Scanning as a Service - Limited-Sources Justification - Redacted.pdf

DEPARTMENT OF THE TREASURY

LIMITED-SOURCES JUSTIFICATION

Acquisition Title: Scanning as a Service This acquisition is conducted under the authority of the Multiple Award Schedule Program (see FAR 8.401)

Treasury Standard Form – 1012 (Rev 12/24)

Prescribed by Treasury: DTAP 1008.405-6

1. Identification of the agency and the contracting activity:

The requiring activity is the Internal Revenue Service (IRS), Taxpayer Services. The contracting activity is the IRS, Office of the Chief Procurement Officer, Special Operations Division, Chief Counsel Branch.

2.a Nature and/or description of the action being approved:

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, 202 , 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.

2.b Name of the vendor: Iron Mountain Information Management LLC.

2.c Requisition No.:

2.d Bridge contract: Yes No 2.e Brand name: Yes No

3.a A description of the supplies or services required to meet the agency’s needs:

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 decision-making 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).

Iron Mountain’s solution shall meet/provide the following requirements:

Scan an estimated 50 million paper submissions, consisting of approximately 20 million

Tax Forms and 30 million Non-Tax Correspondence.

Receive, store, and destroy paper forms after review, consistent with the volume stated above.

Acquisition Title: Scanning as a Service This acquisition is conducted under the authority of the Multiple Award Schedule Program (see FAR 8.401)

Treasury Standard Form – 1012 (Rev 12/24)

Prescribed by Treasury: DTAP 1008.405-6

Complete testing, via Assurance Testing System (ATS) for all tax returns and attachments.

Provide Optical Character Recognition/Intelligent Character Recognition proven at least 95% or higher with a 99% or higher acceptance rate through the Modernized Electronic Filing and/or other IRS systems.

The ability to dispose of all scanned, transmitted, and reviewed paper documents, using cross-cut shredders which produce particles that are 1 mm x 5 mm (0.04 in. x 0.2 in.) in size (or smaller) or pulverize/disintegrate paper materials using disintegrator devices equipped with a 3/32 in. (2.4 mm) security screen. [National Institute of Standards and Technology (NIST) SP 800-88, Guidelines for Media Sanitization].

Comply with the guidelines and requirements outlined in IRS Publication 4812.

Provide scanned documents that are visible/readable, consistent with PGLD’s scanned image and digitization standards.

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 T 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.

3.b Includes IT: Yes No PSC: DA01; NAICS: 518210 3.c IGCE/Estimated dollar value:

The IGCE amount is $ which includes the and the 6-month extension, if exercised. Refer to the IGCE for additional details.

4.a Identification of the authority being used (Check the appropriate box that applies).

FAR 8.405-6(a)(1)(i)(A) – An urgent and compelling need exists, and following the procedures would result in unacceptable delays.

FAR 8.405-6(a)(1)(i)(B) – Only one source is capable of providing the supplies or services required at the level of quality required because the supplies or services are unique or highly specialized.

FAR 8.405-6(a)(1)(i)(C) – In the interest of economy and efficiency, the new work is a logical follow-on to an original Federal Supply Schedule order or BPA provided that the original order or BPA was placed in accordance with FSS procedures in accordance with the applicable Federal Supply Schedule ordering procedures. The original order or BPA must not have been previously issued under sole-source or limited-sources procedures.

FAR 8.405-6(b) – Items peculiar to one manufacturer. (i.e., Brand Name specifications)

4.b Supporting Rationale:

Acquisition Title: Scanning as a Service This acquisition is conducted under the authority of the Multiple Award Schedule Program (see FAR 8.401)

Treasury Standard Form – 1012 (Rev 12/24)

Prescribed by Treasury: DTAP 1008.405-6

The IRS has a digitalization mandate to replace the manual processing and storing of paper. The IRS conducted a market research pilot, Pilot IRS, to assess the capabilities in the commercial marketplace for the digitalization services needed to process the volume of critical tax and non-tax documentation received by mail, on a much smaller scale. Pilot IRS was competed as unrestricted competition and resulted in five awards, one of which was Iron Mountain. The five awardees were assessed on five forms of varying complexity, including Forms 709, 940, 941, 1040, 4868, and 7004. The results of the pilot indicate Iron Mountain was the only vendor capable of successfully scanning all 5 forms within the acceptable quality levels stated above.

The sensitive nature of the documents/forms and the negative consequences associated with inaccurate scanning/processing amplify the need for a vendor capable of performing this requirement within the established criteria. The four unsuccessful pilot awardees were unable to process the reduced volume, they do not possess the capability to process the full volume, especially during peak filing season, the IRS faces on an annual basis.

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 T 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 processing for Individual Masterfile goes down at the end of November and the Business Masterfile goes down mid-December for system upgrades. The IRS requires these services, while it competes the full requirement, to prevent a backlog and delay in getting the systems fully functional to prevent the compromise of the efficiency of filing and unnecessary burden to taxpayers.

Iron Mountain developed their InSight Submission Processing Modernization solution to process the IRS’s most complicated tax returns, which often contain hundreds of schedules and attachments with unstructured data that needs to be captured and formatted.

The IRS conducted extensive market research to identify additional commercially available, technology driven solutions to fulfill this requirement; however, the IRS was unable to identify a vendor with the capabilities and expertise to fulfill the full requirement within the required parameters. The IRS will utilize the duration of this short-term contract to compete and award the next generation contract to fulfill the IRS’s long-term SCaaS requirements.

Acquisition Title: Scanning as a Service This acquisition is conducted under the authority of the Multiple Award Schedule Program (see FAR 8.401)

Treasury Standard Form – 1012 (Rev 12/24)

Prescribed by Treasury: DTAP 1008.405-6

New Tech Solutions, Inc.

Google Public Sector LLC archSCAN, LLC X Iron Mountain Information Management, LLC X X X X DOMA Technologies, LLC X Jamison Professional Services, Inc.

Page After Page Business Systems Ricoh USA DataSavers X FedTribe, LLC Nube Group

22nd Century Technologies: This vendor was part of our Submission Processing Modernization (SPM) Pilot (2022-2025), they had limited space and cleared staff for proper start-up under a new contract. They had multiple staffing issues over the last year of the SPM contract. Additionally, they failed User Acceptance Testing in 2025 for Forms 1040 and 940 due to the unstructured data that was added to the schema. 22nd Century Technologies missed goals 1, 2, and 3 for the reasons stated above.

Brillient Corporation: This vendor was part of both our Pilots. They were completely ineffective in scanning anything other the historical form 709s. They do not have the space of staffing to meet the start-up of the new contract, nor do they have the programming to scan forms to MeF, as was displayed in both pilot awards. Brillient Corporation missed goals 1, 2, and 3 for the reasons stated above.

Dependable On-Site Scan & Shred Inc.: This vendor states in their RFI response they have cleared staff available; however, there is no mention of a facility to receive and house the documents before and after digitalization. Their RFI response mentions Kofax software and the function this program can perform but doesn’t mention that they have confirmed and tested this in anyway. The Government has concerns this vendor is using a commercial-off-the-shelf product and will not be as agile as needed for the number of forms and correspondence the IRS has. Their RFI response does not mention of this being used by this company and any information on how it performed. There is no indication this company has ever digitalized a 1040, 940, 941, etc. Their RFI response makes no mention or reference to digitalization through MeF or being an ERO.

Dependable On-Site Scan & Shred Inc. missed all 4 goals for the reasons stated above.

Eigennet LLC: This vendor does not have cleared staff to start as outlined in the RFI, per their own RFI response. Their RFI response mentions space but provides no specific details to give the Government confidence they could house the volume needed under this effort. Their RFI response does not mention specific knowledge of processing any forms through MeF. They are not an ERO.

Eigennet LLC missed all 4 goals for the reasons stated above.

GovCIO LLC: This vendor has space and staffing cleared and ready to work. This vendor is working another contract that is scanning form 709 for the IRS. The scanning contract they refer to is limited data extraction (10-14 pieces of metadata) from one form type. There is no indication this company has ever digitalized Forms 1040, 940, 941, etc. Their RFI response makes no mention

Acquisition Title: Scanning as a Service This acquisition is conducted under the authority of the Multiple Award Schedule Program (see FAR 8.401) or reference to digitalization through MeF or being an ERO. GovCIO LLC missed goals 2, 3, and 4 for the reasons stated above.

Oxford Government Consulting, LLC: This vendor has space and staffing cleared and ready to work. This vendor is working another contract that is scanning form 709 for the IRS. The scanning contract they refer to of limited data extraction (10-14 pieces of metadata) form one form type.

This vendor was supposed to be at 20 million pages a month by January 2025, they have not even reach 20 million pages since the beginning of this scanning contract which started in August 2024.

Under the contract they mention through their entire RFI response, they have been paused from scanning three time due to scanning issues resulting in us having to remove improperly scanned documents from our system. There is no indication this company has never digitalized Forms 1040, 940, 941, etc. Their RFI response makes no mention or reference to digitalization through MeF or being an ERO. Oxford Government Consulting LLC missed goals 2, 3, and 4 for the reasons stated above.

Phoenix Data Corporation: This vendor’s suggested subcontractor, Resultant, was part of both Pilots since 2021. They have limited cleared space and staff; they would need add more to support an effort this large. They were unable to process the Forms 1040 successfully. They struggled with programming deadlines and were less agile than some of the other vendors under the Pilot contracts. They can do limited amounts of forms 941 through MeF and they are an ERO. Their current scope is limited. Phoenix Data Corporation missed goals 1 and 2 for the reasons stated above.

Vastec, Inc.: This vendor is a wholly owned subsidiary of Ripcord Inc., one of the SCaaS Pilot contractors. This vendor has a cleared facility and staff. They need much less staff due to their Robotic tech which makes them extremely agile. They successfully processed Forms 709 and 941 with the highest quality of any of our Pilot awardees; however, they were unsuccessful in processing form 1040. They are an ERO. Vastec, Inc. missed the 2nd goal for the reasons stated above.

New Tech Solutions, Inc.: This vendor mentions in their RFI response that they have cleared staff and a facility to house our volume but provides no information or specifics to support the claim.

There is no indication this company has ever digitalized a 1040, 940, 941, etc. Their RFI response contains no mention or reference to digitalization through MeF or being an ERO. New Tech Solutions, Inc. missed all 4 goals for the reasons stated above.

Google Public Sector LLC: No mention of cleared staff or facility in their RFI response. There is no indication this company has ever digitalized a 1040, 940, 941, etc. Their RFI response contains no mention or reference to digitalization through MeF or being an ERO. This vendor will not be able to complete everything needed to be effective for the new contract.

ArchSCAN, LLC: Their RFI response mentions having cleared staff and facilities that they say can support the full volume. Their RFI response mentions partnering with 22nd Century, who was ineffective during our SPM pilot. There is no indication this company has ever digitalized a 1040, 940, 941, etc. Their RFI response contains no mention or reference to digitalization through MeF or being an ERO. ArchSCAN, LLC missed goals 2, 3, and 4 for the reasons stated above.

Iron Mountain Information Management, LLC: This vendor was part of our SPM Pilot and was the most effective of the four SPM vendors. Iron Mountain was the only vendor of all seven vendors that made it to the return scanning portion of our pilots that was able to successfully

Acquisition Title: Scanning as a Service This acquisition is conducted under the authority of the Multiple Award Schedule Program (see FAR 8.401) digitalize the Form 1040. Iron Mountain’s RFI response addresses all four goals and indicates Iron Mountain can meet and/or exceed all four goals. Iron Mountain’s RFI response states they are prepared to provide a cleared workforce, adequate space, and a proven software solution capable of meeting the outlined requirements. Iron Mountain’s response includes an enhanced paper-based receipt solution to ingest digital images, including statistics on their work for the IRS that was transmitted to MeF with 100% accuracy. Iron Mountain is an approved Electronic Return Originator according to first-hand knowledge and their RFI response. Iron Mountain Information Management, LLC met all four goals.

DOMA Technologies, LLC: This vendor mentions in their RFI response that they have cleared staff and a facility, but no mention to the number of staff or volume that can be housed. There is no indication this company has ever digitalized a 1040, 940, 941, etc. Their RFI response contains no mention or reference to digitalization through MeF or being an ERO. DOMA Technologies, LLC missed all 4 goals for the reasons stated above.

Global Document Services, LLC: This vendor mentions in their RFI response they know how to manage cleared staff but no mention of having clear staff. This vendor mentions having vetted staff for other projects, no mention of staff currently onboard in their RFI response. They mention having infrastructure in place, but no specifics to provide the Government with confidence they can house the volume of documents associated with this requirement. There is no indication this company has ever digitalized a 1040, 940, 941, etc. Their RFI response contains no mention or reference to digitalization through MeF or being an ERO. Global Document Services, LLC missed all 4 goals for the reasons stated above.

Jamison Professional Services, Inc.: This vendor mentions in their RFI response that they have cleared staff and a facility, but no mention to the number of staff or volume that can be housed.

There is no indication this company has ever digitalized a 1040, 940, 941, etc. Their RFI response contains no mention or reference to digitalization through MeF or being an ERO. Jamison Professional Services, Inc. missed all 4 goals for the reasons stated above.

Page After Page Business Systems: In this vendors RFI response, they answered “yes” to all questions. There is nothing within this vendor’s RFI response that gives the IRS any level of confidence this vendor understands the requirement or can fulfill the requirement. Page After Page Business Systems missed all 4 goals for the reasons stated above.

Ricoh USA: This vendor mentions in their RFI response that they have cleared staff and a facility, but no mention to the number of staff or volume that can be housed. There is no indication this company has ever digitalized a 1040, 940, 941, etc. Their RFI response contains no mention or reference to digitalization through MeF or being an ERO. Ricoh USA missed all 4 goals for the reasons stated above.

DataSavers: This vendor has space and staffing cleared and ready to work. This vendor is working another contract that is scanning form 709 (this vendor is the sub to Oxford) for the IRS. The scanning contract they refer to is limited data extraction (10-14 pieces of metadata) form one form type. There is no indication this company has ever digitalized a 1040, 940, 941, etc. Their RFI response contains no mention or reference to digitalization through MeF or being an ERO.

DataSavers missed goals 2, 3, and 4 for the reasons stated above.

FedTribe LLC: This vendor mentions partnering with another vendor who has been successful with this, but that vendor said they are not partnering with them for this initiative. There is no

Acquisition Title: Scanning as a Service This acquisition is conducted under the authority of the Multiple Award Schedule Program (see FAR 8.401) indication this company has ever digitalized a 1040, 940, 941, etc., other than through the use of the large business (Iron Mountain) they want to partner with. There is no mention or reference to digitalization through MeF or being an ERO. FedTribe LLC missed all 4 goals for the reasons stated above.

Nube Group: This vendor has no mention in their RFI response that they have cleared staff or facility. There is no indication this company has ever digitalized a 1040, 940, 941, etc. Their RFI response contains no mention or reference to digitalization through MeF or being an ERO. Nube Group missed all 4 goals for the reasons stated above.