DOJ's $3.28M A-123 Implementation Contract Awarded to Ernst & Young LLP

Contract Overview

Contract Amount: $3,279,112 ($3.3M)

Contractor: Ernst & Young LLP

Awarding Agency: Department of Justice

Start Date: 2024-10-01

End Date: 2026-06-30

Contract Duration: 637 days

Daily Burn Rate: $5.1K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: TIME AND MATERIALS

Sector: Other

Official Description: FY25 JPRS A-123 IMPLEMENTATION

Place of Performance

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

State: New York Government Spending

Plain-Language Summary

Department of Justice obligated $3.3 million to ERNST & YOUNG LLP for work described as: FY25 JPRS A-123 IMPLEMENTATION Key points: 1. Value for money assessed through comparison with similar professional services contracts. 2. Competition dynamics indicate a full and open process, potentially driving competitive pricing. 3. Risk indicators are moderate, given the nature of implementation services. 4. Performance context relies on Ernst & Young's established track record in similar engagements. 5. Sector positioning places this contract within the professional services supporting government operations.

Value Assessment

Rating: good

The contract value of $3.28 million for A-123 implementation appears reasonable when benchmarked against similar professional services contracts for system implementation and consulting. Ernst & Young LLP is a reputable firm with extensive experience in this domain. The time and materials pricing structure allows for flexibility but requires diligent oversight to ensure cost efficiency. Without specific performance metrics or detailed cost breakdowns, a definitive value assessment is challenging, but the initial indications suggest fair pricing for the scope of work.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple qualified bidders had the opportunity to submit proposals. The specific number of bidders is not provided, but a full and open process generally fosters a competitive environment, which is beneficial for price discovery and innovation. This approach allows the agency to select the best value offer based on a range of factors, including technical approach, past performance, and price.

Taxpayer Impact: A full and open competition ensures that taxpayer dollars are used efficiently by leveraging market forces to obtain the best possible services at competitive prices. It reduces the risk of overpayment and promotes a level playing field for contractors.

Public Impact

The Department of Justice benefits from improved compliance and financial management processes. Services delivered include the implementation of A-123 requirements, enhancing internal controls. Geographic impact is primarily within the Department of Justice's New York operations. Workforce implications may involve training and adaptation to new systems and processes for DOJ personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep in time and materials contracts if not managed closely.
Reliance on contractor expertise may limit internal knowledge transfer if not actively managed.
Ensuring consistent quality across all deliverables requires robust oversight.

Positive Signals

Award to a well-established firm with a strong track record in government contracting.
Full and open competition suggests a robust selection process.
Clear contract start and end dates provide defined project timelines.

Sector Analysis

The professional services sector supporting government operations is vast, encompassing consulting, IT, and specialized advisory services. Contracts like this, focused on compliance and implementation (e.g., Federal Managers' Financial Integrity Act - FMFIA, which A-123 relates to), are common across federal agencies. Benchmarks for similar implementation projects can vary widely based on complexity, duration, and the specific systems involved, but typically range from hundreds of thousands to several million dollars for significant undertakings.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, nor does it explicitly mention subcontracting goals for small businesses. Therefore, the direct impact on the small business ecosystem appears minimal unless Ernst & Young LLP voluntarily includes small businesses in their subcontracting plan. Further investigation into subcontracting provisions would be needed to fully assess the impact.

Oversight & Accountability

Oversight will likely be managed by the contracting officer and program managers within the Department of Justice's Offices, Boards and Divisions. Accountability measures will be tied to contract deliverables and performance milestones. Transparency is generally maintained through contract award databases, though detailed internal performance reviews are typically not public. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Federal Managers' Financial Integrity Act (FMFIA) Compliance
Internal Controls and Auditing Services
Government Financial Management Systems Implementation
Professional Services Contracts
Department of Justice Financial Operations

Risk Flags

Potential for cost overruns in Time and Materials contract.
Need for robust government oversight to ensure efficient service delivery.
Risk of insufficient knowledge transfer to government personnel.

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $3.3 million to ERNST & YOUNG LLP. FY25 JPRS A-123 IMPLEMENTATION

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 $3.3 million.

What is the period of performance?

Start: 2024-10-01. End: 2026-06-30.

What is Ernst & Young LLP's track record with similar federal contracts, particularly those involving A-123 implementation or financial system modernization?

Ernst & Young LLP (EY) has a significant track record with federal agencies, including the Department of Justice, in providing a wide range of professional services. This includes expertise in financial management, internal controls, risk advisory, and system implementation. While specific contracts for 'A-123 implementation' may vary in naming conventions, EY has consistently been awarded contracts related to compliance with federal financial regulations, such as FMFIA, CFO Act, and Sarbanes-Oxley. Their experience often involves assessing control deficiencies, recommending improvements, and assisting in the implementation of remediation plans. Benchmarking their past performance on similar-sized contracts can provide insights into their ability to deliver within scope, budget, and schedule. Publicly available data often highlights their role in large-scale financial system upgrades and compliance audits across various departments and agencies.

How does the $3.28 million contract value compare to similar A-123 implementation projects across the federal government?

The $3.28 million contract value for A-123 implementation, awarded to Ernst & Young LLP, falls within a moderate range for such projects. The Federal Managers' Financial Integrity Act (FMFIA) requires agencies to establish and maintain internal controls. Implementation projects can range significantly in cost depending on the agency's size, complexity of its financial systems, the extent of identified deficiencies, and the scope of remediation required. Smaller, targeted assessments or specific system enhancements might cost less than $1 million, while comprehensive overhauls or agency-wide implementations can easily exceed $5 million or $10 million. Given this contract is for 'implementation' and has a duration of approximately 21 months (Oct 2024 - Jun 2026), the value appears reasonable, especially considering the expertise required from a firm like EY. Comparisons with similar contracts awarded to other 'Big Four' accounting firms (Deloitte, PwC, KPMG) or specialized consulting firms for FMFIA compliance and financial system improvements would provide a more precise benchmark.

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

Time and Materials (T&M) contracts, like this one for A-123 implementation, carry inherent risks, primarily related to cost control and potential for scope creep. The main risk is that costs could escalate beyond the initial estimate if the contractor's hours or material usage are not efficiently managed or if the project scope expands without adequate controls. This can lead to overspending taxpayer funds. Mitigation strategies typically involve robust government oversight, including detailed review of timesheets and invoices, regular progress meetings to monitor work performed against objectives, and clearly defined task orders or statements of work. The contracting officer and project managers must actively manage the contract, ensuring that the work performed is necessary, efficient, and aligned with the contract's goals. Setting not-to-exceed (NTE) limits within task orders and requiring contractor justification for extended efforts are also common mitigation tactics.

What is the expected impact of this contract on the Department of Justice's internal control environment and financial reporting accuracy?

The successful implementation of A-123 requirements under this contract is expected to significantly enhance the Department of Justice's (DOJ) internal control environment and, consequently, improve the accuracy of its financial reporting. A-123 mandates that agencies establish and maintain systems and controls to provide reasonable assurance regarding the achievement of objectives in operational efficiency and effectiveness, reliable financial reporting, and compliance with applicable laws and regulations. By engaging Ernst & Young LLP for implementation, the DOJ aims to strengthen its control framework, identify and remediate control deficiencies, and ensure compliance with federal financial management standards. This should lead to more reliable financial data, reduced risk of fraud or mismanagement, and greater accountability in the use of public funds.

How does the 'Offices of Certified Public Accountants' NAICS code (541211) relate to the A-123 implementation services being procured?

The North American Industry Classification System (NAICS) code 541211, 'Offices of Certified Public Accountants,' is relevant because A-123 implementation often involves assessing and improving internal financial controls, which falls squarely within the expertise of accounting and auditing professionals. While the contract might encompass broader management consulting or IT implementation aspects, the core requirement of ensuring reliable financial reporting and compliance with financial regulations necessitates accounting and auditing knowledge. Certified Public Accountants (CPAs) and firms employing them possess the specialized skills to evaluate control design and operating effectiveness, identify financial reporting risks, and recommend appropriate accounting and control procedures. Therefore, procuring these services under this NAICS code signifies that the government is seeking expertise directly related to financial integrity and accounting standards.

What is the historical spending pattern for A-123 related services within the Department of Justice or similar agencies?

Historical spending on A-123 related services, or more broadly on internal controls and financial management improvements, within the Department of Justice and similar large federal agencies tends to be consistent, reflecting the ongoing mandate for compliance with federal financial regulations. Agencies regularly allocate funds for assessments, remediation, system upgrades, and continuous monitoring related to internal controls. Spending can fluctuate year-to-year based on audit findings, new regulatory guidance, or major system modernization initiatives. Large agencies like DOJ might spend anywhere from several hundred thousand to several million dollars annually on such services, often through multiple contracts awarded via various procurement methods, including full and open competition, GSA schedules, or task orders against indefinite-delivery/indefinite-quantity (IDIQ) vehicles. Tracking specific A-123 spending requires detailed analysis of contract databases, looking for keywords related to internal controls, FMFIA, and financial system compliance.

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

Pricing Type: TIME AND MATERIALS (Y)

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: $3,279,112

Exercised Options: $3,279,112

Current Obligation: $3,279,112

Actual Outlays: $2,153,779

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: 15JPSS20A00000060

IDV Type: BPA

Timeline