IRS Awards $173M for Microsoft Licenses and Support to Minburn Technology Group

Contract Overview

Contract Amount: $173,040,241 ($173.0M)

Contractor: Minburn Technology Group, LLC

Awarding Agency: Department of the Treasury

Start Date: 2024-06-01

End Date: 2026-05-31

Contract Duration: 729 days

Daily Burn Rate: $237.4K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: MICROSOFT SOFTWARE LICENSES AND SUPPORT (TASK ORDER 00004)

Place of Performance

Location: GREAT FALLS, FAIRFAX County, VIRGINIA, 22066

State: Virginia Government Spending

Plain-Language Summary

Department of the Treasury obligated $173.0 million to MINBURN TECHNOLOGY GROUP, LLC for work described as: MICROSOFT SOFTWARE LICENSES AND SUPPORT (TASK ORDER 00004) Key points: 1. Significant contract value of $173M for essential software. 2. Competition was full and open, suggesting potential for competitive pricing. 3. Risk is moderate, tied to software vendor lock-in and support continuity. 4. Sector is IT, specifically software licensing and support services.

Value Assessment

Rating: good

The contract value of $173M for Microsoft licenses and support appears reasonable given the scale and duration. Benchmarking against similar large-scale enterprise software agreements would provide a more precise assessment, but the firm-fixed-price structure offers cost certainty.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition via a BPA Call. This method generally promotes competitive pricing by allowing multiple vendors to bid, leading to potentially better value for the government.

Taxpayer Impact: The use of full and open competition aims to ensure taxpayer funds are used efficiently by securing favorable pricing for essential software licenses and support.

Public Impact

Ensures continued operation of critical IRS systems reliant on Microsoft software. Supports tax administration and taxpayer services through reliable software infrastructure. Potential for future software upgrades and enhanced functionalities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Reliance on a single software vendor (Microsoft).
Potential for price increases upon contract renewal.
Task order awarded to a specific BPA holder, not direct competition for this task order.

Positive Signals

Full and open competition for the underlying BPA.
Firm-fixed-price contract provides cost predictability.
Long-term support ensures system stability.

Sector Analysis

This contract falls within the IT sector, specifically software publishers and licensing. Spending benchmarks for enterprise software licenses and support can vary widely based on the software suite and user base, but $173M over two years indicates a substantial deployment.

Small Business Impact

While the award was made to MINBURN TECHNOLOGY GROUP, LLC, the data does not indicate if this is a small business. Further analysis would be needed to determine the extent of small business participation in this contract.

Oversight & Accountability

The contract is managed by the Department of the Treasury's Internal Revenue Service. Oversight would involve monitoring vendor performance, adherence to licensing terms, and ensuring continued support aligns with IRS operational needs.

Related Government Programs

Software Publishers
Department of the Treasury Contracting
Internal Revenue Service Programs

Risk Flags

Vendor lock-in with Microsoft.
Potential for price increases upon renewal.
Dependence on a single task order awardee under a BPA.
Lack of explicit small business participation noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $173.0 million to MINBURN TECHNOLOGY GROUP, LLC. MICROSOFT SOFTWARE LICENSES AND SUPPORT (TASK ORDER 00004)

Who is the contractor on this award?

The obligated recipient is MINBURN TECHNOLOGY GROUP, 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 $173.0 million.

What is the period of performance?

Start: 2024-06-01. End: 2026-05-31.

What is the total cost of ownership for these Microsoft licenses over their lifecycle, including potential future renewals and upgrades?

The total cost of ownership requires projecting future renewal costs, potential price escalations, and the impact of any required upgrades or new feature adoption. Without specific renewal terms or upgrade paths, a precise lifecycle cost is difficult to determine. However, the current $173M over two years suggests a significant ongoing investment that warrants careful long-term financial planning.

How does the per-unit cost of these Microsoft licenses compare to government-wide enterprise license agreements or other federal agencies?

Benchmarking the per-unit cost against government-wide agreements like NASA SEWP or NIH CIO-SP3, or comparing with similar large-scale Microsoft deployments in other federal agencies, is crucial. This comparison would reveal if the IRS is achieving competitive pricing for these licenses and support services, highlighting potential savings or areas for negotiation.

What is the strategy for mitigating vendor lock-in and ensuring flexibility in future software procurement decisions?

Mitigating vendor lock-in involves exploring open-source alternatives, standardizing on interoperable platforms, and negotiating favorable contract terms that allow for easier transition. The IRS should maintain a clear roadmap for software rationalization and actively assess competitive solutions to avoid long-term dependency and ensure future procurement flexibility.

Industry Classification

NAICS: Information › Software Publishers › Software Publishers

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 9716 ARNON CHAPEL RD, GREAT FALLS, VA, 22066

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Service Disabled Veteran Owned Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $350,821,067

Exercised Options: $192,751,417

Current Obligation: $173,040,241

Actual Outlays: $171,893,771

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 2032H524A00003

IDV Type: BPA

Timeline