Treasury's IRS awarded Booz Allen Hamilton $117.8M for IT support, raising value-for-money questions

Contract Overview

Contract Amount: $117,800,837 ($117.8M)

Contractor: Booz Allen Hamilton Inc

Awarding Agency: Department of the Treasury

Start Date: 2013-09-27

End Date: 2019-03-26

Contract Duration: 2,006 days

Daily Burn Rate: $58.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::CT::IGF CONTRACTOR INFORMATION TECHNOLOGY SUPPORT FOR ENTERPRISE ARCHITECTURE

Place of Performance

Location: MCLEAN, FAIRFAX County, VIRGINIA, 22102

State: Virginia Government Spending

Plain-Language Summary

Department of the Treasury obligated $117.8 million to BOOZ ALLEN HAMILTON INC for work described as: IGF::CT::IGF CONTRACTOR INFORMATION TECHNOLOGY SUPPORT FOR ENTERPRISE ARCHITECTURE Key points: 1. Contract value appears high relative to duration and scope. 2. Limited public data makes direct value-for-money assessment challenging. 3. Sole-source nature of some awards warrants scrutiny. 4. Performance context is unclear without specific deliverables. 5. IT services sector is highly competitive, suggesting potential for better pricing. 6. Contract duration is extensive, increasing risk of cost overruns or obsolescence.

Value Assessment

Rating: questionable

The total award of $117.8 million over approximately five years (2013-2019) suggests a significant annual spend. Benchmarking this against similar IT support contracts for enterprise architecture is difficult without more granular data on services rendered. However, the average annual spend of roughly $23.5 million per year appears substantial, especially if the scope was primarily advisory or support-oriented rather than large-scale development. Further analysis of specific task orders and deliverables would be needed to confirm if this represents a fair price for the value received.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of 3 bidders suggests a reasonable level of competition for this specific requirement. However, the contract type is 'Delivery Order,' which implies it might be part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract vehicle, and the competition details might pertain to the underlying IDIQ rather than this specific order. Without knowing the number of bids for this particular delivery order, it's hard to definitively assess price discovery.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down prices and encourage innovation. The presence of multiple bidders suggests that the government likely received competitive pricing for the services rendered under this contract.

Public Impact

The Internal Revenue Service (IRS) benefits from enhanced enterprise architecture and IT support. Federal employees and taxpayers are indirectly impacted through improved IT infrastructure and services. The contract supports IT modernization efforts within a critical federal agency. Workforce implications are likely within the IT consulting and support sector, with potential for skilled labor engagement.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

High total contract value over a long period could indicate potential for cost inefficiencies.
Lack of detailed public information on specific deliverables makes it hard to assess true performance and value.
The nature of IT support contracts can sometimes lead to scope creep if not managed tightly.
Reliance on a single large contractor for extensive IT support might pose risks if the contractor's performance falters.

Positive Signals

Awarded through full and open competition, suggesting a competitive bidding process.
The contractor, Booz Allen Hamilton, is a well-established firm with significant government contracting experience.
The contract aims to provide essential IT support for enterprise architecture, crucial for agency operations.
Fixed-price contract type can provide cost certainty for the government, assuming well-defined SOWs.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on computer related services and enterprise architecture support. The IT services market is vast and highly competitive, with numerous firms offering specialized solutions. The contract's value of over $117 million places it in the large-contract category within this sector. Comparable spending benchmarks for similar enterprise architecture support contracts within federal agencies can vary widely based on scope, duration, and specific technological requirements.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. There is also no explicit mention of subcontracting goals for small businesses. This suggests that the primary award went to a large business, and opportunities for small businesses would likely be through subcontracting if Booz Allen Hamilton chose to engage them. The impact on the small business ecosystem is therefore indirect, depending on the prime contractor's subcontracting practices.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program managers within the IRS. Performance reviews, milestone tracking, and invoice approvals are standard accountability measures. Transparency is limited by the public availability of detailed contract performance data. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

IRS IT Modernization Programs
Federal Enterprise Architecture Initiatives
IT Consulting Services Contracts
Large-Scale IT Support Contracts

Risk Flags

High Contract Value
Long Contract Duration
Limited Public Performance Data

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $117.8 million to BOOZ ALLEN HAMILTON INC. IGF::CT::IGF CONTRACTOR INFORMATION TECHNOLOGY SUPPORT FOR ENTERPRISE ARCHITECTURE

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 $117.8 million.

What is the period of performance?

Start: 2013-09-27. End: 2019-03-26.

What specific enterprise architecture services were provided under this contract?

The contract, identified as 'IGF::CT::IGF CONTRACTOR INFORMATION TECHNOLOGY SUPPORT FOR ENTERPRISE ARCHITECTURE,' primarily focused on providing IT support related to the IRS's enterprise architecture. While specific deliverables are not detailed in the provided data, such services typically encompass strategic IT planning, development of architectural standards, technology roadmapping, data architecture, integration strategies, and ensuring IT investments align with business goals. The scope likely involved advising on the structure, behavior, and more importantly, the core business processes of the IRS's IT systems to enhance efficiency, agility, and interoperability. The firm-fixed-price nature suggests that the scope was defined upfront, though the exact nature of the 'support' could range from high-level consulting to more hands-on technical guidance.

How does the $117.8 million award compare to similar IT support contracts for enterprise architecture at other federal agencies?

Comparing the $117.8 million award for Booz Allen Hamilton's IT support for enterprise architecture at the IRS requires context regarding the contract's duration and the specific services rendered. This contract spanned from September 2013 to March 2019, approximately 5.5 years, averaging over $21 million annually. Large federal agencies often invest heavily in enterprise architecture support, with contracts ranging from tens to hundreds of millions of dollars over several years. For instance, the Department of Defense or agencies undergoing major IT transformations might have larger or more complex EA support contracts. However, without detailed statements of work and performance metrics for comparable contracts, a precise benchmark is challenging. The IRS's specific needs and the scope of Booz Allen Hamilton's engagement would determine if this figure represents a competitive market rate.

What are the primary risks associated with a contract of this size and duration for IT support?

Contracts of this magnitude ($117.8M) and duration (over 5 years) for IT support carry several inherent risks. Firstly, technological obsolescence is a significant concern; IT landscapes evolve rapidly, and solutions or advice provided early in the contract might become outdated by its end. Secondly, scope creep can inflate costs and extend timelines if not managed meticulously, especially in advisory roles. Thirdly, contractor performance risk is substantial; a decline in the quality of services from a key provider like Booz Allen Hamilton could severely impact IRS operations. Lastly, vendor lock-in can occur, making it difficult and costly to transition to alternative solutions or providers later. Ensuring robust oversight, clear performance metrics, and flexibility in adapting to technological changes are crucial mitigation strategies.

What was the historical spending pattern for IT support at the IRS prior to this contract?

Analyzing historical spending patterns for IT support at the IRS prior to this specific $117.8 million contract (2013-2019) is crucial for context. While the provided data doesn't include historical figures, the IRS, like other large federal agencies, consistently requires substantial investment in IT infrastructure and services to manage its complex operations, including tax processing, taxpayer services, and enforcement. Spending on IT support, including enterprise architecture, is typically driven by modernization needs, security requirements, and the sheer scale of data and transactions handled. Understanding previous IT budgets and contract awards would reveal trends in IT spending, identify key service areas, and potentially highlight shifts in strategy or technology adoption that influenced the size and scope of subsequent contracts like the one awarded to Booz Allen Hamilton.

How effective has Booz Allen Hamilton been in fulfilling similar large-scale IT support contracts for the federal government?

Booz Allen Hamilton is a major government contractor with extensive experience in providing IT support and consulting services across various federal agencies. Historically, the company has been involved in numerous large-scale contracts, often receiving high marks for strategic advice and technical expertise. However, like any large contractor, they have also faced scrutiny and occasional performance issues on specific projects. Assessing their overall effectiveness requires examining past performance evaluations, contract award data, and any publicly available reports from oversight bodies like the Government Accountability Office (GAO) or agency Inspectors General related to their federal IT contracts. For this specific IRS contract, the effectiveness would be best judged by the IRS's internal performance reviews and the achievement of defined objectives within the contract's scope.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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

Address: 8283 GREENSBORO DR, MCLEAN, VA, 22102

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

Financial Breakdown

Contract Ceiling: $120,114,434

Exercised Options: $120,114,434

Current Obligation: $117,800,837

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: TIRNO11D00011

IDV Type: IDC

Timeline