Treasury's IRS awards Deloitte $44M for management consulting, highlighting administrative support needs

Contract Overview

Contract Amount: $44,027,951 ($44.0M)

Contractor: Deloitte Consulting LLP

Awarding Agency: Department of the Treasury

Start Date: 2023-06-23

End Date: 2025-03-19

Contract Duration: 635 days

Daily Burn Rate: $69.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: TRANSFORMATION AND STRATEGY OFFICE PROGRAM MANAGEMENT SUPPORT

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22209

State: Virginia Government Spending

Plain-Language Summary

Department of the Treasury obligated $44.0 million to DELOITTE CONSULTING LLP for work described as: TRANSFORMATION AND STRATEGY OFFICE PROGRAM MANAGEMENT SUPPORT Key points: 1. Contract value of $44M for administrative management consulting services indicates significant investment in internal operational efficiency. 2. The award to Deloitte, a major consulting firm, suggests a focus on leveraging established expertise for complex program management. 3. A contract duration of over 600 days points to the sustained nature of the support required by the Transformation and Strategy Office. 4. The use of a BPA Call award mechanism implies a pre-negotiated framework, potentially streamlining the procurement process. 5. The fixed-price contract type aims to provide cost certainty for the IRS, shifting performance risk to the contractor. 6. The absence of small business set-asides warrants further investigation into opportunities for smaller firms in this support area.

Value Assessment

Rating: good

The contract value of approximately $44 million over its period of performance represents a substantial investment in management consulting services. Benchmarking this against similar large-scale administrative support contracts within federal agencies is challenging without more specific service details. However, the award to a well-established firm like Deloitte suggests a competitive selection process likely focused on expertise and proposed value. The firm-fixed-price structure indicates an expectation of defined deliverables and cost control.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified bidders had the opportunity to submit proposals. The presence of three bidders, as suggested by the 'no' field, points to a reasonable level of competition for this significant contract. This competitive environment is generally favorable for price discovery and ensuring the government receives competitive offers.

Taxpayer Impact: Full and open competition helps ensure that taxpayer dollars are used efficiently by driving down costs through market forces. A competitive process increases the likelihood of selecting the most cost-effective solution for the IRS's management consulting needs.

Public Impact

The primary beneficiary is the IRS's Transformation and Strategy Office, which will receive enhanced program management support. Services delivered are expected to improve administrative management and general management consulting, potentially leading to more efficient IRS operations. The geographic impact is primarily within the IRS's operational footprint, likely centered around its administrative headquarters and key service centers. Workforce implications may include the augmentation of existing IRS staff with specialized consulting expertise, rather than direct hiring.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific small business participation noted in the award details.
Potential for concentration of large contract awards with major consulting firms, limiting opportunities for smaller, specialized businesses.

Positive Signals

Awarded through full and open competition, ensuring broad market access.
Firm-fixed-price contract type provides cost certainty for the agency.
Contract awarded to a reputable firm with demonstrated capabilities in management consulting.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically administrative management and general management consulting. This sector is a significant component of federal spending, supporting a wide array of agency functions from strategic planning to operational efficiency. The market for these services is competitive, with a mix of large, established firms and smaller, specialized consultancies. The IRS's need for such services is typical for large government organizations undergoing transformation or seeking to optimize internal processes.

Small Business Impact

The contract details indicate that this was not a small business set-aside, and the 'sb' field is false. This suggests that small businesses were not specifically targeted for this particular award. While full and open competition allows small businesses to compete, the nature of large-scale consulting contracts often favors larger firms with extensive resources and past performance. Further analysis would be needed to determine if subcontracting opportunities exist for small businesses under this award.

Oversight & Accountability

The contract is subject to standard federal procurement oversight mechanisms. As a firm-fixed-price contract, performance monitoring will be crucial to ensure deliverables are met. The Department of the Treasury's Office of Inspector General may have jurisdiction for audits and investigations related to this contract, ensuring accountability and proper use of funds. Transparency is facilitated through public contract databases where award details are recorded.

Related Government Programs

IRS Transformation Initiatives
Federal Management Consulting Services
Administrative Support Contracts
Department of the Treasury IT and Management Services

Risk Flags

Potential for contractor over-reliance
Need for robust contract oversight
Limited visibility into specific performance metrics
Absence of explicit small business participation goals

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $44.0 million to DELOITTE CONSULTING LLP. TRANSFORMATION AND STRATEGY OFFICE PROGRAM MANAGEMENT SUPPORT

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 $44.0 million.

What is the period of performance?

Start: 2023-06-23. End: 2025-03-19.

What is Deloitte Consulting LLP's track record with the IRS and other federal agencies for similar management consulting services?

Deloitte Consulting LLP is a major federal contractor with a substantial history of providing management and strategy consulting services across numerous government agencies, including the IRS. Their track record typically involves large-scale transformation projects, IT modernization, financial management, and operational efficiency improvements. For the IRS specifically, Deloitte has been involved in various initiatives aimed at modernizing tax administration and improving taxpayer services. Their extensive experience suggests a deep understanding of the federal procurement landscape and the unique challenges faced by large agencies. However, a detailed review of past performance evaluations and any documented issues or successes on prior IRS contracts would provide a more granular assessment of their suitability for this specific award.

How does the $44 million contract value compare to other IRS management consulting contracts awarded over the past five years?

The $44 million contract value for administrative management and general management consulting services is a significant award. To benchmark it effectively, one would need to compare it against the average and median contract values for similar services awarded by the IRS in recent years. Large federal agencies like the IRS often award multi-million dollar contracts for strategic initiatives and operational support. If this contract represents a sole-source award or a sole-source justification, it would warrant closer scrutiny. However, given it was awarded under full and open competition, this value is likely within the expected range for comprehensive program management support for a major office like the Transformation and Strategy Office. A detailed analysis of historical contract data would reveal if this award is an outlier or representative of the IRS's investment in such services.

What are the key performance indicators (KPIs) and deliverables expected under this contract, and how will their achievement be measured?

The specific Key Performance Indicators (KPIs) and deliverables for this contract are not detailed in the provided summary data. However, for administrative management and general management consulting services, typical deliverables might include strategic plans, process improvement recommendations, organizational assessments, project management frameworks, and implementation support. Performance measurement would likely involve adherence to project timelines, quality of deliverables, effectiveness of recommendations, and overall client satisfaction as assessed by the IRS Transformation and Strategy Office. The firm-fixed-price nature of the contract implies that meeting these defined deliverables within the agreed-upon budget is paramount. A thorough review of the Statement of Work (SOW) would be necessary to ascertain the precise KPIs and measurement methodologies.

What is the potential risk associated with relying on a single contractor, Deloitte, for such a substantial program management support role?

While this contract was awarded through full and open competition, the risk associated with relying on a single contractor, Deloitte, for a substantial program management support role centers on potential over-reliance and contractor performance. Risks include the possibility of knowledge transfer gaps if key personnel depart, potential for scope creep if not managed tightly, and the impact of any performance issues on critical IRS transformation efforts. However, the firm-fixed-price structure and the competitive award process aim to mitigate some of these risks by incentivizing performance and ensuring a vetted selection. The IRS will need robust contract management and oversight to ensure accountability, manage performance effectively, and maintain continuity of services.

How does this contract align with the IRS's broader strategic goals for modernization and transformation?

This contract directly aligns with the IRS's broader strategic goals for modernization and transformation by providing essential program management support to the Transformation and Strategy Office. Such support is critical for overseeing complex, multi-year initiatives aimed at updating technology, improving taxpayer services, enhancing data analytics capabilities, and streamlining internal processes. The Transformation and Strategy Office likely plays a pivotal role in guiding these efforts, and the engagement of a firm like Deloitte suggests a focus on leveraging external expertise to accelerate progress and ensure successful execution of the IRS's modernization roadmap. The contract's duration and value indicate a commitment to sustained support for these critical, long-term objectives.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Administrative Management and General Management Consulting 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

Offers Received: 3

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: $61,963,331

Exercised Options: $44,027,951

Current Obligation: $44,027,951

Actual Outlays: $38,287,113

Subaward Activity

Number of Subawards: 3

Total Subaward Amount: $774,067

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 2032H822A00001

IDV Type: BPA

Timeline