maintained.
Positive Signals
- Modernization of a critical government function.
- Awarded through full and open competition.
- Clear delivery timeline and defined scope.
Sector Analysis
The IT sector, particularly government IT modernization, is a significant area of federal spending. This contract aligns with broader trends of agencies upgrading legacy systems to improve efficiency and security, with typical contract values varying widely based on scope and duration.
Small Business Impact
The contract was awarded to IBM, a large corporation, and there is no indication of specific provisions for small business participation in this particular award. Future subcontracts may offer opportunities, but direct small business involvement is not evident.
Oversight & Accountability
The Department of the Treasury, specifically the IRS, is responsible for overseeing this contract. Regular performance reviews and milestone tracking are crucial to ensure successful delivery and accountability for taxpayer funds.
Related Government Programs
- Computer Systems Design Services
- Department of the Treasury Contracting
- Internal Revenue Service Programs
Risk Flags
- Vendor lock-in potential
- Cybersecurity vulnerabilities
- Scope creep leading to cost overruns
- Integration challenges with existing IRS systems
- Dependence on specific IBM technologies
Tags
computer-systems-design-services, department-of-the-treasury, md, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of the Treasury awarded $90.4 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. MODERNIZED E-FILE (MEF)
Who is the contractor on this award?
The obligated recipient is INTERNATIONAL BUSINESS MACHINES 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 $90.4 million.
What is the period of performance?
Start: 2024-06-30. End: 2027-03-29.
What is the projected return on investment for the MEF modernization project?
The projected ROI for the MEF modernization is not explicitly detailed in the provided data. However, the investment aims to improve processing efficiency, reduce errors, and enhance taxpayer services, which are expected to yield long-term cost savings and improved operational effectiveness for the IRS.
What are the key performance indicators (KPIs) for this contract?
Key performance indicators likely include system uptime, processing speed, error rates, data security compliance, and user satisfaction. Specific KPIs would be detailed in the contract's statement of work and performance metrics, ensuring the IRS receives the expected benefits from the modernized e-file system.
How will the IRS ensure the long-term maintainability and scalability of the modernized system?
The IRS will ensure long-term maintainability and scalability through robust contract management, including regular performance reviews, defined service level agreements (SLAs), and potentially phased technology refreshes. The contract's structure and IBM's proposed solution should address future adaptability to evolving tax laws and technological advancements.
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: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 2
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 6710 ROCKLEDGE DRIVE, BETHESDA, MD, 20817
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: $147,911,639
Exercised Options: $90,374,192
Current Obligation: $90,374,192
Actual Outlays: $50,529,790
Subaward Activity
Number of Subawards: 178
Total Subaward Amount: $29,646,801
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Parent Contract
Parent Award PIID: 47QTCK18D0014
IDV Type: GWAC
Timeline
Start Date: 2024-06-30
Current End Date: 2027-03-29
Potential End Date: 2029-03-29 00:00:00
Last Modified: 2026-04-02
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