GSA awards $52M contract to Ernst & Young for financial management services, with a 3-year duration

Contract Overview

Contract Amount: $52,070,370 ($52.1M)

Contractor: Ernst & Young LLP

Awarding Agency: General Services Administration

Start Date: 2023-05-06

End Date: 2027-05-05

Contract Duration: 1,460 days

Daily Burn Rate: $35.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: FINANCIAL MANAGEMENT INTERNAL CONTROLS FMIC RECOMPETE FY23

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 $52.1 million to ERNST & YOUNG LLP for work described as: FINANCIAL MANAGEMENT INTERNAL CONTROLS FMIC RECOMPETE FY23 Key points: 1. Value for money appears reasonable given the scope of financial management and accounting services. 2. The contract was awarded under full and open competition, suggesting a competitive pricing environment. 3. Risk indicators are low due to the recompete nature of the contract and established contractor. 4. Performance context is within the scope of standard financial management support for federal agencies. 5. This contract positions Ernst & Young as a key provider of accounting and auditing services within the federal sector.

Value Assessment

Rating: good

The contract value of approximately $52 million over three years for financial management internal controls (FMIC) services is within a reasonable range for a recompete of this nature. Benchmarking against similar contracts for accounting and auditing services provided to federal agencies suggests that the pricing is competitive, especially considering the expertise required. The firm-fixed-price structure also provides cost certainty for the government.

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 bidders had the opportunity to submit proposals. The presence of two bidders suggests a healthy level of competition for this service. This competitive process is expected to drive more favorable pricing and service offerings for the government.

Taxpayer Impact: Taxpayers benefit from a competitive bidding process that helps ensure the government is not overpaying for essential financial management services.

Public Impact

Federal agencies, particularly those managed by the General Services Administration (GSA), benefit from improved financial management and internal controls. The services delivered include accounting, auditing, and financial consulting to ensure compliance and efficiency. The geographic impact is primarily within the District of Columbia, where the contractor's services are likely concentrated. Workforce implications include the employment of skilled accountants, auditors, and financial analysts by Ernst & Young.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if requirements are not clearly defined and managed.
Reliance on a single contractor for critical financial functions could pose a risk if performance falters.

Positive Signals

Recompete nature of the contract suggests a proven track record and established relationship.
Firm-fixed-price contract provides cost predictability.
Full and open competition indicates a robust selection process.

Sector Analysis

The federal financial management and accounting services sector is a critical component of government operations, ensuring fiscal responsibility and compliance. This contract falls within the professional services category, specifically accounting and auditing. The market size for such services is substantial, with numerous large and small firms competing for federal contracts. This award to Ernst & Young, a major professional services firm, is consistent with industry trends where large, established players often secure significant government contracts.

Small Business Impact

This contract was not set aside for small businesses, and the data indicates no subcontracting requirements were specified. Therefore, the direct impact on the small business ecosystem is minimal. However, large prime contractors like Ernst & Young are often encouraged to subcontract with small businesses on other, larger contracts, which can indirectly benefit the small business community.

Oversight & Accountability

Oversight for this contract is likely managed by the General Services Administration (GSA) contracting officers and program managers. Accountability measures are embedded within the firm-fixed-price contract terms and performance expectations. Transparency is generally maintained through federal contract databases, though specific performance metrics are typically internal. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Federal Financial Management
Government Auditing Services
Accounting and Bookkeeping Services
Management Consulting Services

Risk Flags

Potential for scope creep
Contractor performance risk

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $52.1 million to ERNST & YOUNG LLP. FINANCIAL MANAGEMENT INTERNAL CONTROLS FMIC RECOMPETE FY23

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 $52.1 million.

What is the period of performance?

Start: 2023-05-06. End: 2027-05-05.

What is Ernst & Young's track record with federal financial management contracts?

Ernst & Young (EY) has a significant and long-standing track record of providing professional services, including financial management, auditing, and consulting, to various federal agencies. They are a major player in the government contracting space, often winning large and complex contracts. Their experience typically includes supporting agencies with financial statement audits, internal control assessments, accounting system implementations, and strategic financial planning. While specific performance details for individual contracts are often not publicly disclosed in detail, their continued success in winning competitive bids suggests a generally positive performance history and a strong understanding of federal requirements and regulations.

How does the $52 million award compare to similar financial management contracts?

The $52 million award for financial management internal controls (FMIC) services over three years, awarded to Ernst & Young by GSA, appears to be within a reasonable range when compared to similar contracts for professional accounting and auditing services. Federal agencies frequently contract with large professional services firms for these types of support. For instance, contracts for comprehensive financial statement audits, system modernization, or extensive internal control reviews can range from tens to hundreds of millions of dollars depending on the agency's size, complexity, and the specific scope of work. Given that this is a recompete and likely covers ongoing support and compliance, the value seems aligned with market rates for established firms.

What are the primary risks associated with this contract?

The primary risks associated with this contract are relatively standard for professional services engagements. One key risk is the potential for scope creep, where the requirements may expand beyond the initial agreement, leading to cost overruns or schedule delays if not managed effectively. Another risk is contractor performance; while Ernst & Young is a reputable firm, any lapse in service quality or failure to meet deadlines could impact the agency's financial operations. Dependence on a single contractor for critical financial functions also presents a risk. However, the recompete nature and the firm-fixed-price structure mitigate some of these risks by ensuring clear expectations and cost controls.

How effective are financial management internal control services in improving government operations?

Financial management internal control (FMIC) services are crucial for improving government operations by ensuring the accuracy, reliability, and security of financial information. Effective internal controls help prevent and detect fraud, waste, and abuse, thereby safeguarding taxpayer dollars. They also ensure compliance with laws, regulations, and policies, reducing the risk of penalties and legal challenges. By strengthening these controls, agencies can achieve greater operational efficiency, improve decision-making through reliable data, and enhance public trust. The services provided under this contract likely contribute to these objectives by assessing and improving the systems and processes that govern federal financial management.

What are historical spending patterns for financial management services at GSA?

Historical spending patterns for financial management services at the General Services Administration (GSA) generally show a consistent need for professional support in areas such as accounting, auditing, financial reporting, and internal controls. GSA, as a large service provider to other federal agencies, requires robust financial management to operate effectively and efficiently. Spending in this category often fluctuates based on specific agency initiatives, regulatory changes, and the lifecycle of financial system upgrades or audits. Recompetes, like this one, are common, indicating a sustained requirement for these services over time. The overall trend is towards ensuring compliance, modernizing financial systems, and optimizing financial operations, which necessitates ongoing investment in expert services.

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: 47QFDA22Q0033

Offers Received: 2

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: $62,782,749

Exercised Options: $52,070,370

Current Obligation: $52,070,370

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: GS00F290CA

IDV Type: FSS

Timeline