VA awards $4.96M option exercise to Deloitte for IT services, extending contract through November 2026

Contract Overview

Contract Amount: $4,955,878 ($5.0M)

Contractor: Deloitte & Touche LLP

Awarding Agency: Department of Veterans Affairs

Start Date: 2023-09-19

End Date: 2026-11-30

Contract Duration: 1,168 days

Daily Burn Rate: $4.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: EXERCISE OF OPTION PERIOD 2

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20420

State: District of Columbia Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $5.0 million to DELOITTE & TOUCHE LLP for work described as: EXERCISE OF OPTION PERIOD 2 Key points: 1. Contract value represents a moderate increase for this option period, suggesting continued need for services. 2. The firm fixed-price contract type offers cost certainty for the government. 3. A single award for this option period indicates a potentially limited competitive landscape for subsequent phases. 4. The contract duration of nearly 4 years for this option period suggests a long-term engagement. 5. The North American Industry Classification System (NAICS) code 541519 points to a broad range of IT services. 6. The contract is managed by the Department of Veterans Affairs (VA) with services delivered in Washington D.C.

Value Assessment

Rating: good

The awarded amount of $4.96 million for this option period appears reasonable given the nearly four-year duration. Benchmarking against similar IT services contracts awarded by the VA or other federal agencies for comparable scope and duration would provide a more precise value-for-money assessment. The firm fixed-price structure helps control costs, but the absence of multiple bids in this option exercise warrants further scrutiny regarding potential price escalations in the future.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was initially awarded under full and open competition, indicating a broad solicitation for bids. However, the data provided pertains to an option exercise, and the number of bidders for this specific option period is not explicitly stated. The initial competition likely resulted in a competitive price, but the dynamics of subsequent option periods, especially if awarded to the incumbent, can sometimes lead to reduced price discovery.

Taxpayer Impact: The initial full and open competition likely secured a competitive price for taxpayers. However, the specific competition level for this option exercise needs to be confirmed to ensure continued taxpayer value.

Public Impact

Veterans Affairs beneficiaries are expected to benefit from improved IT infrastructure and services. The contract supports the delivery of 'Other Computer Related Services' essential for VA operations. Services are geographically concentrated in Washington D.C., impacting the local IT workforce. The contract ensures the continuity of IT support for critical VA functions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for reduced competition in future option periods if not re-competed.
Reliance on a single contractor for an extended period could limit innovation.
The broad NAICS code may obscure the specific nature and cost-effectiveness of services.

Positive Signals

Firm fixed-price contract provides cost predictability.
Initial award was under full and open competition, suggesting a competitive baseline.
Contract duration indicates a stable and ongoing need for these IT services.

Sector Analysis

The IT services sector is a significant area of federal spending, with agencies like the VA heavily reliant on technology to deliver services. This contract falls under the 'Other Computer Related Services' category, which can encompass a wide array of support, maintenance, and consulting. Benchmarking this contract's value against similar IT support contracts within the federal government, particularly those managed by large health-focused agencies, would be informative.

Small Business Impact

The provided data indicates that small business participation (ss and sb fields) is false for this contract. This suggests that the contract was not set aside for small businesses, nor does it appear to have explicit subcontracting requirements for small businesses based on the limited data. Further analysis would be needed to determine if any small business subcontracting opportunities were part of the original solicitation or are being pursued by the prime contractor.

Oversight & Accountability

The Department of Veterans Affairs is responsible for overseeing this contract. Standard government oversight mechanisms, including contract performance reviews, financial audits, and potentially Inspector General investigations, would apply. Transparency is generally facilitated through contract databases like FPDS, though detailed performance metrics and specific oversight activities are not always publicly disclosed.

Related Government Programs

VA IT Modernization
Federal Civilian IT Services
IT Professional Services
Computer Systems Design Services

Risk Flags

Potential for reduced competition in future option periods.
Broad NAICS code may obscure specific service risks and costs.
Lack of explicit small business subcontracting data.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $5.0 million to DELOITTE & TOUCHE LLP. EXERCISE OF OPTION PERIOD 2

Who is the contractor on this award?

The obligated recipient is DELOITTE & TOUCHE LLP.

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $5.0 million.

What is the period of performance?

Start: 2023-09-19. End: 2026-11-30.

What is Deloitte & Touche LLP's track record with the Department of Veterans Affairs for IT services?

Deloitte & Touche LLP has a significant history of contracting with the Department of Veterans Affairs, particularly in areas related to IT and professional services. Their involvement often spans large-scale system implementations, consulting, and ongoing support. Analyzing past performance reviews, any documented issues or successes, and the overall value delivered on previous VA contracts would provide a comprehensive understanding of their reliability and effectiveness. This specific contract, representing an option exercise, suggests a continuation of an existing relationship, implying a level of satisfaction with their prior performance, though a deeper dive into specific metrics would be beneficial.

How does the per-unit cost of these 'Other Computer Related Services' compare to market rates or similar federal contracts?

The provided data does not include specific per-unit cost breakdowns for the 'Other Computer Related Services' rendered under this contract. The total contract value of $4.96 million over approximately 3.7 years (from September 2023 to November 2026) offers a high-level view, but without details on the types of services (e.g., hours of consulting, specific software support, system maintenance) and their associated rates, a direct per-unit cost comparison is not feasible. Benchmarking would require access to more granular data on the services delivered and their pricing, as well as comparative data from other federal contracts or commercial market rates for similar IT support functions.

What are the key performance indicators (KPIs) used to measure the success of this contract, and how has Deloitte performed against them?

The specific Key Performance Indicators (KPIs) for this contract are not detailed in the provided data. Typically, IT service contracts include metrics related to system uptime, response times for support requests, project completion rates, adherence to security protocols, and user satisfaction. The Department of Veterans Affairs would have established these KPIs in the contract's Statement of Work. Assessing Deloitte's performance would involve reviewing official performance reports, any contractor performance assessment reports (CPARs), and internal VA evaluations to determine if they have consistently met or exceeded these performance standards throughout the contract's lifecycle.

What is the historical spending pattern for 'Other Computer Related Services' by the Department of Veterans Affairs over the last five years?

Historical spending by the Department of Veterans Affairs (VA) on 'Other Computer Related Services' (NAICS 541519) has been substantial, reflecting the agency's significant reliance on IT infrastructure to manage healthcare, benefits, and administrative functions. While precise figures fluctuate annually based on agency priorities and budget allocations, the VA consistently ranks among the top federal agencies for IT procurement. Analyzing spending trends within this NAICS code would reveal whether this $4.96 million option exercise represents a typical investment, an increase, or a decrease compared to previous years, providing context for the current award's significance and the overall trajectory of VA's IT service expenditures.

Are there any identified risks associated with extending this contract with Deloitte & Touche LLP, such as vendor lock-in or performance degradation?

Potential risks associated with extending this contract include vendor lock-in, where the government becomes overly reliant on a single provider, potentially limiting future flexibility and competitive options. Performance degradation is another risk, although the option exercise suggests satisfactory performance to date. Other risks could involve the contractor's ability to adapt to evolving technological landscapes or potential cost increases in future periods if not managed carefully. The broad nature of the NAICS code might also obscure specific service risks. Mitigation strategies would involve continuous performance monitoring, clear contract management, and planning for future competition.

Industry Classification

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

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: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Deloitte Consulting LLP

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: $14,836,943

Exercised Options: $6,235,117

Current Obligation: $4,955,878

Actual Outlays: $1,157,161

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $1,197,168

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: GS00F029DA

IDV Type: FSS

Timeline