Treasury's $108M IT contract with Booz Allen Hamilton awarded non-competitively for TIPSS-2 program

Contract Overview

Contract Amount: $10,843,669 ($10.8M)

Contractor: Booz Allen Hamilton Inc

Awarding Agency: Department of the Treasury

Start Date: 2003-12-01

End Date: 2012-02-03

Contract Duration: 2,986 days

Daily Burn Rate: $3.6K/day

Competition Type: NON-COMPETITIVE DELIVERY ORDER

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: BOOZ ALLEN & HAMILTON, TIPSS-2

Place of Performance

Location: MC LEAN, FAIRFAX County, VIRGINIA, 22102

State: Virginia Government Spending

Plain-Language Summary

Department of the Treasury obligated $10.8 million to BOOZ ALLEN HAMILTON INC for work described as: BOOZ ALLEN & HAMILTON, TIPSS-2 Key points: 1. Contract awarded on a non-competitive basis, raising questions about potential cost efficiencies. 2. Long contract duration of nearly 10 years suggests a sustained need for services. 3. The Cost Plus Fixed Fee (CPFF) pricing structure can incentivize cost overruns. 4. Services provided under TIPSS-2 likely support critical IRS IT infrastructure and operations. 5. Virginia is the primary location for contract performance, indicating a concentration of federal IT work. 6. The absence of small business set-asides suggests larger prime contractors were anticipated.

Value Assessment

Rating: questionable

Benchmarking the value of this $108 million contract is challenging due to its non-competitive nature and the specific IT services provided under the TIPSS-2 program. Without comparable bids, it's difficult to assess if the pricing reflects market rates or if efficiencies were achieved. The CPFF structure, while offering flexibility, carries inherent risks of cost escalation compared to fixed-price contracts. Further analysis would require detailed service breakdowns and performance metrics to truly gauge value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a non-competitive delivery order under the TIPSS-2 program. The specific reasons for this sole-source award are not detailed in the provided data, but it implies that either only one source was deemed capable of meeting the requirements or that the contract was a follow-on to a previously competed effort where Booz Allen Hamilton was the incumbent. The lack of competition limits price discovery and potentially reduces the government's leverage in negotiating favorable terms.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. Without multiple offers, the government could not benefit from the price reductions typically driven by a competitive environment.

Public Impact

Federal employees and contractors supporting the IRS IT infrastructure benefit from the services provided. The contract supports the development, maintenance, and modernization of critical IRS information technology systems. Services are primarily delivered within Virginia, impacting the local IT workforce and economy. The contract ensures the continuity of essential IT services for tax administration and revenue collection.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Non-competitive award limits price discovery and potential cost savings.
Cost Plus Fixed Fee (CPFF) contract type can lead to cost overruns if not managed tightly.
Long contract duration may indicate a lack of agile procurement or market shifts.
No small business participation noted, potentially limiting opportunities for smaller firms.

Positive Signals

Booz Allen Hamilton is a well-established government contractor with extensive IT experience.
The contract supports critical IRS functions, indicating a high level of importance.
The TIPSS-2 program likely represents a significant and ongoing IT requirement for the agency.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically supporting government IT services. The IT services market for federal agencies is substantial, with significant spending allocated to software development, system integration, and IT support. Contracts like this are common for agencies requiring specialized expertise to manage complex systems. Benchmarks for similar IT support contracts vary widely based on scope, duration, and complexity, but a $108 million award over nearly a decade for a program like TIPSS-2 suggests a substantial and long-term IT investment.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (sb: false) and Booz Allen Hamilton is a large business. This suggests that the primary contract was not specifically targeted to encourage small business participation as a prime. However, it is possible that Booz Allen Hamilton may engage small businesses as subcontractors to fulfill certain aspects of the contract, though this information is not available here. The lack of a small business set-aside on the prime contract means opportunities for direct contracting with the government were limited for small IT firms in this instance.

Oversight & Accountability

Oversight for this contract would typically reside within the Department of the Treasury and the Internal Revenue Service. Mechanisms likely include regular performance reviews, financial audits, and adherence to contract terms and conditions. Given the non-competitive nature, oversight would focus heavily on ensuring the necessity of the services, the reasonableness of costs, and the quality of deliverables. The Inspector General for the Treasury Department would also have jurisdiction to investigate any potential fraud, waste, or abuse.

Related Government Programs

TIPSS-2 Program
IRS IT Modernization Efforts
Federal IT Services Contracts
Cost Plus Fixed Fee Contracts

Risk Flags

Non-competitive award
Cost Plus Fixed Fee pricing
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $10.8 million to BOOZ ALLEN HAMILTON INC. BOOZ ALLEN & HAMILTON, TIPSS-2

Who is the contractor on this award?

The obligated recipient is BOOZ ALLEN HAMILTON 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 $10.8 million.

What is the period of performance?

Start: 2003-12-01. End: 2012-02-03.

What specific IT services were provided under the TIPSS-2 contract to Booz Allen Hamilton?

The provided data does not detail the specific IT services rendered under the TIPSS-2 contract. However, TIPSS (Taxpayer Information Systems Program Support) generally refers to IT support services for the Internal Revenue Service (IRS). This could encompass a wide range of activities including system development, modernization, maintenance, cybersecurity, data management, and technical support for various IRS applications and infrastructure. Given the contract's duration and value, it likely involved significant, ongoing support for critical IRS IT operations, ensuring the agency could effectively administer tax laws and manage taxpayer data.

Why was this contract awarded on a non-competitive basis?

The data indicates this was a 'NON-COMPETITIVE DELIVERY ORDER' (ct: NON-COMPETITIVE DELIVERY ORDER). Federal procurement regulations allow for non-competitive awards under specific circumstances, such as when only one responsible source can satisfy the agency's needs, or in cases of urgent and compelling need. Without further details, it's presumed that either Booz Allen Hamilton was the sole capable provider for the specific requirements of this delivery order under the TIPSS-2 umbrella, or it was a follow-on action to a previously competed contract where they were the incumbent and had unique knowledge or capabilities. This approach bypasses the standard competitive bidding process.

How does the Cost Plus Fixed Fee (CPFF) pricing structure compare to other contract types in terms of risk and value?

The Cost Plus Fixed Fee (CPFF) contract type is characterized by the government reimbursing the contractor for allowable costs plus a predetermined fixed fee representing profit. This structure offers flexibility, especially when project scope is uncertain or likely to evolve, as it did with the long-term TIPSS-2 program. However, it carries a higher risk of cost overruns compared to fixed-price contracts, as the contractor is incentivized to incur costs to complete the work, while their profit (the fee) remains constant. Value for money can be harder to ascertain with CPFF, requiring robust government oversight to ensure costs are reasonable and necessary. Fixed-price contracts, conversely, place more cost risk on the contractor but offer greater price certainty for the government.

What is the significance of the TIPSS-2 program for the IRS?

The TIPSS-2 program is significant for the IRS as it represents a major vehicle for acquiring essential IT support services. The IRS relies heavily on complex IT systems to manage tax administration, process returns, store taxpayer data securely, and implement tax law changes. Programs like TIPSS-2 are crucial for maintaining, modernizing, and enhancing these systems to ensure operational efficiency, security, and compliance. The substantial funding and long duration of this contract suggest TIPSS-2 addresses core, long-standing IT needs vital to the IRS's mission.

What is the historical spending trend for Booz Allen Hamilton with the Department of the Treasury?

The provided data focuses on a single contract awarded in 2003. To understand the historical spending trend for Booz Allen Hamilton with the Department of the Treasury, a broader analysis of contract awards over time would be necessary. This specific $108 million contract represents a significant investment over its nearly 10-year period. Without access to historical contract databases covering multiple years and various agencies within the Treasury, it's impossible to establish a comprehensive trend. However, Booz Allen Hamilton is a large, established contractor, suggesting they likely hold numerous contracts across various federal agencies, including the Treasury.

Competition & Pricing

Extent Competed: NON-COMPETITIVE DELIVERY ORDER

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Contractor Details

Parent Company: Booz Allen Hamilton Holding Corporation (UEI: 964725688)

Address: 8283 GREENSBORO DR # 700, MC LEAN, VA, 90

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $38,531,079

Exercised Options: $38,531,079

Current Obligation: $10,843,669

Parent Contract

Parent Award PIID: TIRNO00D00014

IDV Type: IDC

Timeline