USDA's $13.7M NFC Modernization Contract Awarded to Ernst & Young LLP

Contract Overview

Contract Amount: $13,675,574 ($13.7M)

Contractor: Ernst & Young LLP

Awarding Agency: Department of Agriculture

Start Date: 2024-05-17

End Date: 2026-06-06

Contract Duration: 750 days

Daily Burn Rate: $18.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: LABOR HOURS

Sector: IT

Official Description: NATIONAL FINANCE CENTER ENTERPRISE MODERNIZATION ASSESSMENT

Place of Performance

Location: NEW ORLEANS, ORLEANS County, LOUISIANA, 70129

State: Louisiana Government Spending

Plain-Language Summary

Department of Agriculture obligated $13.7 million to ERNST & YOUNG LLP for work described as: NATIONAL FINANCE CENTER ENTERPRISE MODERNIZATION ASSESSMENT Key points: 1. Contract value of $13.7 million for enterprise modernization. 2. Ernst & Young LLP selected through full and open competition. 3. Potential risks include project scope creep and integration challenges. 4. Spending falls within the professional services sector (accounting/consulting).

Value Assessment

Rating: good

The contract value of $13.7 million appears reasonable for a comprehensive enterprise modernization effort. Benchmarking against similar large-scale IT and financial system modernization projects suggests this is within the expected range.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded using full and open competition, indicating a robust price discovery process. This method generally leads to more competitive pricing as multiple vendors had the opportunity to bid.

Taxpayer Impact: The competitive award process is expected to yield good value for taxpayers by ensuring fair market pricing for the services rendered.

Public Impact

Modernization of the National Finance Center (NFC) is critical for efficient government financial operations. Improved systems could lead to cost savings and enhanced service delivery for federal employees and retirees. The project's success will impact the Department of Agriculture's ability to manage its financial data effectively.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if scope is not managed tightly.
Dependency on contractor expertise for successful system integration.
Risk of data migration issues during modernization.

Positive Signals

Leverages full and open competition for best value.
Addresses a critical need for financial system modernization.
Contract awarded to a reputable firm with relevant experience.

Sector Analysis

This contract falls under professional services, specifically accounting and business consulting, for IT modernization. Spending benchmarks for similar large-scale enterprise resource planning (ERP) or financial system upgrades can range from millions to tens of millions of dollars depending on complexity and scope.

Small Business Impact

While the prime contractor is Ernst & Young LLP, a large business, the contract details do not specify any small business subcontracting goals. Further review would be needed to assess small business participation.

Oversight & Accountability

The award was made by the Department of Agriculture's Office of the Chief Financial Officer, suggesting internal oversight. The use of a delivery order under a larger contract vehicle implies adherence to established procurement procedures.

Related Government Programs

Offices of Certified Public Accountants
Department of Agriculture Contracting
Office of the Chief Financial Officer Programs

Risk Flags

Potential for scope creep impacting budget and timeline.
Integration complexity with existing legacy systems.
Dependency on contractor's expertise for successful implementation.
Risk of data migration issues.
Ensuring long-term maintainability and scalability of the modernized system.

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $13.7 million to ERNST & YOUNG LLP. NATIONAL FINANCE CENTER ENTERPRISE MODERNIZATION ASSESSMENT

Who is the contractor on this award?

The obligated recipient is ERNST & YOUNG LLP.

Which agency awarded this contract?

Awarding agency: Department of Agriculture (Office of the Chief Financial Officer).

What is the total obligated amount?

The obligated amount is $13.7 million.

What is the period of performance?

Start: 2024-05-17. End: 2026-06-06.

What specific modernization goals does this contract aim to achieve for the National Finance Center?

This contract aims to modernize the National Finance Center's enterprise systems, likely focusing on upgrading outdated financial management and payroll processing capabilities. Key goals would include enhancing data security, improving operational efficiency, streamlining workflows, and ensuring compliance with current federal financial regulations. The modernization is expected to reduce technical debt and provide a more agile platform for future financial operations.

What are the primary risks associated with implementing a large-scale enterprise modernization project like this?

Primary risks include scope creep, where project requirements expand beyond initial agreements, leading to cost overruns and delays. Integration challenges with existing legacy systems are also significant, as is the potential for data migration errors or loss. Furthermore, user adoption and resistance to change can hinder the effectiveness of the new system, and reliance on a single contractor introduces vendor lock-in risks.

How will the success of this modernization effort be measured and ensure effectiveness?

Success will be measured against predefined Key Performance Indicators (KPIs) tied to the modernization goals. These could include metrics like reduced processing times for payroll, improved accuracy rates, decreased system downtime, enhanced user satisfaction scores, and successful integration of all required modules. Regular progress reviews, independent testing, and post-implementation audits will be crucial for assessing effectiveness and ensuring the new system meets its objectives.

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) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 12314424Q0076

Offers Received: 2

Pricing Type: LABOR HOURS (Z)

Evaluated Preference: NONE

Contractor Details

Address: 1 MANHATTAN WEST, NEW YORK, NY, 10001

Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $13,675,574

Exercised Options: $13,675,574

Current Obligation: $13,675,574

Actual Outlays: $11,486,904

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $88,973

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: GS00F290CA

IDV Type: FSS

Timeline