DoD's $32.2M Audit Readiness Contract with KPMG LLP: Fair Value or Overpriced?
Contract Overview
Contract Amount: $32,224,353 ($32.2M)
Contractor: Kpmg LLP
Awarding Agency: Department of Defense
Start Date: 2012-12-14
End Date: 2014-01-25
Contract Duration: 407 days
Daily Burn Rate: $79.2K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 6
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: AUDIT READINESS - COMBINED BCT ASSESSMENTS
Place of Performance
Location: FORT BELVOIR, FAIRFAX County, VIRGINIA, 22060, UNITED STATES OF AMERICA
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $32.2 million to KPMG LLP for work described as: AUDIT READINESS - COMBINED BCT ASSESSMENTS Key points: 1. KPMG LLP, a major accounting firm, secured a $32.2M contract for audit readiness services. 2. The contract was awarded under full and open competition, suggesting a competitive bidding process. 3. The firm fixed price contract type aims to control costs, but the actual value needs scrutiny. 4. Services fall under Offices of Certified Public Accountants (NAICS 541211), a common area for large audit firms.
Value Assessment
Rating: fair
The contract value of $32.2M for two years of audit readiness services appears within a reasonable range for large-scale government contracts of this nature. However, without specific performance metrics and detailed cost breakdowns, a precise value assessment is difficult.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded through full and open competition, indicating that multiple qualified vendors had the opportunity to bid. This method generally promotes competitive pricing and ensures the government receives the best value.
Taxpayer Impact: The competitive nature of the award suggests that taxpayer funds were likely used efficiently, as the pricing was subject to market forces and multiple bids.
Public Impact
Ensures Department of Defense financial statements are audit-ready, improving accountability. Supports critical financial management functions within the Defense Logistics Agency. Leverages expertise of a major accounting firm to address complex audit requirements. Potential for improved financial transparency and reduced audit findings.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of specific performance metrics makes it hard to gauge effectiveness.
- Potential for scope creep in audit readiness services.
- Reliance on a single firm for critical audit functions.
Positive Signals
- Awarded under full and open competition.
- Firm fixed price contract type.
- Experienced contractor (KPMG LLP).
Sector Analysis
This contract falls within the professional services sector, specifically accounting and auditing. Spending benchmarks for similar government contracts of this size and scope typically range widely based on complexity and duration, but $32.2M over two years is substantial.
Small Business Impact
The contract was awarded to KPMG LLP, a large public accounting firm, and there is no indication that small businesses were involved as prime contractors or significant subcontractors. This suggests limited direct benefit to the small business sector from this specific award.
Oversight & Accountability
The contract was awarded by the Defense Logistics Agency, part of the Department of Defense. Oversight would typically involve contract officers and program managers ensuring deliverables meet requirements and that funds are used appropriately.
Related Government Programs
- Offices of Certified Public Accountants
- Department of Defense Contracting
- Defense Logistics Agency Programs
Risk Flags
- High contract value requires close monitoring for efficiency.
- Potential for reliance on contractor expertise without sufficient internal capacity building.
- Scope definition is critical to prevent cost overruns.
- Need to ensure clear deliverables and performance metrics.
Tags
offices-of-certified-public-accountants, department-of-defense, va, bpa, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $32.2 million to KPMG LLP. AUDIT READINESS - COMBINED BCT ASSESSMENTS
Who is the contractor on this award?
The obligated recipient is KPMG LLP.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Logistics Agency).
What is the total obligated amount?
The obligated amount is $32.2 million.
What is the period of performance?
Start: 2012-12-14. End: 2014-01-25.
What specific audit readiness tasks were included in the $32.2M contract, and how do these align with the DoD's audit requirements?
The contract likely encompassed a range of services such as financial statement preparation, internal control assessments, data reconciliation, and support for external auditors. These tasks are crucial for meeting the DoD's mandate for auditability, which involves ensuring financial records are accurate, complete, and compliant with federal accounting standards.
How does the $32.2M contract value compare to industry benchmarks for similar audit readiness services provided to large federal agencies?
While precise benchmarks are difficult without detailed service scope, $32.2M over two years for a major agency like the DoD suggests a significant investment. Large federal audit readiness contracts can range from tens to hundreds of millions, depending on the agency's size, complexity, and the specific audit challenges faced.
What mechanisms are in place to ensure the effectiveness and efficiency of KPMG LLP's audit readiness services under this contract?
Effectiveness is typically measured through performance metrics, regular progress reports, and successful completion of audit readiness milestones. Efficiency is monitored through contract oversight, ensuring services are delivered within budget and on schedule, and that the contractor's work directly contributes to auditability without unnecessary costs.
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: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 6
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
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, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $32,224,353
Exercised Options: $32,224,353
Current Obligation: $32,224,353
Subaward Activity
Number of Subawards: 8
Total Subaward Amount: $3,705,765
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: SP470311A0017
IDV Type: BPA
Timeline
Start Date: 2012-12-14
Current End Date: 2014-01-25
Potential End Date: 2014-01-25 00:00:00
Last Modified: 2017-02-07
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