State Department's FY25 Financial Statement Audit contract awarded to Kearney & Company for over $5M
Contract Overview
Contract Amount: $5,027,976 ($5.0M)
Contractor: Kearney & Company, P.C.
Awarding Agency: Department of State
Start Date: 2025-05-11
End Date: 2026-05-19
Contract Duration: 373 days
Daily Burn Rate: $13.5K/day
Competition Type: FULL AND OPEN COMPETITION
Pricing Type: LABOR HOURS
Sector: Other
Official Description: BPA CALL DOS'S FY25 FINANCIAL STATEMENT AUDIT (FSA).
Place of Performance
Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22209
State: Virginia Government Spending
Plain-Language Summary
Department of State obligated $5.0 million to KEARNEY & COMPANY, P.C. for work described as: BPA CALL DOS'S FY25 FINANCIAL STATEMENT AUDIT (FSA). Key points: 1. Value for money assessed through competitive bidding process. 2. Competition dynamics indicate a robust market for audit services. 3. Risk indicators are low given the nature of financial auditing. 4. Performance context is set by the need for accurate financial reporting. 5. Sector positioning is within professional services, specifically accounting and auditing.
Value Assessment
Rating: good
The contract value of approximately $5.03 million for a financial statement audit is within a reasonable range for a federal agency of the State Department's size. Benchmarking against similar audits for large federal agencies suggests this pricing is competitive. The use of labor hours allows for flexibility, but requires careful monitoring to ensure efficiency and prevent cost overruns. The awarded amount of $1.35 million for the base period appears to be a good starting point for the total contract value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that multiple qualified bidders had the opportunity to submit proposals. The specific number of bidders is not provided, but the 'full and open' designation suggests a competitive environment. This level of competition is generally favorable for price discovery and ensures the government receives offers from a wide range of capable firms.
Taxpayer Impact: Taxpayers benefit from full and open competition as it drives down costs and ensures the government selects the most qualified and cost-effective provider for essential services like financial auditing.
Public Impact
The primary beneficiary is the Department of State, which will receive an independent audit of its FY25 financial statements. The service delivered is a critical component of federal financial accountability and transparency. The geographic impact is national, supporting the integrity of federal financial reporting. Workforce implications include employment for auditors at Kearney & Company, P.C.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for scope creep in audit activities if not tightly managed.
- Reliance on contractor expertise requires robust government oversight.
- Timeliness of audit completion is critical for financial reporting deadlines.
Positive Signals
- Award to an established firm with likely experience in federal audits.
- Full and open competition suggests a competitive pricing structure.
- Clear deliverable (financial statement audit) with defined objectives.
Sector Analysis
The federal government spends billions annually on professional services, including auditing and accounting. This contract falls within the professional services sector, specifically the accounting and auditing sub-sector (NAICS code 541211). The market for federal audit services is competitive, with several large firms holding multiple government contracts. This specific contract supports the government's need for independent verification of financial statements, a crucial element of fiscal responsibility.
Small Business Impact
The contract does not indicate any small business set-aside provisions. Given the nature and scale of a financial statement audit for a major federal agency, it is likely that larger, specialized firms are best positioned to compete. There is no explicit mention of subcontracting requirements for small businesses, suggesting that the primary focus is on the prime contractor's capabilities.
Oversight & Accountability
Oversight will likely be managed by the Department of State's Bureau of the Comptroller and Global Financial Services or a similar financial management office. Accountability measures are inherent in the audit process itself, with findings and opinions subject to review. Transparency is facilitated by the public nature of federal financial statements and audit reports, though specific contract details might be redacted. Inspector General jurisdiction would apply if any fraud, waste, or abuse were identified during the audit.
Related Government Programs
- Federal Financial Management
- Government Auditing
- Financial Statement Audits
- Professional Services Contracts
- Department of State Financial Operations
Risk Flags
- Potential for audit findings requiring significant corrective action.
- Risk of delays impacting financial reporting deadlines.
- Need for robust government oversight to manage scope and ensure quality.
Tags
professional-services, audit, financial-statement-audit, department-of-state, full-and-open-competition, kearney-and-company, labor-hours, fiscal-year-2025, virginia, accountant
Frequently Asked Questions
What is this federal contract paying for?
Department of State awarded $5.0 million to KEARNEY & COMPANY, P.C.. BPA CALL DOS'S FY25 FINANCIAL STATEMENT AUDIT (FSA).
Who is the contractor on this award?
The obligated recipient is KEARNEY & COMPANY, P.C..
Which agency awarded this contract?
Awarding agency: Department of State (Department of State).
What is the total obligated amount?
The obligated amount is $5.0 million.
What is the period of performance?
Start: 2025-05-11. End: 2026-05-19.
What is the track record of Kearney & Company, P.C. with federal audit contracts?
Kearney & Company, P.C. is a well-established public accounting firm that has significant experience performing audits for federal agencies. They are a frequent awardee of federal contracts, particularly for financial statement audits, single audits, and other assurance services. Their history includes work with various departments and agencies, demonstrating a capacity to handle complex government financial environments. This experience suggests they possess the necessary expertise and understanding of federal regulations and reporting requirements to successfully execute the State Department's FY25 audit.
How does the awarded amount compare to similar federal financial statement audits?
The awarded amount of approximately $5.03 million for the State Department's FY25 Financial Statement Audit is generally in line with the costs for similar large-scale federal audits. Audits for agencies with extensive global operations and complex financial structures, like the Department of State, typically require substantial resources and specialized expertise. Benchmarking against contracts for agencies such as the Department of Defense, Treasury, or Health and Human Services reveals that audit costs can range from several million to tens of millions of dollars, depending on agency size, complexity, and scope. The base period award of $1.35 million also appears reasonable for the initial phase of such an engagement.
What are the primary risks associated with this type of contract?
The primary risks associated with this financial statement audit contract include potential delays in audit completion, which could impact the timely release of the State Department's financial reports. Another risk is the possibility of audit findings that indicate material weaknesses or significant deficiencies in internal controls, requiring corrective action. Scope creep, where the audit extends beyond its initially defined parameters, is also a risk that needs careful management through clear communication and contract oversight. Finally, ensuring the independence and objectivity of the auditors is paramount to maintaining the integrity of the audit process.
How effective is the full and open competition process in ensuring value for this audit?
The full and open competition process is highly effective in ensuring value for this audit contract. By allowing any qualified firm to bid, it fosters a competitive environment that drives down prices and encourages innovation in service delivery. The government can select the offer that represents the best value, considering both cost and technical qualifications. This process minimizes the risk of overpayment and increases the likelihood of selecting a contractor with the most appropriate expertise and experience for the complex task of auditing the State Department's financial statements, ultimately benefiting taxpayers.
What is the historical spending trend for financial statement audits at the Department of State?
Historical spending data for financial statement audits at the Department of State would provide valuable context for assessing the current award. While specific figures for prior years are not detailed here, federal agencies typically engage in annual audits. Spending can fluctuate based on changes in accounting standards, agency complexity, audit scope, and the competitive landscape of audit firms. A review of past contract awards would reveal trends in pricing, contractor selection, and the overall investment in financial statement audits, allowing for a more robust comparison to the current $5.03 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) › MANAGEMENT SUPPORT SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Solicitation ID: 19AQMM20Q0130
Pricing Type: LABOR HOURS (Z)
Evaluated Preference: NONE
Contractor Details
Parent Company: E.F. Kearney, Limited
Address: 1701 DUKE ST STE 500, ALEXANDRIA, VA, 22314
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $5,808,574
Exercised Options: $5,808,574
Current Obligation: $5,027,976
Subaward Activity
Number of Subawards: 1
Total Subaward Amount: $108,295
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: 19AQMM20A0536
IDV Type: BPA
Timeline
Start Date: 2025-05-11
Current End Date: 2026-05-19
Potential End Date: 2026-05-19 00:00:00
Last Modified: 2026-04-07
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