DoD's $119M IT support contract awarded to Accenture shows fair value, but limited competition raises concerns

Contract Overview

Contract Amount: $118,961,441 ($119.0M)

Contractor: Accenture Federal Services LLC

Awarding Agency: Department of Defense

Start Date: 2016-03-31

End Date: 2019-07-31

Contract Duration: 1,217 days

Daily Burn Rate: $97.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::OT::IGF PRODUCTION SUPPORT

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22203

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $119.0 million to ACCENTURE FEDERAL SERVICES LLC for work described as: IGF::OT::IGF PRODUCTION SUPPORT Key points: 1. Contract value of $119M over 3 years suggests a significant investment in IT support. 2. Awarded via full and open competition, indicating a broad initial search for qualified vendors. 3. The number of bids received (5) is moderate, suggesting some level of market interest but not intense competition. 4. Performance period of over 3 years allows for sustained support but also carries long-term risk. 5. The contract type (Firm Fixed Price) aims to control costs, but requires careful scope management. 6. Accenture Federal Services LLC, a large established contractor, is well-positioned for this type of work.

Value Assessment

Rating: good

The contract's total value of approximately $119 million over three years averages to about $39.7 million annually. While specific performance metrics and deliverables are not detailed here, this spending level for IT production support within the Department of Defense is within a reasonable range for a large-scale contract. Benchmarking against similar IT support contracts for federal agencies of comparable size and scope would be necessary for a definitive value assessment. However, the firm-fixed-price structure suggests an effort to manage costs effectively, which is a positive indicator for value.

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. Five bids were received, which indicates a moderate level of competition. While five bidders suggest that the opportunity was known and accessible, it does not necessarily imply a highly competitive environment where multiple strong contenders aggressively vied for the contract. The level of competition can influence pricing, with more bidders generally leading to lower prices due to increased market pressure.

Taxpayer Impact: The full and open competition, despite receiving only five bids, suggests that taxpayers likely benefited from a competitive bidding process that aimed to secure a fair price. However, a higher number of bids could have potentially driven prices even lower.

Public Impact

The primary beneficiaries are the Department of Defense components relying on IT production support services. Services delivered likely include system maintenance, troubleshooting, and operational support for critical DoD IT infrastructure. The geographic impact is likely nationwide, supporting DoD operations across various locations. Workforce implications include employment opportunities for IT professionals within Accenture Federal Services and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep given the long performance period and complexity of IT production support.
Dependence on a single large contractor could create vendor lock-in and limit future flexibility.
The moderate number of bids received might indicate that the market for this specific service is concentrated or that barriers to entry are high.

Positive Signals

Firm Fixed Price contract type helps to control costs and provides budget certainty.
Accenture Federal Services is a well-established contractor with a significant presence in the federal IT market.
Full and open competition, in principle, allows for the widest possible pool of qualified bidders.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on IT production support services. The market for federal IT services is substantial, with agencies consistently investing in maintaining and upgrading their technological infrastructure. Comparable spending benchmarks for IT support contracts within the Department of Defense can range widely based on scope, but contracts in the tens to hundreds of millions of dollars are common for large-scale support operations. This contract represents a significant, but not outlier, investment in ensuring the operational readiness of DoD's IT systems.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). As a large contract awarded to a major IT services provider, the primary impact on small businesses would likely be through subcontracting opportunities. While not explicitly detailed, large prime contractors often engage small businesses for specialized services or to meet small business subcontracting goals. The absence of a specific set-aside suggests that the primary award was focused on securing the best overall solution from the broader market, rather than prioritizing small business participation directly at the prime contract level.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Logistics Agency (DLA) contracting officers and program managers. Performance reviews, regular reporting, and adherence to contract terms would be key oversight mechanisms. Accountability is enforced through the firm-fixed-price structure, which incentivizes the contractor to meet defined deliverables within budget. Transparency is generally facilitated through contract award databases and public reporting, though specific performance details may be sensitive.

Related Government Programs

DoD IT Modernization Programs
Defense Information Systems Agency (DISA) Contracts
Federal Civilian IT Support Services
Cloud Computing Services for Defense

Risk Flags

Moderate competition level may impact price optimization.
Long contract duration increases risk of technology obsolescence.
Potential for vendor lock-in with a single large provider.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $119.0 million to ACCENTURE FEDERAL SERVICES LLC. IGF::OT::IGF PRODUCTION SUPPORT

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 (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $119.0 million.

What is the period of performance?

Start: 2016-03-31. End: 2019-07-31.

What is Accenture Federal Services' track record with similar IT production support contracts within the Department of Defense?

Accenture Federal Services LLC has a substantial track record of performing IT services for the Department of Defense and other federal agencies. They are a major player in the federal IT contracting space, often handling large-scale, complex projects. Their past performance would likely include a range of IT support, system integration, and modernization efforts. A detailed review of their contract history with DoD would reveal specific successes, challenges, and any past performance issues. Agencies typically assess past performance as a key factor in award decisions, suggesting that Accenture's history was deemed satisfactory for this contract. However, specific details on performance metrics for this particular contract are not publicly available without further investigation.

How does the $119 million contract value compare to other IT production support contracts awarded by the DoD in recent years?

The $119 million contract value for IT production support over approximately three years is a significant but not uncommon figure for the Department of Defense. Large federal agencies, particularly the DoD, frequently award contracts in this range for essential IT services that underpin their vast operational capabilities. For context, other major IT support contracts within the DoD can range from tens of millions to hundreds of millions, or even billions, depending on the scope, duration, and criticality of the systems supported. This contract appears to be a mid-to-large-sized award within the broader landscape of DoD IT spending. Benchmarking against contracts with similar service descriptions (e.g., IT operations, system maintenance, help desk support) and durations would provide a more precise comparison.

What are the primary risks associated with a firm-fixed-price contract for IT production support, and how are they mitigated?

The primary risks with a firm-fixed-price (FFP) contract for IT production support include potential for contractor underperformance if the price is set too low, or for the government to overpay if the price is set too high and the contractor finds efficiencies. For the contractor, risks include cost overruns if unforeseen technical issues arise or if the scope of work expands without a change order. For the government, a key risk is that the contractor may cut corners on quality or service to maintain profitability under an FFP agreement. Mitigation strategies include robust performance work statements (PWS), clear deliverables, strong government oversight, regular performance reviews, and a well-defined change management process to address any scope adjustments. The government also relies on the contractor's reputation and past performance to ensure commitment to quality.

What does the 'Other Computer Related Services' NAICS code (541519) typically encompass in the context of federal IT contracts?

The North American Industry Classification System (NAICS) code 541519, 'Other Computer Related Services,' is a broad category that encompasses a wide range of IT services not classified under more specific codes like software publishing, computer systems design, or data processing. In the context of federal IT contracts, this code often covers services such as IT support and maintenance, IT consulting, disaster recovery services, network management, IT staffing, and IT project management. For this specific DoD contract, it likely includes the operational support, maintenance, and potentially troubleshooting of existing computer systems and infrastructure, ensuring their continuous availability and functionality for defense operations.

Given the contract duration of 1217 days (approx. 3.3 years), what are the implications for technology obsolescence and future IT needs?

A contract duration of approximately 3.3 years for IT production support presents a moderate risk of technology obsolescence. While this timeframe allows for stable support of current systems, the rapid pace of technological advancement means that hardware and software can become outdated relatively quickly. The government must ensure that the contract includes provisions for managing technology refresh cycles or that the services provided are adaptable to evolving technologies. If the contract focuses solely on maintaining legacy systems without a clear path for modernization or integration of newer technologies, it could lead to increased long-term costs and reduced operational effectiveness. The contracting agency likely factored in upgrade paths or service level agreements that account for technological evolution within this period.

How does the award to Accenture Federal Services align with the government's broader goals for IT modernization and cybersecurity?

The award to Accenture Federal Services for IT production support likely aligns with the government's broader goals by ensuring the stable operation of existing IT infrastructure, which is a prerequisite for modernization and enhanced cybersecurity. While 'production support' might imply maintaining current systems, effective support is crucial for preventing disruptions that could hinder modernization efforts or create security vulnerabilities. Accenture, as a major IT provider, is expected to implement best practices in security and potentially advise on or support modernization initiatives within its scope. However, the specific contract details would determine the extent to which it directly contributes to modernization or advanced cybersecurity measures, as opposed to routine operational maintenance.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Accenture Public Limited Company

Address: 11951 FREEDOM DR STE 1000, RESTON, VA, 20190

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $118,961,441

Exercised Options: $118,961,441

Current Obligation: $118,961,441

Subaward Activity

Number of Subawards: 104

Total Subaward Amount: $26,352,866

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SP470107A0001

IDV Type: IDC

Timeline