IRS ACA PTC-AVS Project: $26.1M IT contract for health insurance form processing, awarded to Booz Allen Hamilton

Contract Overview

Contract Amount: $26,135,071 ($26.1M)

Contractor: Booz Allen Hamilton Inc

Awarding Agency: Department of the Treasury

Start Date: 2015-09-23

End Date: 2020-09-22

Contract Duration: 1,826 days

Daily Burn Rate: $14.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::CL::IGF FOR CLOSELY ASSOCIATED - THE ACA PTC-AVS PROJECT OBJECTIVE WAS TO CREATE, DEVELOP, AND IMPLEMENT IT SOFTWARE DEVELOPMENT REQUIREMENTS IN ORDER TO ENABLE THE IRS TO COMPLY WITH THE PPACA AND SUPPORT THE IRS IN PROCESSING HEALTH INSURANCE-RELATED TAX FORMS AND SCHEDULES.

Place of Performance

Location: LANHAM, PRINCE GEORGES County, MARYLAND, 20706

State: Maryland Government Spending

Plain-Language Summary

Department of the Treasury obligated $26.1 million to BOOZ ALLEN HAMILTON INC for work described as: IGF::CL::IGF FOR CLOSELY ASSOCIATED - THE ACA PTC-AVS PROJECT OBJECTIVE WAS TO CREATE, DEVELOP, AND IMPLEMENT IT SOFTWARE DEVELOPMENT REQUIREMENTS IN ORDER TO ENABLE THE IRS TO COMPLY WITH THE PPACA AND SUPPORT THE IRS IN PROCESSING HEALTH INSURANCE-RELATED TAX FORMS AND SCHEDULE… Key points: 1. Contract aimed to enhance IRS compliance with the Patient Protection and Affordable Care Act (PPACA). 2. Focused on IT software development for processing health insurance-related tax forms. 3. Awarded via full and open competition, indicating broad market engagement. 4. Firm Fixed Price contract type suggests defined scope and cost control. 5. Duration of 1826 days (5 years) indicates a substantial, long-term project. 6. The project's success is tied to IRS's ability to manage PPACA compliance effectively.

Value Assessment

Rating: fair

The contract value of $26.1 million over five years for IT software development for tax form processing appears within a reasonable range for a project of this complexity and duration. Benchmarking against similar IRS IT modernization efforts or PPACA-related system development would provide a more precise value-for-money assessment. The firm fixed-price structure suggests that the contractor bears the risk of cost overruns, which is a positive indicator for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' suggesting that multiple vendors had the opportunity to bid. The presence of two bidders (as indicated by 'no': 2) means there was some level of competition, but it's on the lower end. A higher number of bidders typically leads to more competitive pricing and a wider selection of solutions. The limited number of bidders here might suggest specific technical requirements or a concentrated market for this specialized IT service.

Taxpayer Impact: A full and open competition, even with a limited number of bidders, is generally favorable for taxpayers as it allows for a broader search for the best value and can drive down costs compared to sole-source or limited competition scenarios.

Public Impact

Taxpayers benefit from improved accuracy and efficiency in processing health insurance-related tax forms. The IRS is better equipped to comply with the Patient Protection and Affordable Care Act (PPACA). IT professionals and software developers in Maryland may have been involved in the project. Enhances the government's capacity to manage and analyze health insurance data for policy and compliance purposes.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep in long-term IT development projects if not managed rigorously.
Dependence on contractor expertise could pose risks if key personnel depart.
Ensuring the software remains up-to-date with evolving tax laws and PPACA regulations.

Positive Signals

Firm Fixed Price contract helps control costs and provides budget certainty.
Awarded through full and open competition, maximizing potential for best value.
Long-term duration allows for sustained development and integration of complex IT solutions.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on custom software development and IT services. The market for such services is large and competitive, with many firms offering specialized solutions. The IRS, as a major government agency, frequently procures IT services to maintain and modernize its complex systems. This contract aligns with broader government efforts to leverage technology for improved tax administration and compliance, particularly concerning major legislative initiatives like the PPACA.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Booz Allen Hamilton is a large business. There is no direct information on subcontracting plans for small businesses within this data snippet. The absence of a small business set-aside suggests that the primary focus was on securing the most capable vendor through open competition, rather than specifically targeting small business participation.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program managers within the IRS. The firm fixed-price nature provides some cost control. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected or identified during the contract's performance.

Related Government Programs

Affordable Care Act (ACA) Implementation
IRS Tax Form Processing Systems
PPACA Compliance Software Development
Government IT Modernization Projects

Risk Flags

Potential for scope creep
Reliance on contractor expertise
Evolving regulatory landscape
Data security and privacy concerns

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $26.1 million to BOOZ ALLEN HAMILTON INC. IGF::CL::IGF FOR CLOSELY ASSOCIATED - THE ACA PTC-AVS PROJECT OBJECTIVE WAS TO CREATE, DEVELOP, AND IMPLEMENT IT SOFTWARE DEVELOPMENT REQUIREMENTS IN ORDER TO ENABLE THE IRS TO COMPLY WITH THE PPACA AND SUPPORT THE IRS IN PROCESSING HEALTH INSURANCE-RELATED TAX FORMS AND SCHEDULES.

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 $26.1 million.

What is the period of performance?

Start: 2015-09-23. End: 2020-09-22.

What was the specific technical scope of the IT software development required for the ACA PTC-AVS Project?

The ACA PTC-AVS Project (IRS IT Software Development Requirements) aimed to create, develop, and implement IT software solutions to enable the IRS to comply with the Patient Protection and Affordable Care Act (PPACA). This involved supporting the IRS in processing health insurance-related tax forms and schedules. The objective was to build or enhance systems that could accurately capture, validate, and report information required by the PPACA, ensuring the IRS had the necessary technological infrastructure to manage these new tax obligations and data flows effectively.

How does the $26.1 million contract value compare to similar IRS IT projects for compliance purposes?

The $26.1 million contract value for a five-year IT development project is substantial but not unusual for the IRS, given the complexity of tax law and compliance initiatives. For instance, major IRS IT modernization efforts or system overhauls related to new legislation often run into tens or hundreds of millions of dollars. Projects focused on specific compliance areas, like PPACA, require significant investment in software development, integration, and maintenance. Without direct comparative data on similar PPACA-specific IT projects, it's difficult to definitively benchmark, but the amount appears consistent with the scale of IRS technology investments for legislative mandates.

What are the key risks associated with a five-year IT development contract for tax form processing?

Key risks include technological obsolescence, where the developed software may become outdated before the end of its lifecycle due to rapid advancements in IT. There's also the risk of changing regulatory requirements; if the PPACA or related tax laws are amended, the software may need significant rework. Contractor performance risk is always present, including potential delays, cost overruns (though mitigated by FFP), and quality issues. Furthermore, data security and privacy risks are paramount when handling sensitive taxpayer information, requiring robust cybersecurity measures throughout development and deployment.

How effective has the IRS been in leveraging IT to meet PPACA compliance requirements historically?

The IRS has faced significant challenges in implementing and adapting its IT systems to meet the evolving demands of the PPACA since its inception. Early implementation phases required substantial IT resources and adjustments. While specific project effectiveness data for the ACA PTC-AVS Project isn't detailed here, the IRS has generally worked to build capabilities for processing forms like the 1094/1095 series. Success is often measured by the accuracy and timeliness of processing, and the ability to provide necessary data for policy analysis and enforcement. Continuous investment in IT, like this contract, indicates an ongoing effort to improve compliance capabilities.

What was the historical spending trend for IT services related to PPACA compliance prior to this contract?

Prior to this specific $26.1 million contract (awarded in 2015), the IRS likely engaged in various IT-related activities and smaller contracts to address initial PPACA implementation needs. This would have included requirements analysis, system design, initial development, and integration efforts. Spending would have been distributed across different fiscal years and potentially multiple vendors or internal resources. The $26.1M contract represents a significant, consolidated investment for a defined period (2015-2020) to build out and sustain these capabilities, suggesting a ramp-up in dedicated funding for this specific IT function.

What is the track record of Booz Allen Hamilton in delivering large-scale IT projects for federal agencies?

Booz Allen Hamilton has a long and extensive track record of delivering large-scale IT projects and consulting services for numerous federal agencies, including the Department of the Treasury and the IRS. They are known for their expertise in areas such as IT modernization, cybersecurity, data analytics, and systems integration. While specific performance details for this particular contract are not provided, Booz Allen Hamilton generally possesses the resources, experience, and established processes to manage complex government IT initiatives. Their history includes numerous high-value contracts across various federal departments, indicating a capacity for handling significant technological challenges.

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: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Booz Allen Hamilton Holding Corporation

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: $26,642,851

Exercised Options: $26,479,433

Current Obligation: $26,135,071

Actual Outlays: $3,562,497

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: TIRNO11D00011

IDV Type: IDC

Timeline