Deloitte Consulting LLP awarded $51.9M for RUS Program Services, impacting IT systems and rural development

Contract Overview

Contract Amount: $51,887,075 ($51.9M)

Contractor: Deloitte Consulting LLP

Awarding Agency: Department of Agriculture

Start Date: 2022-12-12

End Date: 2027-01-02

Contract Duration: 1,482 days

Daily Burn Rate: $35.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: FY22 RUS PROGRAM SERVICES DME BASE PERIOD OF PERFORMANCE 01/03/2023 THROUGH 01/02/2024 OPTION PERIOD ONE - PERIOD OF PERFORMANCE 01/03/2024 THROUGH 01/02/2025 OPTION PERIOD TWO - PERIOD OF PERFORMANCE 01/03/2025 THROUGH 01/02/2026 OPTION PERIOD T

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20250

State: District of Columbia Government Spending

Plain-Language Summary

Department of Agriculture obligated $51.9 million to DELOITTE CONSULTING LLP for work described as: FY22 RUS PROGRAM SERVICES DME BASE PERIOD OF PERFORMANCE 01/03/2023 THROUGH 01/02/2024 OPTION PERIOD ONE - PERIOD OF PERFORMANCE 01/03/2024 THROUGH 01/02/2025 OPTION PERIOD TWO - PERIOD OF PERFORMANCE 01/03/2025 THROUGH 01/02/2026 OPTION PERIOD T Key points: 1. Contract awarded to Deloitte Consulting LLP for IT services supporting the Rural Housing Service. 2. The contract has a base period and two option periods, extending through January 2026. 3. Services include computer systems design, crucial for modernizing USDA's rural development programs. 4. The contract was awarded under full and open competition, suggesting a competitive bidding process. 5. The firm fixed-price contract type aims to control costs for the government. 6. This award represents a significant investment in maintaining and improving critical IT infrastructure.

Value Assessment

Rating: good

The contract value of $51.9 million over approximately three years appears reasonable for comprehensive IT systems design services. Benchmarking against similar large-scale IT modernization contracts within federal agencies suggests this pricing is within expected ranges. The firm fixed-price structure provides cost certainty, although it places the risk of cost overruns on the contractor. Further analysis would require detailed task breakdowns and comparison to specific service rates.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of two bidders suggests a moderate level of competition for this significant IT services contract. While not an extremely high number of bidders, full and open competition generally promotes price discovery and allows the government to select the best value offer.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it encourages competitive pricing and allows for the selection of the most capable vendor, potentially leading to better service delivery and cost savings.

Public Impact

Benefits rural communities by ensuring the continued operation and modernization of housing and development programs. Delivers essential IT services, including computer systems design and support, for the Rural Housing Service. Geographic impact is nationwide, supporting USDA's mission across all states and territories. Workforce implications include potential employment opportunities within Deloitte and its subcontractors for IT professionals.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if services are highly specialized and difficult to transition.
Reliance on a single contractor for critical IT infrastructure could pose risks if performance falters.
Scope creep could lead to cost increases if not managed tightly under the firm fixed-price structure.

Positive Signals

Awarded through full and open competition, indicating a competitive process.
Firm fixed-price contract type provides cost certainty for the government.
Contractor, Deloitte Consulting LLP, is a well-established firm with extensive federal contracting experience.
Services support critical USDA programs aimed at rural development.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically Computer Systems Design Services. The federal IT services market is substantial, with agencies consistently investing in modernization and cybersecurity. This contract aligns with the government's ongoing efforts to upgrade legacy systems and improve digital service delivery. Comparable spending benchmarks for large-scale IT support contracts within federal agencies often range in the tens to hundreds of millions of dollars.

Small Business Impact

The contract data indicates that small business participation was not a primary set-aside consideration for this award, as the 'ss' (small business set-aside) field is false. However, large prime contractors like Deloitte are often required to meet small business subcontracting goals. The extent to which this contract will benefit the small business ecosystem will depend on Deloitte's subcontracting plan and its ability to identify and engage qualified small businesses for specialized IT tasks.

Oversight & Accountability

Oversight for this contract will likely be managed by the Rural Housing Service contracting officers and program managers within the Department of Agriculture. The firm fixed-price nature of the contract provides a degree of financial oversight by limiting potential cost increases. Transparency is generally maintained through contract award databases and public reporting, 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 IT Modernization Initiatives
Rural Development Program Support
Federal Civilian IT Services
Computer Systems Design Contracts

Risk Flags

Potential for scope creep
Reliance on single contractor for critical systems
Need for clear performance metrics

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $51.9 million to DELOITTE CONSULTING LLP. FY22 RUS PROGRAM SERVICES DME BASE PERIOD OF PERFORMANCE 01/03/2023 THROUGH 01/02/2024 OPTION PERIOD ONE - PERIOD OF PERFORMANCE 01/03/2024 THROUGH 01/02/2025 OPTION PERIOD TWO - PERIOD OF PERFORMANCE 01/03/2025 THROUGH 01/02/2026 OPTION PERIOD T

Who is the contractor on this award?

The obligated recipient is DELOITTE CONSULTING LLP.

Which agency awarded this contract?

Awarding agency: Department of Agriculture (Rural Housing Service).

What is the total obligated amount?

The obligated amount is $51.9 million.

What is the period of performance?

Start: 2022-12-12. End: 2027-01-02.

What is Deloitte Consulting LLP's track record with the Department of Agriculture and similar IT service contracts?

Deloitte Consulting LLP has a significant history of contracting with the federal government, including the Department of Agriculture. They are a major provider of IT and management consulting services across various agencies. Their track record typically includes large-scale system implementations, IT modernization efforts, and program management support. For the USDA specifically, Deloitte has been involved in projects related to financial management systems, data analytics, and IT infrastructure. Their experience with similar computer systems design services contracts for other federal entities suggests a strong capability to handle complex IT requirements. However, a detailed review of past performance evaluations and any past performance issues would be necessary for a comprehensive assessment.

How does the $51.9 million contract value compare to similar IT services contracts awarded by the USDA or other agencies?

The $51.9 million contract value for Deloitte's services over approximately three years is a substantial but not unusual amount for comprehensive IT systems design and support within a federal agency like the USDA. Large-scale IT modernization and sustainment contracts frequently fall within this range, and can often exceed it significantly depending on the scope and duration. For context, other federal agencies often award multi-year IT contracts valued in the tens or hundreds of millions of dollars for similar services, such as enterprise resource planning (ERP) system support, cloud migration, or cybersecurity enhancements. The specific nature of supporting the Rural Housing Service's programs likely involves complex data management and application support, justifying this investment level. A direct comparison would require identifying contracts with identical service descriptions and agency missions.

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

Primary risks include potential performance issues from the contractor, leading to delays or subpar service delivery impacting critical rural development programs. Another risk is the potential for scope creep, where the project's requirements expand beyond the initial agreement, potentially leading to cost overruns despite the firm fixed-price structure. Vendor lock-in is also a concern, making future transitions to different providers difficult or costly. Mitigation strategies include the government's oversight through contract management, performance monitoring, and defined deliverables. The firm fixed-price contract itself mitigates financial risk for the government by setting a ceiling on costs. The competitive award process also aims to select a vendor with a proven track record, reducing performance risk. Clear contract terms and change control processes are essential for managing scope.

How effective is the firm fixed-price contract type in ensuring value for money for this specific IT services engagement?

The firm fixed-price (FFP) contract type is generally considered effective for ensuring value for money when the scope of work is well-defined and unlikely to change significantly. For IT services like computer systems design, where requirements can sometimes evolve, FFP places the risk of cost overruns on the contractor. This incentivizes the contractor to perform efficiently and manage costs effectively to maximize profit. For the government, it provides budget certainty. However, if the scope is not precisely defined upfront, it can lead to disputes or the contractor potentially cutting corners to maintain profitability, which could impact quality. The success of FFP here relies heavily on the clarity of the SOW and the government's ability to manage scope changes rigorously.

What are the historical spending patterns for IT services within the Rural Housing Service or similar USDA divisions?

Historical spending patterns for IT services within the Rural Housing Service (RHS) and broader USDA divisions typically show consistent investment in maintaining and modernizing their technology infrastructure. Agencies like USDA manage vast amounts of data related to agricultural programs, loans, and services, necessitating robust IT systems. Spending often fluctuates based on major system upgrades, cybersecurity initiatives, or the introduction of new digital services. While specific historical data for RHS is not provided here, federal IT spending overall has been on an upward trend, driven by the need for digital transformation, cloud adoption, and enhanced data analytics capabilities. Contracts for IT services, including system design, development, and maintenance, represent a significant portion of these budgets.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 12SAD122Q0012

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

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: $53,433,489

Exercised Options: $51,887,075

Current Obligation: $51,887,075

Actual Outlays: $39,667,948

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $1,460,276

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 12314420A0034

IDV Type: BPA

Timeline