Justice Department's FBI awards $3.18M for audit services to Ernst & Young LLP

Contract Overview

Contract Amount: $3,175,461 ($3.2M)

Contractor: Ernst & Young LLP

Awarding Agency: Department of Justice

Start Date: 2024-02-03

End Date: 2026-02-28

Contract Duration: 756 days

Daily Burn Rate: $4.2K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: AUDIT SERVICES SUPPORT

Place of Performance

Location: NEW YORK, NEW YORK County, NEW YORK, 10001

State: New York Government Spending

Plain-Language Summary

Department of Justice obligated $3.2 million to ERNST & YOUNG LLP for work described as: AUDIT SERVICES SUPPORT Key points: 1. Value for money appears reasonable given the specialized nature of audit services. 2. The contract was awarded through full and open competition, suggesting a competitive market. 3. Risk indicators are low, with a firm-fixed-price contract type mitigating cost overruns. 4. Performance context is within the standard for audit support services. 5. This contract positions Ernst & Young LLP as a key provider for federal audit needs. 6. The duration of 756 days provides a stable period for service delivery.

Value Assessment

Rating: good

The contract value of $3.18 million for audit services over approximately two years appears to be within a reasonable range for a large federal agency like the FBI. Benchmarking against similar audit support contracts awarded by other federal agencies for comparable services would provide a more precise value-for-money assessment. However, the firm-fixed-price contract type suggests that the pricing was determined upfront and is less susceptible to cost increases, which is a positive indicator for value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. The specific number of bidders is not provided, but the use of full and open competition generally suggests a healthy level of market interest and potential for competitive pricing. This method aims to ensure the government receives the best possible value by leveraging the widest possible pool of qualified contractors.

Taxpayer Impact: Taxpayers benefit from full and open competition as it typically drives down prices and encourages innovation among bidders, leading to more cost-effective service delivery for the government.

Public Impact

The Federal Bureau of Investigation (FBI) is the primary beneficiary, receiving essential audit support services. These services are crucial for maintaining financial integrity and compliance within the agency. The contract's impact is primarily concentrated within the federal government's financial oversight functions. Workforce implications are likely related to the specialized skills of accounting and auditing professionals employed by Ernst & Young LLP.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if follow-on contracts are not competitively bid.
Reliance on a single large firm for critical audit functions could pose a risk if performance falters.

Positive Signals

Award to a well-established firm with a strong track record in audit services.
Firm-fixed-price contract type provides cost certainty.
Full and open competition suggests a robust selection process.
Long-term contract duration allows for consistent service delivery.

Sector Analysis

The audit services sector within the federal government is a critical component of financial management and accountability. This contract falls under professional services, specifically accounting and auditing. The market for these services is competitive, with several large public accounting firms and specialized audit firms vying for government contracts. Spending in this area is consistent across many federal agencies to ensure compliance with regulations and efficient use of taxpayer funds. The FBI's need for these services aligns with broader government-wide requirements for financial integrity.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. The award to a large firm like Ernst & Young LLP suggests that the primary focus was on capability and capacity rather than small business participation. However, large prime contractors are often required to subcontract a portion of their work to small businesses. Further analysis would be needed to determine if subcontracting goals were established and met for this specific award, which could impact the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the FBI's program officials responsible for audit functions. The firm-fixed-price nature of the contract provides a degree of accountability by fixing the cost. Transparency is generally maintained through contract award databases, though specific performance metrics and detailed audit reports may not be publicly disclosed. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to the contract were suspected.

Related Government Programs

Audit Services
Professional Services
Financial Management Support
Federal Bureau of Investigation Contracts
Department of Justice Contracts

Risk Flags

Contract Type: Firm Fixed Price (FFP) generally reduces cost risk for the government.
Competition Level: Full and Open Competition indicates a robust market and potential for competitive pricing.
Contractor: Ernst & Young LLP is a large, established firm with significant federal contracting experience.

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $3.2 million to ERNST & YOUNG LLP. AUDIT SERVICES SUPPORT

Who is the contractor on this award?

The obligated recipient is ERNST & YOUNG LLP.

Which agency awarded this contract?

Awarding agency: Department of Justice (Federal Bureau of Investigation).

What is the total obligated amount?

The obligated amount is $3.2 million.

What is the period of performance?

Start: 2024-02-03. End: 2026-02-28.

What is Ernst & Young LLP's track record with federal audit service contracts?

Ernst & Young LLP (EY) is one of the 'Big Four' accounting firms and has a long-standing history of providing audit, tax, and advisory services to both the private and public sectors. Within the federal government, EY has secured numerous contracts across various agencies, including the Department of Defense, Department of the Treasury, and the Securities and Exchange Commission, among others. Their federal contract portfolio often includes financial statement audits, performance audits, internal control assessments, and forensic accounting services. While specific performance data for individual contracts is not always public, their continued success in winning competitive bids suggests a generally positive track record and satisfaction with their services by federal agencies. The FBI's selection of EY for this significant audit support contract further indicates confidence in their capabilities and experience.

How does the $3.18 million contract value compare to similar federal audit service contracts?

The $3.18 million contract value for audit services awarded to Ernst & Young LLP by the FBI is a moderate-sized award within the federal contracting landscape for professional services. To benchmark this value effectively, one would compare it to contracts for similar audit support, financial statement audits, or internal control assessments awarded by agencies of comparable size and complexity, such as the IRS, SEC, or other major components of the Department of Justice or Department of Homeland Security. Contracts for these services can range from tens of thousands to tens of millions of dollars, depending on the scope, duration, and specific requirements. Given the FBI's extensive operations and financial dealings, $3.18 million over approximately two years appears to be a reasonable investment for specialized audit support, likely covering a defined set of audit objectives or a specific period.

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

The primary risks associated with this audit services contract include potential performance issues (e.g., delays, quality of work), scope creep, and over-reliance on a single contractor. However, several factors mitigate these risks. The contract is a Firm Fixed Price (FFP) type, which shifts the cost risk to the contractor, incentivizing them to manage costs efficiently and deliver within the agreed budget. The award was made through 'Full and Open Competition,' suggesting a thorough vetting process of potential bidders, including their technical capabilities and past performance. Furthermore, the contract duration of 756 days (approximately two years) provides a defined period for service delivery, and the FBI's program officials will provide ongoing oversight to monitor performance against contract requirements and address any emerging issues promptly. Clear statement of work and deliverables also help in managing scope.

How effective is the 'Full and Open Competition' approach for securing audit services for the FBI?

The 'Full and Open Competition' approach is generally considered the most effective method for the government to secure audit services, including for the FBI, as it maximizes the potential for obtaining the best value. This method ensures that all qualified and responsible sources are given the opportunity to compete, fostering a competitive environment that can lead to lower prices, higher quality services, and innovative solutions. By casting a wide net, the FBI increases its chances of finding a contractor with the specific expertise, experience, and capacity required for its complex audit needs. While it requires more administrative effort upfront compared to other methods like sole-source procurement, the long-term benefits in terms of cost savings and service quality typically outweigh the initial investment. The presence of multiple bidders also provides a benchmark for pricing and performance expectations.

What are the historical spending patterns for audit services at the FBI or Department of Justice?

Analyzing historical spending patterns for audit services at the FBI or the broader Department of Justice (DOJ) is crucial for understanding trends and setting appropriate budgets. While specific historical data for this exact contract type and value is not provided in the summary, federal agencies like the FBI consistently require audit services to ensure financial accountability and compliance. Spending in this category can fluctuate based on audit cycles, regulatory changes, and the complexity of agency operations. Historically, large federal agencies contract with major accounting firms (like the 'Big Four') as well as smaller, specialized firms for various audit needs. The DOJ, as a whole, expends significant resources on financial audits, internal controls, and compliance reviews across its numerous components. The $3.18 million awarded here represents a portion of the FBI's overall budget allocated to maintaining financial integrity and operational oversight.

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

Pricing Type: FIRM FIXED PRICE (J)

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: $3,701,048

Exercised Options: $3,175,461

Current Obligation: $3,175,461

Actual Outlays: $2,965,211

Contract Characteristics

Commercial Item: PRODUCTS OR SERVICES PURSUANT TO FAR 12.102(F)

Parent Contract

Parent Award PIID: 15F06721A0003386

IDV Type: BPA

Timeline