Treasury's IRS awards $18.8M for IT services to Unisys, highlighting long-term IT support needs

Contract Overview

Contract Amount: $18,769,880 ($18.8M)

Contractor: Unisys Corporation

Awarding Agency: Department of the Treasury

Start Date: 2007-09-25

End Date: 2012-03-31

Contract Duration: 1,649 days

Daily Burn Rate: $11.4K/day

Competition Type: COMPETITIVE DELIVERY ORDER

Number of Offers Received: 103

Pricing Type: COMBINATION (APPLIES TO AWARDS WHERE TWO OR MORE OF THE ABOVE APPLY)

Sector: IT

Official Description: EXFIRS O&M FOLLOW-ON

Place of Performance

Location: RESTON, FAIRFAX County, VIRGINIA, 20190

State: Virginia Government Spending

Plain-Language Summary

Department of the Treasury obligated $18.8 million to UNISYS CORPORATION for work described as: EXFIRS O&M FOLLOW-ON Key points: 1. Contract awarded to a single, established vendor suggests a focus on continuity and specialized knowledge. 2. The duration of the contract indicates a need for sustained IT support rather than short-term projects. 3. Competition level for this award is not detailed, making it difficult to assess price competitiveness. 4. The IT services sector is highly dynamic, requiring continuous adaptation and investment. 5. This contract falls within the broader category of IT support and systems design services for federal agencies. 6. The value of the contract, while significant, needs to be benchmarked against similar long-term IT support contracts.

Value Assessment

Rating: fair

Benchmarking the value of this $18.8 million contract is challenging without specific details on the services rendered and comparable market rates. The contract's duration of over four years suggests a need for ongoing support, which can sometimes lead to higher overall costs compared to shorter, more agile engagements. However, if the services provided are critical and require specialized expertise from Unisys, the pricing might be justified. Further analysis would require comparing the per-unit costs of specific services against industry benchmarks.

Cost Per Unit: N/A

Competition Analysis

Competition Level: unknown

This contract was awarded as a competitive delivery order, indicating that multiple vendors likely had an opportunity to bid. The fact that it was a competitive process is positive for price discovery. However, the number of bidders (103) is high, which generally suggests robust competition. The specific terms and pricing negotiated within this competitive environment would determine the ultimate value for the government.

Taxpayer Impact: A competitive award process, especially with a large number of bidders, generally leads to better pricing for taxpayers by fostering a competitive market environment.

Public Impact

Taxpayers benefit from the IRS's ability to maintain and improve its IT systems, ensuring efficient tax processing and services. The contract supports the delivery of essential IT infrastructure and computer systems design services for the Internal Revenue Service. The geographic impact is primarily within the United States, supporting federal IT operations. This contract likely supports a workforce of IT professionals, including system designers, engineers, and support staff, within Unisys and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in due to the long-term nature of the contract.
Risk of cost overruns if scope creep occurs or if market rates for IT services increase significantly.
Dependence on a single vendor for critical IT infrastructure could pose a risk if the vendor faces financial or operational challenges.

Positive Signals

Competitive award process suggests potential for good value and price negotiation.
Long contract duration indicates a stable and reliable IT support solution for the IRS.
The award to a known entity like Unisys may imply a track record of successful service delivery for the IRS.

Sector Analysis

This contract falls within the Information Technology sector, specifically Computer Systems Design Services. This is a large and critical sector for government operations, encompassing a wide range of services from software development to IT infrastructure management. Federal spending in IT services is substantial, driven by the need to modernize legacy systems, enhance cybersecurity, and improve data management. Comparable spending benchmarks would involve looking at other large, multi-year IT support contracts awarded to major IT service providers by agencies like the IRS or other large federal entities.

Small Business Impact

The contract details indicate that small business participation was not a primary set-aside consideration (ss: false, sb: false). While the contract was competitively awarded, there is no explicit information on subcontracting plans for small businesses. This suggests that the primary award went to a large business, and the extent to which small businesses will benefit through subcontracting opportunities remains unclear without further data. This could represent a missed opportunity to leverage the small business ecosystem for specialized IT services.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officers and program managers within the IRS and the Department of the Treasury. Accountability measures would be defined in the contract's terms and conditions, including performance metrics and service level agreements. Transparency is facilitated through contract award databases like FPDS, which provide public access to contract details. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to the contract were suspected.

Related Government Programs

IRS IT Modernization Programs
Treasury Department IT Infrastructure Support
Federal Civilian Agency IT Services Contracts
Computer Systems Design and Related Services

Risk Flags

Long-term contract duration may lead to vendor lock-in.
Potential for technological obsolescence if not managed proactively.
Scope creep could lead to cost overruns.
Dependence on a single vendor for critical systems.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $18.8 million to UNISYS CORPORATION. EXFIRS O&M FOLLOW-ON

Who is the contractor on this award?

The obligated recipient is UNISYS CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of the Treasury (Internal Revenue Service).

What is the total obligated amount?

The obligated amount is $18.8 million.

What is the period of performance?

Start: 2007-09-25. End: 2012-03-31.

What is Unisys Corporation's track record with the IRS and other federal agencies for similar IT services?

Unisys Corporation has a long history of providing IT services to the federal government, including significant work with the IRS. They have been involved in various large-scale IT projects, such as modernizing tax processing systems and providing infrastructure support. Their track record with the IRS includes previous contracts for IT operations and maintenance, suggesting a deep understanding of the agency's complex environment. While specific performance metrics for past contracts are not detailed here, their continued engagement with the IRS indicates a level of satisfaction or necessity from the agency's perspective. It is important to note that large IT contracts often involve complex performance evaluations, and any issues or successes would typically be documented internally by the agency.

How does the $18.8 million contract value compare to similar IT services contracts awarded by the IRS or other large federal agencies?

The $18.8 million contract value for Computer Systems Design Services over a period of approximately 4.5 years (September 2007 to March 2012) places it as a moderately sized, long-term IT support contract. For context, large federal agencies like the IRS often award multi-billion dollar contracts for major IT modernization efforts or comprehensive IT outsourcing. However, for specific IT support, system design, and maintenance tasks, $18.8 million is a substantial sum. Comparable contracts would include those for managed IT services, network infrastructure support, or custom software development for agencies of similar size and complexity. Without specific details on the scope of services, a direct comparison is difficult, but it suggests a significant investment in maintaining and evolving the IRS's IT capabilities during that period.

What are the primary risks associated with a long-term IT services contract of this nature?

Long-term IT services contracts, such as this $18.8 million award to Unisys for the IRS, carry several inherent risks. One primary risk is technological obsolescence; the IT landscape evolves rapidly, and a contract designed for a specific period might not fully account for future technological advancements or shifts in requirements, potentially leading to the need for costly modifications or early termination. Another significant risk is vendor lock-in, where the agency becomes overly dependent on the incumbent contractor's proprietary systems or knowledge, making it difficult and expensive to switch providers. Cost overruns are also a concern, especially if the contract's scope is not precisely defined or if unforeseen issues arise during implementation or maintenance. Finally, performance risk exists, where the contractor may fail to meet service level agreements or deliver the expected quality of service, impacting critical government functions.

What does the number of bidders (103) suggest about the competition and potential value for the IRS?

A total of 103 bidders for this delivery order suggests a highly competitive initial bidding environment. A large number of interested parties typically indicates that the contract opportunity was attractive and that the market for Computer Systems Design Services is robust. High competition generally benefits the government by driving down prices through competitive bidding and encouraging vendors to offer their best solutions and pricing. For the IRS, this large pool of bidders likely resulted in a more favorable price for the services rendered compared to a sole-source or limited-competition award. It also suggests that the IRS had a good selection of qualified vendors to choose from, potentially leading to better overall service quality.

How does this contract fit into the IRS's broader IT strategy and historical spending patterns?

This contract, awarded in 2007, likely represented a component of the IRS's ongoing efforts to manage and update its complex IT infrastructure. Historically, the IRS has faced challenges with its aging IT systems and has undertaken numerous modernization initiatives. Contracts for IT services, system design, and maintenance are crucial for ensuring the operational continuity of tax administration systems. The $18.8 million value and the 4.5-year duration suggest a focus on sustained support and potentially incremental upgrades rather than a complete system overhaul, which would typically involve much larger, multi-year programs. This award fits within a pattern of significant, ongoing investment in IT by the IRS to meet evolving taxpayer needs and security requirements.

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 › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: COMPETITIVE DELIVERY ORDER

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 103

Pricing Type: COMBINATION (APPLIES TO AWARDS WHERE TWO OR MORE OF THE ABOVE APPLY) (2)

Evaluated Preference: NONE

Contractor Details

Address: 11720 PLAZA AMERICA DR, RESTON, VA, 20190

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $21,998,774

Exercised Options: $21,755,800

Current Obligation: $18,769,880

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: TIRNO06D00010

IDV Type: IDC

Timeline