DOI's OIG awards $11.5M audit support contract to KPMG, highlighting a need for specialized financial oversight

Contract Overview

Contract Amount: $11,472,858 ($11.5M)

Contractor: Kpmg LLP

Awarding Agency: Department of the Interior

Start Date: 2025-03-14

End Date: 2026-12-31

Contract Duration: 657 days

Daily Burn Rate: $17.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: DEPARTMENT OF INTERIOR (DOI), OFFICE OF THE INSPECTOR GENERAL (OIG) FINANCIAL AUDIT SUPPORT SERVICES

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20240

State: District of Columbia Government Spending

Plain-Language Summary

Department of the Interior obligated $11.5 million to KPMG LLP for work described as: DEPARTMENT OF INTERIOR (DOI), OFFICE OF THE INSPECTOR GENERAL (OIG) FINANCIAL AUDIT SUPPORT SERVICES Key points: 1. The contract value of $11.5 million for approximately two years suggests a significant investment in audit services. 2. KPMG LLP, a major accounting firm, was selected through full and open competition, indicating a robust selection process. 3. The fixed-price contract type aims to control costs and provide predictability for the Department of the Interior. 4. The duration of 657 days aligns with typical audit cycles for large government agencies. 5. This award reflects the ongoing importance of independent financial audits for government accountability. 6. The contract's focus on financial audit support services is crucial for maintaining the integrity of DOI's financial operations.

Value Assessment

Rating: good

The contract value of approximately $11.5 million for a period of roughly two years appears reasonable for comprehensive financial audit support services for a department as large as the Interior. Benchmarking against similar contracts for audit services to large federal agencies suggests that this award falls within expected ranges. The firm-fixed-price structure provides cost certainty, which is a positive indicator for value. Without specific details on the scope of work and deliverables, a precise value-for-money assessment is challenging, but the competitive nature of the award supports a presumption of fair pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning that all responsible sources were permitted to submit a bid. The fact that it was competed openly suggests that multiple firms likely vied for this opportunity. A competitive process like this generally leads to better price discovery and encourages contractors to offer their best terms and pricing to win the award. The number of bidders, while not specified, is expected to be sufficient to ensure meaningful competition.

Taxpayer Impact: Taxpayers benefit from full and open competition as it typically drives down costs and ensures the government receives the best possible value for its investment. This process helps prevent inflated pricing that might occur with less competitive or sole-source awards.

Public Impact

The Office of the Inspector General (OIG) at the Department of the Interior benefits directly by receiving essential support for its financial audit functions. The services delivered will enhance the accuracy and reliability of the Department's financial reporting and internal controls. The geographic impact is primarily within the District of Columbia, where the Department of the Interior is headquartered, but the audit's findings can affect operations nationwide. The contract supports the professional services workforce within the accounting and auditing sector, specifically benefiting the employees of KPMG LLP.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if the audit requirements are not clearly defined and managed.
Reliance on a single large contractor could pose a risk if performance issues arise.
The effectiveness of the audit support is dependent on the quality of the personnel assigned by KPMG.

Positive Signals

Awarded through full and open competition, suggesting a competitive pricing environment.
Firm-fixed-price contract type helps control costs and provides budget certainty.
KPMG LLP is a well-established firm with significant experience in government auditing.
The contract duration allows for thorough audit procedures and follow-up.

Sector Analysis

The federal government consistently spends significant amounts on professional services, including auditing and accounting, to ensure accountability and compliance. The North American Industry Classification System (NAICS) code 541211, 'Offices of Certified Public Accountants,' represents a mature market. This contract fits within the broader category of government support services, where agencies outsource specialized functions to private sector experts. Comparable spending benchmarks for audit support services to large federal departments often range in the millions of dollars annually, depending on the agency's size and complexity.

Small Business Impact

This contract was awarded through full and open competition and does not appear to have a small business set-aside. There is no explicit indication of subcontracting requirements for small businesses within the provided data. Therefore, the direct impact on the small business ecosystem is likely minimal unless KPMG voluntarily engages small businesses as subcontractors for specific tasks.

Oversight & Accountability

The Office of the Inspector General (OIG) itself is the oversight body, and this contract supports its audit mission. The OIG operates independently to provide objective audits, inspections, and investigations. Oversight of this contract would fall under the OIG's internal quality control and performance management processes. Transparency is generally maintained through public OIG reports and audit findings, though specific contract performance details may be internal.

Related Government Programs

Department of the Interior Financial Statement Audits
Office of Inspector General Audit Services
Federal Financial Management
Government Accountability Office (GAO) Audits
Professional Services Contracts

Risk Flags

Contract awarded to a large, well-known firm; ensure adequate oversight to prevent complacency.
Firm-fixed-price contracts can sometimes lead to contractor pressure to cut corners if not closely monitored.
The effectiveness of the audit is highly dependent on the specific expertise and diligence of the assigned audit team.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Interior awarded $11.5 million to KPMG LLP. DEPARTMENT OF INTERIOR (DOI), OFFICE OF THE INSPECTOR GENERAL (OIG) FINANCIAL AUDIT SUPPORT SERVICES

Who is the contractor on this award?

The obligated recipient is KPMG LLP.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $11.5 million.

What is the period of performance?

Start: 2025-03-14. End: 2026-12-31.

What is KPMG LLP's track record with the Department of the Interior and other federal agencies for audit support services?

KPMG LLP is a major global professional services firm with extensive experience providing audit, tax, and advisory services to both public and private sector entities, including numerous federal agencies. While specific contract history with DOI's OIG is not detailed here, KPMG has a well-documented history of performing large-scale financial statement audits and related services for various government departments and large corporations. Their track record generally includes successful completion of complex audits, adherence to professional standards, and navigating regulatory requirements. Agencies often select firms like KPMG based on their established reputation, resources, and demonstrated capabilities in handling significant government audit engagements. Further analysis would involve reviewing past performance evaluations and specific contract awards to DOI and similar agencies.

How does the $11.5 million contract value compare to typical spending on similar audit support services for federal agencies of DOI's size?

The $11.5 million contract value for approximately two years of financial audit support services for the Department of the Interior (DOI) appears to be within a reasonable range when compared to similar contracts awarded to large federal agencies. DOI is a vast department with complex financial operations spanning multiple bureaus and programs. Large federal departments often engage in multi-million dollar contracts for comprehensive audit support. For instance, contracts for the Department of Defense or Health and Human Services for similar services can easily exceed tens of millions of dollars annually. Given the scope and complexity inherent in auditing a department like DOI, this award suggests a competitive and appropriate valuation for the services required to ensure financial integrity and compliance.

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

Primary risks associated with this contract include potential performance deficiencies by the contractor (KPMG LLP), such as delays in deliverables, inadequate audit quality, or failure to identify significant financial irregularities. Another risk is the potential for cost overruns if the firm-fixed-price contract is not managed effectively or if unforeseen complexities arise. Furthermore, there's a risk related to the independence and objectivity of the auditors, although this is mitigated by the OIG's oversight role and professional ethical standards. Mitigation strategies likely involve robust contract management by the DOI OIG, clear performance metrics and deliverables, regular progress reviews, and the OIG's inherent authority to enforce contract terms and professional standards. The competitive award process also serves as an initial risk mitigation by selecting a reputable firm.

What is the expected impact of these audit support services on the effectiveness of the DOI's financial management and accountability?

The expected impact of these audit support services on the effectiveness of the DOI's financial management and accountability is significant and positive. By engaging KPMG LLP, the Office of the Inspector General (OIG) is bolstering its capacity to conduct thorough and independent financial audits. These audits are critical for verifying the accuracy of financial statements, assessing the effectiveness of internal controls, and ensuring compliance with laws and regulations. Improved audit findings can lead to enhanced financial reporting, better resource allocation, reduced instances of fraud or mismanagement, and increased public trust. Ultimately, these services contribute directly to strengthening the overall financial stewardship and accountability framework within the Department of the Interior.

How has federal spending on financial audit support services evolved over the past five years, and does this contract align with historical trends?

Federal spending on financial audit support services has remained a consistent and substantial component of government expenditures over the past five years, driven by legislative mandates like the Federal Information System Controls Audit Manual (FISCAM) and the Federal Managers' Financial Integrity Act. Agencies are continuously required to undergo audits to ensure accountability and transparency. While specific aggregate data for 'financial audit support services' can be fragmented across various categories, the overall trend indicates sustained or increasing investment in these services due to growing complexity of government operations and heightened scrutiny. This $11.5 million contract for the Department of the Interior aligns with historical trends, reflecting the ongoing need for specialized external expertise to support the internal audit functions of large federal departments, ensuring compliance and financial integrity.

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) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 140D0425Q0101

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 8350 BROAD ST STE 900, MC LEAN, VA, 22102

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

Financial Breakdown

Contract Ceiling: $17,220,850

Exercised Options: $11,472,858

Current Obligation: $11,472,858

Actual Outlays: $4,402,674

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $500,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: GS00F275CA

IDV Type: FSS

Timeline