Treasury's IRS awards $37M+ for Other Computer Related Services to Booz Allen Hamilton over 9 years

Contract Overview

Contract Amount: $37,135,944 ($37.1M)

Contractor: Booz Allen Hamilton Inc

Awarding Agency: Department of the Treasury

Start Date: 2002-09-15

End Date: 2012-02-03

Contract Duration: 3,428 days

Daily Burn Rate: $10.8K/day

Competition Type: COMPETITIVE DELIVERY ORDER

Number of Offers Received: 21

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Place of Performance

Location: NEW CARROLLTON, PRINCE GEORGE'S County, MARYLAND, 20784

State: Maryland Government Spending

Plain-Language Summary

Department of the Treasury obligated $37.1 million to BOOZ ALLEN HAMILTON INC for work described as: Key points: 1. Significant contract value over a decade indicates long-term reliance on specialized IT services. 2. Booz Allen Hamilton is a major player in government contracting, suggesting strong competition in the broader market. 3. The 'Other Computer Related Services' category is broad, potentially masking specific risks or efficiencies. 4. Contract duration and cost-plus structure warrant scrutiny for potential cost overruns and value for money.

Value Assessment

Rating: fair

The contract's cost-plus fixed fee structure, spanning nearly a decade, makes direct pricing comparisons difficult. The total award of over $37 million suggests a substantial investment, but without detailed breakdowns of services rendered and associated costs, assessing true value for money is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: unknown

Awarded as a competitive delivery order, indicating multiple bids were considered. However, the long duration and specific nature of 'Other Computer Related Services' might limit the pool of truly competitive bidders over time, potentially impacting price discovery.

Taxpayer Impact: Taxpayer funds totaling over $37 million were allocated. While competition was present, the cost-plus structure necessitates careful oversight to ensure efficient use of these funds.

Public Impact

Impacts IRS operations by providing essential computer-related services, potentially affecting tax processing and citizen services. The long-term nature of the contract suggests a sustained need for these services within the agency. Transparency in how the $37M+ was spent is crucial for public trust in government IT procurement.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (9+ years) increases risk of cost escalation and vendor lock-in.
Cost-plus fixed fee structure can incentivize higher spending if not tightly managed.
Broad service category ('Other Computer Related Services') lacks specificity, hindering performance evaluation.
No small business participation noted, potentially missing opportunities for economic diversity.

Positive Signals

Awarded through a competitive process, suggesting initial price discovery.
Booz Allen Hamilton is a reputable contractor with a track record in government IT.
Contract provides essential services to the IRS, supporting critical government functions.

Sector Analysis

This contract falls under IT services, specifically 'Other Computer Related Services'. Government IT spending benchmarks vary widely by service type, but long-term, large-value contracts like this require rigorous justification and performance monitoring to ensure they align with agency needs and fiscal responsibility.

Small Business Impact

The data indicates this contract was not awarded to small businesses (sb: false). This suggests that the scale or specialized nature of the services required may have favored larger, established contractors, potentially limiting opportunities for small business participation in this specific procurement.

Oversight & Accountability

The competitive delivery order process implies some level of oversight. However, the long duration and cost-plus nature of the contract necessitate continuous monitoring by the IRS to ensure performance, control costs, and maintain accountability for taxpayer funds.

Related Government Programs

Other Computer Related Services
Department of the Treasury Contracting
Internal Revenue Service Programs

Risk Flags

Long contract duration (over 9 years).
Cost-plus contract type can lead to higher costs.
Broad service category lacks specificity.
No small business participation.
Potential for vendor lock-in over extended period.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $37.1 million to BOOZ ALLEN HAMILTON INC. See the official description on USAspending.

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 $37.1 million.

What is the period of performance?

Start: 2002-09-15. End: 2012-02-03.

What specific 'Other Computer Related Services' were provided under this contract, and how did their necessity justify the $37M+ expenditure over nine years?

The 'Other Computer Related Services' category is exceptionally broad. To assess value, a detailed breakdown of services such as system integration, cybersecurity support, data management, or specialized software development is needed. Understanding the specific technical requirements and their criticality to IRS operations would clarify whether the $37M+ expenditure was justified and efficiently utilized over the contract's extensive lifespan.

Given the cost-plus fixed fee structure and long duration, what mechanisms were in place to mitigate risks of cost overruns and ensure optimal performance?

Cost-plus contracts inherently carry a risk of cost escalation. Effective mitigation relies on stringent oversight, clearly defined performance metrics, regular audits, and robust change control processes. For this contract, the IRS would need to demonstrate proactive management, including detailed reviews of contractor expenditures, performance evaluations against milestones, and competitive re-evaluation if significant scope changes occurred, to ensure value and control.

How effectively did the competitive delivery order process ensure fair pricing and optimal vendor selection for 'Other Computer Related Services' over a nine-year period?

A competitive delivery order is a positive start for price discovery. However, the long-term nature of this contract raises questions about sustained competition and potential vendor lock-in. While the initial award was competitive, ensuring ongoing value requires periodic market analysis and potentially re-competition to confirm that Booz Allen Hamilton's pricing remained competitive and that their services continued to meet the IRS's evolving needs effectively.

Industry Classification

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

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: COMPETITIVE DELIVERY ORDER

Offers Received: 21

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: $50,217,313

Exercised Options: $37,225,695

Current Obligation: $37,135,944

Parent Contract

Parent Award PIID: TIRNO00D00014

IDV Type: IDC

Timeline