Ginnie Mae's $121.8M cloud migration contract awarded to Deloitte Consulting LLP

Contract Overview

Contract Amount: $121,868,141 ($121.9M)

Contractor: Deloitte Consulting LLP

Awarding Agency: General Services Administration

Start Date: 2020-09-14

End Date: 2026-09-13

Contract Duration: 2,190 days

Daily Burn Rate: $55.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: GINNE MAE IT INTEGRATED CLOUD DEDICATED CLOUD MIGRATION

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22209

State: Virginia Government Spending

Plain-Language Summary

General Services Administration obligated $121.9 million to DELOITTE CONSULTING LLP for work described as: GINNE MAE IT INTEGRATED CLOUD DEDICATED CLOUD MIGRATION Key points: 1. The contract aims to migrate Ginnie Mae's IT infrastructure to a dedicated cloud environment, a critical step for modernization. 2. Deloitte Consulting LLP, a major player in IT services, secured this significant award. 3. The contract duration of 2190 days (6 years) suggests a long-term strategic investment in cloud capabilities. 4. The use of Time and Materials pricing may introduce cost variability, requiring close monitoring. 5. The award falls under Computer Systems Design Services, a broad category encompassing significant IT transformation efforts. 6. The contract's value places it among substantial IT modernization initiatives within the federal government.

Value Assessment

Rating: good

The contract value of $121.8 million over six years for a dedicated cloud migration is substantial but appears aligned with the scope of such a complex IT undertaking. Benchmarking against similar large-scale cloud migration projects for federal agencies suggests this pricing is within a reasonable range, considering the specialized services and long-term commitment required. The Time and Materials (T&M) pricing structure, while offering flexibility, necessitates robust oversight to ensure cost efficiency and prevent scope creep. Without specific per-unit cost data for cloud services or labor rates, a precise value-for-money assessment is challenging, but the overall investment reflects a strategic move towards modernizing critical IT infrastructure.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of 3 bidders suggests a competitive environment, which is generally favorable for price discovery and innovation. A competitive process helps ensure that the government receives proposals that are both technically sound and cost-effective. The fact that Deloitte Consulting LLP was selected implies they offered the best value proposition among the competing firms, meeting the government's requirements effectively.

Taxpayer Impact: Full and open competition typically leads to better pricing for taxpayers by fostering a competitive environment where vendors strive to offer their best terms and pricing to win the contract.

Public Impact

Ginnie Mae benefits from a modernized, secure, and scalable IT infrastructure, enhancing its operational efficiency and service delivery. The contract supports the delivery of critical financial services related to mortgage-backed securities, impacting the housing market. The geographic impact is primarily within Ginnie Mae's operational centers, but the improved services indirectly benefit homeowners and the broader economy. The contract likely involves a workforce of skilled IT professionals, including cloud architects, engineers, and cybersecurity specialists, potentially creating or sustaining high-value jobs.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The Time and Materials (T&M) pricing model can lead to cost overruns if not managed diligently, as it allows for payment based on actual hours worked and materials used.
The long duration of the contract (6 years) may present challenges in adapting to rapidly evolving cloud technologies and security best practices.
Reliance on a single vendor for a critical IT migration could create vendor lock-in and limit future flexibility.
The complexity of migrating large-scale IT systems carries inherent risks of disruption to ongoing operations if not executed flawlessly.

Positive Signals

The award to Deloitte Consulting LLP, a reputable firm with extensive experience in cloud solutions, suggests a high likelihood of successful execution.
The use of full and open competition indicates a robust selection process, likely resulting in a technically superior solution.
The strategic focus on cloud migration aligns with modern IT best practices, promising enhanced scalability, security, and cost-efficiency in the long run.
The contract's clear objectives for dedicated cloud migration provide a focused scope for the vendor's efforts.

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on cloud computing services and IT system design. The federal IT market is vast, with agencies increasingly prioritizing cloud adoption for its scalability, flexibility, and potential cost savings. Comparable spending benchmarks for large-scale cloud migration projects often range from tens to hundreds of millions of dollars, depending on the agency's size, complexity of systems, and the scope of the migration. This contract's value is consistent with significant IT modernization efforts aimed at improving infrastructure and service delivery.

Small Business Impact

This contract was not set aside for small businesses and does not appear to involve significant subcontracting opportunities for small businesses based on the provided data. The primary awardee, Deloitte Consulting LLP, is a large prime contractor. While large federal contracts often have subcontracting plans, the absence of explicit small business set-aside indicators suggests that the focus is on leveraging the capabilities of large, established IT service providers for this complex migration. This may limit direct opportunities for small businesses to participate in this specific contract, though they may be involved in other aspects of Ginnie Mae's IT ecosystem.

Oversight & Accountability

Oversight for this contract is likely managed by the General Services Administration (GSA) Federal Acquisition Service, which awarded the contract, and Ginnie Mae's internal IT and contracting offices. Accountability measures would include performance metrics, regular reporting requirements, and adherence to the contract's terms and conditions. Transparency is facilitated through federal procurement databases like FPDS-NG, where contract awards are publicly reported. The Inspector General's office for the Department of Housing and Urban Development (HUD), which oversees Ginnie Mae, may also have jurisdiction for audits and investigations related to this contract.

Related Government Programs

Ginnie Mae Mortgage-Backed Securities Programs
Federal Cloud Computing Strategy
IT Modernization Initiatives
Computer Systems Design Services Contracts
General Services Administration IT Schedule Contracts

Risk Flags

Potential for cost overruns due to Time and Materials pricing.
Risk of vendor lock-in with a long-term, single-vendor contract.
Complexity of migration could lead to operational disruptions if not managed carefully.
Need for continuous monitoring of evolving cloud technologies and security threats.

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $121.9 million to DELOITTE CONSULTING LLP. GINNE MAE IT INTEGRATED CLOUD DEDICATED CLOUD MIGRATION

Who is the contractor on this award?

The obligated recipient is DELOITTE CONSULTING LLP.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $121.9 million.

What is the period of performance?

Start: 2020-09-14. End: 2026-09-13.

What is Deloitte Consulting LLP's track record with large-scale federal IT cloud migration projects?

Deloitte Consulting LLP has a significant and well-established track record in providing IT consulting and cloud services to federal agencies. They are a major player in the federal IT landscape, frequently awarded large contracts for system modernization, cloud adoption, and digital transformation. Their experience spans various agencies, including defense, civilian, and intelligence communities. Specific to cloud migrations, Deloitte has been involved in helping agencies move from on-premises data centers to various cloud environments (public, private, hybrid) on platforms like AWS, Azure, and Google Cloud. Their expertise typically covers strategy development, architecture design, migration execution, and ongoing cloud management. While specific project details and outcomes are often proprietary, their consistent presence and the scale of contracts they win suggest a strong capability in handling complex federal IT challenges, including large-scale cloud migrations.

How does the $121.8 million contract value compare to similar federal cloud migration efforts?

The $121.8 million contract value for Ginnie Mae's dedicated cloud migration over six years is substantial and aligns with the typical investment required for large-scale IT modernization projects within the federal government. Cloud migration projects are complex undertakings that involve significant planning, execution, and ongoing management. Comparable federal contracts for similar services, especially those involving the migration of critical infrastructure and applications for agencies of Ginnie Mae's operational scope, often fall within a similar range, sometimes exceeding this amount for larger agencies or more complex environments. Factors influencing cost include the volume of data, the number of applications to be migrated, the required security protocols, and the level of customization needed. This contract's value appears to be in line with industry benchmarks for such strategic IT transformations.

What are the primary risks associated with this Time and Materials (T&M) contract structure for cloud migration?

The primary risk associated with a Time and Materials (T&M) contract structure for a cloud migration project like this is the potential for cost overruns. Unlike fixed-price contracts, T&M contracts reimburse the contractor for the actual labor hours expended and materials used. If the project scope expands unexpectedly (scope creep), if the migration proves more complex than initially assessed, or if the contractor's efficiency is lower than anticipated, the total cost can escalate significantly beyond initial estimates. This necessitates rigorous oversight, detailed tracking of hours and resources, and strong project management from the government's side to ensure that the work performed is necessary, efficient, and aligned with the project's objectives. Without such controls, T&M contracts can become less cost-effective than fixed-price alternatives.

How does this contract contribute to Ginnie Mae's overall program effectiveness?

This contract is crucial for enhancing Ginnie Mae's overall program effectiveness by modernizing its core IT infrastructure. Migrating to a dedicated cloud environment is expected to provide greater scalability, allowing Ginnie Mae to handle fluctuating workloads more efficiently and adapt to future demands. Enhanced security features inherent in modern cloud platforms can better protect sensitive financial data. Improved system reliability and performance will support the continuous delivery of Ginnie Mae's mission-critical services, such as the guarantee of mortgage-backed securities, which underpins the U.S. housing market. Ultimately, a more robust and agile IT infrastructure enables Ginnie Mae to operate more efficiently, reduce operational risks, and better serve its stakeholders.

What are the historical spending patterns for Ginnie Mae's IT modernization efforts?

Historical spending patterns for Ginnie Mae's IT modernization efforts, while not detailed in the provided data, can be inferred to be significant given the agency's critical role in the U.S. housing finance system. Agencies like Ginnie Mae typically invest heavily in IT to maintain and upgrade systems that support complex financial operations, regulatory compliance, and data security. Prior to this large cloud migration contract, spending likely focused on maintaining existing data centers, upgrading hardware and software, and implementing incremental improvements. The shift to a dedicated cloud migration contract signifies a strategic pivot towards a more modern, scalable, and potentially cost-effective IT architecture, suggesting a substantial increase in investment dedicated to long-term infrastructure transformation compared to previous, more incremental modernization approaches.

What are the implications of a 'dedicated cloud' versus a 'shared cloud' environment for Ginnie Mae?

The choice of a 'dedicated cloud' environment for Ginnie Mae implies a higher level of control, security, and potentially performance compared to a shared cloud environment. In a dedicated cloud, the infrastructure resources are exclusively used by Ginnie Mae, offering greater isolation from other tenants and reducing the 'noisy neighbor' effect that can impact performance in shared environments. This is particularly important for an agency handling sensitive financial data and critical government functions. While potentially more costly than a shared public cloud, a dedicated environment allows for greater customization of hardware and software configurations to meet specific security and operational requirements, offering a more tailored and secure solution for Ginnie Mae's unique needs. This approach prioritizes security and performance for mission-critical operations.

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 › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 3

Pricing Type: TIME AND MATERIALS (Y)

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: $205,591,009

Exercised Options: $125,108,661

Current Obligation: $121,868,141

Actual Outlays: $-10,047

Subaward Activity

Number of Subawards: 16

Total Subaward Amount: $17,776,207

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: GS35F0617Y

IDV Type: FSS

Timeline