Accenture Federal Services awarded $27M for IRS IT systems, highlighting critical functions support

Contract Overview

Contract Amount: $26,963,198 ($27.0M)

Contractor: Accenture Federal Services LLC

Awarding Agency: Department of the Treasury

Start Date: 2012-08-24

End Date: 2016-07-07

Contract Duration: 1,413 days

Daily Burn Rate: $19.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIXED PRICE AWARD FEE

Sector: IT

Official Description: IGF::CT::IGF CRITICAL FUNCTIONS - CAPABILITY IN IRS PORTAL ENVIRONMEN

Place of Performance

Location: RESTON, FAIRFAX County, VIRGINIA, 20190

State: Virginia Government Spending

Plain-Language Summary

Department of the Treasury obligated $27.0 million to ACCENTURE FEDERAL SERVICES LLC for work described as: IGF::CT::IGF CRITICAL FUNCTIONS - CAPABILITY IN IRS PORTAL ENVIRONMEN Key points: 1. Contract value of $26.96M over 1413 days suggests a significant investment in IT infrastructure. 2. The award was made under full and open competition, indicating a competitive bidding process. 3. The contract type, Fixed Price Award Fee, aims to balance cost control with performance incentives. 4. Delivery order under a larger contract vehicle points to a structured procurement approach. 5. The duration of nearly four years implies a long-term need for these IT services. 6. Focus on IRS portal environment suggests a critical role in tax administration technology.

Value Assessment

Rating: good

The contract value of approximately $27 million over nearly four years for computer systems design services appears reasonable given the scope of supporting critical IRS functions. Benchmarking against similar large-scale IT system development and maintenance contracts within federal agencies suggests this pricing is within expected ranges. The fixed-price award fee structure incentivizes performance while providing a degree of cost certainty for the government. Without specific details on the deliverables and performance metrics, a precise value-for-money assessment is challenging, but the competitive nature of the award provides some assurance.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit bids. The presence of 4 bids indicates a healthy level of interest and competition for this requirement. A competitive process like this generally leads to better price discovery and encourages contractors to offer their best terms and pricing to win the award. The government received multiple proposals, allowing for comparison and selection of the most advantageous offer.

Taxpayer Impact: Taxpayers benefit from full and open competition as it typically drives down costs and ensures the government secures services at competitive market rates, maximizing the value of federal dollars spent.

Public Impact

Taxpayers benefit from improved efficiency and reliability of IRS online services through enhanced IT systems. IRS operations are supported by robust and secure IT infrastructure, facilitating tax administration. The contract supports the modernization of critical government IT systems, impacting millions of users. Federal IT professionals and contractors may be involved in the development and maintenance of these systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if award fee criteria are not tightly managed.
Dependence on a single contractor for critical IT functions could pose a risk.
Scope creep could increase the overall cost beyond initial projections.

Positive Signals

Award fee structure incentivizes contractor performance and quality.
Full and open competition suggests a competitive market price was likely achieved.
Long-term contract duration allows for stable support of critical systems.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on computer systems design services. The federal IT market is substantial, with agencies consistently investing in modernizing and maintaining their digital infrastructure. This contract for the IRS is a component of that broader trend, supporting essential government functions through technology. Comparable spending benchmarks for IT services contracts of this nature often range in the tens to hundreds of millions of dollars, depending on the complexity and duration.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses, nor does it explicitly mention subcontracting goals for small businesses. As a large contract awarded under full and open competition, it is possible that small businesses could participate as subcontractors to the prime contractor, Accenture Federal Services. However, without specific subcontracting plans detailed in the award, the direct impact on the small business ecosystem is not immediately clear, though prime contractors often leverage small business capabilities.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program managers within the IRS and the Department of the Treasury. Performance monitoring against the award fee criteria would be a key accountability measure. Transparency is generally maintained through contract award databases like FPDS. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

IRS IT Modernization Programs
Federal Civilian Agency IT Services
Computer Systems Design and Related Services
Department of the Treasury IT Contracts

Risk Flags

Potential for technological obsolescence over the contract's duration.
Risk of vendor lock-in for critical IT systems.
Need for continuous performance monitoring to ensure quality.
Dependency on contractor personnel and potential for key staff turnover.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $27.0 million to ACCENTURE FEDERAL SERVICES LLC. IGF::CT::IGF CRITICAL FUNCTIONS - CAPABILITY IN IRS PORTAL ENVIRONMEN

Who is the contractor on this award?

The obligated recipient is ACCENTURE FEDERAL SERVICES LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $27.0 million.

What is the period of performance?

Start: 2012-08-24. End: 2016-07-07.

What specific IRS portal environments and critical functions are supported by this contract?

This contract, valued at approximately $26.96 million, supports critical functions within the IRS portal environment. While the specific details of 'critical functions' are not elaborated in the provided data, they likely pertain to core operations essential for tax administration, such as taxpayer account management, tax form processing, electronic filing systems, and data security. The IRS portal serves as a primary interface for taxpayers and internal users, making the reliability and efficiency of its underlying systems paramount. Accenture Federal Services' role would involve ensuring the operational integrity, performance, and potentially the enhancement of these vital IT systems, thereby directly impacting the IRS's ability to serve the public and manage tax obligations effectively.

How does the fixed-price award fee (FP-AF) contract structure balance cost control and performance incentives for this IRS IT contract?

The Fixed-Price Award Fee (FP-AF) structure employed for this IRS IT contract aims to provide a predictable base cost while incentivizing the contractor, Accenture Federal Services, to exceed minimum performance standards. The 'fixed-price' component establishes a ceiling for the base payment, encouraging cost efficiency. The 'award fee' portion allows the government to grant additional compensation based on subjective performance evaluations against pre-defined criteria. For this contract, the government would assess Accenture's performance in areas such as system uptime, responsiveness, security compliance, and project management. If performance meets or exceeds expectations, Accenture receives a portion or all of the available award fee. This dual structure motivates the contractor to deliver high-quality services and achieve specific performance goals, going beyond mere contract fulfillment, while the government retains a degree of control over the total expenditure.

What is the historical spending pattern for similar IT system design services at the IRS or Treasury?

Analyzing historical spending patterns for IT system design services at the IRS and the broader Department of the Treasury reveals a consistent and significant investment in technology modernization and maintenance. Agencies like the IRS face continuous pressure to upgrade legacy systems, enhance cybersecurity, and improve taxpayer-facing digital services. Consequently, contracts for computer systems design, integration, and support are recurring and often substantial in value. Over the past decade, federal agencies, including the IRS, have increasingly relied on external contractors for specialized IT expertise. Spending in this category typically fluctuates based on major modernization initiatives, cybersecurity threats, and evolving technological landscapes. While this specific $27 million contract is a discrete award, it represents a piece of a larger, ongoing commitment to maintaining and advancing the IRS's technological capabilities, reflecting a trend of significant IT expenditure across civilian agencies.

What are the potential risks associated with a nearly four-year contract for critical IT systems support?

A contract duration of nearly four years (1413 days) for critical IT systems support, such as this one for the IRS, presents several potential risks. Firstly, technological obsolescence is a significant concern; the IT landscape evolves rapidly, and systems or solutions implemented at the beginning of the contract might be outdated by its end. Secondly, vendor lock-in could occur, making it difficult and costly to transition to new technologies or providers later. Thirdly, there's the risk of performance degradation over time if the contractor's focus wanes or if key personnel depart. Furthermore, long-term contracts can sometimes lead to complacency or a reduced sense of urgency if not managed proactively. Finally, changes in government priorities or budget constraints could impact the contract's scope or funding, leading to disruptions. Robust oversight, clear performance metrics, and contingency planning are crucial to mitigate these risks.

How does the number of bidders (4) in this full and open competition impact the value for taxpayers?

Having four bidders participate in this full and open competition for IRS IT services is generally a positive indicator for taxpayers. A moderate number of bidders, like four, suggests sufficient competition to drive competitive pricing without being so numerous as to indicate potential market fragmentation or overly complex solicitation processes. It implies that multiple capable companies were interested and able to bid, allowing the IRS to compare offerings and select the most advantageous proposal based on a combination of technical merit and price. This level of competition helps ensure that the selected contractor, Accenture Federal Services, provides services at a price that reflects market rates, preventing potential overcharging and maximizing the value derived from the $26.96 million investment. It signals that the government likely secured a fair price through a rigorous evaluation process.

Industry Classification

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

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 4

Pricing Type: FIXED PRICE AWARD FEE (M)

Evaluated Preference: NONE

Contractor Details

Parent Company: Accenture Public Limited Company (UEI: 985015354)

Address: 11951 FREEDOM DR STE 1000, RESTON, VA, 20190

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

Financial Breakdown

Contract Ceiling: $97,849,968

Exercised Options: $97,849,968

Current Obligation: $26,963,198

Subaward Activity

Number of Subawards: 4

Total Subaward Amount: $904,564

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: TIRNO11D00041

IDV Type: IDC

Timeline