IRS MEF Platform Contract Awarded to IBM for $45.3M for Tax Filing Services

Contract Overview

Contract Amount: $45,344,586 ($45.3M)

Contractor: International Business Machines Corporation

Awarding Agency: Department of the Treasury

Start Date: 2016-09-30

End Date: 2020-09-30

Contract Duration: 1,461 days

Daily Burn Rate: $31.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::CT::IGF FOR CRITICAL FUNCTIONS - MEF IS A WEB BASED PLATFORM FOR FILING IRS TAX RETURNS, INFORMATION RETURNS, FORMS, AND SCHEDULES VIA THE INTERNET. MEF ALSO PROVIDES FUNCTIONALITY FOR SINGLE-POINT TRANSMISSION AND ACKNOWLEDGEMENT OF STATE RETURNS FOR REGISTERED THIRD PARTIES, ORIGINATORS, TRANSMITTERS, AND STATE AGENCIES, COLLECTIVELY KNOW AS TRADING PARTN

Place of Performance

Location: LANHAM, PRINCE GEORGES County, MARYLAND, 20703

State: Maryland Government Spending

Plain-Language Summary

Department of the Treasury obligated $45.3 million to INTERNATIONAL BUSINESS MACHINES CORPORATION for work described as: IGF::CT::IGF FOR CRITICAL FUNCTIONS - MEF IS A WEB BASED PLATFORM FOR FILING IRS TAX RETURNS, INFORMATION RETURNS, FORMS, AND SCHEDULES VIA THE INTERNET. MEF ALSO PROVIDES FUNCTIONALITY FOR SINGLE-POINT TRANSMISSION AND ACKNOWLEDGEMENT OF STATE RETURNS FOR REGISTERED THIRD PARTIE… Key points: 1. The MEF platform is crucial for IRS tax return processing, impacting millions of taxpayers. 2. IBM secured this contract through full and open competition. 3. The contract value of $45.3M over four years warrants scrutiny for cost-effectiveness. 4. This IT service contract falls under 'Other Computer Related Services'.

Value Assessment

Rating: fair

The contract value of $45.3M over approximately four years suggests an average annual spend of over $11M. Benchmarking this against similar large-scale IT service contracts for government platforms is necessary to assess if the pricing is competitive.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating a robust process for soliciting bids. This method generally promotes competitive pricing and ensures the government receives best value.

Taxpayer Impact: The efficient processing of tax returns through this platform directly impacts taxpayer services and government revenue collection, making its cost-effectiveness a key concern for taxpayers.

Public Impact

Millions of taxpayers rely on the MEF platform for filing federal and state tax returns. The IRS utilizes this system for critical tax processing and data transmission. Third-party tax preparers and state agencies depend on MEF for seamless integration. Ensuring the platform's reliability and security is paramount for taxpayer trust.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific performance metrics in provided data.
Potential for cost overruns in long-term IT contracts.
Dependence on a single vendor for critical tax infrastructure.

Positive Signals

Awarded through full and open competition.
Firm Fixed Price contract type can limit cost uncertainty.
Platform supports both federal and state tax return filing.

Sector Analysis

This contract falls within the IT services sector, specifically 'Other Computer Related Services'. Government spending in this area is substantial, focusing on developing and maintaining critical digital infrastructure for various agencies.

Small Business Impact

The data indicates this contract was not awarded to small businesses, as indicated by 'sb': false. Further analysis would be needed to determine if small businesses were subcontracting opportunities within this larger contract.

Oversight & Accountability

The contract was awarded via a delivery order, suggesting it may be part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract. Oversight would focus on ensuring adherence to the original contract terms and performance standards.

Related Government Programs

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

Risk Flags

Potential for vendor lock-in.
Reliance on a single vendor for critical infrastructure.
Lack of detailed performance metrics in the provided summary.
Cybersecurity risks associated with handling sensitive taxpayer data.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $45.3 million to INTERNATIONAL BUSINESS MACHINES CORPORATION. IGF::CT::IGF FOR CRITICAL FUNCTIONS - MEF IS A WEB BASED PLATFORM FOR FILING IRS TAX RETURNS, INFORMATION RETURNS, FORMS, AND SCHEDULES VIA THE INTERNET. MEF ALSO PROVIDES FUNCTIONALITY FOR SINGLE-POINT TRANSMISSION AND ACKNOWLEDGEMENT OF STATE RETURNS FOR REGISTERED THIRD PARTIES, ORIGINATORS, TRANSMITTERS, AND STATE AGENCIES, COLLECTIVELY KNOW AS TRADING PARTN

Who is the contractor on this award?

The obligated recipient is INTERNATIONAL BUSINESS MACHINES CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $45.3 million.

What is the period of performance?

Start: 2016-09-30. End: 2020-09-30.

What is the specific definition of 'critical functions' for the MEF platform and how is its performance measured against these functions?

The provided data does not detail the specific 'critical functions' of the MEF platform beyond its role in filing IRS tax returns and state returns. Performance measurement details are also absent. A deeper dive into the contract's statement of work and performance work statement would be required to understand these metrics and ensure the platform effectively meets its critical objectives.

Given the firm fixed price, what mechanisms are in place to prevent scope creep and ensure the $45.3M budget remains adhered to throughout the contract duration?

While a firm fixed price contract offers budget certainty, preventing scope creep requires robust contract management. This includes a clear statement of work, a formal change control process, and regular communication between the IRS and IBM. Any proposed changes outside the original scope should undergo rigorous review for necessity and impact on cost and schedule.

How does the IRS ensure the security and integrity of taxpayer data transmitted through the MEF platform, especially considering the increasing sophistication of cyber threats?

Ensuring data security and integrity involves multiple layers of protection, including encryption, access controls, regular security audits, and compliance with federal cybersecurity standards (e.g., NIST guidelines). The IRS likely mandates specific security protocols within the contract and conducts ongoing monitoring and vulnerability assessments of the MEF platform.

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

Solicitation ID: TIRNO16T4187

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 6710 ROCKLEDGE DR, BETHESDA, MD, 20817

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

Financial Breakdown

Contract Ceiling: $122,077,295

Exercised Options: $105,581,254

Current Obligation: $45,344,586

Actual Outlays: $16,715,735

Subaward Activity

Number of Subawards: 47

Total Subaward Amount: $8,446,726

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: TIRNO11D00022

IDV Type: IDC

Timeline