Updated May 19, 2025
Earlier today, IRS posted the sole source justification for a $142M Scanning as a Service and Digitalization bridge contract award to Iron Mountain. This short term award is necessary to fulfill required needs until they can compete the next generation SCaaS contract.
The purpose of this limited-sources justification (LSJ) is to award a Firm-Fixed-Price (FFP) Task Order (TO) with Iron Mountain Information Management LLC (Iron Mountain), for Scanning as a Service (SCaaS). The period of performance will be a base period of April 25, 2025, through July 24, 2025, and nine 1-month option periods running through April 24, 2026, if needed. The 6-month extension authorized by Federal Acquisition Regulation (FAR) 52.217-8 will be included, providing a possible extension from April 25, 2026, through October 24, 2026. The duration of the bridge affords the Government additional time to competitively procure the IRS’s long-term SCaaS solution while ensuring compliance with policy and procedures.
The requested bridge TO will provide a proven solution for indexing, scanning, Optical Character Recognition/Intelligence Character Recognition, file formatting, Electronic Return Originator (ERO) and transmitting authority, and storage and destruction. The IRS needs an end-to-end solution that can provide the above functions for all tax and information returns, tax forms, and payments and correspondence. The Contractor must have a cleared workforce, adequate space for housing all paper until destruction is authorized and is an ERO. The contractor, including their solution, must be capable of digitalizing upwards of 50 million pieces of mail annually. The IRS receives tens of millions of pieces of mail annually, with the contents of each receipted envelope containing individual or multiple pieces of paper in the form of correspondence and/or tax and/or information returns and various other tax forms either with or without remittance. The IRS has an immediate digitalization mandate to replace the manual processing and storing of paper. To manage this capacity and improve taxpayer service, the IRS needs a proven scanning solution(s) to modernize submission processing while complying with all applicable policies and timeframes. The IRS is committed to creating an environment where IRS data is available, accessible, and usable in a format that enables data-driven decisionmaking at all levels of the organization. These efforts shall support improvements to taxpayer service, enhance the fairness of IRS compliance efforts, and address federal guidelines (e.g., Office of Management and Budget (M-19-21, National Archive and Records Administration 2022 mandate).
The work to be performed under this award will provide critical digitalization and modernization services, implementing digital tools to reduce paper across the IRS campuses as part of the Zero Paper effort, a priority of the Department of the Treasury and the Administration, as implemented by Executive Order Modernizing Payments To and From America’s Bank Account 14247 requiring The Secretary of the Treasury shall support agencies’ transition to digital payment methods by September 30, 2025. The SCaaS T2 will lay the groundwork for the final removal of paper incoming to IRS facilities as the IRS begins the journey to full scale digitalization and modernization. As the federal government’s tax administrator, the IRS is spending over $300 million per year in the processing and handling of paper correspondence. The manual processing of paper correspondence causes the need for thousands of employees, multiple workflows, delays, and the inability to scale to meet the expectations of a modern tax agency.
The delay of these critical services would result in a cost of at least $173,000 per day, or $63.2 million per year, to the American taxpayers. The delay of these critical services would adversely affect the IRS’s ability to modernize in preparation of next year’s tax filing season. The ramp up for an effort as large as the anticipated TO is a substantial undertaking. Iron Mountain was the only successful Pilot IRS vendor, they are the only vendor who can fulfill this requirement in the short-term while the Government competes the long term solution.
The requiring and contracting activities remain committed to maximizing competition when soliciting the next generation contract. The requiring and contracting activities are aggressively pursuing the next generation contract and assessing all available solutions. The requested bridge would provide the Government with enough time to compete and award a next generation effort.
Read The Full Justification Here
Related
Added April 30, 2025
A huge win for this 2025 Elev8 GovCon honoree and global leader in storage and information management services and trusted by more than 225,000 organizations around the world. This Scanning as a Service contract,including the digitalization of paper tax and/or information returns, was awarded a sole source contract.
Awardee: IRON MOUNTAIN INFORMATION MANAGEMENT, LLC
UEI: KJB1WJG4NXS7
Funding Agency: INTERNAL REVENUE SERVICE
Award ID: 2023H225F00055
Referenced IDV ID: GS03F049GA
Base and All Options Value (Total Contract Value): $142,406,958.04
Solicitation Number: 2023H2-25-Q-00029
Number of Bidders: 1
