Treasury's IRS Spends $12.6M on EMC DASD Lease in FY09, Lacking Competition

Contract Overview

Contract Amount: $12,577,267 ($12.6M)

Contractor: Government Acquisitions Inc

Awarding Agency: Department of the Treasury

Start Date: 2008-12-08

End Date: 2009-09-30

Contract Duration: 296 days

Daily Burn Rate: $42.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: EMC DASD LEASE PAYMENT FY09

Place of Performance

Location: KEARNEYSVILLE, JEFFERSON County, WEST VIRGINIA, 25430

State: West Virginia Government Spending

Plain-Language Summary

Department of the Treasury obligated $12.6 million to GOVERNMENT ACQUISITIONS INC for work described as: EMC DASD LEASE PAYMENT FY09 Key points: 1. Significant spending on data storage hardware lease. 2. No competition reported for this acquisition. 3. Potential for overpayment due to lack of competitive bidding. 4. IT hardware procurement sector.

Value Assessment

Rating: questionable

The $12.6 million lease payment for EMC DASD in FY09 appears high given the lack of competition. Without competitive quotes, it's difficult to ascertain if the pricing reflects fair market value for the leased equipment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was not competed, indicating a sole-source or limited competition scenario. This significantly limits price discovery and potentially leads to higher costs for taxpayers.

Taxpayer Impact: The lack of competition likely resulted in a higher price than could have been achieved through a competitive process, impacting taxpayer funds.

Public Impact

Taxpayers may have overpaid for leased data storage equipment. Lack of transparency in the procurement process raises concerns. IRS reliance on specific vendors without competition can stifle innovation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Potential for overpricing
Sole-source award

Positive Signals

Firm fixed price contract

Sector Analysis

This acquisition falls within the IT sector, specifically data storage hardware. Spending benchmarks for similar leased equipment are difficult to establish without competitive data, but $12.6M is a substantial amount for a single lease.

Small Business Impact

There is no indication that small businesses were involved in this specific lease agreement, as it was not competed.

Oversight & Accountability

The sole-source nature of this award warrants further review to ensure the government received fair value and that such non-competitive awards are justified and infrequent.

Related Government Programs

Computer and Computer Peripheral Equipment and Software Merchant Wholesalers
Department of the Treasury Contracting
Internal Revenue Service Programs

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for inflated pricing
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $12.6 million to GOVERNMENT ACQUISITIONS INC. EMC DASD LEASE PAYMENT FY09

Who is the contractor on this award?

The obligated recipient is GOVERNMENT ACQUISITIONS 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 $12.6 million.

What is the period of performance?

Start: 2008-12-08. End: 2009-09-30.

Was the lack of competition justified for this EMC DASD lease?

The provided data indicates the contract was 'NOT COMPETED'. Without further documentation explaining the justification (e.g., urgent need, unique capability), it raises concerns about whether a competitive process was bypassed. This lack of competition makes it difficult to assess if the government secured the best possible price and terms.

What is the potential financial risk to taxpayers due to this sole-source lease?

The primary financial risk is overpayment. When a contract is not competed, the government loses the benefit of competitive pricing, which typically drives down costs. The $12.6 million lease could have been significantly higher than a market-driven price, directly impacting taxpayer funds negatively.

How effective was this procurement in meeting the IRS's data storage needs?

While the lease was awarded and presumably fulfilled the IRS's data storage needs for FY09, its effectiveness in terms of value for money is questionable due to the lack of competition. The agency acquired the necessary equipment, but potentially at a suboptimal cost, impacting overall procurement effectiveness.

Industry Classification

NAICS: Wholesale Trade › Professional and Commercial Equipment and Supplies Merchant Wholesalers › Computer and Computer Peripheral Equipment and Software Merchant Wholesalers

Product/Service Code: LEASE/RENT EQUIPMENT › LEASE OR RENTAL OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 231 W 4TH ST, CINCINNATI, OH, 90

Business Categories: Asian Pacific American Owned Business, Category Business, Minority Owned Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $12,577,267

Exercised Options: $12,577,267

Current Obligation: $12,577,267

Timeline