Treasury's $22.4M IT contract with Booz Allen Hamilton for computer systems design services awarded competitively

Contract Overview

Contract Amount: $22,373,859 ($22.4M)

Contractor: Booz Allen Hamilton Inc.

Awarding Agency: Department of the Treasury

Start Date: 2006-09-25

End Date: 2014-08-01

Contract Duration: 2,867 days

Daily Burn Rate: $7.8K/day

Competition Type: COMPETITIVE DELIVERY ORDER

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: TIPSS 3 - AFTRAK PROJECT, TTS 2140

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20224

State: District of Columbia Government Spending

Plain-Language Summary

Department of the Treasury obligated $22.4 million to BOOZ ALLEN HAMILTON INC. for work described as: TIPSS 3 - AFTRAK PROJECT, TTS 2140 Key points: 1. Contract awarded competitively, suggesting potential for good value. 2. IT services sector is highly dynamic, requiring continuous adaptation. 3. Long contract duration (nearly 8 years) may indicate a stable, ongoing need. 4. Fixed-fee structure can provide cost control if well-defined. 5. Focus on computer systems design is a core IT function. 6. Geographic concentration in DC may reflect agency proximity.

Value Assessment

Rating: good

The contract's total value of $22.4 million over nearly 8 years averages to approximately $2.86 million annually. While specific performance metrics are not detailed, the competitive award and fixed-fee structure suggest an effort towards achieving value for money. Benchmarking against similar large-scale IT system design contracts would provide a clearer picture of cost-effectiveness, but the duration implies a sustained need and potentially successful delivery.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded as a competitive delivery order, indicating that multiple vendors likely had the opportunity to bid. The presence of two bidders suggests a reasonable level of competition for this IT services requirement. A competitive process generally leads to better price discovery and encourages vendors to offer their best terms.

Taxpayer Impact: The competitive nature of this award is beneficial for taxpayers, as it likely resulted in a more favorable price than a sole-source or limited competition scenario.

Public Impact

Benefits the Department of the Treasury by providing essential computer systems design services. Supports the Internal Revenue Service's operational needs through IT infrastructure development. Services delivered likely enhance the efficiency and effectiveness of tax administration systems. Geographic impact is concentrated in Washington D.C., where the Treasury Department is headquartered. Workforce implications include IT professionals and system designers employed by the contractor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration could lead to vendor lock-in if not managed carefully.
Fixed-fee contracts can sometimes incentivize cost-cutting that impacts quality if not monitored.
Reliance on a single contractor for critical IT systems design poses a risk if performance falters.

Positive Signals

Competitive award process suggests a fair market approach and potential for good value.
Fixed-fee structure provides a degree of cost certainty for the government.
Contract duration indicates a sustained need and potentially successful, long-term partnership.

Sector Analysis

This contract falls within the Computer Systems Design Services sector, a critical component of the broader Information Technology industry. This sector is characterized by rapid technological advancements and a high demand for specialized expertise. The market size for IT services is substantial, with government agencies being significant consumers. This contract represents a portion of the federal government's investment in maintaining and upgrading its complex IT infrastructure, comparable to other large IT service contracts awarded across various agencies.

Small Business Impact

The contract details indicate that small business participation was not a primary set-aside criterion (ss: false, sb: false). This suggests the contract was competed on a broader scale, likely targeting larger IT service providers. There is no explicit information on subcontracting plans for small businesses, which could represent missed opportunities for the small business ecosystem to participate in this significant federal IT spend.

Oversight & Accountability

Oversight for this contract would typically fall under the contracting officer and program managers within the Department of the Treasury and the IRS. Accountability measures would be tied to the terms of the Cost Plus Fixed Fee (CPFF) contract, including performance milestones and deliverables. Transparency is generally facilitated through contract award databases, though detailed performance reports may not always be publicly accessible. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

IT Services
Computer Systems Design
Federal IT Modernization
IRS Technology Modernization
Department of the Treasury IT Procurement

Risk Flags

Contract duration exceeds typical IT project lifecycles, potentially indicating scope creep or lack of clear completion criteria.
CPFF contract type requires robust oversight to prevent cost overruns.
Concentration in a single geographic location (DC) may limit broader access to talent or create single points of failure.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $22.4 million to BOOZ ALLEN HAMILTON INC.. TIPSS 3 - AFTRAK PROJECT, TTS 2140

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 $22.4 million.

What is the period of performance?

Start: 2006-09-25. End: 2014-08-01.

What was the specific nature of the computer systems design services provided under this contract?

While the contract specifies 'Computer Systems Design Services' (NAICS 541512), the exact nature of the work performed under TIPSS 3 - AFTRAK PROJECT, TTS 2140 is not detailed in the provided data. Typically, such services involve designing, developing, and implementing new computer systems or modifying existing ones to meet specific organizational needs. This could encompass software development, hardware integration, network architecture design, database management system design, and overall IT infrastructure planning. Given the client is the IRS, the systems likely supported tax processing, data management, taxpayer services, or internal operational functions.

How does the awarded amount of $22.4 million compare to similar IT system design contracts for federal agencies?

The total value of $22.4 million over nearly 8 years, averaging around $2.86 million annually, places this contract in the mid-to-large tier for IT services. Federal agencies frequently award IT system design contracts ranging from a few million to tens or even hundreds of millions of dollars, depending on the scope and duration. For instance, large-scale system overhauls or the development of entirely new platforms can easily exceed $50 million. This contract's value appears reasonable for a sustained, competitive IT design effort within a major agency like the Treasury, but a precise comparison would require benchmarking against contracts with similar scope, complexity, and duration.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract structure for IT services?

The Cost Plus Fixed Fee (CPFF) structure, while offering some cost certainty through the fixed fee, carries inherent risks. For the government, the primary risk is that the 'cost' portion can escalate beyond initial estimates if the contractor's expenses are not tightly controlled or if the scope of work expands significantly without adequate adjustments. This can lead to the total contract value exceeding projections. For the contractor, the fixed fee might become insufficient if unforeseen complexities arise, potentially leading to disputes or reduced profit margins. Effective oversight and clear definition of allowable costs are crucial to mitigate these risks.

What does the duration of nearly 8 years (2867 days) imply about the program's stability and the contractor's performance?

A contract duration of nearly 8 years strongly suggests a stable, long-term requirement for the services provided. For the government, it indicates a consistent need for the IT system design capabilities. For the contractor, Booz Allen Hamilton, it implies a successful track record in delivering the required services to the satisfaction of the Department of the Treasury and the IRS, warranting continued engagement. Such long durations often signify that the systems being designed are critical and complex, requiring sustained development, integration, and potentially ongoing support or evolution over an extended period.

How has federal spending on computer systems design services evolved, and where does this contract fit in?

Federal spending on computer systems design services (NAICS 541512) has generally trended upwards over the past two decades, driven by the increasing reliance on technology across all government functions and the need for modernization. Agencies constantly seek to upgrade legacy systems, enhance cybersecurity, improve data analytics capabilities, and develop new digital services. This $22.4 million contract, awarded in 2006 and ending in 2014, represents a specific investment during that period. It fits within the broader pattern of federal agencies outsourcing complex IT design and development work to specialized contractors to meet evolving technological demands and operational 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: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

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

Address: 1953 GALLOWS RD STE 600, VIENNA, VA, 11

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $26,627,396

Exercised Options: $24,673,811

Current Obligation: $22,373,859

Parent Contract

Parent Award PIID: TIRNO06D00026

IDV Type: IDC

Timeline