Treasury's IRS Spends $22.6M on Deloitte IT Support, Raising Value Concerns

Contract Overview

Contract Amount: $22,576,917 ($22.6M)

Contractor: Deloitte Consulting LLP

Awarding Agency: Department of the Treasury

Start Date: 2015-09-30

End Date: 2019-03-30

Contract Duration: 1,277 days

Daily Burn Rate: $17.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::OT::IGF FOR OTHER FUNCTIONS - IMPLEMENTATION AND TESTING IT SUPPORT

Place of Performance

Location: LANHAM, PRINCE GEORGES County, MARYLAND, 20703

State: Maryland Government Spending

Plain-Language Summary

Department of the Treasury obligated $22.6 million to DELOITTE CONSULTING LLP for work described as: IGF::OT::IGF FOR OTHER FUNCTIONS - IMPLEMENTATION AND TESTING IT SUPPORT Key points: 1. Significant spending on IT support services by the IRS. 2. Deloitte Consulting LLP is the sole awardee for this contract. 3. The contract duration is over three years, indicating a substantial commitment. 4. The 'Other Computer Related Services' NAICS code suggests a broad scope of work.

Value Assessment

Rating: questionable

The total award of $22.6 million for IT support over three years warrants scrutiny. Without detailed performance metrics or comparison data, it's difficult to definitively assess value for money. The fixed-price nature suggests cost certainty, but the overall efficiency is unclear.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which is positive for price discovery. However, the specific details of the bidding process and the number of competitors are not provided, making it hard to gauge the competitive intensity and its impact on the final price.

Taxpayer Impact: Taxpayer funds are being utilized for IT support services. The value and efficiency of this spending directly impact the effective use of public money.

Public Impact

IRS relies on external contractors for critical IT functions, impacting service delivery. Significant government spending on IT services highlights the growing digital infrastructure needs. Contract details like performance metrics and specific deliverables are crucial for public accountability.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of detailed performance metrics.
Potential for cost overruns if scope expands.
Dependence on a single vendor for critical IT functions.

Positive Signals

Awarded under full and open competition.
Firm fixed price contract provides cost certainty.

Sector Analysis

The IT services sector is a major area of government spending. Benchmarks for 'Other Computer Related Services' (NAICS 541519) vary widely, but $22.6 million over three years for implementation and testing IT support is a substantial investment, requiring careful evaluation against industry standards.

Small Business Impact

The data indicates that the contract was awarded to Deloitte Consulting LLP, a large business. There is no indication of small business participation in this specific award, suggesting potential missed opportunities for small business engagement in this IT support contract.

Oversight & Accountability

Oversight of this contract would involve monitoring Deloitte's performance against the contract's terms and conditions, ensuring deliverables are met, and verifying that the services provided align with the IRS's IT needs. Regular reviews and audits are essential for accountability.

Related Government Programs

Other Computer Related Services
Department of the Treasury Contracting
Internal Revenue Service Programs

Risk Flags

Lack of detailed performance metrics.
Potential for vendor lock-in.
Limited transparency on competitive landscape.
No clear indication of small business subcontracting.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $22.6 million to DELOITTE CONSULTING LLP. IGF::OT::IGF FOR OTHER FUNCTIONS - IMPLEMENTATION AND TESTING IT SUPPORT

Who is the contractor on this award?

The obligated recipient is DELOITTE CONSULTING LLP.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $22.6 million.

What is the period of performance?

Start: 2015-09-30. End: 2019-03-30.

What specific IT support functions were covered under this contract, and how did their scope align with the IRS's internal capabilities?

The contract, identified as 'IGF FOR OTHER FUNCTIONS - IMPLEMENTATION AND TESTING IT SUPPORT,' likely encompassed a range of services related to the development, deployment, and maintenance of IT systems. Understanding the precise nature of these functions is key to assessing whether they represented a core competency the IRS should have retained in-house or a specialized need best met by external expertise.

Were there any performance issues or cost overruns reported during the contract's execution, despite the firm fixed-price structure?

While a firm fixed-price contract aims to cap costs, performance issues can still arise, potentially leading to disputes or the need for contract modifications. Without access to performance reports or contract modification history, it's impossible to determine if the IRS received the full value expected or if unforeseen challenges impacted the project's success and taxpayer benefit.

How did the pricing of this contract compare to similar IT support services procured by other federal agencies during the same period?

Benchmarking this $22.6 million contract against similar IT support procurements is crucial for assessing its value. A comprehensive analysis would involve comparing the per-unit costs, service levels, and overall scope with contracts awarded through full and open competition to ensure the IRS secured competitive pricing and avoided potential overpayment.

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: Deloitte LLP (UEI: 014127109)

Address: 1725 DUKE ST, ALEXANDRIA, VA, 22314

Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $22,583,251

Exercised Options: $22,583,251

Current Obligation: $22,576,917

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: TIRNO11D00016

IDV Type: IDC

Timeline