Treasury's $110M BEP MES Support Services contract awarded to Deloitte Consulting LLP

Contract Overview

Contract Amount: $110,147,901 ($110.1M)

Contractor: Deloitte Consulting LLP

Awarding Agency: Department of the Treasury

Start Date: 2021-05-21

End Date: 2026-05-20

Contract Duration: 1,825 days

Daily Burn Rate: $60.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: BEP MANUFACTURING EXECUTION SYSTEM(MES) SUPPORT SERVICES CYRBYME-NA

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20228

State: District of Columbia Government Spending

Plain-Language Summary

Department of the Treasury obligated $110.1 million to DELOITTE CONSULTING LLP for work described as: BEP MANUFACTURING EXECUTION SYSTEM(MES) SUPPORT SERVICES CYRBYME-NA Key points: 1. The contract value of $110M over 5 years suggests a significant investment in critical manufacturing execution systems. 2. Deloitte's extensive experience in IT consulting positions them well for this complex support role. 3. The firm-fixed-price contract type aims to control costs, but requires careful scope management. 4. The contract's duration of 1825 days indicates a long-term need for these specialized services. 5. The absence of small business set-asides warrants examination of subcontracting opportunities. 6. Performance metrics and service level agreements will be crucial for ensuring value delivery.

Value Assessment

Rating: good

The contract value of approximately $110 million over five years for MES support services appears reasonable given the critical nature of the Bureau of Engraving and Printing's operations. Benchmarking against similar large-scale IT support contracts for manufacturing systems suggests this pricing is within expected ranges. The firm-fixed-price structure, while potentially offering cost certainty, necessitates robust oversight to ensure the contractor delivers on all specified requirements without scope creep leading to cost overruns. The value proposition hinges on the successful implementation and ongoing maintenance of the MES, which directly impacts production efficiency and security.

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 vendors had the opportunity to bid. The specific number of bidders is not provided, but the 'full and open' designation suggests a competitive process was intended. This approach generally fosters price discovery and encourages vendors to offer their best terms and pricing to secure the award. The Bureau of Engraving and Printing likely sought to leverage the competitive market to obtain optimal value for these essential IT support services.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it promotes a more competitive bidding environment, which can lead to lower prices and better service quality compared to sole-source or limited competition awards.

Public Impact

The Bureau of Engraving and Printing (BEP) benefits through enhanced operational efficiency and security of its manufacturing processes. The contract ensures the continued functionality and support of the Manufacturing Execution System (MES), critical for production. The primary geographic impact is within the District of Columbia, where the BEP facilities are located. Specialized IT and manufacturing systems expertise is maintained and potentially enhanced within the contractor's workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if knowledge transfer is insufficient.
Reliance on a single contractor for critical system support could pose risks if performance degrades.
The firm-fixed-price nature requires diligent monitoring to prevent cost overruns due to unforeseen technical challenges.

Positive Signals

Award to a well-established contractor like Deloitte suggests a high likelihood of technical competence.
Full and open competition indicates a robust market engagement process.
The long-term nature of the contract allows for deep system understanding and optimization.

Sector Analysis

The IT services sector, particularly within government contracting, is highly competitive. This contract falls under computer systems design services, a segment focused on planning and designing computer systems that integrate hardware, software, and communication technologies. The market for such services is substantial, driven by agencies' needs for modernization, efficiency, and security. The BEP's requirement for MES support is a niche within this broader sector, demanding specialized expertise in manufacturing operations technology and IT integration. Comparable spending benchmarks for similar large-scale IT support contracts often range in the tens to hundreds of millions of dollars over several years.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the requirement was likely deemed too complex or specialized for small business capabilities, or that the competitive landscape favored large businesses. Consequently, there may be limited direct subcontracting opportunities for small businesses on this specific award. However, the prime contractor, Deloitte Consulting LLP, may engage small businesses for specific components or services as part of their overall project execution, though this is not guaranteed by the contract terms.

Oversight & Accountability

Oversight for this contract will primarily reside with the Bureau of Engraving and Printing's contracting officers and program managers. They are responsible for monitoring contractor performance, ensuring compliance with contract terms, and approving payments. The firm-fixed-price nature necessitates close attention to deliverables and milestones. While specific Inspector General (IG) jurisdiction is not detailed, the Treasury Inspector General for Tax Administration (TIGTA) or the Government Accountability Office (GAO) could potentially review this contract as part of broader audits of BEP operations or IT spending. Transparency is facilitated through contract award databases like FPDS.

Related Government Programs

Manufacturing Execution Systems (MES) Support
IT Systems Design and Integration
Bureau of Engraving and Printing Operations
Department of the Treasury IT Modernization

Risk Flags

Potential for vendor lock-in
Reliance on single contractor for critical system
Adequacy of small business subcontracting plan (if applicable)
Performance monitoring and service level adherence

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $110.1 million to DELOITTE CONSULTING LLP. BEP MANUFACTURING EXECUTION SYSTEM(MES) SUPPORT SERVICES CYRBYME-NA

Who is the contractor on this award?

The obligated recipient is DELOITTE CONSULTING LLP.

Which agency awarded this contract?

Awarding agency: Department of the Treasury (Bureau of Engraving and Printing).

What is the total obligated amount?

The obligated amount is $110.1 million.

What is the period of performance?

Start: 2021-05-21. End: 2026-05-20.

What is the specific nature of the 'BEP MANUFACTURING EXECUTION SYSTEM (MES) SUPPORT SERVICES' and why is it critical for the Bureau of Engraving and Printing?

The Manufacturing Execution System (MES) at the Bureau of Engraving and Printing (BEP) is a critical software system that monitors and controls the manufacturing processes involved in producing currency and other government securities. It acts as a bridge between the enterprise resource planning (ERP) systems and the shop floor control systems. Its criticality stems from its role in ensuring production efficiency, quality control, material tracking, traceability, and adherence to stringent security protocols required for currency production. Support services for this MES are vital to maintain operational continuity, prevent production disruptions, implement necessary upgrades, and ensure the system's integrity and security, which directly impacts the nation's financial infrastructure.

How does the firm-fixed-price (FFP) contract type influence risk and value for this MES support services contract?

The firm-fixed-price (FFP) contract type aims to provide cost certainty for the government by establishing a set price for the defined scope of work. For the BEP MES support services contract, this means Deloitte Consulting LLP assumes most of the risk associated with cost overruns. This structure incentivizes the contractor to manage costs efficiently. However, it also places a significant burden on the BEP to meticulously define the scope of work upfront. If the scope is poorly defined or if unforeseen technical challenges arise that are not adequately covered by the contract's contingencies, the government might not receive the full value if the contractor limits effort to the defined scope, or conversely, the contractor could incur losses if costs escalate beyond projections. Effective oversight is crucial to ensure the contractor delivers all required services within the agreed-upon price.

What is the typical cost range for similar MES support services contracts in the federal government, and how does this contract compare?

The cost range for MES support services contracts in the federal government can vary significantly based on the complexity of the manufacturing environment, the specific MES software used, the duration of the support, and the level of service required (e.g., 24/7 support, software updates, customization). For large-scale, mission-critical systems like those at the BEP, annual support costs can range from several hundred thousand dollars to millions of dollars. A $110 million contract over five years equates to an average annual cost of $22 million. This figure appears substantial but is likely commensurate with the critical nature of currency production, the sophistication of the MES, and the need for highly reliable support from a major contractor like Deloitte. Without specific details on the scope and service levels, a precise comparison is difficult, but it falls within the upper range for specialized government IT support contracts.

What are the potential performance risks associated with relying on Deloitte Consulting LLP for these critical MES support services?

Potential performance risks associated with relying on Deloitte Consulting LLP for critical MES support services include: 1) **Key Personnel Dependence:** Over-reliance on specific Deloitte experts could lead to disruptions if those individuals leave the company or are reassigned. 2) **Knowledge Transfer Gaps:** Insufficient knowledge transfer from Deloitte to BEP staff or a successor contractor could create long-term dependencies and increase future costs. 3) **Service Level Failures:** Despite contractual obligations, Deloitte might fail to meet agreed-upon service levels for system uptime, response times, or issue resolution, impacting BEP's production capabilities. 4) **Security Vulnerabilities:** Any lapse in security protocols by Deloitte personnel or during system updates could expose the MES to cyber threats. 5) **Scope Creep Management:** While FFP aims to control costs, inadequate management of change requests or scope expansion could lead to performance issues if not properly addressed.

How has the Bureau of Engraving and Printing historically spent on MES support services, and does this contract represent an increase or decrease?

Historical spending data for the BEP's MES support services specifically is not readily available in the provided data snippet. However, the award of an $110 million contract over five years suggests a significant and ongoing commitment to maintaining and supporting this critical system. To determine if this represents an increase or decrease, one would need to analyze prior contract awards for MES support at the BEP, potentially looking at predecessor contracts or related IT services spending over previous fiscal years. It is plausible that this contract consolidates previous efforts or reflects an increased investment due to system modernization, expanded functionality, or heightened security requirements. A detailed historical spending analysis would be necessary for a definitive comparison.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1919 N LYNN ST, ARLINGTON, VA, 22209

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

Financial Breakdown

Contract Ceiling: $116,505,304

Exercised Options: $110,147,901

Current Obligation: $110,147,901

Actual Outlays: $99,009,503

Subaward Activity

Number of Subawards: 6

Total Subaward Amount: $3,802,992

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: 47QTCK18D0029

IDV Type: GWAC

Timeline