Deloitte Consulting LLP awarded $86.7M for USDA DAFM Financial System Support Services, a 4-year contract

Contract Overview

Contract Amount: $86,669,206 ($86.7M)

Contractor: Deloitte Consulting LLP

Awarding Agency: Department of Agriculture

Start Date: 2022-06-01

End Date: 2026-09-30

Contract Duration: 1,582 days

Daily Burn Rate: $54.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: LABOR HOURS

Sector: Other

Official Description: DEPUTY ADMINISTRATOR FOR FINANCIAL MANAGEMENT (DAFM) FINANCIAL SYSTEM SUPPORT SERVICES (FSSS)

Place of Performance

Location: ALEXANDRIA, ALEXANDRIA CITY County, VIRGINIA, 22314

State: Virginia Government Spending

Plain-Language Summary

Department of Agriculture obligated $86.7 million to DELOITTE CONSULTING LLP for work described as: DEPUTY ADMINISTRATOR FOR FINANCIAL MANAGEMENT (DAFM) FINANCIAL SYSTEM SUPPORT SERVICES (FSSS) Key points: 1. Contract value represents a significant investment in financial system modernization and support. 2. The contract was awarded through full and open competition, suggesting a competitive pricing environment. 3. Performance period spans over four years, indicating a need for sustained support. 4. The services are categorized under Engineering Services, though the nature of financial system support may differ from traditional engineering. 5. The awardee, Deloitte Consulting LLP, is a large, established government contractor. 6. The contract is a delivery order, implying it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle.

Value Assessment

Rating: good

Benchmarking the value of this contract requires comparison to similar financial system support services contracts. Given the duration and scope, the total value appears reasonable. However, without specific details on the labor hours and rates, a precise value-for-money assessment is challenging. The contract's pricing structure, based on labor hours, necessitates careful monitoring to ensure efficiency and prevent cost overruns. The benchmarked 'br' value of 54,785 suggests a potential comparison point, but its exact meaning in relation to this contract's total value is unclear without further context.

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 process typically fosters a competitive environment, driving down prices and encouraging innovation. The number of bidders is not specified, but the 'full and open' designation suggests a robust competition.

Taxpayer Impact: Taxpayers benefit from a competitive bidding process that aims to secure the best possible price and quality for essential government services.

Public Impact

The primary beneficiaries are the Deputy Administrator for Financial Management (DAFM) and the Food and Nutrition Service (FNS) within the USDA, who will receive enhanced financial system support. Services delivered include crucial support for financial management systems, ensuring operational efficiency and data integrity. The geographic impact is primarily within the Department of Agriculture, supporting its financial operations nationwide. Workforce implications may include the need for specialized IT and financial management personnel, both within the contractor and potentially within the agency for oversight.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep in labor-hour based contracts if not tightly managed.
Reliance on a single large contractor for critical financial systems could pose a risk if performance falters.
Ensuring adequate knowledge transfer and agency personnel development alongside contractor support.

Positive Signals

Award to a reputable contractor with a strong track record in government IT services.
The contract's duration allows for stability and continuity in financial system operations.
Full and open competition suggests a commitment to achieving competitive pricing and best value.

Sector Analysis

The IT services sector supporting government financial management systems is a significant market. This contract falls within the broader category of professional, scientific, and technical services, specifically focusing on IT and engineering support for financial applications. Comparable spending benchmarks would involve analyzing other large-scale IT support contracts for federal financial systems across various agencies, which often run into tens or hundreds of millions of dollars over several years.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. The awardee, Deloitte Consulting LLP, is a large business. There is no explicit information regarding subcontracting plans for small businesses within this data, which could be a missed opportunity for small business participation in supporting federal financial systems.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve the contracting officer's representative (COR) within the USDA, regular performance reviews, and adherence to contract terms and conditions. Accountability measures are built into the contract through performance standards and payment schedules. Transparency is generally facilitated through contract award databases, though detailed performance metrics may not always be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

USDA Financial Management Systems
Federal Financial Management Modernization Programs
Government IT Support Services
Engineering Services for Government IT

Risk Flags

Potential for cost overruns in labor-hour contracts.
Risk of vendor lock-in due to long contract duration.
Need for robust oversight to ensure performance and value.
Limited visibility into specific performance metrics and subcontractor utilization.

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $86.7 million to DELOITTE CONSULTING LLP. DEPUTY ADMINISTRATOR FOR FINANCIAL MANAGEMENT (DAFM) FINANCIAL SYSTEM SUPPORT SERVICES (FSSS)

Who is the contractor on this award?

The obligated recipient is DELOITTE CONSULTING LLP.

Which agency awarded this contract?

Awarding agency: Department of Agriculture (Food and Nutrition Service).

What is the total obligated amount?

The obligated amount is $86.7 million.

What is the period of performance?

Start: 2022-06-01. End: 2026-09-30.

What is the specific nature of the 'Engineering Services' provided under this contract, given it's for financial system support?

The classification of 'Engineering Services' (NAICS code 541330) for a financial system support contract suggests that the services may involve the design, development, integration, and maintenance of complex financial IT systems. This could include aspects like system architecture, data flow engineering, cybersecurity engineering related to financial data, and the engineering of robust, scalable financial platforms. It implies a technical and systematic approach to ensuring the reliability, security, and efficiency of the DAFM's financial management systems, going beyond basic IT helpdesk functions to encompass the underlying technical infrastructure and processes.

How does the contract duration of 1582 days (approximately 4.3 years) impact the overall value and risk?

A duration of over four years for financial system support provides stability and allows for the contractor to gain deep institutional knowledge, potentially leading to more efficient and effective support. This extended period can reduce transition costs and learning curves associated with shorter contracts. However, it also increases the risk of vendor lock-in and the potential for costs to escalate if not managed diligently. For taxpayers, a longer duration can be beneficial if it leads to sustained improvements and cost savings through optimized system performance and reduced need for frequent re-competition, but it requires robust oversight to ensure continued value and prevent complacency.

What are the implications of this contract being a 'Delivery Order' (aw)?

The designation 'Delivery Order' (aw) indicates that this contract is likely a task order issued under a larger, pre-existing Indefinite Delivery/Indefinite Quantity (IDIQ) contract vehicle. This means that the foundational terms, conditions, and pricing structures were likely established during a prior competitive process for the IDIQ. For this specific delivery order, the USDA's Food and Nutrition Service is procuring a defined set of services. This approach allows agencies to procure services more rapidly once an IDIQ is in place, but the overall value and competition are tied to the initial IDIQ award. It can streamline procurement but may limit direct competition for individual task orders if the IDIQ itself was not broadly competed.

What is Deloitte Consulting LLP's track record with similar federal financial system support contracts?

Deloitte Consulting LLP is a major federal contractor with extensive experience in providing IT, financial management, and consulting services to various government agencies. They have a well-established track record in supporting large-scale financial systems, including those for defense, civilian agencies, and intelligence communities. While specific details on past performance for DAFM financial system support are not provided here, their general profile suggests they possess the capabilities and experience necessary for such a contract. A deeper analysis would involve reviewing past performance evaluations and contract histories for similar engagements to assess their reliability and effectiveness.

How does the benchmarked value 'br': 54785 relate to the total contract award of $86.7 million?

The benchmarked value 'br': 54785 is significantly lower than the total contract award of $86.7 million. Without additional context on what 'br' represents (e.g., a per-year cost, a cost per specific deliverable, or a comparison metric from a different dataset), it is difficult to establish a direct relationship or assess its relevance. It could represent a unit cost for a specific service, a benchmark from a different contract type, or a threshold value. If it's intended as a comparative metric, its low value relative to the total award suggests either this contract is significantly larger than the benchmark, or the benchmark represents a very specific, limited aspect of the services provided.

What are the potential risks associated with relying on a single large contractor like Deloitte for critical financial system support over a multi-year period?

Relying on a single large contractor for critical financial system support over several years presents several risks. Firstly, there's the risk of vendor lock-in, where the agency becomes heavily dependent on the contractor's proprietary systems or knowledge, making future transitions difficult and potentially costly. Secondly, performance can degrade over time if incentives aren't maintained, or if the contractor faces internal challenges. Thirdly, a lack of ongoing competition for task orders under an IDIQ can lead to complacency and potentially higher costs than if the work were re-competed periodically. Finally, the departure of key personnel from the contractor could disrupt operations if knowledge isn't adequately shared or documented.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

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

Offers Received: 1

Pricing Type: LABOR HOURS (Z)

Evaluated Preference: NONE

Contractor Details

Address: 1919 N LYNN ST, ARLINGTON, VA, 22209

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

Financial Breakdown

Contract Ceiling: $101,296,118

Exercised Options: $86,669,206

Current Obligation: $86,669,206

Actual Outlays: $75,701,459

Subaward Activity

Number of Subawards: 6

Total Subaward Amount: $24,284,625

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS00Q14OADU113

IDV Type: IDC

Timeline