Ernst & Young LLP awarded $35M contract for accounting and audit services to the Department of Justice

Contract Overview

Contract Amount: $34,962,994 ($35.0M)

Contractor: Ernst & Young LLP

Awarding Agency: Department of Justice

Start Date: 2021-10-01

End Date: 2026-09-30

Contract Duration: 1,825 days

Daily Burn Rate: $19.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 10

Pricing Type: LABOR HOURS

Sector: Other

Official Description: ACCOUNTING, AUDIT AND PROGRAM OPS FOR AFMS

Place of Performance

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

State: New York Government Spending

Plain-Language Summary

Department of Justice obligated $35.0 million to ERNST & YOUNG LLP for work described as: ACCOUNTING, AUDIT AND PROGRAM OPS FOR AFMS Key points: 1. Contract provides essential accounting and audit support for the DOJ's financial management. 2. Full and open competition suggests a robust market for these specialized services. 3. The contract duration of five years indicates a long-term need for these functions. 4. Services are concentrated in New York, potentially impacting local accounting professionals. 5. The award to a large, established firm like EY suggests a focus on experience and capability. 6. Performance will be crucial in ensuring the integrity of DOJ financial operations.

Value Assessment

Rating: good

The contract value of approximately $35 million over five years for accounting and audit services appears reasonable given the scope and duration. Benchmarking against similar large-scale government contracts for professional services suggests that pricing is likely competitive, especially considering it was awarded under full and open competition. The specific services required by the Department of Justice are critical for financial integrity and compliance, justifying a significant investment. Without detailed cost breakdowns, a precise value-for-money assessment is challenging, but the competitive award process provides a degree of assurance.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, indicating that multiple qualified vendors were invited to submit proposals. The presence of 10 bidders (as indicated by 'no': 10 in the data) suggests a healthy level of competition for this type of service. A competitive process generally leads to better price discovery and encourages vendors to offer their best value propositions to secure the contract. The outcome of this competition is a contract awarded to Ernst & Young LLP.

Taxpayer Impact: Taxpayers benefit from a competitive bidding process that aims to secure the most cost-effective solution for essential government functions. This approach helps prevent overpayment and ensures that public funds are used efficiently for critical services like accounting and auditing.

Public Impact

The Department of Justice benefits directly through enhanced financial management, audit, and accounting operations. Federal financial integrity and compliance are supported by the services rendered. The primary geographic impact is in New York, where the contractor is located. The contract supports specialized accounting and auditing jobs within the professional services sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for over-reliance on a single large contractor for critical financial functions.
Geographic concentration of services in New York may limit broader accessibility or local economic benefits elsewhere.
The long contract duration could lead to complacency if performance is not rigorously monitored.

Positive Signals

Awarded through full and open competition, indicating a competitive marketplace.
Contractor is a well-established firm with significant experience in government contracting.
The contract addresses essential government functions critical to financial oversight and compliance.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically focusing on accounting, audit, and tax preparation services (NAICS code 541211). This sector is characterized by a mix of large, established firms and smaller specialized companies. Government spending in this area is substantial, driven by the need for financial oversight, compliance, and management support across various agencies. Comparable spending benchmarks would involve analyzing other large federal contracts for similar accounting and audit support services awarded to major professional services firms.

Small Business Impact

This contract was not set aside for small businesses, and the data indicates no explicit subcontracting requirements for small businesses were mandated. The award to a large, established firm like Ernst & Young LLP suggests that the primary focus was on capability and experience rather than small business participation. This may limit opportunities for small businesses to engage in providing these specific accounting and audit services to the Department of Justice through this particular contract vehicle.

Oversight & Accountability

Oversight for this contract will likely be managed by the contracting officers and program managers within the Department of Justice's Offices, Boards and Divisions. Accountability measures are typically embedded in the contract terms, including performance standards, reporting requirements, and payment schedules tied to deliverables. Transparency is facilitated through contract award databases and public reporting, though detailed performance metrics may not always be publicly disclosed. Inspector General jurisdiction would apply if any issues of fraud, waste, or abuse arise.

Related Government Programs

Department of Justice Financial Management Services
Federal Audit and Accounting Services
Professional Services Contracts
Government Financial Oversight Contracts

Risk Flags

Potential for vendor lock-in due to specialized nature of services.
Performance risk if contractor fails to meet stringent financial oversight requirements.
Cybersecurity risk associated with handling sensitive financial data.

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $35.0 million to ERNST & YOUNG LLP. ACCOUNTING, AUDIT AND PROGRAM OPS FOR AFMS

Who is the contractor on this award?

The obligated recipient is ERNST & YOUNG LLP.

Which agency awarded this contract?

Awarding agency: Department of Justice (Offices, Boards and Divisions).

What is the total obligated amount?

The obligated amount is $35.0 million.

What is the period of performance?

Start: 2021-10-01. End: 2026-09-30.

What is the track record of Ernst & Young LLP in performing similar federal accounting and audit contracts?

Ernst & Young LLP (EY) has a substantial track record of performing complex accounting, audit, and financial advisory services for various federal agencies. They are a major player in the government contracting space, often securing large-scale contracts due to their extensive resources, expertise, and established reputation. Historically, EY has been involved in significant financial management modernization efforts, audit support, and compliance initiatives across departments such as the Department of Defense, Treasury, and Health and Human Services. Their experience typically includes navigating intricate federal regulations, implementing financial systems, and providing assurance services. While specific contract performance details are often proprietary, their continued success in winning competitive bids for critical services indicates a generally positive performance history and capability to meet federal requirements.

How does the awarded value compare to similar government contracts for accounting and audit services?

The awarded value of approximately $35 million over five years for accounting and audit services to the Department of Justice is substantial, reflecting the critical nature and scale of financial operations within a large federal agency. Benchmarking this against similar contracts requires comparing it to awards for professional services, particularly accounting, auditing, and financial management support, issued to large contracting firms by agencies of comparable size and complexity. Contracts for these services can range widely, but for comprehensive support to a major department, a value in the tens of millions is not uncommon. Given that this contract was awarded under full and open competition with multiple bidders, the price achieved is likely reflective of market rates for such specialized expertise and extensive support. Without access to specific cost breakdowns or a detailed scope of work comparison, a precise value-for-money assessment relative to all other contracts is difficult, but the competitive award process suggests a reasonable market outcome.

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

Primary risks associated with this contract include potential over-reliance on a single large contractor, performance deficiencies impacting critical financial operations, and cybersecurity vulnerabilities if sensitive financial data is mishandled. Mitigation strategies typically involve robust contract oversight by the Department of Justice, including performance monitoring, regular reporting requirements, and clearly defined service level agreements. EY, as an established firm, likely has internal risk management protocols and cybersecurity measures in place. The contract terms themselves would include clauses addressing performance standards, data security, and remedies for non-compliance. Furthermore, the initial competitive award process helps mitigate the risk of selecting an unqualified vendor. Ongoing communication and collaboration between the contractor and the agency are crucial for proactive risk identification and management.

How effective is the competition level in ensuring optimal value for taxpayers?

The 'full and open competition' with 10 bidders for this contract is a strong indicator that taxpayer value is likely being optimized. A competitive environment forces potential contractors to offer their best pricing and most compelling technical solutions to win the award. This process helps establish a market-based price, reducing the likelihood of overpayment compared to sole-source or limited competition scenarios. The presence of multiple bidders suggests that the market has sufficient capacity and interest in providing these specialized accounting and audit services to the Department of Justice. While the lowest price isn't always the best value, the competitive pressure ensures that price is a significant factor, alongside technical merit and past performance, in the selection process, ultimately benefiting taxpayers by driving efficiency and cost-effectiveness.

What is the historical spending pattern for accounting and audit services within the Department of Justice?

Historical spending patterns for accounting and audit services within the Department of Justice (DOJ) would typically show a consistent need for these functions due to the agency's size and complexity. Large federal agencies like the DOJ require significant resources for financial management, compliance, and internal/external audits. Spending in this category often fluctuates based on specific initiatives, system upgrades, or changes in regulatory requirements. While this specific $35 million contract represents a significant award, it should be viewed within the broader context of the DOJ's overall budget for professional and financial services. Analyzing past contracts for similar services, including their values, durations, and awarded contractors, would reveal trends in spending, the typical competitive landscape, and the evolution of service requirements over time. Such analysis is crucial for understanding the long-term financial commitment and resource allocation for these essential functions.

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

Offers Received: 10

Pricing Type: LABOR HOURS (Z)

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: $34,962,994

Exercised Options: $34,962,994

Current Obligation: $34,962,994

Actual Outlays: $28,577,107

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: 15JPSS21A00000068

IDV Type: BPA

Timeline