Interior Department's $31.4M accounting services contract with KPMG LLP awarded in 2001, spanning 8 years

Contract Overview

Contract Amount: $31,430,450 ($31.4M)

Contractor: Kpmg LLP

Awarding Agency: Department of the Interior

Start Date: 2001-05-21

End Date: 2009-04-10

Contract Duration: 2,881 days

Daily Burn Rate: $10.9K/day

Competition Type: COMPETITIVE DELIVERY ORDER

Number of Offers Received: 51

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Other

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20240, UNITED STATES OF AMERICA

State: District of Columbia Government Spending

Plain-Language Summary

Department of the Interior obligated $31.4 million to KPMG LLP for work described as: Key points: 1. Contract awarded for accounting services, indicating a need for financial expertise within the Department of the Interior. 2. The contract's duration of over 8 years suggests a long-term requirement for these services. 3. Awarded as a competitive delivery order, implying multiple bids were considered. 4. The fixed-price with economic price adjustment structure aims to manage cost fluctuations over the contract term. 5. The contractor, KPMG LLP, is a major player in the professional services industry. 6. The contract was awarded to a single vendor, raising questions about potential alternatives. 7. The North American Industry Classification System (NAICS) code 541211 points to accounting services. 8. The contract was active during a period of significant federal spending.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific deliverables and performance metrics. However, the total award amount of over $31 million spread across 8 years suggests an average annual spend of approximately $3.9 million. This figure needs to be compared against the scale and complexity of the accounting services required by the Department of the Interior's 'Departmental Offices' and 'Offices of Certified Public Accountants'. Given the long duration and the nature of accounting services, the pricing structure (fixed price with economic price adjustment) is typical, but the actual value realized depends heavily on the efficiency and effectiveness of KPMG's service delivery.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded as a 'COMPETITIVE DELIVERY ORDER', indicating that it was part of a larger competitive process where multiple vendors could bid. The presence of 51 offers suggests a robust level of competition for this requirement. A high number of bidders generally leads to better price discovery and can drive down costs for the government. The competitive nature of the award is a positive indicator for value for money.

Taxpayer Impact: The competitive award process for this contract likely resulted in more favorable pricing for taxpayers compared to a sole-source or limited competition scenario. The significant number of offers indicates that taxpayer funds were used efficiently by soliciting a broad range of potential service providers.

Public Impact

The Department of the Interior benefits from professional accounting services, ensuring financial integrity and compliance. Taxpayers benefit from a competitive bidding process that aims to secure cost-effective services. The contract supports the operational functions of the Departmental Offices and specifically the Offices of Certified Public Accountants. The geographic impact is primarily within the District of Columbia, where the contract was awarded. The workforce implications include employment opportunities within KPMG LLP for accounting professionals.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The long duration of the contract (over 8 years) could lead to vendor lock-in and reduced flexibility for the agency.
Economic price adjustments, while necessary, can introduce cost uncertainty if not carefully managed.
Reliance on a single contractor for a significant period might limit opportunities for innovation from other market players.
The specific details of the 'Offices of Certified Public Accountants' within the Department of the Interior are not fully elaborated, making it hard to gauge the precise scope of services.
The contract was awarded as a delivery order, which implies it might be part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract, the details of which are not provided here.

Positive Signals

Awarded through a competitive process with 51 offers, indicating strong market interest and potential for good value.
The contractor, KPMG LLP, is a well-established and reputable firm in the accounting industry, suggesting a high likelihood of quality service delivery.
The fixed-price structure, even with economic adjustments, provides a degree of cost predictability for the agency.
The contract duration suggests a stable and ongoing need for these critical accounting services within the Department.
The NAICS code 541211 clearly defines the service category, providing transparency on the nature of the work performed.

Sector Analysis

The accounting services sector is a mature and competitive market, with a mix of large global firms and smaller specialized providers. Federal agencies like the Department of the Interior often contract out for specialized accounting, auditing, and financial advisory services to ensure compliance, efficiency, and expertise. The total federal spending on professional services, including accounting, is substantial, often running into billions of dollars annually. This contract fits within the broader category of professional services procurement, where agencies leverage private sector capabilities to support their missions. Benchmarking this contract's value requires comparison to similar accounting service contracts awarded to large professional services firms by other federal agencies, considering the scope of work and duration.

Small Business Impact

This contract does not appear to have a specific small business set-aside component, as indicated by 'ss': false and 'sb': false. The award to KPMG LLP, a large multinational professional services firm, suggests that the primary focus was on securing established expertise rather than specifically fostering small business participation. While large prime contractors are often required to subcontract portions of their work to small businesses, the extent to which this occurred under this specific contract is not detailed here. The absence of a direct set-aside means that opportunities for small businesses to directly compete for this work were likely limited.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Interior's contracting officers and program managers responsible for financial services. The contract's long duration and fixed-price nature with economic adjustments would necessitate regular performance reviews and audits to ensure compliance and value. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arose. Transparency is generally facilitated through contract databases like FPDS, where basic award information is publicly available, though detailed performance reports are often internal.

Related Government Programs

Federal Financial Management Services
Government Auditing Services
Professional Services Contracts
Department of the Interior Financial Operations
Accounting and Auditing Services

Risk Flags

Long contract duration may limit flexibility.
Economic price adjustment introduces cost uncertainty.
Potential for vendor lock-in.
Lack of detailed performance metrics in public data.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Interior awarded $31.4 million to KPMG LLP. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is KPMG LLP.

Which agency awarded this contract?

Awarding agency: Department of the Interior (Departmental Offices).

What is the total obligated amount?

The obligated amount is $31.4 million.

What is the period of performance?

Start: 2001-05-21. End: 2009-04-10.

What was the specific scope of accounting services provided under this contract?

The provided data indicates the contract was for 'Offices of Certified Public Accountants' under NAICS code 541211, which broadly covers accounting services. However, the specific deliverables, such as financial statement preparation, auditing support, internal control assessments, or tax advisory services, are not detailed. Given the duration of over 8 years and the award to a major firm like KPMG LLP, it's likely the scope encompassed a range of complex financial management and accounting support functions critical to the Department of the Interior's operations. Without access to the contract statement of work, a precise definition of services remains elusive, but it would typically involve ensuring financial accuracy, compliance with regulations, and efficient financial operations.

How does the $31.4 million award compare to similar accounting service contracts for federal agencies of similar size?

Comparing the $31.4 million award for over 8 years (averaging about $3.9 million annually) requires context on the agency's size and the complexity of its financial operations. The Department of the Interior is a large agency with diverse responsibilities. For large federal agencies, annual spending on professional accounting and auditing services can range from a few million to tens of millions of dollars, depending on the scope. For instance, contracts for comprehensive financial statement audits or major financial system implementations can be significantly larger. This contract's value appears within a reasonable range for long-term, comprehensive accounting support for a major federal department, especially considering it was competitively awarded. However, a precise benchmark would necessitate comparing it against contracts with identical or highly similar scopes of work and service levels.

What were the key performance indicators (KPIs) used to evaluate KPMG LLP's performance under this contract?

The provided data does not include specific Key Performance Indicators (KPIs) or performance metrics that were used to evaluate KPMG LLP's service delivery. Typically, government contracts include clauses outlining performance standards, such as timeliness of deliverables, accuracy of work, responsiveness to agency requests, and adherence to professional standards. For accounting services, KPIs might include the timely completion of financial reports, successful audit support, and the identification of cost-saving or efficiency improvement opportunities. Without the contract's statement of work or performance reports, it's impossible to detail the exact KPIs. However, the agency's decision to extend or manage the contract over 8 years suggests that performance was likely deemed satisfactory, though the specific metrics remain unknown.

What is the historical spending trend for accounting services within the Department of the Interior, and how does this contract fit in?

The provided data focuses on a single contract awarded in 2001. To understand historical spending trends, one would need to analyze the Department of the Interior's procurement data over multiple years, looking at all contracts awarded for accounting and related financial services. This $31.4 million contract represents a significant investment in accounting services over its 8-year period. It's plausible that the Department has consistently required such services, potentially through multiple contracts or task orders over time. Analyzing broader spending patterns would reveal whether this contract was an outlier, part of a consistent strategy, or indicative of increasing/decreasing reliance on external accounting support. Without broader data, this contract stands as a substantial, long-term commitment to a single provider for these essential services.

Were there any significant risks identified during the contract lifecycle, and how were they mitigated?

The provided data does not detail specific risks identified during the contract lifecycle or the mitigation strategies employed. However, common risks associated with long-term professional services contracts include scope creep, cost overruns (despite fixed-price elements, due to economic adjustments), performance deficiencies, and contractor dependency. For this contract, the 'economic price adjustment' clause introduces a risk of rising costs beyond initial projections. Mitigation would typically involve robust contract management, regular performance reviews, clear communication channels, and potentially exercising options for renewal only if performance met expectations. The competitive award and the involvement of a reputable firm like KPMG LLP might have been seen as risk-reduction measures from the outset.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Accounting, Tax Preparation, Bookkeeping, and Payroll Services › Offices of Certified Public Accountants

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: COMPETITIVE DELIVERY ORDER

Offers Received: 51

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

Contractor Details

Parent Company: Kpmg L.L.P. (UEI: 001667906)

Address: 2001 M ST NW, WASHINGTON, DC, 20036

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $25,573,357

Exercised Options: $32,812,167

Current Obligation: $31,430,450

Parent Contract

Parent Award PIID: GS23F8127H

IDV Type: FSS

Timeline