IRS awards $2.55M contract for conservation easement valuation services to RER SOLUTIONS, INC

Contract Overview

Contract Amount: $2,551,242 ($2.6M)

Contractor: RER Solutions, Inc.

Awarding Agency: Department of the Treasury

Start Date: 2023-09-30

End Date: 2028-09-17

Contract Duration: 1,814 days

Daily Burn Rate: $1.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: THIS IS AN AWARD TO ACQUIRE THE SERVICES OF AN OUTSIDE CONTRACTOR TO ASSIST WITH THE VALUATION OF CONSERVATION EASEMENTS FOR THE SYNDICATED CONSERVATION EASEMENT CAMPAIGN OF INTERNAL REVENUE SERVICE (IRS) LARGE BUSINESS AND INTERNATIONAL DIVISION.

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20005

State: District of Columbia Government Spending

Plain-Language Summary

Department of the Treasury obligated $2.6 million to RER SOLUTIONS, INC. for work described as: THIS IS AN AWARD TO ACQUIRE THE SERVICES OF AN OUTSIDE CONTRACTOR TO ASSIST WITH THE VALUATION OF CONSERVATION EASEMENTS FOR THE SYNDICATED CONSERVATION EASEMENT CAMPAIGN OF INTERNAL REVENUE SERVICE (IRS) LARGE BUSINESS AND INTERNATIONAL DIVISION. Key points: 1. Contract aims to support IRS's syndicated conservation easement campaign. 2. Services focus on administrative management and general management consulting. 3. Awarded via full and open competition, indicating broad market participation. 4. Firm-fixed-price contract type suggests defined scope and cost control. 5. Long duration of nearly 5 years implies ongoing need for these specialized services. 6. Contract value is modest within the context of large federal procurements.

Value Assessment

Rating: good

The contract value of $2.55 million over approximately five years appears reasonable for specialized consulting services related to complex tax valuations. Benchmarking against similar contracts for expert valuation services in conservation or real estate would provide a more precise assessment. However, the firm-fixed-price structure suggests that the government has a clear understanding of the scope and cost, which is a positive indicator for value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, meaning that all responsible sources were permitted to submit a bid. The number of bidders is not specified, but this method of procurement generally fosters a competitive environment, which can lead to better pricing and service quality. The open competition suggests that the IRS sought the best available expertise in the market for this specialized valuation work.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it encourages a wide range of providers to offer their services, potentially driving down costs and improving the quality of services received by the government.

Public Impact

Benefits the Internal Revenue Service in its efforts to combat tax fraud related to syndicated conservation easements. Delivers expert valuation services crucial for accurate tax assessments. Primarily impacts the District of Columbia where the IRS operates, but has national implications for tax law enforcement. Supports a specialized segment of the consulting industry focused on tax and financial advisory services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if the valuation requirements evolve significantly over the contract's long duration.
Reliance on a single contractor for critical valuation expertise could pose a risk if performance issues arise.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Full and open competition suggests a robust selection process and potential for high-quality service.
Long contract duration allows for continuity of essential services.

Sector Analysis

This contract falls within the Administrative Management and General Management Consulting Services sector (NAICS 541611). This sector encompasses a wide range of advisory services provided to businesses and government agencies. The market for such services is competitive, with many firms offering specialized expertise. The IRS's need for valuation services in this context highlights the critical role of expert consultants in complex regulatory and enforcement activities.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, the primary contractor, RER SOLUTIONS, INC., is likely a larger entity. There is no explicit information on subcontracting plans for small businesses within this award notice. The absence of a small business set-aside means that opportunities for small businesses to participate in this specific contract are limited unless they are part of a subcontracting effort by the prime contractor.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program officials within the IRS Large Business and International Division. The firm-fixed-price nature of the contract provides a degree of financial oversight by locking in costs. Transparency is generally maintained through contract award databases, though specific performance metrics and detailed oversight activities are not publicly disclosed.

Related Government Programs

IRS Tax Enforcement Programs
Conservation Easement Tax Deductions
Federal Consulting Services
Financial Advisory Services
Real Estate Valuation Services

Risk Flags

Potential for conflicts of interest if contractor has prior dealings with easement promoters.
Risk of inaccurate or biased valuations impacting tax revenue.
Contract duration may exceed the immediate need or lead to complacency.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $2.6 million to RER SOLUTIONS, INC.. THIS IS AN AWARD TO ACQUIRE THE SERVICES OF AN OUTSIDE CONTRACTOR TO ASSIST WITH THE VALUATION OF CONSERVATION EASEMENTS FOR THE SYNDICATED CONSERVATION EASEMENT CAMPAIGN OF INTERNAL REVENUE SERVICE (IRS) LARGE BUSINESS AND INTERNATIONAL DIVISION.

Who is the contractor on this award?

The obligated recipient is RER SOLUTIONS, 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 $2.6 million.

What is the period of performance?

Start: 2023-09-30. End: 2028-09-17.

What is the track record of RER SOLUTIONS, INC. in providing similar valuation services to federal agencies?

Information regarding RER SOLUTIONS, INC.'s specific track record with federal agencies for conservation easement valuation is not detailed in this award notice. A comprehensive review would require examining past performance evaluations, other federal contracts awarded to the company, and any available debriefings. Federal procurement databases may offer insights into their history with similar service contracts, but without direct access to performance data, it's difficult to definitively assess their experience in this niche area. The IRS's selection implies they met the required qualifications, but further due diligence would be needed to understand the depth and success of their prior engagements.

How does the awarded amount compare to typical federal spending on similar consulting services?

The awarded amount of $2.55 million over nearly five years for specialized valuation consulting is relatively modest in the context of overall federal spending on professional services. Many federal consulting contracts, particularly those involving large-scale IT, defense, or infrastructure projects, can reach tens or hundreds of millions of dollars. However, for niche services like expert conservation easement valuation, this figure could represent a significant contract. A precise comparison would necessitate benchmarking against contracts for similar valuation expertise, factoring in the complexity of the assets being valued and the specific regulatory environment.

What are the primary risks associated with this contract for the IRS?

Key risks for the IRS include potential underperformance by RER SOLUTIONS, INC. in delivering accurate and timely valuations, which could impact enforcement actions. There's also a risk of cost overruns if the firm-fixed-price contract doesn't adequately account for unforeseen complexities, though this is mitigated by the contract type. Over-reliance on a single contractor for critical expertise could pose a continuity risk if the relationship sours or the contractor faces internal issues. Ensuring the contractor's independence and objectivity in valuation is paramount to maintaining the integrity of the tax assessment process.

How effective is this contract likely to be in supporting the IRS's conservation easement campaign?

The effectiveness of this contract hinges on the quality of RER SOLUTIONS, INC.'s valuation services and the IRS's ability to leverage these valuations in its campaign. If the contractor provides robust, defensible valuations, it will significantly strengthen the IRS's position in challenging questionable tax deductions. The long duration suggests the IRS anticipates sustained need, implying a strategic importance. However, the ultimate effectiveness will also depend on the IRS's internal processes for utilizing these valuations and the legal outcomes of challenged easements.

What are the historical spending patterns for valuation services within the IRS or Treasury?

Historical spending patterns for valuation services within the IRS or Treasury are not detailed in this award notice. However, it is understood that the IRS frequently engages external experts for specialized valuations, particularly in areas like complex financial instruments, real estate, and art, which can be crucial for tax assessment and enforcement. The need for such services often fluctuates based on enforcement priorities and the complexity of tax cases. This contract suggests a focused effort on syndicated conservation easements, potentially indicating an increase in IRS activity or scrutiny in this specific area.

What is the potential impact of this contract on the market for conservation easement valuation services?

This contract could signal increased federal attention and resources dedicated to scrutinizing conservation easements, potentially boosting demand for specialized valuation services in this niche. For RER SOLUTIONS, INC., it represents a significant contract award that could enhance their reputation and market position. It may also encourage other firms with relevant expertise to pursue similar government contracts. The IRS's engagement of external experts suggests a strategic approach to addressing valuation challenges, which could influence how other agencies or even private entities approach similar valuation needs.

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: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1119 12TH ST NW, WASHINGTON, DC, 20005

Business Categories: 8(a) Program Participant, Black American Owned Business, Category Business, Corporate Entity Not Tax Exempt, Minority Owned Business, Not Designated a Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Woman Owned Business

Financial Breakdown

Contract Ceiling: $2,551,242

Exercised Options: $2,551,242

Current Obligation: $2,551,242

Actual Outlays: $2,151,995

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: GS00F233CA

IDV Type: FSS

Timeline