Justice Department's $3.56M financial statement support contract awarded to Ernst & Young LLP

Contract Overview

Contract Amount: $3,562,755 ($3.6M)

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: $2.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 8

Pricing Type: LABOR HOURS

Sector: Other

Official Description: FINANCIAL STATEMENT PREPARATION SUPPORT FOR FSG

Place of Performance

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

State: New York Government Spending

Plain-Language Summary

Department of Justice obligated $3.6 million to ERNST & YOUNG LLP for work described as: FINANCIAL STATEMENT PREPARATION SUPPORT FOR FSG Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract duration of 5 years (1825 days) indicates a long-term need for these services. 3. The North American Industry Classification System (NAICS) code 541211 points to accounting services. 4. The contract is a BPA Call, a type of task order under a larger agreement. 5. The award was made to a single contractor, Ernst & Young LLP. 6. The contract is not set aside for small businesses. 7. The contract is labor hour based, meaning payment is for time spent. 8. The contract is for financial statement preparation support.

Value Assessment

Rating: fair

Benchmarking the value of this contract requires more detailed cost breakdowns and comparisons to similar financial statement preparation support contracts. Without specific performance metrics or a breakdown of labor hours and rates, it is difficult to definitively assess if the $3.56 million represents excellent value for money. However, given the nature of the services provided by a large, established firm like Ernst & Young, the pricing is likely within a reasonable range for complex government accounting support. Further analysis would involve comparing the loaded hourly rates to industry averages for similar roles and experience levels.

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 number of bidders is not specified in the provided data, but the 'full and open' designation suggests a robust competitive environment. This approach is generally expected to foster price discovery and encourage competitive pricing among potential offerors, potentially leading to better value for the government.

Taxpayer Impact: A competitive award process helps ensure that taxpayer dollars are used efficiently by driving down costs through market forces. It reduces the risk of overpayment and promotes a fair allocation of government contracts.

Public Impact

The Department of Justice benefits from expert financial statement preparation support, ensuring compliance and accuracy. This contract supports the accurate financial reporting of the department's operations. The services are delivered primarily within New York, as indicated by the state code 'NY'. The contract likely involves highly skilled accounting professionals, impacting the workforce in the accounting sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific performance metrics makes it difficult to assess the contractor's performance beyond basic delivery.
The labor hour pricing model can sometimes lead to cost overruns if not closely managed and monitored.
Reliance on a single large firm for critical financial functions may present a dependency risk.

Positive Signals

Award to Ernst & Young LLP, a reputable firm with extensive experience in accounting and auditing.
The contract was awarded through full and open competition, suggesting a competitive pricing environment.
The long contract duration (5 years) indicates a stable and ongoing need for these essential services.

Sector Analysis

The accounting services sector is a critical component of the professional services industry, supporting government and private entities in financial management and compliance. The market for government accounting support is substantial, with agencies requiring expertise in areas such as financial statement preparation, auditing, and forensic accounting. This contract fits within the broader landscape of professional services procurement, where agencies often leverage specialized firms to meet complex needs. Comparable spending benchmarks would typically involve analyzing the total government expenditure on accounting and auditing services across various agencies.

Small Business Impact

This contract was not set aside for small businesses, as indicated by the 'sb' field being false. Consequently, there are no direct subcontracting implications for small businesses stemming from a small business set-aside. The award to a large firm like Ernst & Young suggests that the primary focus was on securing specialized expertise rather than promoting small business participation through this specific procurement vehicle.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Justice's contracting officers and program managers responsible for financial operations. Accountability measures would be embedded in the contract terms, including performance standards and reporting requirements. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would likely apply if any allegations of fraud, waste, or abuse related to the contract arise.

Related Government Programs

Department of Justice Financial Management
Federal Financial Reporting
Government Accounting Services
Professional Services Contracts

Risk Flags

Potential for cost overruns due to labor hour pricing.
Contract performance risk if not adequately monitored.
Dependency on a single large contractor.

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $3.6 million to ERNST & YOUNG LLP. FINANCIAL STATEMENT PREPARATION SUPPORT FOR FSG

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 $3.6 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 financial statement preparation services for federal agencies?

Ernst & Young LLP (EY) is a major global professional services firm with a significant track record in providing audit, tax, consulting, and advisory services to both public and private sector clients, including numerous federal agencies. Their experience encompasses financial statement preparation, auditing, risk advisory, and regulatory compliance. While specific details of their past performance on similar contracts with the Department of Justice or other agencies are not provided in this data snippet, EY's established reputation and extensive resources suggest a strong capability to meet the requirements of this contract. Government contract databases often contain past performance evaluations, which would offer more granular insights into their specific successes and challenges on prior engagements.

How does the total contract value of $3.56 million compare to similar financial statement preparation contracts within the federal government?

Comparing the total contract value of $3.56 million requires context regarding the scope, duration, and specific services rendered. This contract spans five years, with an average annual value of approximately $712,000. To benchmark effectively, one would need to analyze contracts for similar financial statement preparation support services awarded by other federal agencies of comparable size and complexity. Factors such as the number of financial statements, the volume of transactions, the level of detail required, and the specific accounting standards to be applied significantly influence contract value. Without access to a broader dataset of comparable contracts, it's challenging to definitively state whether $3.56 million is high or low, but it appears to be a substantial investment for ongoing financial support.

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

Key risks associated with this contract include potential cost overruns due to the labor hour pricing model, contractor performance issues, and dependency on a single provider. Cost overruns can occur if labor hours are not efficiently utilized or if unforeseen complexities arise, increasing the total expenditure. Performance issues could lead to inaccuracies in financial statements or delays in reporting, impacting the Department of Justice's compliance. Dependency risk arises from relying heavily on one firm, which could create challenges if the firm faces internal issues or decides not to bid on future renewals. Mitigation strategies typically involve robust contract oversight, clear performance metrics, regular progress reviews, and potentially incorporating incentive clauses. The Department of Justice's contracting officers are responsible for actively managing these risks throughout the contract's lifecycle.

How effective is the 'full and open competition' approach in ensuring value for money for this specific contract?

The 'full and open competition' approach is generally considered the most effective method for ensuring value for money in federal contracting, as it maximizes the pool of potential bidders and encourages competitive pricing. For this contract, it suggests that multiple firms had the opportunity to compete for the Department of Justice's financial statement preparation support services. The effectiveness in practice depends on the number of bids received, the quality of the proposals submitted, and the evaluation criteria used. If a sufficient number of qualified bidders participated, and the evaluation process rigorously assessed both technical merit and price, then this approach likely contributed to achieving a fair market price. However, without knowing the number of bidders or the specific evaluation outcomes, the precise level of value achieved remains an assumption based on the process employed.

What are the historical spending patterns for financial statement preparation support at the Department of Justice?

Historical spending patterns for financial statement preparation support at the Department of Justice (DOJ) are not detailed in the provided data. To analyze this, one would need to access historical contract databases (like FPDS) and query for similar contracts awarded by the DOJ over previous fiscal years. Key metrics to examine would include the total amount spent annually on these services, the number of contracts awarded, the primary contractors utilized, and the average duration and value of such contracts. Understanding these patterns can reveal trends in agency needs, contractor reliance, and the evolution of costs for these essential financial services, providing context for the current $3.56 million award.

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: 8

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: $3,605,795

Exercised Options: $3,605,795

Current Obligation: $3,562,755

Actual Outlays: $2,923,767

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: 15JPSS21A00000068

IDV Type: BPA

Timeline