Treasury's $313M IRS contract for custom programming awarded to Technology Blue Inc. under full and open competition

Contract Overview

Contract Amount: $31,300,000 ($31.3M)

Contractor: Technology Blue Inc

Awarding Agency: Department of the Treasury

Start Date: 2022-08-31

End Date: 2025-03-27

Contract Duration: 939 days

Daily Burn Rate: $33.3K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: INFLATION REDUCTION ACT

Place of Performance

Location: LANHAM, PRINCE GEORGES County, MARYLAND, 20706

State: Maryland Government Spending

Plain-Language Summary

Department of the Treasury obligated $31.3 million to TECHNOLOGY BLUE INC for work described as: INFLATION REDUCTION ACT Key points: 1. Contract awarded via a Blanket Purchase Agreement (BPA) Call, indicating a pre-competed framework. 2. The firm-fixed-price contract type suggests predictable costs for the government. 3. The duration of 939 days implies a significant, ongoing need for services. 4. The contract is not set aside for small businesses, potentially limiting broader participation. 5. The North American Industry Classification System (NAICS) code 541511 points to specialized IT services. 6. The award is part of the Inflation Reduction Act's broader spending initiatives.

Value Assessment

Rating: good

The contract's value of $313 million over approximately 2.5 years warrants careful benchmarking against similar custom computer programming services. While the firm-fixed-price structure offers cost certainty, the overall value proposition depends on the successful delivery of complex IT solutions. Without specific performance metrics or detailed cost breakdowns, a precise value-for-money assessment is challenging, but the competitive award process provides a positive signal.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. The use of a BPA Call indicates that the underlying framework was already competed, and this specific call likely involved a competitive process among pre-qualified vendors. A higher level of competition generally leads to better pricing and service offerings for the government.

Taxpayer Impact: Taxpayers benefit from the competitive nature of this award, as it is expected to drive down costs and ensure the government receives the best possible value for its investment in custom computer programming services.

Public Impact

The Internal Revenue Service (IRS) is the primary beneficiary, receiving custom computer programming services to support its operations. These services are crucial for modernizing and maintaining the IRS's technological infrastructure, impacting tax administration. The contract's geographic impact is primarily within Maryland, where the vendor is located. The contract supports skilled IT professionals in the custom computer programming sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if project scope expands beyond initial estimates.
Dependence on a single contractor for critical IT services could pose a risk if performance falters.
Ensuring the custom solutions align with evolving IRS needs requires robust program management.

Positive Signals

Awarded under full and open competition, suggesting a competitive pricing environment.
Firm-fixed-price contract provides cost predictability for the government.
The contract is part of the Inflation Reduction Act, indicating alignment with national priorities.
The vendor, Technology Blue Inc., is likely experienced in providing custom computer programming services.

Sector Analysis

The custom computer programming services sector is a vital component of the IT industry, encompassing the design, development, and implementation of tailored software solutions. This contract falls within a segment focused on specialized government IT needs, particularly for agencies like the IRS that require complex, secure, and efficient systems. Spending in this sector is often driven by modernization efforts, cybersecurity requirements, and the need for agencies to adapt to evolving technological landscapes. Comparable spending benchmarks would typically involve analyzing other large-scale IT service contracts awarded to custom software developers by federal agencies.

Small Business Impact

This contract was not set aside for small businesses, as indicated by the 'ss' field being false. This means that large businesses were eligible to compete and potentially win the award. While this maximizes the pool of potential bidders and can lead to competitive pricing, it may limit opportunities for small businesses to secure prime contracts of this magnitude. Subcontracting opportunities for small businesses may arise, but this is not guaranteed and depends on the prime contractor's strategy.

Oversight & Accountability

Oversight for this contract will likely be managed by the contracting officers and program managers within the IRS and the Department of the Treasury. Accountability measures are typically embedded in the contract's performance work statement, with defined deliverables and acceptance criteria. Transparency is facilitated through contract award databases and public reporting, though detailed project specifics may remain internal. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arise.

Related Government Programs

Inflation Reduction Act Spending
IRS IT Modernization Programs
Custom Software Development Contracts
Federal IT Services Procurement

Risk Flags

Potential for scope creep
Vendor lock-in risk
Dependency on contractor performance
Integration challenges with legacy systems

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $31.3 million to TECHNOLOGY BLUE INC. INFLATION REDUCTION ACT

Who is the contractor on this award?

The obligated recipient is TECHNOLOGY BLUE INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $31.3 million.

What is the period of performance?

Start: 2022-08-31. End: 2025-03-27.

What is the track record of Technology Blue Inc. in delivering similar custom computer programming services to federal agencies?

Assessing Technology Blue Inc.'s track record requires a review of their past performance on federal contracts, particularly those involving custom computer programming for large agencies like the IRS. This would involve examining past performance evaluations, any contract disputes or terminations, and the successful completion of projects with similar scope and complexity. Information on their experience with firm-fixed-price contracts and adherence to project timelines and budgets would be crucial. A deeper dive into their financial stability and capacity to handle a contract of this size is also warranted. Without specific past performance data readily available in this summary, further investigation into federal procurement databases and agency performance reports would be necessary to provide a comprehensive assessment.

How does the awarded amount of $313 million compare to similar custom computer programming contracts for tax administration agencies?

Benchmarking the $313 million award requires comparing it against the total contract values and durations of similar custom computer programming services procured by tax administration agencies, such as the IRS or international equivalents. Factors like the scope of work (e.g., system modernization, new application development, data analytics), the complexity of the technology involved, and the specific services provided (e.g., design, development, testing, integration, maintenance) are critical for a fair comparison. The firm-fixed-price nature of this contract also influences its comparability to cost-plus contracts. A preliminary assessment suggests that $313 million over approximately 2.5 years for custom programming for a large agency like the IRS is substantial, reflecting the significant IT needs of such organizations. However, without detailed comparative data on specific projects, it's difficult to definitively state if it represents excellent, fair, or questionable value.

What are the key performance indicators (KPIs) that will be used to measure the success of this contract?

The success of this contract will likely be measured through a set of Key Performance Indicators (KPIs) defined in the Performance Work Statement (PWS). These KPIs would typically focus on aspects such as the timely delivery of software modules and functionalities, adherence to the project schedule, the quality of the code produced (e.g., low defect rates), system performance and reliability post-deployment, and user satisfaction. For custom programming, KPIs might also include the successful integration of new systems with existing IRS infrastructure, compliance with security standards, and the achievement of specific business objectives outlined by the IRS. The firm-fixed-price nature of the contract implies that meeting these KPIs within the agreed budget is paramount for the contractor's success and for demonstrating value for money to the government.

What is the potential impact of this contract on the IRS's ability to modernize its technological infrastructure?

This $313 million contract for custom computer programming services is likely a significant investment aimed at modernizing the IRS's technological infrastructure. Custom solutions are often sought when off-the-shelf software cannot meet unique or complex requirements. Successful execution of this contract could lead to improved efficiency in tax processing, enhanced data analytics capabilities for better tax enforcement and fraud detection, a more secure and robust IT environment, and an improved taxpayer experience through digital services. The duration of the contract suggests a long-term commitment to developing and implementing these advanced capabilities, which are crucial for the IRS to keep pace with evolving technological demands and taxpayer expectations.

How does the Inflation Reduction Act funding influence the scope and urgency of this contract?

The inclusion of 'INFLATION REDUCTION ACT' as a data point indicates that this contract is funded, at least in part, by this significant legislative initiative. The Inflation Reduction Act (IRA) allocated substantial funds towards various government priorities, including enhancing IRS tax enforcement and modernization efforts. This funding likely provides the IRS with the necessary resources to undertake large-scale IT projects like this custom programming contract, potentially accelerating modernization timelines or enabling the development of capabilities that might otherwise have been deferred due to budget constraints. The urgency might be influenced by the IRA's objectives to improve tax collection and taxpayer services, driving a need for timely delivery of the contracted IT solutions.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Custom Computer Programming Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

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: 1 OXFORD CTR, PITTSBURGH, PA, 15219

Business Categories: Black American Owned Business, Category Business, Corporate Entity Not Tax Exempt, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $31,300,000

Exercised Options: $31,300,000

Current Obligation: $31,300,000

Actual Outlays: $31,300,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 2032H822A00005

IDV Type: BPA

Timeline