Accenture Federal Services awarded $1.62B for IT systems design, highlighting extensive contract history

Contract Overview

Contract Amount: $16,217,954 ($16.2M)

Contractor: Accenture Federal Services LLC

Awarding Agency: Department of the Treasury

Start Date: 2010-05-01

End Date: 2015-10-31

Contract Duration: 2,009 days

Daily Burn Rate: $8.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 15

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: RETURN PREPARER REGISTRATION SYSTEM

Place of Performance

Location: RESTON, FAIRFAX County, VIRGINIA, 20190, UNITED STATES OF AMERICA

State: Virginia Government Spending

Plain-Language Summary

Department of the Treasury obligated $16.2 million to ACCENTURE FEDERAL SERVICES LLC for work described as: RETURN PREPARER REGISTRATION SYSTEM Key points: 1. Contract value of $1.62 billion over five years indicates significant investment in IT infrastructure. 2. Full and open competition suggests a robust bidding process, potentially leading to competitive pricing. 3. The contract's duration and value present moderate performance and financial risks. 4. This award falls within the Computer Systems Design Services category, a common area for federal IT. 5. The firm fixed-price structure shifts some risk to the contractor, incentivizing cost control. 6. Accenture's extensive track record in federal contracting suggests a lower risk of contractor failure.

Value Assessment

Rating: good

The contract value of $1.62 billion over five years for IT systems design services is substantial. Benchmarking against similar large-scale IT contracts within the federal government, this award appears to be within a reasonable range, especially considering the scope of services typically involved in computer systems design. The firm fixed-price nature of the contract suggests that the government has negotiated a set price, which can be advantageous if the contractor can deliver efficiently. However, without specific details on the deliverables and performance metrics, a precise value-for-money assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. The presence of 15 bids suggests a healthy level of competition for this significant IT services contract. A higher number of bidders generally leads to better price discovery and can drive down costs for the government, as contractors compete to offer the most attractive terms and pricing.

Taxpayer Impact: The extensive competition for this contract is beneficial for taxpayers, as it likely resulted in a more favorable price than a sole-source or limited competition award. It ensures that taxpayer funds are being used efficiently by leveraging market forces.

Public Impact

The primary beneficiaries are federal agencies requiring advanced IT systems design and integration services. This contract supports the modernization and enhancement of critical government IT infrastructure. The services delivered are essential for improving the efficiency and effectiveness of government operations. The geographic impact is likely nationwide, supporting federal agencies across various locations. Workforce implications include employment opportunities for IT professionals, analysts, and support staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep in long-term IT projects if not managed rigorously.
Dependency on a single large contractor for critical IT systems design.
Risk of cost overruns if fixed-price contract terms are not meticulously defined and monitored.
Challenges in adapting to rapidly evolving technology within a fixed contract framework.

Positive Signals

Accenture's established track record and experience in large federal IT contracts.
The firm fixed-price contract structure incentivizes contractor efficiency and cost control.
Full and open competition suggests a competitive environment that can drive value.
The contract duration allows for sustained focus on complex IT system development.
Awarded by the Department of the Treasury, indicating a focus on critical government functions.

Sector Analysis

The federal IT services market is a vast and dynamic sector, with agencies consistently investing in modernizing their digital infrastructure. Computer Systems Design Services, classified under NAICS code 541512, represent a significant portion of this spending. This contract with Accenture Federal Services aligns with the broader trend of agencies outsourcing complex IT design and integration work to specialized firms. Comparable spending benchmarks in this area often involve multi-year, multi-million dollar awards for system development, cybersecurity, and cloud migration.

Small Business Impact

This contract was awarded under full and open competition and does not indicate any specific small business set-aside provisions. While the prime contractor, Accenture Federal Services, is a large business, there may be opportunities for small businesses to participate as subcontractors. The extent of small business subcontracting would depend on the specific requirements outlined in the contract and Accenture's subcontracting plan, which is not detailed here. The absence of a direct set-aside means the primary focus was on competition among all eligible firms.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program office within the Department of the Treasury. Performance monitoring, adherence to contract terms, and quality assurance are key oversight mechanisms. Transparency is facilitated through contract award databases and reporting requirements. While specific Inspector General jurisdiction is not detailed, the Treasury IG would likely have oversight if any issues of fraud, waste, or abuse arise related to this contract.

Related Government Programs

IT Modernization Programs
Enterprise Resource Planning (ERP) Systems
Cloud Computing Services
Cybersecurity Infrastructure Support
Digital Transformation Initiatives

Risk Flags

Large contract value
Long contract duration
Potential for scope creep
Reliance on fixed-price structure for complex IT

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $16.2 million to ACCENTURE FEDERAL SERVICES LLC. RETURN PREPARER REGISTRATION SYSTEM

Who is the contractor on this award?

The obligated recipient is ACCENTURE FEDERAL SERVICES LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $16.2 million.

What is the period of performance?

Start: 2010-05-01. End: 2015-10-31.

What is Accenture Federal Services' track record with large federal IT contracts?

Accenture Federal Services has a substantial track record of securing and performing on large federal IT contracts across various agencies. Their history includes significant awards for IT modernization, systems integration, and digital transformation initiatives. For instance, they have been involved in major projects with the Department of Defense, Health and Human Services, and other civilian agencies. This extensive experience suggests a deep understanding of federal procurement processes, compliance requirements, and the technical complexities of government IT systems. Their ability to consistently win and execute these large contracts indicates a strong capacity for managing complex projects, large workforces, and significant budgets, which is a positive indicator for this specific award.

How does the $1.62 billion award compare to similar IT systems design contracts?

The $1.62 billion award for IT systems design services over five years is a substantial contract, placing it among the larger IT awards in the federal government. When compared to similar contracts for comprehensive IT system design and development, this figure is within the expected range for large-scale, multi-year engagements. For example, contracts for enterprise-wide system overhauls, major software development, or significant infrastructure upgrades often reach hundreds of millions or even billions of dollars. The firm fixed-price nature of this contract also influences its comparison; fixed-price contracts often reflect a comprehensive scope and a higher degree of contractor responsibility. Without specific details on the exact deliverables and scope, a precise benchmark is difficult, but the magnitude aligns with significant federal IT modernization efforts.

What are the primary risks associated with a contract of this magnitude and duration?

Contracts of this magnitude ($1.62 billion) and duration (five years) carry several inherent risks. Firstly, there's the risk of scope creep, where the project's requirements expand beyond the initial agreement, potentially leading to cost overruns or delays, even under a fixed-price contract if not managed carefully. Secondly, technological obsolescence is a concern; IT evolves rapidly, and systems designed today might be outdated before the contract ends. Thirdly, contractor performance risk exists; despite Accenture's experience, any large project faces execution challenges. Finally, there's the financial risk for the government if the contractor fails to deliver the expected value or if unforeseen issues arise that necessitate additional funding or contract modifications. Robust oversight and change management are crucial to mitigate these risks.

How effective is full and open competition in ensuring value for taxpayer money in IT contracts?

Full and open competition is generally considered the most effective method for ensuring value for taxpayer money in IT contracts. By allowing all responsible sources to bid, the government maximizes the pool of potential offerors, fostering a competitive environment. This competition drives down prices as contractors vie for the award, and it encourages innovation as they propose the best solutions. Furthermore, it provides a wider range of choices, allowing the government to select not only the most cost-effective solution but also the one that best meets technical requirements and performance standards. The presence of 15 bidders on this contract strongly suggests that competition was robust, increasing the likelihood that the government secured a favorable price and optimal solution.

What are the implications of the firm fixed-price (FFP) contract type for this award?

The firm fixed-price (FFP) contract type has significant implications for this award. Under an FFP contract, the price is set and not subject to adjustment based on the contractor's cost experience. This structure places the primary risk of cost overruns on the contractor, Accenture Federal Services. It incentivizes the contractor to manage costs efficiently and to perform the work within the agreed-upon budget. For the government, this provides cost certainty, making budgeting more predictable. However, it also means that the government must clearly define the scope of work upfront, as any changes may require a formal contract modification, potentially at a higher price. The FFP structure is generally favored for well-defined requirements where risks can be reasonably assessed.

How does this contract fit within the broader context of federal IT spending?

This contract fits squarely within the broader context of substantial and ongoing federal IT spending. Agencies across the government consistently allocate significant portions of their budgets to IT services, driven by the need for modernization, cybersecurity, data management, and digital service delivery. The NAICS code 541512 (Computer Systems Design Services) indicates a focus on the design, development, and integration of IT systems, which is a core component of federal IT modernization efforts. The $1.62 billion value over five years reflects the scale of investment required for complex, enterprise-level IT projects. This award is indicative of a larger trend where federal agencies rely on large, experienced contractors to manage and execute critical IT initiatives, often through competitive procurement processes.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 15

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Accenture Public Limited Company (UEI: 985015354)

Address: 11951 FREEDOM DR STE 1000, RESTON, VA, 20190

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $17,977,302

Exercised Options: $16,220,934

Current Obligation: $16,217,954

Contract Characteristics

Cost or Pricing Data: NO

Timeline