Treasury's IRS awards $4.48M task order for IT modernization to Diaconia LLC under GSA 8(a) STARS III

Contract Overview

Contract Amount: $4,482,719 ($4.5M)

Contractor: Diaconia LLC

Awarding Agency: Department of the Treasury

Start Date: 2025-07-28

End Date: 2026-07-27

Contract Duration: 364 days

Daily Burn Rate: $12.3K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: AUTOMATED LIEN SERVICE (ALS) ENTITY MODERNIZATION PROJECT PHASE 2, GSA 8(A) STARS III COMPETED FFP TASK ORDER AWARD.

Place of Performance

Location: GAITHERSBURG, MONTGOMERY County, MARYLAND, 20877

State: Maryland Government Spending

Plain-Language Summary

Department of the Treasury obligated $4.5 million to DIACONIA LLC for work described as: AUTOMATED LIEN SERVICE (ALS) ENTITY MODERNIZATION PROJECT PHASE 2, GSA 8(A) STARS III COMPETED FFP TASK ORDER AWARD. Key points: 1. The contract is a firm-fixed-price task order, indicating predictable costs for the government. 2. Awarded under GSA 8(a) STARS III, a contract vehicle designed to streamline IT services procurement for small businesses. 3. The task order has a duration of 364 days, suggesting a focused project scope. 4. The North American Industry Classification System (NAICS) code 541512 points to computer systems design services. 5. The contract was competed under 'Full and Open Competition after Exclusion of Sources,' a specific procurement method. 6. The award value of $4.48 million is a significant investment in the IRS's IT infrastructure modernization.

Value Assessment

Rating: good

The contract value of $4.48 million for 364 days of computer systems design services appears reasonable for a specialized IT modernization project. Benchmarking against similar task orders under the GSA 8(a) STARS III vehicle would provide a more precise value-for-money assessment. The firm-fixed-price structure helps control costs, but the specific deliverables and their complexity are key to determining true value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This task order was awarded under the GSA 8(a) STARS III GWAC, which itself is a competitive vehicle. The 'Full and Open Competition after Exclusion of Sources' designation suggests that while the GWAC is open, specific restrictions or requirements may have been applied during the competition for this particular task order. The presence of 6 bidders indicates a healthy level of competition for this specific IT modernization effort.

Taxpayer Impact: The competitive nature of the award, with 6 bidders, suggests that taxpayers likely benefited from competitive pricing and a range of technical solutions being considered.

Public Impact

The primary beneficiary is the Internal Revenue Service (IRS), which will receive modernized IT systems. The services delivered are computer systems design, crucial for enhancing operational efficiency and data management. The geographic impact is primarily within the United States, supporting federal IT infrastructure. The contract supports the federal IT workforce, potentially involving specialized technical roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if project requirements are not clearly defined and managed.
Dependence on Diaconia LLC's ability to deliver complex IT modernization services within the timeframe.
Risk of integration challenges with existing IRS IT infrastructure.

Positive Signals

Awarded under GSA 8(a) STARS III, a pre-vetted contract vehicle for IT services.
Firm-fixed-price contract type provides cost certainty.
Multiple bidders (6) indicate a competitive selection process.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on computer systems design services. The federal government is a major consumer of IT services, with significant spending allocated to modernizing legacy systems and enhancing cybersecurity. The GSA 8(a) STARS III GWAC is a key vehicle for agencies to procure these services from small, disadvantaged businesses. Comparable spending benchmarks would involve analyzing other IT modernization contracts awarded to similar firms or under similar GWACs.

Small Business Impact

The contract was awarded under the GSA 8(a) STARS III GWAC, which is specifically designed to provide IT services and solutions to federal agencies from a diverse pool of small, disadvantaged businesses. While this specific task order does not appear to be a small business set-aside at the task order level, the underlying GWAC prioritizes small business participation. There is no explicit mention of subcontracting requirements for this task order, but the nature of the GWAC encourages small business engagement.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Treasury's Internal Revenue Service contracting officers and program managers. The GSA 8(a) STARS III GWAC has its own oversight mechanisms managed by GSA. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would typically fall under the Treasury OIG for matters related to IRS operations and spending.

Related Government Programs

GSA 8(a) STARS III GWAC
IRS IT Modernization Initiatives
Federal Civilian IT Services
Computer Systems Design Services

Risk Flags

Potential for integration issues with legacy systems.
Reliance on a single contractor for a critical modernization phase.
Need for strong project management to prevent scope creep.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $4.5 million to DIACONIA LLC. AUTOMATED LIEN SERVICE (ALS) ENTITY MODERNIZATION PROJECT PHASE 2, GSA 8(A) STARS III COMPETED FFP TASK ORDER AWARD.

Who is the contractor on this award?

The obligated recipient is DIACONIA 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 $4.5 million.

What is the period of performance?

Start: 2025-07-28. End: 2026-07-27.

What is Diaconia LLC's track record with the federal government, particularly on similar IT modernization projects?

Diaconia LLC has a history of federal contract awards, primarily within IT services. Information from contract databases indicates previous awards for various IT-related tasks. To assess their track record specifically for IT modernization, a deeper dive into past performance reviews, project outcomes, and client satisfaction on similar projects would be necessary. Analyzing their experience with systems integration, data migration, and software development relevant to modernization efforts is crucial. The GSA 8(a) STARS III vehicle itself is designed to vet and provide access to capable small businesses, suggesting a baseline level of qualification.

How does the $4.48 million value compare to similar IT modernization task orders awarded under GSA 8(a) STARS III?

The $4.48 million value for a 364-day task order for computer systems design services is within a typical range for IT modernization projects under the GSA 8(a) STARS III GWAC. However, a precise comparison requires analyzing the scope of work, specific technical requirements, and the level of complexity involved. Task orders under this GWAC can range from a few hundred thousand dollars for smaller projects to several million for more extensive modernization efforts. Factors such as the number of users impacted, the criticality of the systems being modernized, and the required security protocols significantly influence pricing. Benchmarking against task orders with similar NAICS codes and service descriptions would provide a more accurate assessment of value.

What are the key risks associated with this contract, and how are they being mitigated?

Key risks include potential scope creep, integration challenges with existing IRS infrastructure, and contractor performance. Scope creep can be mitigated through robust contract management, clearly defined deliverables, and change control processes. Integration risks are addressed by requiring detailed technical specifications, phased implementation, and thorough testing. Contractor performance risk is managed through performance monitoring, regular progress reviews, and adherence to the firm-fixed-price contract terms, which incentivize timely and cost-effective delivery. The IRS's technical expertise and oversight will be critical in managing these risks.

How effective is the GSA 8(a) STARS III GWAC in facilitating efficient and competitive IT procurement for agencies like the IRS?

The GSA 8(a) STARS III GWAC is generally considered an effective tool for streamlining IT services procurement from small, disadvantaged businesses. It provides agencies with a pre-competed, flexible contract vehicle, reducing the time and effort required for acquisition. The GWAC's structure encourages competition among a vetted pool of small businesses, which can lead to better pricing and a wider range of innovative solutions. For agencies like the IRS, it offers a compliant and efficient pathway to acquire specialized IT support, particularly for modernization efforts, while supporting small business goals.

What is the historical spending pattern for computer systems design services at the IRS, and how does this award fit in?

The IRS historically spends significant amounts on IT services, including computer systems design, to maintain and modernize its vast and complex technological infrastructure. This $4.48 million award for the 'AUTOMATED LIEN SERVICE (ALS) ENTITY MODERNIZATION PROJECT PHASE 2' represents a specific investment within the broader IRS IT modernization strategy. Analyzing past IRS spending on similar modernization projects, particularly those involving system redesign, data management, and process automation, would provide context. This award appears to be a continuation or a distinct phase of a larger modernization effort, aligning with the agency's ongoing need to update its systems.

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 AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 205AE9-Q-25-00114

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 702 RUSSELL AVE STE 305, GAITHERSBURG, MD, 20877

Business Categories: 8(a) Program Participant, Category Business, HUBZone Firm, Minority Owned Business, Partnership or Limited Liability Partnership, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Indian (Subcontinent) American Owned Business, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $8,528,231

Exercised Options: $4,482,719

Current Obligation: $4,482,719

Actual Outlays: $2,241,359

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: 47QTCB22D0490

IDV Type: GWAC

Timeline