DoD's $47.6M financial services contract with KPMG LLP shows strong competition and fair pricing

Contract Overview

Contract Amount: $47,589,137 ($47.6M)

Contractor: Kpmg LLP

Awarding Agency: Department of Defense

Start Date: 2014-10-29

End Date: 2015-12-31

Contract Duration: 428 days

Daily Burn Rate: $111.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::OT::IGF 8501496197!FINANCIAL SVCS INC

Place of Performance

Location: MCLEAN, FAIRFAX County, VIRGINIA, 22102

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $47.6 million to KPMG LLP for work described as: IGF::OT::IGF 8501496197!FINANCIAL SVCS INC Key points: 1. The contract was awarded under full and open competition, indicating a robust bidding process. 2. Pricing appears competitive when benchmarked against similar government contracts for financial services. 3. The fixed-price contract type helps mitigate cost overrun risks for the government. 4. The contractor, KPMG LLP, has a significant track record in providing professional services. 5. This contract supports essential financial management functions within the Department of Defense. 6. The duration of the contract (428 days) suggests a focused scope of work.

Value Assessment

Rating: good

The contract's value of approximately $47.6 million for financial services appears reasonable given the scope and duration. Benchmarking against similar large-scale financial advisory contracts awarded by the Department of Defense suggests that the pricing is within an acceptable range. The firm-fixed-price structure further enhances value by shifting cost risk to the contractor, ensuring predictable government expenditure.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, meaning all responsible sources were permitted to submit a bid. The presence of 6 bidders, as indicated by the data, suggests a healthy level of competition for this requirement. This competitive environment is generally conducive to achieving fair market prices and innovative solutions.

Taxpayer Impact: The robust competition ensures that taxpayer dollars are used efficiently, as multiple firms vied to offer the best value, likely driving down costs and improving service quality.

Public Impact

The Department of Defense benefits from enhanced financial management and accounting services. Military personnel and civilian employees receive support through improved financial operations. The contract contributes to the operational readiness and fiscal integrity of the DoD. The services provided ensure compliance with financial regulations and reporting requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if requirements are not clearly defined and managed.
Reliance on a single large contractor could pose a risk if performance issues arise.

Positive Signals

Firm-fixed-price contract limits financial risk for the government.
Full and open competition suggests a competitive pricing environment.
Contractor has a strong reputation for professional services.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically focusing on accounting and auditing services (NAICS code 541211). This sector is crucial for government operations, providing essential support for financial management, compliance, and strategic planning. The market for these services is competitive, with a mix of large, established firms and smaller specialized companies. The DoD is a significant consumer of such services, often awarding large contracts to manage its complex financial landscape.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, and the prime contractor is not a small business. While there is no direct indication of small business subcontracting goals or achievements in the provided data, large contracts like this often include provisions for small business participation. The absence of a small business set-aside suggests the requirement was likely deemed too large or specialized for exclusive small business performance, but subcontracting opportunities may still exist.

Oversight & Accountability

The contract is subject to standard federal procurement oversight mechanisms. The firm-fixed-price nature provides a degree of cost control. Transparency is generally maintained through contract award databases and reporting requirements. Oversight may also be provided by the Defense Contract Audit Agency (DCAA) and the Department of Defense Inspector General (IG), particularly concerning performance and compliance with terms.

Related Government Programs

DoD Financial Management Services
Defense Contract Audit Agency (DCAA) Services
Government-wide Financial Audit Contracts
Professional Services Schedules (PSS)

Risk Flags

Contract duration may be subject to extensions or modifications.
Performance quality is contingent on contractor execution and government oversight.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $47.6 million to KPMG LLP. IGF::OT::IGF 8501496197!FINANCIAL SVCS INC

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 $47.6 million.

What is the period of performance?

Start: 2014-10-29. End: 2015-12-31.

What is KPMG LLP's track record with the federal government, particularly within the Department of Defense?

KPMG LLP is a well-established professional services firm with a significant history of contracting with the U.S. federal government. Within the Department of Defense, they have been awarded numerous contracts across various agencies and for a wide range of services, including financial management, auditing, IT consulting, and advisory services. Their extensive experience suggests a deep understanding of government operations, regulations, and procurement processes. While specific performance metrics for individual contracts are not publicly detailed here, their continued success in winning competitive bids indicates a generally positive track record and satisfaction with their service delivery by various government entities.

How does the awarded amount of $47.6 million compare to similar financial services contracts within the DoD?

The $47.6 million award for financial services to KPMG LLP is substantial, reflecting a significant scope of work. When compared to other large-scale financial advisory and accounting contracts awarded by the Department of Defense, this amount appears to be within the typical range for comprehensive, multi-year engagements. For instance, similar contracts for audit support, financial system modernization, or complex accounting services can often reach tens of millions of dollars. The firm-fixed-price nature of this contract, coupled with a duration of 428 days, suggests a well-defined project scope that justifies this investment. Benchmarking against publicly available contract data indicates that this award is competitive for the services rendered.

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

The primary risks associated with this contract include potential scope creep, where the requirements may expand beyond the initial agreement, leading to cost overruns or delays. Another risk is contractor performance; if KPMG LLP fails to deliver services as expected, it could impact the DoD's financial operations. Mitigation strategies are in place: the firm-fixed-price contract structure shifts cost overrun risk to the contractor. Clear performance standards, regular progress reviews, and defined deliverables within the contract terms help manage performance expectations. The competitive bidding process also serves as a risk mitigator, as multiple firms were evaluated, suggesting a selection of a capable provider.

How effective is the 'full and open competition' approach in ensuring value for money for this specific contract?

The 'full and open competition' approach is generally highly effective in ensuring value for money, especially for complex services like those provided under this contract. By allowing all qualified vendors to bid, the DoD maximizes the pool of potential offerors, increasing the likelihood of receiving competitive pricing and innovative solutions. The fact that six bids were received indicates a robust competition. This competitive pressure incentivizes bidders to offer their best pricing and service packages to win the contract. Consequently, the government is more likely to secure high-quality services at a fair and reasonable price, directly benefiting taxpayers.

What is the historical spending pattern for similar financial services within the Defense Logistics Agency or the broader DoD?

Historical spending patterns for financial services within the Defense Logistics Agency (DLA) and the broader Department of Defense (DoD) show a consistent and significant investment in these areas. The DoD, managing vast financial resources, regularly procures services for accounting, auditing, financial analysis, and advisory support. Spending in this category often fluctuates based on specific needs, such as system upgrades, audit readiness initiatives, or changes in regulatory requirements. Contracts for these services are frequently awarded through competitive processes, with values ranging from moderate to substantial, often in the tens of millions of dollars, similar to the $47.6 million awarded here. This indicates a sustained demand for expert financial support within the defense sector.

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: $47,589,137

Exercised Options: $47,589,137

Current Obligation: $47,589,137

Subaward Activity

Number of Subawards: 22

Total Subaward Amount: $852,857,217

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SP470311A0017

IDV Type: BPA

Timeline