Navy ERP support contract awarded to Accenture for over $21M, utilizing full and open competition

Contract Overview

Contract Amount: $21,387,050 ($21.4M)

Contractor: Accenture Federal Services LLC

Awarding Agency: Department of Defense

Start Date: 2015-09-22

End Date: 2017-01-21

Contract Duration: 487 days

Daily Burn Rate: $43.9K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::OT::IGF REPORT, INTERFACE, CONVERSION, AND ENHANCEMENT (RICE) CONTRACTOR SUPPORT SERVICES (CSS) IN SUPPORT OF NAVY ENTERPRISE RESOURCE PLANNING (ERP).

Place of Performance

Location: MECHANICSBURG, CUMBERLAND County, PENNSYLVANIA, 17055

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $21.4 million to ACCENTURE FEDERAL SERVICES LLC for work described as: IGF::OT::IGF REPORT, INTERFACE, CONVERSION, AND ENHANCEMENT (RICE) CONTRACTOR SUPPORT SERVICES (CSS) IN SUPPORT OF NAVY ENTERPRISE RESOURCE PLANNING (ERP). Key points: 1. The contract value of over $21 million for ERP support services indicates a significant investment in maintaining and enhancing critical Navy systems. 2. Full and open competition suggests a potentially competitive bidding process, which could lead to better pricing and service quality. 3. The fixed-price contract type shifts performance risk to the contractor, incentivizing efficient delivery. 4. The contract duration of approximately 1.5 years (487 days) suggests a focused scope of work for interface, conversion, and enhancement. 5. The absence of small business set-aside flags indicates this was not specifically targeted for small business participation. 6. The contract's focus on ERP systems highlights the importance of robust IT infrastructure for naval operations.

Value Assessment

Rating: good

The contract value of $21.4 million for approximately 1.5 years of support for Navy ERP systems appears reasonable given the complexity of enterprise resource planning. Benchmarking against similar large-scale IT support contracts for federal agencies suggests that costs for specialized services like interface, conversion, and enhancement can range significantly, but this figure falls within expected parameters for such a critical function. The firm fixed-price nature of the award provides cost certainty for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit bids. While the number of bidders is not specified, this procurement method generally fosters a competitive environment. A competitive process is expected to drive down prices and encourage innovation as contractors vie for the award. The government likely received multiple proposals, allowing for a thorough evaluation of technical capabilities and pricing.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it increases the likelihood of securing the best value by encouraging a wide range of qualified contractors to offer competitive pricing and innovative solutions.

Public Impact

The primary beneficiaries are the Department of the Navy, which receives enhanced and maintained ERP systems crucial for its operations. Services delivered include interface, conversion, and enhancement of the Navy's Enterprise Resource Planning systems. The geographic impact is likely nationwide, supporting Navy personnel and operations across various bases and commands. Workforce implications include the potential for specialized IT professionals to be engaged in supporting these critical systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if the contractor becomes deeply embedded in system architecture.
Risk of cost overruns if unforeseen technical complexities arise, despite the fixed-price structure.
Dependence on contractor expertise could create knowledge gaps within the Navy if not managed proactively.

Positive Signals

Firm fixed-price contract type mitigates cost uncertainty for the government.
Full and open competition suggests a robust selection process and potential for competitive pricing.
Focus on enhancement and conversion indicates efforts to modernize and improve existing systems.
The contractor, Accenture Federal Services LLC, is a well-established entity with significant experience in large-scale IT projects.

Sector Analysis

This contract falls within the IT services sector, specifically focusing on enterprise resource planning (ERP) systems. The market for ERP support services is substantial, with numerous government contractors offering specialized expertise. The Navy's investment in maintaining and enhancing its ERP is consistent with broader federal trends towards modernizing IT infrastructure to improve efficiency and data management. Comparable spending benchmarks for large federal IT support contracts often run into tens or hundreds of millions of dollars annually, depending on scope and duration.

Small Business Impact

The contract was not awarded as a small business set-aside, nor does it explicitly mention subcontracting goals for small businesses. This suggests that the primary focus was on securing the best overall solution from the most capable vendors, rather than specifically promoting small business participation through this particular award. Consequently, the direct impact on the small business ecosystem through this contract may be limited unless the prime contractor voluntarily engages small businesses for subcontracting.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the contract specialist within the Department of the Navy. Performance monitoring would likely involve regular progress reviews, deliverable acceptance, and adherence to the firm fixed-price terms. Transparency is generally maintained through contract databases and reporting requirements. While no specific Inspector General (IG) jurisdiction is mentioned for this delivery order, the Department of Defense's IG office has broad oversight over defense spending.

Related Government Programs

Navy Enterprise Resource Planning (ERP) Systems
Department of Defense IT Modernization Programs
Federal Civilian IT Services Contracts
Large-Scale IT System Integration Services

Risk Flags

Potential for scope creep
Contractor performance risk
Integration complexity

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.4 million to ACCENTURE FEDERAL SERVICES LLC. IGF::OT::IGF REPORT, INTERFACE, CONVERSION, AND ENHANCEMENT (RICE) CONTRACTOR SUPPORT SERVICES (CSS) IN SUPPORT OF NAVY ENTERPRISE RESOURCE PLANNING (ERP).

Who is the contractor on this award?

The obligated recipient is ACCENTURE FEDERAL SERVICES LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $21.4 million.

What is the period of performance?

Start: 2015-09-22. End: 2017-01-21.

What is Accenture Federal Services LLC's track record with large federal IT contracts, particularly ERP systems?

Accenture Federal Services LLC is a major player in the federal IT contracting space, with a long history of managing and implementing large-scale IT projects, including ERP systems for various government agencies. They have been involved in significant projects for the Department of Defense, civilian agencies, and intelligence community. Their experience often includes system integration, modernization, cloud migration, and cybersecurity. For ERP systems specifically, Accenture has a global reputation and has worked on complex implementations for organizations of similar scale to the Navy. Their track record generally indicates a capacity to handle complex, high-value contracts, though like any large contractor, they have faced scrutiny on specific projects regarding cost and schedule performance. The Navy's choice of Accenture suggests confidence in their ability to deliver on this particular ERP support contract.

How does the $21.4 million contract value compare to similar Navy ERP support contracts?

Comparing the $21.4 million value for approximately 1.5 years of support requires context on the specific services (interface, conversion, enhancement) and the scale of the Navy ERP systems involved. However, for large federal agencies, IT support contracts for core systems like ERP can easily range from tens to hundreds of millions of dollars over multiple years. This particular contract appears to be a focused effort for a defined period, rather than a comprehensive, multi-year sustainment or development program. Given the critical nature of ERP systems and the specialized skills required for their maintenance and enhancement, a $21.4 million award for this scope is within the expected range for a significant federal agency like the Navy. It suggests a substantial but potentially contained project rather than a full system lifecycle cost.

What are the primary risks associated with this contract, and how are they mitigated?

The primary risks associated with this contract include potential technical challenges in interface, conversion, and enhancement of complex ERP systems, which could lead to schedule delays or cost overruns despite the firm fixed-price structure. There's also a risk of vendor lock-in if Accenture becomes indispensable to the Navy's ERP operations. Mitigation strategies likely include robust project management by the Navy, clear performance metrics, regular progress reviews, and potentially phased delivery schedules. The firm fixed-price nature itself is a mitigation for the government against cost escalation. Furthermore, the Navy likely has internal expertise to oversee the contractor's work and ensure knowledge transfer to reduce long-term dependence.

How effective is the 'full and open competition' approach for ensuring value in IT support contracts of this magnitude?

The 'full and open competition' approach is generally considered the most effective method for ensuring value in IT support contracts of this magnitude. By allowing all responsible sources to bid, it maximizes the pool of potential offerors, thereby increasing the likelihood of receiving competitive proposals that offer the best combination of technical merit and price. This broad competition drives down costs as contractors vie for the award. It also encourages innovation as companies seek to differentiate their offerings. For the Navy's ERP support contract, this approach likely resulted in a more favorable price and a higher quality of service than a sole-source or limited competition award would have provided. The government's ability to evaluate multiple proposals ensures that the chosen contractor is not only capable but also offers the most advantageous terms.

What are the historical spending patterns for Navy ERP support services, and how does this contract fit in?

Historical spending on Navy ERP support services would likely show a consistent and significant investment over many years, reflecting the critical role of ERP systems in managing the vast resources and operations of the Navy. This spending would encompass various contracts for system development, implementation, maintenance, upgrades, and specialized support like interface, conversion, and enhancement. This specific $21.4 million contract appears to be a component within that broader historical spending trend, addressing a particular set of needs for a defined period. It likely represents a continuation or evolution of efforts to maintain and improve the Navy's core financial and operational systems, fitting into a pattern of ongoing investment in IT infrastructure.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Facilities Support Services › Facilities Support Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0010412RQ527

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Accenture Public Limited Company (UEI: 985015354)

Address: 800 NORTH GLEBE RD #300, ARLINGTON, VA, 22203

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $22,541,158

Exercised Options: $21,387,050

Current Obligation: $21,387,050

Subaward Activity

Number of Subawards: 5

Total Subaward Amount: $5,600,768

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0010413DQA04

IDV Type: IDC

Timeline