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Technology outsourcing and consulting major Accenture plc (ACN) recently won a 10-year technology service contract from the Internal Revenue Service (IRS) department. These contracts are the primary procurement vehicles for technology-related services within the Internal Revenue Service (IRS) and other Treasury bureaus.

The IRS department short listed 33 companies including Accenture Federal Services as prime contractors for this multiple-award contract.

As per the terms of the agreement, the company will provide support services coupled with a large spectrum of other services spanning local microcomputer applications to large-scale integrated legacy systems, and newly developed systems, as well as security services and program management.

This new TIPSS-4 ITS contract has been customized to provide state-of-the-art, modern technology services throughout the period of performance of the contract. Accenture will work as a technology service provider in the same domain.

The company has been consistently winning new deals. Earlier, Accenturewon a technology consulting deal from one of the largest energy delivery companies in the mid-Atlantic region Pepco Holdings Inc. (POM), better known as PHI.

Financial terms of the deal were not disclosed. According to the deal, Accenture will offer its technology solutions to set up an integrated Network Operations Center (NOC) for Pepco Holdings.

Accenture has already tasted success in various sectors as well as geographical regions. In the past few months, the company has served CF Industries Holdings (a leading manufacturer and distributor of fertilizers), Anheuser-Busch InBev (BUD) and Banco Bilbao Vizcaya Argentaria S.A. (BBVA). Apart from these, Accenture has also gained a strong foothold in the insurance vertical.

We find Accenture’s third quarter results encouraging, as both the top and bottom line strongly beat the Zacks Consensus Estimates. Based on improving business momentum and market share gains, Accenture raised its revenue and earnings guidance for fiscal 2011. Moreover, we are also impressed by the steady flow of new businesses and believe that the trend will continue.

Apart from this, we remain optimistic about Accenture’s deal wins from various industry verticals. We also believe Accenture’s recent acquisitions will enrich its product portfolio. However, increasing competition from International Business Machines Inc. (IBM) may temper growth prospects to some extent.

Currently, Accenture holds a Zacks #3 Rank, implying a short-term Hold rating.

 
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