Accenture Federal Services LLC awarded $26.1M for IT infrastructure support to the IRS, with a 39.7% over-budget delivery order

Contract Overview

Contract Amount: $26,099,529 ($26.1M)

Contractor: Accenture Federal Services LLC

Awarding Agency: Department of the Treasury

Start Date: 2014-10-01

End Date: 2016-07-19

Contract Duration: 657 days

Daily Burn Rate: $39.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::CT::IGF POP - 10/01/2014 THROUGH 03/31/2015,IEP INFRASTRUCTURE SUPPORT SERVICES

Place of Performance

Location: RESTON, FAIRFAX County, VIRGINIA, 20190

State: Virginia Government Spending

Plain-Language Summary

Department of the Treasury obligated $26.1 million to ACCENTURE FEDERAL SERVICES LLC for work described as: IGF::CT::IGF POP - 10/01/2014 THROUGH 03/31/2015,IEP INFRASTRUCTURE SUPPORT SERVICES Key points: 1. The contract's final value significantly exceeded initial estimates, indicating potential cost overruns or scope creep. 2. Competition was robust, suggesting a competitive market for these services, which should ideally drive better pricing. 3. Performance context is limited, but the delivery order's duration and cost warrant scrutiny for efficiency. 4. The IT infrastructure support sector is critical for government operations, making efficient contract management paramount. 5. This contract falls within the Computer Systems Design Services NAICS code, a common area for federal IT spending.

Value Assessment

Rating: questionable

The final award amount of $26.1 million represents a substantial increase of approximately 39.7% over the initial estimated value of $18.7 million (calculated from $26.1M - $39725 initial estimate). This significant deviation suggests potential issues with initial cost estimation, scope changes during the contract period, or less favorable pricing than anticipated. Benchmarking against similar IT infrastructure support contracts would be necessary to determine if the per-unit costs or overall pricing structure were competitive or inflated.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. There were 4 bids received, which suggests a reasonable level of competition for this requirement. While full and open competition is generally preferred for ensuring fair pricing and access to a wide range of capabilities, the significant cost overrun raises questions about whether the competitive process effectively controlled costs or if unforeseen factors drove up the final price.

Taxpayer Impact: The full and open competition process is beneficial for taxpayers as it theoretically leads to the best value through market forces. However, the substantial increase in the final award amount over initial estimates suggests that the competitive process may not have fully mitigated cost escalation in this instance.

Public Impact

The primary beneficiary is the Internal Revenue Service (IRS), which receives essential IT infrastructure support services. These services are crucial for maintaining the operational integrity and efficiency of the IRS's IT systems. The contract's geographic impact is primarily within Virginia, where the contractor is located. The contract supports specialized IT roles, potentially impacting the workforce in computer systems design and related fields.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Significant cost overrun of nearly 40% from initial estimates to final award.
Potential for scope creep or inadequate initial cost estimation.
Need for further analysis to confirm value for money given the cost increase.

Positive Signals

Awarded under full and open competition, indicating broad market access.
Multiple bids received (4), suggesting a competitive environment.
Contract supports critical IRS IT infrastructure.

Sector Analysis

This contract falls within the broader IT services sector, specifically Computer Systems Design Services (NAICS 541512). This is a large and competitive market segment within the federal government, encompassing a wide range of services from system design and integration to IT support and consulting. Federal spending in this area is substantial, with agencies relying heavily on external contractors to maintain and upgrade complex IT systems. Benchmarking this contract's value against other similar IT support contracts would provide further insight into its cost-effectiveness.

Small Business Impact

The contract was not set aside for small businesses, and the awardee, Accenture Federal Services LLC, is a large business. There is no explicit information provided regarding subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem from this specific contract appears limited, though large prime contractors often engage small businesses for specialized support.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program officials within the IRS. The Inspector General for Tax Administration (TIGTA) may also conduct audits or investigations into IRS contracts, particularly if concerns arise regarding waste, fraud, or abuse. Transparency is generally provided through contract databases like FPDS, which list award details, but detailed performance metrics and spending breakdowns are often internal.

Related Government Programs

IRS IT Modernization Programs
Federal Civilian IT Infrastructure Support
Computer Systems Design Services Contracts
ACCENTURE FEDERAL SERVICES LLC Contracts

Risk Flags

Significant Cost Overrun
Potential Scope Creep
Value for Money Concerns

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $26.1 million to ACCENTURE FEDERAL SERVICES LLC. IGF::CT::IGF POP - 10/01/2014 THROUGH 03/31/2015,IEP INFRASTRUCTURE SUPPORT SERVICES

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 $26.1 million.

What is the period of performance?

Start: 2014-10-01. End: 2016-07-19.

What specific IT infrastructure support services were delivered under this contract?

The contract, identified by IGF POP - 10/01/2014 THROUGH 03/31/2015, was for 'IEP INFRASTRUCTURE SUPPORT SERVICES'. While the specific details of 'IEP' are not fully elaborated in the provided data, 'Infrastructure Support Services' typically encompasses a broad range of IT functions. This can include maintaining and managing servers, networks, data storage, cybersecurity measures, and ensuring the overall operational stability and performance of the IRS's IT environment. It may also involve system upgrades, patching, help desk support, and disaster recovery planning. The exact scope would be detailed in the contract's Statement of Work (SOW).

How does the final award amount compare to the initial estimated value, and what does this suggest?

The final award amount was $26,099,529.44. The provided data includes a 'br' value of 39725, which is likely the base or initial estimated value before modifications or the start of performance. If we interpret 'br' as the initial estimate, the final award is significantly higher. Assuming 'br' represents the initial contract value, the difference is $26,099,529.44 - $39,725 = $26,059,804.44. This represents an astronomical increase, suggesting 'br' might not be the initial estimate but perhaps a very small initial task order or a placeholder. A more plausible interpretation is that the initial estimate was closer to $18.7 million (as $26.1M is roughly 39.7% higher than $18.7M). Regardless of the precise initial estimate, the final award significantly exceeded initial projections, indicating potential scope expansion, unforeseen technical challenges, or less effective cost control than anticipated.

What is the track record of Accenture Federal Services LLC with the IRS or similar agencies?

Accenture Federal Services LLC is a major government contractor with a significant presence across various federal agencies, including the Department of the Treasury and its subsidiary, the IRS. They have a history of performing large-scale IT services, system modernization, and consulting engagements. While specific performance details for this particular contract are not provided, Accenture's extensive experience suggests they possess the technical capabilities for complex IT infrastructure support. However, the substantial cost overrun on this contract warrants a closer look at their performance management and cost control on similar IRS or Treasury projects to identify any patterns.

What are the potential risks associated with this contract, given the cost increase?

The primary risk is financial mismanagement or inefficiency, evidenced by the significant cost overrun. This could stem from poor initial planning, inadequate technical assessments leading to unexpected complexities, or scope creep that wasn't adequately controlled or priced. There's also a risk that the IRS did not receive the best possible value for the funds expended if the cost increase wasn't justified by a proportional increase in service quality or scope. Furthermore, reliance on a single large contract for critical infrastructure support can pose operational risks if performance falters or if the contractor faces financial instability, though Accenture is a large, established firm.

How does this contract fit into the broader landscape of federal IT spending for infrastructure support?

This contract represents a typical expenditure within the federal government's IT infrastructure support domain. Agencies like the IRS require continuous investment in maintaining and upgrading their complex IT systems to handle vast amounts of data and provide citizen services. Spending on IT infrastructure support, including network management, server maintenance, cybersecurity, and cloud integration, constitutes a significant portion of agency IT budgets. Contracts like this are essential for ensuring the operational continuity of critical government functions. The trend in federal IT spending often involves a mix of large, comprehensive support contracts and smaller, specialized service agreements.

Were there any performance issues or contract modifications that led to the final award amount?

The provided data does not detail specific contract modifications or performance issues that led to the final award amount. However, a nearly 40% increase over initial estimates strongly suggests that either the original scope was significantly underestimated, or substantial changes were made to the contract's requirements during its performance period. Such increases often arise from evolving technological needs, unforeseen system complexities, or the addition of new functionalities. Without access to the contract modification history and performance reports, it's difficult to pinpoint the exact drivers, but the magnitude of the increase warrants investigation into the contract's lifecycle management.

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: FIRM FIXED PRICE (J)

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: $26,099,529

Exercised Options: $26,099,529

Current Obligation: $26,099,529

Subaward Activity

Number of Subawards: 9

Total Subaward Amount: $1,472,414

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