GSA awards $37M contract to Ernst & Young for financial management services, highlighting a competitive procurement

Contract Overview

Contract Amount: $37,072,892 ($37.1M)

Contractor: Ernst & Young LLP

Awarding Agency: General Services Administration

Start Date: 2022-01-05

End Date: 2023-05-05

Contract Duration: 485 days

Daily Burn Rate: $76.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: FINANCIAL MANAGEMENT INTERNAL CONTROLS FMIC FFP TASK ORDER

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20410

State: District of Columbia Government Spending

Plain-Language Summary

General Services Administration obligated $37.1 million to ERNST & YOUNG LLP for work described as: FINANCIAL MANAGEMENT INTERNAL CONTROLS FMIC FFP TASK ORDER Key points: 1. The contract value of $37.1 million represents a significant investment in financial management and internal controls. 2. Ernst & Young, a major player in professional services, secured this award, indicating strong capabilities. 3. The fixed-price contract type suggests a clear scope and predictable costs for the government. 4. The duration of 485 days indicates a substantial project requiring sustained effort. 5. The contract was awarded under full and open competition, implying a robust selection process. 6. The services fall under the 'Offices of Certified Public Accountants' NAICS code, specifying the nature of the work.

Value Assessment

Rating: good

The contract value of $37.1 million for a 485-day period, with a firm fixed-price structure, appears reasonable for specialized financial management consulting. Benchmarking against similar large-scale financial advisory contracts awarded by GSA or other agencies would provide a more precise value-for-money assessment. However, given the contractor's established reputation and the competitive nature of the award, the pricing is likely aligned with market rates for such expertise.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, suggesting that multiple qualified vendors were invited to submit proposals. The presence of only one bid, as indicated by 'no': 1, is unusual for a full and open competition and warrants further investigation. Typically, full and open competition aims to maximize the number of bidders to foster price discovery and ensure the best value. The low number of bids could indicate specific technical requirements, a concentrated market, or potential challenges in the solicitation process.

Taxpayer Impact: While full and open competition is generally beneficial for taxpayers by promoting competitive pricing, the single bid received in this instance may have limited the potential for cost savings. Taxpayers would ideally benefit from multiple competing offers driving down the price.

Public Impact

Federal agencies requiring expert financial management and internal control support will benefit from the services provided. The contract aims to enhance the efficiency and effectiveness of financial operations within the General Services Administration. Services delivered are expected to improve compliance, reduce financial risks, and optimize resource allocation. The primary geographic impact is within the District of Columbia, where the agency's operations are centered. The contract supports a highly skilled professional workforce specializing in accounting and financial consulting.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The low number of bids (1) under a full and open competition raises concerns about the effectiveness of the solicitation process in attracting a wider range of qualified offerors.
Potential for limited price competition due to only one bidder, which could impact overall value for taxpayers.
The specific task order details are not fully elaborated, making it difficult to assess the granular value proposition.

Positive Signals

Award to a reputable contractor (Ernst & Young) with demonstrated expertise in financial management.
The use of a firm fixed-price contract provides cost certainty for the government.
The contract falls under the General Services Administration's Federal Acquisition Service, which often signifies well-defined procurement processes.
The services are crucial for maintaining sound financial management and internal controls within a federal agency.

Sector Analysis

This contract operates within the professional services sector, specifically focusing on accounting and financial consulting. The market for these services is large and competitive, with major firms like Ernst & Young playing a significant role. Government spending in this area is substantial, driven by the need for expertise in financial management, auditing, and compliance. Comparable spending benchmarks would involve analyzing other large federal contracts for financial advisory services, often awarded to 'Big Four' accounting firms.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the contractor, Ernst & Young, is a large professional services firm, making it unlikely to be a small business. There is no explicit information regarding subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem from this specific award is likely minimal, though large prime contractors often engage small businesses in their broader subcontracting networks.

Oversight & Accountability

Oversight for this contract would primarily fall under the General Services Administration (GSA), specifically the Federal Acquisition Service. As a delivery order under a larger contract vehicle, the oversight mechanisms are likely well-established. Accountability measures would be tied to the performance work statement and the firm fixed-price terms. Transparency is generally maintained through federal procurement databases like FPDS. Inspector General jurisdiction would apply if any issues of fraud, waste, or abuse arise.

Related Government Programs

Financial Management Services
Internal Controls Consulting
Audit Support Services
Government Financial Advisory Contracts
Professional Services Contracts

Risk Flags

Low number of bids received under full and open competition.
Potential for limited price discovery due to single bidder.

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $37.1 million to ERNST & YOUNG LLP. FINANCIAL MANAGEMENT INTERNAL CONTROLS FMIC FFP TASK ORDER

Who is the contractor on this award?

The obligated recipient is ERNST & YOUNG LLP.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $37.1 million.

What is the period of performance?

Start: 2022-01-05. End: 2023-05-05.

What is the track record of Ernst & Young in delivering similar financial management services to federal agencies?

Ernst & Young (EY) has a long-standing and extensive track record of providing a wide array of professional services, including financial management, auditing, and consulting, to federal agencies. They are one of the 'Big Four' accounting firms and regularly compete for and win large government contracts. Their experience spans areas such as financial statement audits, internal control assessments, financial system implementation, and strategic financial planning. Past performance evaluations and contract awards data available through federal procurement databases would offer specific details on their success rates, client satisfaction, and adherence to contract terms for similar engagements. Agencies often rely on EY's established reputation and demonstrated capabilities when awarding significant financial services contracts.

How does the awarded amount of $37.1 million compare to similar financial management contracts awarded by GSA or other federal agencies?

The awarded amount of approximately $37.1 million for a 485-day period (roughly 1.3 years) for financial management and internal controls services is substantial, reflecting the complexity and scope typically associated with such engagements. To benchmark this value, one would compare it to other firm fixed-price delivery orders or task orders issued by the General Services Administration (GSA) or other large federal agencies (e.g., Department of Defense, Treasury) for similar professional services. Factors such as the specific services required (e.g., system implementation vs. ongoing advisory), the level of expertise needed, and the duration of the contract are critical for a fair comparison. Given that Ernst & Young is a major professional services provider, their pricing is generally competitive within the market for high-level expertise, but a detailed analysis would require access to comparable contract data and performance metrics.

What are the primary risks associated with this contract, and how are they being mitigated?

Primary risks associated with this contract include potential cost overruns if the scope is not precisely managed (though mitigated by the firm fixed-price structure), contractor performance issues (mitigated by GSA's oversight and performance evaluation), and the risk of insufficient competition leading to suboptimal pricing (a concern given only one bid). Mitigation strategies employed by the government typically involve robust contract administration, clear performance metrics, regular progress reviews, and potentially exercising options judiciously. For this specific contract, the firm fixed-price nature inherently shifts some cost risk to the contractor. The government's mitigation for the low bid scenario would involve careful monitoring of performance and value received to ensure the single bidder is meeting expectations.

What is the expected impact of this contract on the agency's ability to manage its finances and internal controls?

This contract is expected to significantly enhance the agency's ability to manage its finances and internal controls. By engaging a leading professional services firm like Ernst & Young, the agency aims to leverage specialized expertise to improve financial reporting accuracy, strengthen internal control frameworks, ensure compliance with regulations, and potentially optimize financial processes. The services provided are likely to address identified weaknesses or enhance existing capabilities in areas such as accounting operations, risk management, and financial system integrity. Ultimately, this investment should lead to more efficient resource allocation, reduced financial risk, and greater accountability in the agency's financial operations.

How does historical spending on financial management services by the General Services Administration compare to this award?

Analyzing historical spending patterns by the General Services Administration (GSA) on financial management services is crucial for context. GSA, as a major service provider and manager of federal real estate and technology, consistently requires significant financial expertise. Historical data would reveal trends in contract values, types of services procured (e.g., audit, advisory, system implementation), and the primary contractors utilized. This $37.1 million award should be viewed against the backdrop of GSA's overall budget and its historical allocation towards financial management support. If GSA's annual spending on such services typically ranges in the tens or hundreds of millions, this award represents a significant but potentially standard investment. A detailed comparison would involve examining GSA's spending over the past 5-10 years for NAICS codes related to accounting and financial consulting.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Accounting, Tax Preparation, Bookkeeping, and Payroll Services › Offices of Certified Public Accountants

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: 47QFDA22Q0006

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1 MANHATTAN WEST, NEW YORK, NY, 10001

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

Financial Breakdown

Contract Ceiling: $50,985,627

Exercised Options: $40,199,069

Current Obligation: $37,072,892

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: GS00F290CA

IDV Type: FSS

Timeline