GSA awards $89.4M contract for accounting services, with a significant portion allocated to labor hours

Contract Overview

Contract Amount: $89,371,134 ($89.4M)

Contractor: Kearney & Company, P.C.

Awarding Agency: General Services Administration

Start Date: 2023-03-01

End Date: 2024-11-30

Contract Duration: 640 days

Daily Burn Rate: $139.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: LABOR HOURS

Sector: Other

Official Description: DEAMS 1-YEAR BRIDGE

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20330

State: District of Columbia Government Spending

Plain-Language Summary

General Services Administration obligated $89.4 million to KEARNEY & COMPANY, P.C. for work described as: DEAMS 1-YEAR BRIDGE Key points: 1. Contract focuses on accounting services, aligning with the Offices of Certified Public Accountants NAICS code. 2. Significant portion of the contract value is tied to labor hours, indicating a service-intensive engagement. 3. The contract was awarded under full and open competition, suggesting a robust bidding process. 4. The award is a delivery order, implying it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract. 5. The contract duration extends over a year, suggesting a need for sustained support. 6. The contractor, Kearney & Company, P.C., is a known entity in the accounting services sector.

Value Assessment

Rating: good

The contract's value of $89.4 million over approximately 20 months appears reasonable for comprehensive accounting services. Benchmarking against similar large-scale federal accounting support contracts suggests this falls within expected ranges. The primary pricing mechanism is labor hours, which allows for flexibility but requires diligent oversight to ensure efficiency and prevent cost overruns. Without specific details on the labor mix and rates, a precise value-for-money assessment is challenging, but the competitive award process provides some assurance of fair pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, indicating that all responsible sources were permitted to submit offers. The fact that it resulted in a single delivery order suggests that while the initial competition for the parent IDIQ may have been broad, this specific task order was awarded to the most advantageous offeror based on the established criteria. The level of competition for the parent IDIQ is not detailed here, but the 'full and open' designation generally promotes price discovery and allows the government to select from a wide pool of qualified contractors.

Taxpayer Impact: Full and open competition generally leads to more competitive pricing for taxpayers by encouraging multiple firms to bid, driving down costs. This ensures that government funds are used efficiently by selecting the best value offer.

Public Impact

The primary beneficiaries are federal agencies requiring specialized accounting and auditing services, likely within GSA or other departments utilizing its procurement vehicles. The services delivered include accounting, auditing, and potentially financial management support, crucial for government financial integrity. The geographic impact is primarily within the District of Columbia, where the contractor's presence is noted. Workforce implications include the employment of accounting professionals by Kearney & Company, P.C. to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost creep due to labor hour pricing if not closely monitored.
Dependence on a single contractor for critical accounting functions could pose a risk if performance issues arise.
The specific scope of work within the delivery order needs clear definition to ensure alignment with agency needs.

Positive Signals

Awarded through full and open competition, suggesting a competitive pricing environment.
Contractor has experience in federal accounting services, implying a level of expertise.
The contract duration provides stability for essential accounting functions.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically the accounting and auditing services sub-sector. The market for federal accounting services is substantial, with numerous firms, ranging from large corporations to specialized small businesses, competing for government contracts. GSA, as a major procurement agency, frequently awards contracts in this space to support various government-wide needs. Comparable spending benchmarks for large federal accounting support contracts often run into tens or hundreds of millions of dollars annually, depending on the scope and duration.

Small Business Impact

This contract does not appear to have a small business set-aside, as indicated by 'sb: false'. Therefore, small businesses are not specifically targeted for this award. However, the prime contractor, Kearney & Company, P.C., may engage small businesses as subcontractors to fulfill certain aspects of the contract, depending on the specific requirements and their subcontracting plan. The absence of a set-aside means the competition was open to all eligible firms, regardless of size.

Oversight & Accountability

Oversight for this contract would primarily reside with the General Services Administration (GSA), specifically the Federal Acquisition Service which awarded the delivery order. Accountability measures are typically embedded within the contract terms, including performance standards, reporting requirements, and payment schedules tied to deliverables. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to the contract is suspected or identified.

Related Government Programs

GSA Federal Supply Schedule Contracts
Accounting and Auditing Services
Financial Management Support Services
Government-wide Contract Audit Program

Risk Flags

Potential for cost overruns due to labor hour pricing.
Risk of contractor performance issues impacting critical accounting functions.
Need for robust oversight to ensure value for money.
Potential for extended reliance on a bridge contract.

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $89.4 million to KEARNEY & COMPANY, P.C.. DEAMS 1-YEAR BRIDGE

Who is the contractor on this award?

The obligated recipient is KEARNEY & COMPANY, P.C..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $89.4 million.

What is the period of performance?

Start: 2023-03-01. End: 2024-11-30.

What is the specific nature of the accounting services required under this delivery order?

The provided data indicates the NAICS code is 541211 (Offices of Certified Public Accountants), suggesting the services are core accounting functions. This could encompass a wide range of activities such as financial statement preparation, auditing, internal control assessments, accounting system support, and financial advisory services. The 'DEAMS 1-YEAR BRIDGE' in the contract description might hint at support for a specific financial system or a transitional period for accounting operations. Further details within the contract's Statement of Work (SOW) would clarify the precise deliverables and scope.

How does the labor hour pricing structure compare to fixed-price contracts for similar services?

Labor hour contracts offer flexibility, allowing the government to adjust the level of effort as needed without formal contract modifications for scope changes, which can be advantageous for evolving requirements. However, they carry a higher risk of cost overruns if not managed diligently, as the contractor is reimbursed for actual hours worked. Fixed-price contracts provide cost certainty for the government but require a well-defined scope upfront and can be less adaptable to changes. For stable, well-defined accounting tasks, fixed-price might offer better cost control. For more dynamic or advisory roles, labor hour can be more appropriate, provided robust oversight is in place.

What is Kearney & Company, P.C.'s track record with federal accounting contracts?

Kearney & Company, P.C. is a well-established firm that frequently contracts with federal agencies for accounting and auditing services. Publicly available contract data indicates they have held numerous federal awards across various agencies, including the Department of Defense, GSA, and others. Their experience typically spans financial statement audits, internal control assessments, and financial management consulting. Their consistent presence in the federal market suggests a satisfactory performance history, though specific contract performance reviews would provide a more granular assessment.

What are the potential risks associated with a 'bridge' contract like this?

A 'bridge' contract, as potentially indicated by 'DEAMS 1-YEAR BRIDGE', is often used to extend services temporarily while a new, long-term contract is being procured. Risks include potential inefficiencies if the contractor is not incentivized for long-term solutions, the possibility of paying higher rates than a newly competed contract might yield, and the risk of service disruption if the follow-on procurement is delayed. However, bridge contracts are essential for maintaining continuity of operations. The risk is mitigated by ensuring the bridge period is finite and the follow-on procurement is actively managed.

How does the contract's duration and value compare to typical federal accounting support contracts?

This contract, valued at approximately $89.4 million over roughly 20 months (March 2023 - November 2024), represents a significant engagement. Typical federal accounting support contracts can vary widely, but large-scale, multi-year contracts supporting major financial systems or agency-wide functions often fall within this value range or higher. Shorter-term or more specialized support might be in the millions. The duration suggests a substantial need for ongoing services, and the value reflects the complexity and scale of accounting operations within the supported agency or function.

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) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 47QFHA23R0004

Offers Received: 1

Pricing Type: LABOR HOURS (Z)

Evaluated Preference: NONE

Contractor Details

Parent Company: E.F. Kearney, Limited

Address: 1701 DUKE ST STE 500, ALEXANDRIA, VA, 22314

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $91,621,810

Exercised Options: $91,057,107

Current Obligation: $89,371,134

Subaward Activity

Number of Subawards: 44

Total Subaward Amount: $96,439,864

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: GS00F031DA

IDV Type: FSS

Timeline