Zartek Solutions LLC awarded $4.34M for IRS application maintenance, highlighting IT system reliability needs

Contract Overview

Contract Amount: $4,341,016 ($4.3M)

Contractor: Zartek Solutions LLC

Awarding Agency: Department of the Treasury

Start Date: 2024-09-30

End Date: 2025-09-29

Contract Duration: 364 days

Daily Burn Rate: $11.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: THIS REQUIREMENT IS TO OBTAIN CONTRACTOR SUPPORT WITH AN EFFECTIVE APPROACH FOR MAINTAINING OPTIMUM PERFORMANCE AND RELIABILITY OF IRS APPLICATIONS AND SYSTEMS.

Place of Performance

Location: LEESBURG, LOUDOUN County, VIRGINIA, 20176

State: Virginia Government Spending

Plain-Language Summary

Department of the Treasury obligated $4.3 million to ZARTEK SOLUTIONS LLC for work described as: THIS REQUIREMENT IS TO OBTAIN CONTRACTOR SUPPORT WITH AN EFFECTIVE APPROACH FOR MAINTAINING OPTIMUM PERFORMANCE AND RELIABILITY OF IRS APPLICATIONS AND SYSTEMS. Key points: 1. Contract focuses on maintaining optimal performance and reliability of critical IRS applications and systems. 2. The award represents a significant investment in ensuring the stability of essential government IT infrastructure. 3. Competition dynamics for this contract are crucial for ensuring cost-effectiveness in IT system support. 4. Performance context suggests a need for robust IT support to prevent disruptions in taxpayer services. 5. Sector positioning is within IT services, specifically computer systems design and related services. 6. The contract duration of one year indicates a need for ongoing, adaptable support.

Value Assessment

Rating: good

The contract value of $4.34 million for a one-year period for IT application maintenance appears reasonable given the critical nature of IRS systems. Benchmarking against similar contracts for system maintenance and support for large federal agencies would provide a more precise value-for-money assessment. The firm-fixed-price structure suggests that the contractor bears the risk of cost overruns, which can be beneficial for the government if managed effectively. However, without specific performance metrics or comparisons to industry standards for similar services, a definitive assessment of cost-effectiveness is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. The specific number of bidders is not provided, but full and open competition generally fosters a competitive environment, which can lead to better pricing and service offerings. This approach allows the government to select the most capable and cost-effective solution from a wide pool of potential contractors.

Taxpayer Impact: Full and open competition is the most advantageous for taxpayers as it maximizes the potential for cost savings through a robust bidding process and encourages a wider range of innovative solutions.

Public Impact

Taxpayers benefit from the reliable operation of IRS applications, ensuring smooth processing of tax returns and other services. The services delivered are critical for maintaining the operational integrity of the Internal Revenue Service's IT infrastructure. The geographic impact is national, as IRS systems support operations across the United States. Workforce implications include the need for skilled IT professionals to perform maintenance and support tasks, potentially creating jobs in the IT sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if the contractor's proprietary systems are deeply integrated.
Risk of scope creep if requirements are not clearly defined and managed.
Dependence on contractor expertise could lead to knowledge gaps within the agency if not managed.
Ensuring continuous service delivery during transition periods if contract renewal is uncertain.

Positive Signals

Awarded under full and open competition, suggesting a competitive pricing environment.
Firm-fixed-price contract structure shifts cost risk to the contractor.
Focus on maintaining optimum performance and reliability indicates a clear objective.
Contract duration of one year allows for periodic reassessment of needs and performance.

Sector Analysis

The IT services sector, particularly computer systems design, is a critical component of government operations. Federal spending in this area is substantial, driven by the need to maintain and modernize complex IT infrastructures. This contract fits within the broader category of IT support and maintenance services, which are essential for agencies like the IRS to function effectively. Comparable spending benchmarks would involve analyzing IT maintenance contracts for other large federal agencies with similar system complexities.

Small Business Impact

The provided data indicates that small business participation (ss: false, sb: false) was not a specific set-aside requirement for this contract. Therefore, the direct impact on small businesses through set-asides is likely minimal. However, the prime contractor, Zartek Solutions LLC, may engage small businesses as subcontractors, depending on their subcontracting plans and the nature of the services required. Further analysis would be needed to determine the extent of subcontracting opportunities for small businesses.

Oversight & Accountability

Oversight for this contract will likely be managed by the contracting officer and the program/technical point of contact within the IRS. The firm-fixed-price nature of the contract provides a degree of accountability by fixing the total cost. Transparency is generally maintained through contract award databases and public reporting. The Inspector General for the Department of the Treasury may have jurisdiction for audits and investigations related to this contract, ensuring accountability and preventing fraud, waste, and abuse.

Related Government Programs

IRS IT Modernization Initiatives
Federal Civilian Agency IT Support Contracts
Computer Systems Design Services
Application Maintenance and Support

Risk Flags

Potential for performance degradation if contractor fails to meet SLAs.
Cybersecurity risks associated with third-party access to sensitive IRS systems.
Dependence on contractor expertise may create knowledge gaps within the agency.
Risk of cost overruns if scope is not clearly defined and managed.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $4.3 million to ZARTEK SOLUTIONS LLC. THIS REQUIREMENT IS TO OBTAIN CONTRACTOR SUPPORT WITH AN EFFECTIVE APPROACH FOR MAINTAINING OPTIMUM PERFORMANCE AND RELIABILITY OF IRS APPLICATIONS AND SYSTEMS.

Who is the contractor on this award?

The obligated recipient is ZARTEK 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 $4.3 million.

What is the period of performance?

Start: 2024-09-30. End: 2025-09-29.

What is Zartek Solutions LLC's track record with the IRS and other federal agencies for similar IT maintenance contracts?

Assessing Zartek Solutions LLC's track record is crucial for understanding their capability to fulfill this contract. A review of past performance evaluations, contract awards, and any reported issues with previous IRS or federal contracts would provide insight. Specifically, looking for experience in maintaining large-scale, mission-critical applications similar to those used by the IRS is important. Evidence of successful project completion, adherence to timelines, and effective issue resolution in prior engagements would indicate a lower risk profile. Conversely, a history of performance deficiencies, contract disputes, or significant cost overruns on comparable projects would raise concerns about their ability to meet the requirements of this new award.

How does the awarded amount of $4.34 million compare to the market rates for similar IT application maintenance services for federal agencies of the IRS's scale?

The awarded amount of $4.34 million for a one-year contract for IRS application maintenance needs to be benchmarked against industry standards and similar federal contracts. Factors influencing market rates include the complexity of the applications, the scope of services (e.g., 24/7 support, patching, upgrades, cybersecurity), and the required skill sets of the personnel. Comparing this contract's value to other government-wide IT support contracts or specific agency IT maintenance awards of similar scope and duration can reveal whether the price is competitive. If the cost per hour or per system maintained is significantly higher than comparable contracts, it might indicate potential overpricing or a less competitive bidding process. Conversely, if it aligns with or is lower than benchmarks, it suggests good value for the taxpayer.

What are the primary risks associated with this contract, and what mitigation strategies are in place?

Key risks for this contract include potential performance issues leading to system downtime or degradation, cybersecurity vulnerabilities introduced or exploited during maintenance, and contractor personnel turnover impacting service continuity. Another risk is the potential for scope creep if the definition of 'optimum performance and reliability' is not clearly delineated and managed. Mitigation strategies likely involve robust performance monitoring and service level agreements (SLAs) within the contract, stringent cybersecurity requirements and audits, and requirements for knowledge transfer and personnel continuity plans from the contractor. The firm-fixed-price structure also incentivizes the contractor to manage risks effectively to avoid cost overruns.

How effective is the current IT infrastructure at the IRS, and how does this contract contribute to its overall effectiveness?

This contract directly contributes to the effectiveness of the IRS's IT infrastructure by ensuring the optimal performance and reliability of its applications and systems. The IRS relies heavily on its IT systems for processing tax returns, managing taxpayer accounts, and enforcing tax laws. Any degradation in performance or reliability can lead to significant operational disruptions, impacting taxpayer services and agency efficiency. By securing contractor support for maintenance, the IRS aims to prevent such disruptions, maintain data integrity, and ensure that its systems can handle the demands placed upon them, thereby supporting the agency's core mission.

What has been the historical spending trend for IT application maintenance at the IRS over the past five years?

Analyzing historical spending on IT application maintenance at the IRS over the past five years is essential for understanding budget trends and identifying potential anomalies. This data would reveal whether spending has been consistent, increasing, or decreasing, and whether it aligns with modernization efforts or system upgrades. Significant year-over-year increases might warrant scrutiny regarding efficiency or scope expansion, while decreases could indicate successful cost-saving measures or potential underinvestment. Understanding this trend provides context for the current $4.34 million award, helping to determine if it represents a typical investment or a deviation from past patterns.

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: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 312 E MARKET ST STE F, LEESBURG, VA, 20176

Business Categories: 8(a) Program Participant, Asian Pacific American Owned Business, Category Business, HUBZone Firm, Minority Owned Business, Partnership or Limited Liability Partnership, Small Business, Special Designations, U.S.-Owned Business, Woman Owned Business, Women Owned Small Business

Financial Breakdown

Contract Ceiling: $4,341,016

Exercised Options: $4,341,016

Current Obligation: $4,341,016

Actual Outlays: $4,341,016

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 47QTCA21D0081

IDV Type: FSS

Timeline