Deloitte Consulting LLP awarded $48.3M for IRS data analytics, facing fair competition

Contract Overview

Contract Amount: $48,291,663 ($48.3M)

Contractor: Deloitte Consulting LLP

Awarding Agency: Department of the Treasury

Start Date: 2016-09-30

End Date: 2018-09-29

Contract Duration: 729 days

Daily Burn Rate: $66.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: IGF::CT::IGF FOR CRITICAL FUNCTIONS - OCA COMPLIANCE AND DATA ANALYTICS SUPPORT SERVICES - CYRBYME-NA

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20224

State: District of Columbia Government Spending

Plain-Language Summary

Department of the Treasury obligated $48.3 million to DELOITTE CONSULTING LLP for work described as: IGF::CT::IGF FOR CRITICAL FUNCTIONS - OCA COMPLIANCE AND DATA ANALYTICS SUPPORT SERVICES - CYRBYME-NA Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. 3. The duration of the contract is 2 years, indicating a medium-term need for these services. 4. The award was a Delivery Order, suggesting it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract. 5. The North American Industry Classification System (NAICS) code 541519 points to 'Other Computer Related Services', a broad category. 6. The contractor, Deloitte Consulting LLP, is a large, established firm with significant federal contracting experience.

Value Assessment

Rating: fair

Benchmarking the value for this specific contract is challenging without knowing the scope of 'OCA Compliance and Data Analytics Support Services'. However, the Cost Plus Fixed Fee (CPFF) contract type carries inherent risks of cost escalation. While Deloitte is a reputable contractor, CPFF contracts require robust oversight to ensure cost-effectiveness. Comparing this to similar data analytics support contracts for large agencies like the IRS would provide a clearer picture of value for money.

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 2 bids suggests a moderate level of competition for this specific delivery order. While full and open competition is generally preferred for price discovery, the number of bidders can influence the competitiveness of the pricing.

Taxpayer Impact: A competitive bidding process, even with a limited number of bidders, generally benefits taxpayers by encouraging more favorable pricing compared to sole-source awards.

Public Impact

The Internal Revenue Service (IRS) is the primary beneficiary, receiving support for critical compliance and data analytics functions. Services delivered likely include data analysis, compliance monitoring, and potentially the development or maintenance of analytical tools. The geographic impact is primarily within the District of Columbia, where the IRS headquarters is located, but the data analyzed could be nationwide. Workforce implications may involve specialized data analysts, IT professionals, and compliance experts, potentially both within Deloitte and the IRS.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type can incentivize contractor to increase costs to maximize fee.
Lack of specific performance metrics makes it difficult to assess the effectiveness of the services provided.
The broad NAICS code 'Other Computer Related Services' may obscure the specific nature and complexity of the work performed.

Positive Signals

Awarded under full and open competition, indicating a fair process.
Contractor is a large, experienced firm with a significant federal contracting presence.
The contract supports critical IRS functions related to compliance and data analytics.

Sector Analysis

This contract falls within the broader IT services sector, specifically focusing on data analytics and compliance support. The market for such services is large and competitive, with numerous firms offering specialized expertise. The IRS, as a major federal agency, frequently procures IT and data analytics support to manage its vast datasets and ensure taxpayer compliance. Comparable spending benchmarks would involve looking at other large federal agencies' contracts for similar data analytics and IT support services.

Small Business Impact

There is no indication that this contract included a small business set-aside. Given the contractor is Deloitte Consulting LLP, a large business, and the nature of the services, it is unlikely that significant subcontracting opportunities for small businesses were mandated or a primary focus of this specific award. Further analysis would be needed to determine if any small business subcontracting plan was associated with this delivery order.

Oversight & Accountability

Oversight for this contract would typically fall under the contracting officer and program managers within the IRS. As a Cost Plus Fixed Fee contract, rigorous financial oversight and auditing are crucial to ensure costs are reasonable and allocable. The IRS likely has internal audit functions, and potentially Inspector General oversight, depending on the specific nature and financial thresholds of the work performed.

Related Government Programs

IRS IT Modernization Programs
Federal Data Analytics Initiatives
Taxpayer Compliance Programs
Government IT Consulting Services

Risk Flags

Cost Plus Fixed Fee contract type requires careful monitoring to control costs.
Limited number of bidders (2) may indicate potential for less competitive pricing.
Broad NAICS code may obscure specific service details and complexity.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $48.3 million to DELOITTE CONSULTING LLP. IGF::CT::IGF FOR CRITICAL FUNCTIONS - OCA COMPLIANCE AND DATA ANALYTICS SUPPORT SERVICES - CYRBYME-NA

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 $48.3 million.

What is the period of performance?

Start: 2016-09-30. End: 2018-09-29.

What specific data analytics and compliance support services were delivered under this contract?

The provided data does not detail the specific services rendered. The contract is categorized under NAICS code 541519 ('Other Computer Related Services') and is for 'OCA Compliance and Data Analytics Support Services'. This suggests services related to analyzing taxpayer data, ensuring compliance with regulations (OCA likely refers to an IRS office), and potentially developing or maintaining analytical tools. Without access to the contract's statement of work (SOW), the precise deliverables, methodologies, and technologies employed remain unspecified. Further investigation into IRS procurement records or agency reports would be necessary to ascertain the granular details of the services provided.

How does the $48.3 million cost compare to similar IRS data analytics contracts?

Direct comparison of the $48.3 million cost is difficult without knowing the exact scope, duration, and complexity of the services provided by Deloitte. However, the IRS, like other large federal agencies, invests significantly in IT and data analytics. Contracts for similar services can range from a few million to hundreds of millions of dollars, depending on the scale and criticality of the function. This $48.3 million award over two years ($24.15 million annually) appears to be a substantial investment, suggesting a significant operational need. Benchmarking against other IRS contracts for data analytics support, IT consulting, or compliance systems would provide a more accurate assessment of its relative cost-effectiveness.

What are the key risks associated with a Cost Plus Fixed Fee (CPFF) contract for data analytics?

The primary risk with a CPFF contract is the potential for cost overruns. While the contractor's fee is fixed, the total cost of performance is reimbursed. This structure can incentivize contractors to incur higher costs, as their fixed fee remains the same regardless of the final project cost. For data analytics, risks include scope creep, unforeseen technical challenges in data processing or analysis, and the need for specialized expertise that may be more expensive than initially anticipated. Effective oversight, clear performance metrics, and robust change control processes are essential to mitigate these risks and ensure the government receives value for its investment.

What is the track record of Deloitte Consulting LLP in delivering IT and data analytics services to the federal government?

Deloitte Consulting LLP is a major federal contractor with a long history of providing a wide range of services, including IT, data analytics, cybersecurity, and management consulting, to numerous government agencies. They have consistently secured large contracts across various departments, including the Department of the Treasury (IRS), Department of Defense, and Health and Human Services. Their track record generally indicates significant capacity and experience. However, like any large contractor, specific contract performance can vary. Reviewing past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS) for similar contracts would offer a more detailed insight into their specific performance history with the federal government.

How has IRS spending on data analytics support evolved over the past five years?

The provided data only pertains to a single contract award from 2016. To assess the evolution of IRS spending on data analytics support over the past five years, a broader analysis of IRS procurement data would be required. Generally, federal agencies, including the IRS, have been increasing their investment in data analytics capabilities to improve efficiency, enhance security, and better serve citizens. This trend is driven by the growing volume of data, advancements in analytical technologies, and a push for data-driven decision-making across government. Specific figures for the IRS would necessitate querying federal spending databases for relevant contract actions over the specified period.

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: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

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: $98,770,087

Exercised Options: $98,770,087

Current Obligation: $48,291,663

Actual Outlays: $19,413

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $3,010,491

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: TIRNO11D00016

IDV Type: IDC

Timeline