Treasury's IRS awarded Booz Allen Hamilton $43.2M for IT compliance and data analytics support

Contract Overview

Contract Amount: $43,251,647 ($43.3M)

Contractor: Booz Allen Hamilton Inc

Awarding Agency: Department of the Treasury

Start Date: 2015-06-01

End Date: 2017-07-27

Contract Duration: 787 days

Daily Burn Rate: $55.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: IGF::OT::IGF FOR OTHER FUNCTIONS - COMPLIANCE AND DATA ANALYTICS SUPPORT

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20001

State: District of Columbia Government Spending

Plain-Language Summary

Department of the Treasury obligated $43.3 million to BOOZ ALLEN HAMILTON INC for work described as: IGF::OT::IGF FOR OTHER FUNCTIONS - COMPLIANCE AND DATA ANALYTICS SUPPORT Key points: 1. Contract provides critical IT support for IRS compliance and data analytics functions. 2. Booz Allen Hamilton, a large incumbent contractor, secured this award. 3. The contract was awarded under full and open competition, suggesting a competitive process. 4. Performance period spans over two years, indicating a need for sustained support. 5. The contract type (Cost Plus Fixed Fee) can sometimes lead to cost overruns if not managed tightly. 6. This award falls within the 'Other Computer Related Services' NAICS code.

Value Assessment

Rating: fair

The total award amount of $43.2 million over approximately two years for IT compliance and data analytics support appears to be within a reasonable range for services of this nature, especially considering the complexity of IRS operations. Benchmarking against similar large-scale IT support contracts for federal agencies would provide a clearer picture of value for money. The Cost Plus Fixed Fee (CPFF) contract type, while allowing flexibility, necessitates robust oversight to ensure costs remain controlled and do not escalate beyond initial expectations. Without specific performance metrics or detailed cost breakdowns, a definitive value 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 bids. The presence of 3 bidders suggests a moderate level of competition for this requirement. While multiple bidders participated, the specific details of the bidding process, such as the number of proposals received and the evaluation criteria, are not provided. A competitive process generally helps in achieving better pricing and service quality, but the ultimate benefit depends on the intensity of the competition and the government's negotiation strategy.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it encourages multiple companies to vie for the contract, potentially driving down costs and improving the quality of services through competitive pricing and innovation.

Public Impact

The Internal Revenue Service (IRS) benefits directly through enhanced IT capabilities for compliance and data analytics. Taxpayer data security and the efficiency of tax collection processes are indirectly supported. The contract supports IT infrastructure and services primarily within the District of Columbia. The award likely involves skilled IT professionals, contributing to the federal IT workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

CPFF contract type requires diligent oversight to prevent cost overruns.
Reliance on a single large contractor for critical IT functions could pose a risk if performance falters.
The specific performance metrics and their achievement are not detailed, making it hard to assess effectiveness.
Limited information on the competitive landscape beyond the number of bidders.

Positive Signals

Awarded through full and open competition, indicating a fair and accessible bidding process.
Booz Allen Hamilton is an established contractor with significant experience in government IT services.
The contract duration suggests a stable need for these services, implying a well-defined requirement.
The contract supports essential IRS functions related to compliance and data analytics.

Sector Analysis

This contract falls under the IT services sector, specifically focusing on computer-related services. The market for federal IT services is substantial, with agencies consistently investing in technology to improve operations, security, and data management. Contracts like this are crucial for agencies like the IRS to maintain and upgrade their complex IT systems, manage vast amounts of data, and ensure compliance with regulations. Comparable spending benchmarks would involve looking at other large IT support contracts awarded to system integrators and IT service providers by agencies such as the Department of Defense, Treasury, or HHS.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb: false'. Booz Allen Hamilton is a large business. While there is no direct set-aside, the prime contractor may engage small businesses as subcontractors. However, without specific subcontracting plans or reporting data, the extent of small business participation and its impact on the small business ecosystem remains unclear. Large IT contracts often have subcontracting opportunities, but the focus here is on the prime award to a large entity.

Oversight & Accountability

Oversight for this contract would primarily reside with the contracting officer and the relevant program officials within the IRS. As a Cost Plus Fixed Fee (CPFF) contract, rigorous financial oversight is essential to monitor costs incurred by the contractor against the fixed fee. Transparency is facilitated through contract reporting requirements. Inspector General jurisdiction would typically apply if there were allegations of fraud, waste, or abuse related to the contract's performance or financial management.

Related Government Programs

IRS IT Modernization Programs
Federal Civilian Agency IT Support Services
Data Analytics and Business Intelligence Services
IT Compliance and Security Contracts

Risk Flags

Cost Plus Fixed Fee contract type requires diligent oversight.
Potential for cost overruns if not managed effectively.
Reliance on a single large contractor for critical functions.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $43.3 million to BOOZ ALLEN HAMILTON INC. IGF::OT::IGF FOR OTHER FUNCTIONS - COMPLIANCE AND DATA ANALYTICS SUPPORT

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 $43.3 million.

What is the period of performance?

Start: 2015-06-01. End: 2017-07-27.

What is Booz Allen Hamilton's track record with the IRS and similar federal agencies for IT support contracts?

Booz Allen Hamilton is a major federal contractor with extensive experience providing IT, cybersecurity, and management consulting services across numerous government agencies, including the IRS. They have a long history of supporting complex IT infrastructure, data analytics, and mission-critical systems for civilian and defense clients. For the IRS specifically, their past performance likely includes various IT modernization, data management, and compliance-related projects. While this specific contract award is for a defined period, their broader portfolio suggests a significant capacity to handle large-scale IT requirements. Assessing their specific performance on past IRS contracts, including any past performance issues or commendations, would require a deeper dive into contract databases and agency performance records.

How does the $43.2 million award compare to similar IT support contracts for federal agencies of the IRS's size and complexity?

The $43.2 million award for approximately two years of IT compliance and data analytics support for the IRS is substantial but falls within the typical range for large-scale IT services contracts awarded to major federal contractors. Agencies like the IRS, with vast datasets and complex operational needs, often require significant investment in IT. Comparable contracts for similar services (e.g., IT modernization, data management, cybersecurity) awarded to large system integrators by agencies such as the Department of Defense, Department of Justice, or HHS can range from tens to hundreds of millions of dollars over multiple years. The value is influenced by the scope of work, required expertise, and the duration. Without detailed scope-of-work comparisons, precise benchmarking is difficult, but the award appears consistent with the scale of IT needs for a large federal agency.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for IT services, and how are they mitigated?

The primary risk with a CPFF contract is the potential for the contractor to incur costs exceeding initial estimates, which could lead to budget overruns, although the contractor's profit is fixed. The government bears the risk of cost increases, while the contractor is incentivized to control costs to maximize their fixed fee relative to actual costs. Mitigation strategies include robust government oversight, detailed cost monitoring, regular audits, and clear definition of contract scope to prevent scope creep. The contracting officer and technical team must diligently review contractor expenditures and performance to ensure the government receives the best value and that costs remain reasonable and allocable to the contract objectives. Effective management and communication are key to mitigating these risks.

What is the expected impact of this contract on the IRS's ability to perform its compliance and data analytics functions?

This contract is expected to significantly enhance the IRS's capabilities in IT compliance and data analytics. By providing specialized support, it allows the IRS to leverage advanced technologies and expertise to improve the efficiency and effectiveness of its operations. This includes better data processing, analysis for tax enforcement, fraud detection, and ensuring compliance with tax laws and regulations. The support likely contributes to maintaining and upgrading critical IT systems that underpin these functions, ultimately aiding the IRS in its mission to administer and enforce the nation's tax laws more effectively and securely.

How has federal spending on IT services, particularly for data analytics and compliance support, evolved over the past five years?

Federal spending on IT services, including data analytics and compliance support, has seen a consistent upward trend over the past five years, driven by the increasing digitization of government operations, cybersecurity imperatives, and the growing volume of data generated. Agencies are prioritizing investments in cloud computing, artificial intelligence, machine learning, and advanced analytics to improve decision-making, enhance citizen services, and bolster security. The IRS, like other large agencies, has been undergoing IT modernization efforts, which include significant spending on data analytics to improve tax administration and compliance. This trend is expected to continue as agencies face evolving threats and demand more sophisticated technological solutions.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 3

Pricing Type: COST PLUS FIXED FEE (U)

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: $86,727,403

Exercised Options: $86,708,334

Current Obligation: $43,251,647

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: TIRNO11D00011

IDV Type: IDC

Timeline