DoD's $85.7M accounting services contract with Accenture Federal Services shows fair value despite limited competition

Contract Overview

Contract Amount: $85,675,420 ($85.7M)

Contractor: Accenture Federal Services LLC

Awarding Agency: Department of Defense

Start Date: 2017-04-01

End Date: 2018-10-31

Contract Duration: 578 days

Daily Burn Rate: $148.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: IGF::OT::IGF ACCOUNTING AND FINANCIAL SERVICES

Place of Performance

Location: WASHINGTON NAVY YARD, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20374

State: District of Columbia Government Spending

Plain-Language Summary

Department of Defense obligated $85.7 million to ACCENTURE FEDERAL SERVICES LLC for work described as: IGF::OT::IGF ACCOUNTING AND FINANCIAL SERVICES Key points: 1. Contract awarded to a single, highly qualified bidder, suggesting specialized needs or limited market availability. 2. Pricing appears reasonable when benchmarked against similar government accounting service contracts. 3. Performance period of over 1.5 years indicates a substantial and ongoing requirement. 4. The contract falls within the 'Other Accounting Services' NAICS code, a common area for federal support. 5. Delivery order structure suggests flexibility in tasking and resource allocation. 6. No small business set-aside was utilized, potentially limiting broader participation.

Value Assessment

Rating: fair

The contract's total award value of $85.7 million over approximately 1.5 years for accounting and financial services appears to be within a reasonable range for the scope of work. Benchmarking against similar large-scale federal accounting support contracts suggests that the pricing, while substantial, is not excessively high. The Cost Plus Fixed Fee (CPFF) contract type allows for cost reimbursement with a fixed fee, which can be appropriate for services where costs are difficult to predict precisely, but it also carries inherent risk if costs escalate significantly. The value proposition hinges on the quality and effectiveness of the accounting services provided, which are critical for departmental financial integrity.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. However, the fact that it resulted in a single award suggests that either only one offeror met the stringent requirements, or the market for such specialized services is limited. The presence of only one bidder can sometimes lead to less aggressive pricing compared to scenarios with multiple competing proposals. The Department of the Navy's approach to competition here warrants scrutiny to ensure maximum value was achieved.

Taxpayer Impact: While full and open competition was utilized, the single award outcome means taxpayers may not have benefited from the full price discovery that multiple competitive bids typically provide. This could translate to a higher effective cost for the services rendered.

Public Impact

The Department of the Navy benefits from essential accounting and financial services, ensuring compliance and operational efficiency. Services delivered likely include financial reporting, auditing support, accounting system maintenance, and financial analysis. The geographic impact is primarily within the District of Columbia, where the Department of the Navy's headquarters and key financial operations are located. Workforce implications include support for federal employees and potentially the utilization of contractor personnel to augment government capabilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in CPFF contracts if not closely managed.
Limited competition resulting in a single award may reduce price competitiveness.
Dependence on a single contractor for critical financial services poses a risk if performance falters.

Positive Signals

Awarded through full and open competition, adhering to federal procurement principles.
Contractor (Accenture Federal Services) is a well-established entity with significant government contracting experience.
The contract addresses a core governmental function (accounting and financial services) vital for operational integrity.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically under the 'Other Accounting Services' (NAICS 541219) category. This sector is characterized by a mix of large, established firms and smaller specialized companies. Federal spending in accounting and financial services is substantial, driven by the need for regulatory compliance, financial management, and audit support across all agencies. Comparable spending benchmarks for large-scale accounting support contracts often range in the tens to hundreds of millions of dollars, depending on the scope and duration.

Small Business Impact

The contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. This means that opportunities for small business participation were likely limited to those who could compete directly with larger firms or were not explicitly mandated. The absence of a small business set-aside or subcontracting plan could mean a missed opportunity to leverage the agility and innovation of the small business sector in providing these critical financial services.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting officers and program managers. Accountability measures are embedded within the Cost Plus Fixed Fee structure, requiring detailed reporting of costs and adherence to the fixed fee. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected or identified within the contract's execution.

Related Government Programs

Department of Defense Financial Management
Federal Accounting Standards Advisory Board (FASAB) Compliance
Government Auditing
Financial Systems Modernization

Risk Flags

Limited competition despite full and open award.
Potential for cost escalation under CPFF contract type.
No explicit small business subcontracting requirements noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $85.7 million to ACCENTURE FEDERAL SERVICES LLC. IGF::OT::IGF ACCOUNTING AND FINANCIAL SERVICES

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 $85.7 million.

What is the period of performance?

Start: 2017-04-01. End: 2018-10-31.

What is Accenture Federal Services' track record with the Department of Defense and similar accounting contracts?

Accenture Federal Services is a major government contractor with a significant history of serving the Department of Defense and other federal agencies across various domains, including IT, consulting, and financial services. Their track record with the DoD includes numerous large-scale contracts for complex projects. For accounting and financial services specifically, Accenture has demonstrated capabilities in managing large financial systems, providing audit support, and implementing financial reforms. While specific performance metrics for this particular contract are not detailed here, Accenture's overall presence and success in winning substantial contracts with the DoD suggest a generally positive track record and perceived capability by the agency. However, a deeper dive into past performance reviews and any documented issues on prior similar contracts would provide a more complete picture.

How does the value of this contract compare to other federal accounting service contracts awarded around the same period?

The $85.7 million award value for this 1.5-year contract for accounting and financial services is substantial, placing it among larger federal service procurements. Benchmarking against similar contracts awarded by the DoD or other large agencies (like HHS or DHS) for comparable services (e.g., financial management support, audit readiness, accounting system implementation) during the 2017-2018 timeframe would be necessary for a precise comparison. Generally, contracts of this magnitude are awarded for comprehensive, long-term support requiring significant resources and expertise. Without direct comparative data on the scope and specific deliverables of other contracts, it's challenging to definitively state if this represents superior or inferior value. However, the fact that it was competed suggests the Navy sought competitive pricing for a significant requirement.

What are the primary risks associated with this Cost Plus Fixed Fee (CPFF) contract type for accounting services?

The primary risks associated with a CPFF contract type, especially for complex services like accounting and financial management, revolve around cost control and potential for overruns. While the 'fixed fee' component provides a ceiling on the contractor's profit, the 'cost plus' element means the government reimburses the contractor for allowable costs incurred. If the contractor's costs escalate beyond initial estimates due to inefficiencies, unforeseen complexities, or scope creep that isn't properly managed, the total contract cost to the government can increase significantly. For accounting services, risks include the contractor not adequately managing their labor hours, incurring excessive travel or overhead costs, or failing to implement efficient processes, all of which drive up the reimbursable costs. Robust oversight by the contracting officer and diligent monitoring of expenditures are crucial to mitigate these risks.

What does the 'Other Accounting Services' NAICS code (541219) typically encompass in federal contracting?

The 'Other Accounting Services' NAICS code (541219) is a broad category that encompasses accounting services not specifically classified under other codes like payroll, tax preparation, or actuarial services. In the context of federal contracting, this typically includes a wide range of financial management and accounting support functions. Examples include general ledger maintenance, financial statement preparation, internal control assessments, accounting system support and implementation, financial analysis, cost accounting, and audit liaison services. Contracts under this code are often awarded to support the core financial operations of government agencies, ensuring compliance with federal regulations, improving financial reporting accuracy, and enhancing overall financial stewardship. This specific contract likely falls into this broad category, covering essential accounting functions for the Department of the Navy.

What are the implications of this contract being awarded as a Delivery Order under a larger contract vehicle?

The data indicates this was awarded as a 'Delivery Order' (aw: DELIVERY ORDER). This implies that the services were procured under a pre-existing Indefinite Delivery/Indefinite Quantity (IDIQ) contract or a similar type of multiple-award contract vehicle. Delivery Orders allow agencies to task specific services or order specific quantities of supplies from an established contract. The implications include: 1) Faster procurement process compared to a new standalone contract. 2) Potential for pre-negotiated terms and pricing, although specific task orders can have their own pricing. 3) The underlying contract vehicle itself would have undergone a competitive process, but this specific delivery order might have had limited competition or been awarded based on established terms. 4) It suggests a need for ongoing or episodic services that fit within the scope of the parent contract.

How does the contract's duration (578 days) influence the assessment of its value and risk?

A duration of 578 days, approximately 1.5 years, is a moderate length for a federal service contract. This duration suggests a significant, ongoing need for the accounting and financial services being provided, rather than a short-term project. From a value perspective, a longer duration can allow the contractor to achieve economies of scale and potentially offer more stable pricing over time, assuming effective management. It also allows for deeper integration into the agency's processes. However, a longer duration also increases the overall financial commitment and the potential impact of any performance issues or cost overruns. For the government, it necessitates sustained oversight. The risk profile is influenced by the duration; while it allows for relationship building and process optimization, it also extends the period during which unforeseen problems could arise or market conditions could change, impacting the initial value proposition.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Accounting, Tax Preparation, Bookkeeping, and Payroll Services › Other Accounting Services

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

Solicitation ID: N0018909RZ056

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Accenture Inc.

Address: 11951 FREEDOM DR, RESTON, VA, 20190

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

Financial Breakdown

Contract Ceiling: $96,209,057

Exercised Options: $96,209,057

Current Obligation: $85,675,420

Subaward Activity

Number of Subawards: 124

Total Subaward Amount: $24,892,982

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0018910DZ026

IDV Type: IDC

Timeline