KPMG LLP awarded $29.5M for accounting services, representing a significant portion of the 'Other Accounting Services' category

Contract Overview

Contract Amount: $29,460,750 ($29.5M)

Contractor: Kpmg LLP

Awarding Agency: Department of Defense

Start Date: 2017-04-01

End Date: 2018-10-31

Contract Duration: 578 days

Daily Burn Rate: $51.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: IGF::OT::IGF ACCOUNTING AND FINANCIAL SERVICES

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20350

State: District of Columbia Government Spending

Plain-Language Summary

Department of Defense obligated $29.5 million to KPMG LLP for work described as: IGF::OT::IGF ACCOUNTING AND FINANCIAL SERVICES Key points: 1. The contract value of $29.5M for accounting services indicates a substantial investment in financial expertise. 2. KPMG LLP, a major player in professional services, secured this contract, highlighting established market presence. 3. The 'Other Accounting Services' NAICS code suggests a broad scope of financial support beyond standard auditing. 4. Awarded under a full and open competition, this contract implies a competitive bidding process. 5. The contract duration of 578 days points to a medium-term engagement for the services rendered. 6. The fixed fee structure suggests that costs were estimated upfront, with potential for adjustments. 7. The contract was awarded to a single vendor, indicating a focused selection process.

Value Assessment

Rating: good

The contract value of $29.5 million for accounting services appears reasonable given the scope and duration. Benchmarking against similar large-scale federal accounting contracts would provide a more precise value-for-money assessment. The fixed-fee pricing structure suggests a degree of cost certainty for the government, though the specific profit margin is not detailed. Without direct per-unit cost data, a definitive comparison is challenging, but the overall award size aligns with significant professional service engagements.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through a full and open competition, suggesting that multiple qualified vendors had the opportunity to bid. The specific number of bidders is not provided, but the designation implies a robust process designed to solicit the best value. A competitive process generally leads to more favorable pricing for the government by encouraging vendors to offer competitive rates to win the contract.

Taxpayer Impact: A full and open competition ensures that taxpayer dollars are used efficiently by fostering a marketplace where contractors vie for the business, potentially driving down costs and improving service quality.

Public Impact

The Department of the Navy benefits from specialized accounting and financial services, enhancing fiscal management. This contract supports critical financial operations within the Department of Defense. The services provided likely contribute to accurate financial reporting and compliance for the agency. The contract's impact on the workforce is primarily through the employment of accounting professionals by KPMG LLP.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific performance metrics makes it difficult to assess the effectiveness of the services provided.
The fixed-fee structure, while offering cost certainty, might limit flexibility if unforeseen complexities arise.
Limited transparency on the number of bidders in the full and open competition makes it hard to gauge the true competitive pressure.

Positive Signals

Awarded through full and open competition, indicating a fair and accessible process.
KPMG LLP is a reputable firm with extensive experience in government contracting.
The contract duration suggests a commitment to sustained support for essential financial functions.

Sector Analysis

The accounting services sector within the federal government is diverse, encompassing a wide range of financial support functions. This contract falls under the 'Other Accounting Services' NAICS code (541219), which typically includes services like forensic accounting, financial system analysis, and accounting system design. Spending in this sector is driven by the government's need for robust financial management, compliance, and auditing. Comparable spending benchmarks would involve analyzing other large contracts for similar professional accounting services awarded to major firms within the federal landscape.

Small Business Impact

This contract was awarded under full and open competition and does not indicate any specific small business set-aside. Therefore, its direct impact on small businesses is likely limited to potential subcontracting opportunities, which are not detailed in the provided data. The primary awardee, KPMG LLP, is a large business, suggesting that the bulk of the contract value will flow to them. Further analysis would be needed to determine if any small business subcontracting plans were mandated or achieved.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting officers and program managers. Accountability measures are embedded within the contract's terms and conditions, including performance standards and payment schedules. Transparency is facilitated through contract databases like FPDS, which record award details. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

Financial Management Services
Audit and Assurance Services
Accounting System Modernization
Federal Financial Reporting
Contract Audit Support

Risk Flags

Potential for cost overruns in CPFF contracts if not managed stringently.
Scope creep risk in professional services contracts.
Reliance on a single large contractor may limit future competition or flexibility.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $29.5 million to KPMG LLP. IGF::OT::IGF ACCOUNTING AND FINANCIAL SERVICES

Who is the contractor on this award?

The obligated recipient is KPMG LLP.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $29.5 million.

What is the period of performance?

Start: 2017-04-01. End: 2018-10-31.

What is KPMG LLP's track record with the Department of Defense and other federal agencies for similar accounting services?

KPMG LLP has a significant track record of providing professional services, including accounting and financial advisory, to the Department of Defense (DoD) and various other federal agencies. Their experience spans a wide range of support, from audit and assurance to financial management systems implementation and consulting. Historical data from sources like the Federal Procurement Data System (FPDS) would detail the number and value of contracts awarded to KPMG by the DoD and other entities, specifying the types of services rendered. This contract with the Department of the Navy for 'Other Accounting Services' aligns with their established capabilities. A review of past performance evaluations and any past issues or successes would provide a comprehensive understanding of their reliability and effectiveness in delivering similar services to the federal government.

How does the $29.5 million contract value compare to other federal contracts for 'Other Accounting Services' awarded in recent years?

The $29.5 million contract value for 'Other Accounting Services' awarded to KPMG LLP is a substantial figure, placing it among significant federal procurements in this category. To benchmark this value, one would compare it against the average and median contract values for NAICS code 541219 awarded by various federal agencies over the past 3-5 fiscal years. Data from the Federal Procurement Data System (FPDS) would be essential for this analysis. If this award is significantly higher or lower than the typical range for similar services and contract durations, it could indicate either exceptional service requirements, a highly competitive market driving down prices, or potentially an over/underestimation of costs. The specific scope of work and the duration (578 days) are critical factors in making a fair comparison.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for accounting services?

Cost Plus Fixed Fee (CPFF) contracts, while offering some cost certainty through the fixed fee, carry inherent risks. For the government, a primary risk is that the contractor may have less incentive to control costs once the contract is awarded, as the government agrees to cover all allowable costs. This can lead to cost overruns if not managed diligently. The contractor, on the other hand, bears the risk of underestimating costs, as the fee is fixed regardless of the actual effort expended. For accounting services, risks can include scope creep, where the services required expand beyond the initial agreement, potentially leading to disputes over allowable costs and the fixed fee. Effective oversight, clear definition of the Statement of Work (SOW), and robust cost accounting standards are crucial to mitigate these risks.

What is the typical duration for federal contracts categorized under 'Other Accounting Services' (NAICS 541219)?

The duration for federal contracts categorized under 'Other Accounting Services' (NAICS 541219) can vary significantly depending on the specific nature of the services required. Contracts can range from short-term, project-specific engagements lasting a few months to longer-term, comprehensive support agreements that may extend over several years, often including option periods. The 578-day duration (approximately 1.5 years) of this specific contract with KPMG LLP falls within a common range for medium-term professional services. Factors influencing duration include the complexity of the accounting issues, the need for ongoing financial system support, regulatory compliance requirements, and the agency's budgetary cycles. Analyzing historical data for this NAICS code can reveal typical contract lengths and identify any outliers.

How does the geographic location of contract performance (District of Columbia) influence the cost and execution of accounting services?

The geographic location of contract performance, in this case, the District of Columbia (DC), can influence the cost and execution of accounting services. DC is known for its high cost of living and doing business, which often translates to higher labor rates for skilled professionals, including accountants and financial analysts. Contractors performing work in DC may incur higher personnel costs compared to those in regions with lower living expenses. Furthermore, proximity to federal agencies headquartered in DC can facilitate communication, collaboration, and on-site support, potentially improving execution efficiency. However, it can also mean increased competition for talent. The specific impact on cost would depend on whether the services are performed on-site at government facilities or remotely by the contractor's staff based in the DC area.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Accounting, Tax Preparation, Bookkeeping, and Payroll Services › Other Accounting Services

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: N0018909RZ056

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Kpmg L.L.P.

Address: 1676 INTERNATIONAL DR STE 7000, MCLEAN, VA, 22102

Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $32,690,849

Exercised Options: $32,690,849

Current Obligation: $29,460,750

Subaward Activity

Number of Subawards: 9

Total Subaward Amount: $5,843,593

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0018910DZ028

IDV Type: IDC

Timeline