Treasury's IRS Awards $77M Deloitte Contract for Individual Masterfile Modernization Support

Contract Overview

Contract Amount: $77,080,538 ($77.1M)

Contractor: Deloitte Consulting LLP

Awarding Agency: Department of the Treasury

Start Date: 2025-01-16

End Date: 2026-04-30

Contract Duration: 469 days

Daily Burn Rate: $164.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: THIS IS A DELIVERY ORDER TO ACQUIRE LONG TERM INTEGRATION SUPPORT (LTIS) FROM A SUBJECT OF MATTER EXPERT FOR THE INDIVIDUAL MASTERFILE MODERNIZATION (IMF MOD) PROGRAM.

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22209

State: Virginia Government Spending

Plain-Language Summary

Department of the Treasury obligated $77.1 million to DELOITTE CONSULTING LLP for work described as: THIS IS A DELIVERY ORDER TO ACQUIRE LONG TERM INTEGRATION SUPPORT (LTIS) FROM A SUBJECT OF MATTER EXPERT FOR THE INDIVIDUAL MASTERFILE MODERNIZATION (IMF MOD) PROGRAM. Key points: 1. The contract focuses on critical IT modernization for the IRS's Individual Masterfile. 2. Deloitte Consulting LLP is the sole awardee under full and open competition. 3. The contract duration is 469 days, ending April 30, 2026. 4. This award represents a significant investment in tax system infrastructure.

Value Assessment

Rating: good

The contract value of $77.08 million for approximately 16 months of support appears reasonable given the specialized nature of IT modernization for a critical government system. Benchmarking against similar large-scale IT integration contracts would provide further context.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting a robust process for soliciting and evaluating offers. This method generally promotes competitive pricing and ensures the government receives best value.

Taxpayer Impact: Taxpayer funds are being used for essential IT upgrades to improve the efficiency and security of tax processing systems.

Public Impact

Modernization of the Individual Masterfile is crucial for accurate tax processing and taxpayer services. Improved IT infrastructure can lead to more efficient IRS operations and potentially faster refunds. This investment aims to enhance the security and reliability of sensitive taxpayer data.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep in long-term integration projects.
Dependence on a single contractor for critical system support.

Positive Signals

Awarded through full and open competition.
Focus on modernizing a core IRS system.

Sector Analysis

This contract falls within the Computer Systems Design Services sector, a critical area for government IT modernization. Spending in this sector is substantial as agencies upgrade legacy systems to improve efficiency and security.

Small Business Impact

While this specific contract was awarded to a large business (Deloitte Consulting LLP), the IRS often utilizes a mix of large and small businesses for various IT support functions. The overall IT landscape involves significant opportunities for small businesses in specialized roles.

Oversight & Accountability

The award is a delivery order against an existing contract, implying prior vetting and oversight. Continued monitoring by the IRS Contracting Officer's Representative will be essential to ensure performance and cost control.

Related Government Programs

Computer Systems Design Services
Department of the Treasury Contracting
Internal Revenue Service Programs

Risk Flags

Potential for cost overruns.
Risk of vendor lock-in.
Dependence on key personnel.
Integration complexity challenges.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $77.1 million to DELOITTE CONSULTING LLP. THIS IS A DELIVERY ORDER TO ACQUIRE LONG TERM INTEGRATION SUPPORT (LTIS) FROM A SUBJECT OF MATTER EXPERT FOR THE INDIVIDUAL MASTERFILE MODERNIZATION (IMF MOD) PROGRAM.

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 $77.1 million.

What is the period of performance?

Start: 2025-01-16. End: 2026-04-30.

What specific performance metrics will be used to evaluate Deloitte's success in the LTIS program?

Performance metrics will likely focus on key areas such as system uptime, successful integration of new functionalities, adherence to project timelines, and the resolution of technical issues. The IRS will need to establish clear, measurable objectives tied to the IMF Mod program's goals to ensure accountability and track progress effectively.

What are the primary risks associated with relying on a single contractor for long-term integration support?

Key risks include vendor lock-in, potential for cost overruns if contract terms are not tightly managed, and a reduced ability to adapt to rapidly changing technological landscapes. Mitigating these risks requires strong contract oversight, clear performance expectations, and contingency planning for knowledge transfer.

How will the success of this modernization effort be measured in terms of taxpayer benefit?

Success will be measured by improvements in IRS operational efficiency, such as reduced processing times for tax returns and inquiries, enhanced data accuracy, and improved taxpayer experience through more reliable online services. Ultimately, the goal is to ensure the IRS can effectively administer tax laws and serve taxpayers.

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 - IT MANAGEMENT

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: $205,000,000

Exercised Options: $142,531,794

Current Obligation: $77,080,538

Actual Outlays: $67,774,000

Subaward Activity

Number of Subawards: 10

Total Subaward Amount: $17,954,466

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 47QTCK18D0029

IDV Type: GWAC

Timeline