Navy's $6.88M IT support contract awarded to Deloitte, raising questions about competition and value

Contract Overview

Contract Amount: $6,881,614 ($6.9M)

Contractor: Deloitte & Touche LLP

Awarding Agency: General Services Administration

Start Date: 2023-06-02

End Date: 2025-12-01

Contract Duration: 913 days

Daily Burn Rate: $7.5K/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: UNITED STATES NAVY AVIATION PRODUCT LIFECYCLE MANAGEMENT AVPLM AND PEOCS LOG IT COMFRC DIGITAL DEPOT SUPPORT SERVICES

Place of Performance

Location: PATUXENT RIVER, SAINT MARYS County, MARYLAND, 20670

State: Maryland Government Spending

Plain-Language Summary

General Services Administration obligated $6.9 million to DELOITTE & TOUCHE LLP for work described as: UNITED STATES NAVY AVIATION PRODUCT LIFECYCLE MANAGEMENT AVPLM AND PEOCS LOG IT COMFRC DIGITAL DEPOT SUPPORT SERVICES Key points: 1. Contract awarded on a sole-source basis, limiting competitive pressure and potentially impacting price. 2. Significant portion of contract value allocated to custom computer programming services. 3. Contract duration of 913 days suggests a need for sustained IT support. 4. Awarded by GSA to support the Navy's Aviation Product Lifecycle Management system. 5. Time and Materials contract type can lead to cost overruns if not closely managed. 6. No small business set-aside, indicating potential missed opportunities for smaller firms.

Value Assessment

Rating: fair

The contract's value of $6.88 million for IT support services appears moderate for a federal contract of this nature. However, without comparable sole-source contracts for similar custom computer programming and lifecycle management support, a definitive value-for-money assessment is challenging. The Time and Materials pricing structure introduces a risk of cost escalation, which warrants close monitoring to ensure fair pricing against market rates for skilled IT personnel.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed under the Simplified Acquisition Procedures (SAP) and was awarded on a sole-source basis. This means that only one vendor, Deloitte & Touche LLP, was solicited for this requirement. The lack of competition limits the government's ability to explore alternative solutions and potentially secure more favorable pricing through a competitive bidding process. This approach is typically used when a specific capability is required that only one vendor can provide.

Taxpayer Impact: Sole-source awards can result in higher costs for taxpayers as there is no competitive pressure to drive down prices. This limits the government's leverage in price negotiations.

Public Impact

The primary beneficiaries are the United States Navy's aviation programs, which will receive enhanced IT support. Services include custom computer programming and lifecycle management for critical aviation systems. The contract's geographic impact is primarily within Maryland, where the digital depot is located. The contract supports IT professionals, potentially including programmers, analysts, and support staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases costs for taxpayers.
Time and Materials contract type carries inherent risk of cost overruns if not managed diligently.
Lack of small business participation may limit opportunities for smaller, specialized IT firms.
Absence of clear performance metrics makes it difficult to assess the effectiveness of services delivered.

Positive Signals

Award to a large, established firm like Deloitte suggests access to significant resources and expertise.
Contract supports critical Navy aviation lifecycle management, indicating a vital operational need.
Longer contract duration (913 days) allows for continuity of essential IT services.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on custom computer programming services (NAICS 541511). The federal IT services market is substantial, with significant spending allocated to software development, system integration, and lifecycle management. This contract supports a niche but critical area within the defense industrial base, ensuring the operational readiness of naval aviation systems. Benchmarking this contract's value is difficult without more specific details on the scope of work and the specialized nature of the AVPLM and PEOCS systems.

Small Business Impact

The contract was not set aside for small businesses, and the awardee is a large business. This indicates that opportunities for small businesses to directly participate in this specific contract are limited. While Deloitte may engage small businesses as subcontractors, the primary award does not reflect a direct effort to boost small business prime contracting. This could represent a missed opportunity to foster innovation and competition within the small business IT ecosystem.

Oversight & Accountability

Oversight for this contract is likely managed by the General Services Administration (GSA) and the United States Navy program office. As a sole-source award, there may be less public scrutiny compared to a competitively bid contract. Transparency could be enhanced by making detailed performance reports and cost justifications publicly available. The specific Inspector General jurisdiction would depend on the Navy's internal oversight structures for IT procurements.

Related Government Programs

Navy Aviation Logistics IT Support
Defense IT Lifecycle Management Systems
GSA IT Schedule Contracts
Custom Software Development Services for DoD
Federal Aviation Systems IT Modernization

Risk Flags

Sole-source award
Time and Materials contract type
Lack of competition
No small business set-aside

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $6.9 million to DELOITTE & TOUCHE LLP. UNITED STATES NAVY AVIATION PRODUCT LIFECYCLE MANAGEMENT AVPLM AND PEOCS LOG IT COMFRC DIGITAL DEPOT SUPPORT SERVICES

Who is the contractor on this award?

The obligated recipient is DELOITTE & TOUCHE LLP.

Which agency awarded this contract?

Awarding agency: General Services Administration (Federal Acquisition Service).

What is the total obligated amount?

The obligated amount is $6.9 million.

What is the period of performance?

Start: 2023-06-02. End: 2025-12-01.

What is the specific justification for awarding this contract on a sole-source basis to Deloitte & Touche LLP?

The provided data indicates the contract was 'NOT COMPETED UNDER SAP' and awarded as a sole-source. A sole-source award typically occurs when a government agency determines that only one responsible source can provide the required supplies or services. Common justifications include unique capabilities, urgent needs where competition is not feasible, or when a specific technology or proprietary knowledge is required. For this contract, the justification would likely stem from the specialized nature of the Aviation Product Lifecycle Management (AVPLM) and PEOCS systems, suggesting that Deloitte possesses unique expertise or access required for their support and development. A formal justification document (e.g., a Justification for Other Than Full and Open Competition - JOFOC) would typically be required and should detail these specific reasons.

How does the Time and Materials (T&M) contract type compare to other contract types for IT services in terms of cost control?

Time and Materials (T&M) contracts are often used when the scope of work is not clearly defined or is expected to change. They reimburse the contractor for the actual cost of labor (at specified hourly rates) and materials, plus a fixed fee or percentage for overhead and profit. While T&M offers flexibility, it carries a higher risk of cost overruns for the government compared to fixed-price contracts, as the total cost is not predetermined. Effective cost control under T&M requires rigorous monitoring of labor hours, material usage, and adherence to pre-negotiated rates. Agencies often implement contract clauses like 'ceiling prices' or 'level of effort' requirements to mitigate these risks. For IT services, fixed-price or performance-based contracts are generally preferred when requirements are well-defined, as they incentivize efficiency and predictable spending.

What are the potential risks associated with a sole-source IT support contract for critical Navy systems?

Sole-source IT support contracts for critical systems like the Navy's AVPLM and PEOCS present several risks. Firstly, the lack of competition can lead to inflated pricing, as the contractor faces no pressure to offer the most cost-effective solution. Secondly, it can foster vendor lock-in, making it difficult and costly to switch providers in the future, even if performance declines or better alternatives emerge. Thirdly, without competitive benchmarking, it's harder to ensure the contractor is delivering optimal value and innovation. Finally, reliance on a single vendor can create vulnerabilities; if the contractor experiences financial instability, operational issues, or personnel turnover, the critical Navy systems could be severely impacted, potentially affecting national security readiness.

What is Deloitte & Touche LLP's track record with federal IT contracts, particularly for the Department of Defense?

Deloitte & Touche LLP is a major federal contractor with a significant history of providing a wide range of services, including IT consulting, systems integration, and professional services, to various government agencies, including the Department of Defense (DoD). They have held numerous large contracts across different branches of the military and civilian agencies. Their track record generally reflects extensive experience and capability in managing complex IT projects. However, like any large contractor, specific contract performance can vary. Evaluating their performance on this particular Navy contract would require examining past performance reviews, any reported issues or disputes, and their success in meeting milestones and deliverables on similar DoD IT initiatives.

How does the $6.88 million contract value compare to historical spending on similar Navy IT support services?

Comparing the $6.88 million contract value requires context regarding the specific services provided and the duration. This contract is for custom computer programming and lifecycle management support over approximately two years (June 2023 - December 2025). Federal IT spending is vast, and individual contract values can range dramatically. For specialized IT support of complex systems like aviation product lifecycle management, this value appears moderate. To provide a precise comparison, one would need to analyze historical spending data for similar IT support contracts within the Navy's aviation or logistics domains, considering factors like contract type, scope, and the number of years covered. Without access to detailed historical spending databases filtered by specific service codes and agencies, a direct benchmark is difficult.

Industry Classification

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

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

Competition & Pricing

Extent Competed: NOT COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: 47QFAA23Q0006

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

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: $6,881,614

Exercised Options: $6,881,614

Current Obligation: $6,881,614

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $264,456

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 47QFAA21A0002

IDV Type: BPA

Timeline