Deloitte & Touche LLP awarded $2.89M IT contract for Ukraine energy sector support

Contract Overview

Contract Amount: $2,893,029 ($2.9M)

Contractor: Deloitte & Touche LLP

Awarding Agency: Department of the Interior

Start Date: 2021-09-27

End Date: 2025-09-06

Contract Duration: 1,440 days

Daily Burn Rate: $2.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: ITAP- TA ON UKRAINE NAFTOGAZ UPSTREAM

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22209

State: Virginia Government Spending

Plain-Language Summary

Department of the Interior obligated $2.9 million to DELOITTE & TOUCHE LLP for work described as: ITAP- TA ON UKRAINE NAFTOGAZ UPSTREAM Key points: 1. Contract awarded via BPA Call, indicating a pre-competed framework. 2. Fixed-price contract type suggests cost certainty for the government. 3. Contract duration of 1440 days (4 years) indicates a long-term need. 4. Awarded by the Department of the Interior, unusual for IT support. 5. NAICS code 541519 points to specialized computer-related services. 6. Contractor has a long history with federal contracts, established track record.

Value Assessment

Rating: good

The contract value of $2.89 million over four years appears reasonable for specialized IT support, especially given the geopolitical context. Benchmarking against similar IT services contracts for international aid or consulting would provide a more precise value-for-money assessment. The fixed-price nature of the award helps manage cost risks for the government. However, without specific deliverables or performance metrics, a definitive value assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. The award type is a BPA Call, which means it was likely sourced from an existing Blanket Purchase Agreement that itself was competed. This method generally promotes competitive pricing and allows the government to leverage pre-negotiated terms. The specific number of bidders for this call is not provided, but the 'full and open' designation is a positive indicator.

Taxpayer Impact: Full and open competition generally leads to better pricing for taxpayers by encouraging a wider range of vendors to offer their services, driving down costs through market forces.

Public Impact

The primary beneficiaries are the Ukrainian energy sector (Naftogaz), receiving critical IT support. Services delivered include IT support, likely focused on operational technology and data management. Geographic impact is primarily in Ukraine, with potential indirect benefits to U.S. foreign policy objectives. Workforce implications may involve specialized IT professionals, potentially including those with experience in international projects or the energy sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep given the complex and evolving geopolitical situation in Ukraine.
Dependency on a single contractor for critical IT infrastructure support in a sensitive region.
Challenges in verifying performance and impact due to the remote and high-risk operating environment.

Positive Signals

Award to a well-established contractor (Deloitte & Touche LLP) with a proven federal track record.
Fixed-price contract structure provides cost predictability.
Awarded under full and open competition, suggesting a competitive process.
Long-term contract duration allows for sustained support and relationship building.

Sector Analysis

This contract falls within the Information Technology sector, specifically under IT consulting and support services. The market for such services is vast, with significant government spending allocated annually. This particular contract addresses a niche need for IT assistance to a critical foreign energy infrastructure entity, likely supported by U.S. foreign aid or national security initiatives. Comparable spending benchmarks would typically involve IT modernization or cybersecurity contracts for government agencies or international organizations.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. The award to a large, established firm like Deloitte & Touche LLP suggests that the primary focus was on specialized expertise rather than small business participation. This contract does not appear to directly benefit the small business ecosystem.

Oversight & Accountability

Oversight is likely managed by the Department of the Interior's contracting officers and program managers. Given the international nature and potential sensitivity, additional oversight from agencies involved in foreign affairs or national security may also be involved. Transparency is facilitated through federal contract databases, but specific performance metrics and detailed reporting may be internal. Inspector General jurisdiction would depend on the specific funding source and agency policies.

Related Government Programs

USAID IT Support Contracts
Department of State Foreign Assistance IT
DoD IT Services for International Operations
Energy Sector Support Programs

Risk Flags

Geopolitical Risk
Cybersecurity Threat
Performance Verification Challenges
Scope Creep Potential

Frequently Asked Questions

What is this federal contract paying for?

Department of the Interior awarded $2.9 million to DELOITTE & TOUCHE LLP. ITAP- TA ON UKRAINE NAFTOGAZ UPSTREAM

Who is the contractor on this award?

The obligated recipient is DELOITTE & TOUCHE LLP.

Which agency awarded this contract?

Awarding agency: Department of the Interior (Departmental Offices).

What is the total obligated amount?

The obligated amount is $2.9 million.

What is the period of performance?

Start: 2021-09-27. End: 2025-09-06.

What is Deloitte & Touche LLP's track record with federal IT contracts, particularly those involving international support or critical infrastructure?

Deloitte & Touche LLP has a substantial history of securing and performing on federal IT contracts. Their portfolio includes a wide range of services, from system modernization and cybersecurity to cloud migration and data analytics, across various agencies like the Department of Defense, Health and Human Services, and Homeland Security. While specific contracts for direct IT support to foreign national energy companies like Naftogaz might be less common in public records, Deloitte's experience in complex, large-scale IT implementations and consulting, often in challenging environments, suggests a capacity to handle such requirements. Their extensive experience indicates a mature understanding of federal procurement regulations and performance expectations.

How does the $2.89 million contract value compare to similar IT support services for international energy entities?

Direct comparisons for IT support to specific national energy companies like Ukraine's Naftogaz are difficult due to the unique geopolitical context and the proprietary nature of such agreements. However, general IT consulting and support contracts for large organizations can range significantly. For instance, major system overhauls or cybersecurity enhancements for Fortune 500 companies or large government agencies can run into tens or hundreds of millions of dollars. A $2.89 million contract over four years, averaging around $722,500 annually, suggests a focused scope, possibly related to specific system upgrades, maintenance, or specialized advisory services rather than a complete IT infrastructure overhaul. This value appears moderate for specialized, long-term IT support in a critical sector.

What are the primary risks associated with this contract, considering the recipient is a Ukrainian state-owned enterprise?

Key risks include geopolitical instability impacting service delivery and personnel safety in Ukraine, potential for cyber threats targeting critical energy infrastructure, and challenges in ensuring accountability and performance verification in a high-risk environment. There's also a risk of scope creep due to the evolving needs in a conflict zone. Furthermore, currency fluctuations and the potential for sanctions or changes in international aid could affect the contract's execution or funding. The Department of the Interior's involvement, while unusual for direct IT support to a foreign entity, may imply specific national security or foreign policy objectives that introduce their own set of risks and oversight complexities.

What is the expected program effectiveness and impact of this IT support on Naftogaz's operations?

The expected effectiveness hinges on the specific IT services provided. If the support focuses on enhancing cybersecurity, improving operational efficiency through better data management, or ensuring the reliability of critical IT systems, the impact could be significant. For Naftogaz, maintaining stable operations is crucial, especially during wartime. Improved IT infrastructure can bolster resilience against attacks, streamline production and distribution processes, and aid in financial management and reporting. The ultimate impact will depend on the quality of Deloitte's services, the specific needs addressed, and the stability of the operating environment in Ukraine.

How has federal spending on IT support for international entities or critical infrastructure evolved in recent years?

Federal spending on IT support for international entities and critical infrastructure has seen a notable increase, driven by growing cybersecurity threats, the digitalization of essential services globally, and geopolitical imperatives. Agencies like USAID, the Department of State, and the Department of Defense increasingly procure IT services to support allies, enhance partner capacity, and protect U.S. interests abroad. This includes funding for cybersecurity enhancements, network infrastructure upgrades, and digital transformation initiatives in partner nations. The trend reflects a recognition that IT resilience and security are integral to national security and foreign policy objectives, leading to more specialized and often higher-value contracts in this domain.

Industry Classification

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

Solicitation ID: 0040542439

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Deloitte Consulting LLP

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: $2,893,029

Exercised Options: $2,893,029

Current Obligation: $2,893,029

Actual Outlays: $2,893,029

Subaward Activity

Number of Subawards: 7

Total Subaward Amount: $665,493

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 140D0418A0030

IDV Type: BPA

Timeline