Greentree Group's $50.8M contract for financial management support shows a high per-unit cost compared to benchmarks

Contract Overview

Contract Amount: $50,797,545 ($50.8M)

Contractor: THE Greentree Group, Inc.

Awarding Agency: General Services Administration

Start Date: 2018-09-01

End Date: 2024-03-22

Contract Duration: 2,029 days

Daily Burn Rate: $25.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: FINANCIAL MANAGEMENT SUPPORT FOR SAF FMPSO AFFSO

Place of Performance

Location: DAYTON, GREENE County, OHIO, 45433

State: Ohio Government Spending

Plain-Language Summary

General Services Administration obligated $50.8 million to THE GREENTREE GROUP, INC. for work described as: FINANCIAL MANAGEMENT SUPPORT FOR SAF FMPSO AFFSO Key points: 1. The contract's total value of $50.8 million over its duration indicates significant investment in financial management support. 2. Competition dynamics suggest a robust bidding process, potentially leading to better pricing, though per-unit costs warrant scrutiny. 3. Risk indicators are moderate, with a long contract duration and a fixed-price structure potentially mitigating some financial risks. 4. Performance context is tied to financial management support for SAF FMPSO AFFSO, a critical function within the agency. 5. Sector positioning places this contract within the 'Other Computer Related Services' NAICS code, indicating a focus on IT-enabled support.

Value Assessment

Rating: questionable

The total contract value of $50.8 million for financial management support appears substantial. Benchmarking against similar contracts for IT-enabled financial services reveals that the average per-unit cost for this type of support can vary significantly. However, the provided benchmark of $2,503.60 per unit suggests that this contract may be on the higher end, especially considering the contract's duration and the nature of the services. Further analysis of the specific deliverables and the contractor's overhead is needed to fully assess value for money.

Cost Per Unit: $2,503.60 per unit (benchmark)

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. The presence of 4 bids suggests a reasonable level of competition for this requirement. While full and open competition is generally preferred for maximizing price discovery and ensuring fair access to government contracts, the number of bidders can influence the intensity of that competition. A higher number of bidders typically leads to more aggressive pricing.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it encourages multiple vendors to offer their best prices, potentially reducing overall government expenditure.

Public Impact

The primary beneficiaries are the SAF FMPSO AFFSO, which receives essential financial management support. Services delivered include financial management, accounting, and potentially IT support related to these functions. The geographic impact is primarily within the agency's operational areas, likely concentrated in Ohio where the contractor is based. Workforce implications may involve specialized financial and IT professionals employed by the contractor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the per-unit cost benchmark is consistently exceeded across all units delivered.
Contract duration of over 2000 days (nearly 6 years) increases the risk of scope creep or evolving requirements not being adequately addressed.
Reliance on a single contractor for critical financial functions could pose a risk if performance issues arise.

Positive Signals

Awarded through full and open competition, suggesting a competitive bidding process that should have driven favorable pricing.
Firm Fixed Price contract type helps to control costs and provides predictability for the government.
The contract has a defined period of performance, allowing for periodic review and potential reassessment of needs.

Sector Analysis

This contract falls within the 'Other Computer Related Services' sector, which is a broad category encompassing a wide range of IT support and consulting. The market for these services is highly competitive, with numerous small, medium, and large businesses offering specialized expertise. Government spending in this area is substantial, driven by the need for modernizing IT infrastructure and supporting complex agency operations. This specific contract for financial management support is a common type of IT service procured by federal agencies to ensure efficient and accurate financial operations.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications specifically mandated for small businesses through a set-aside program. However, the prime contractor, The Greentree Group, Inc., may choose to subcontract portions of the work to small businesses as part of their overall business strategy, which could indirectly benefit the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the General Services Administration (GSA), specifically the Federal Acquisition Service (FAS). Mechanisms likely include contract officer representative (COR) oversight, regular performance reviews, and adherence to established reporting requirements. Transparency is generally maintained through contract award databases like FPDS. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arise during the contract's performance.

Related Government Programs

Financial Management Services
IT Consulting Services
Administrative Support Contracts
Federal Financial Systems Support
IT Professional Services

Risk Flags

High Per-Unit Cost
Long Contract Duration
Potential for Scope Creep

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $50.8 million to THE GREENTREE GROUP, INC.. FINANCIAL MANAGEMENT SUPPORT FOR SAF FMPSO AFFSO

Who is the contractor on this award?

The obligated recipient is THE GREENTREE GROUP, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $50.8 million.

What is the period of performance?

Start: 2018-09-01. End: 2024-03-22.

What is the track record of The Greentree Group, Inc. with federal contracts, particularly in financial management support?

The Greentree Group, Inc. has a history of performing federal contracts, primarily within the IT and administrative support domains. Their experience often includes providing services related to financial management, system integration, and operational support. Analyzing their past performance on similar contracts, including any reported issues or successes, is crucial for assessing their capability to meet the requirements of this $50.8 million contract. A review of their contract history would reveal the types of agencies they have served, the value and duration of previous awards, and any performance evaluations or past performance questionnaires submitted by government agencies. This information helps in understanding their reliability and expertise in delivering complex financial management solutions.

How does the $2,503.60 per-unit cost benchmark compare to similar financial management support contracts awarded by GSA or other agencies?

The benchmark of $2,503.60 per unit for financial management support warrants closer examination when compared to similar contracts. The definition of a 'unit' in this context is critical; it could represent an hour of labor, a specific deliverable, or a defined service package. If this benchmark represents a typical hourly rate for specialized financial IT support, it might be within a reasonable range, especially for highly skilled personnel. However, if it represents a broader service package or a less complex task, it could indicate a higher-than-average cost. Benchmarking against contracts with similar scope, complexity, and duration, particularly those awarded under full and open competition by agencies like GSA, is essential. Variations in labor costs by geographic location and the specific skill sets required can also influence per-unit pricing, making direct comparisons challenging without detailed service descriptions.

What are the primary risks associated with a contract of this duration (over 2000 days) for financial management support?

A contract duration exceeding 2000 days (approximately 5.5 years) for financial management support presents several key risks. Firstly, the risk of technological obsolescence is significant; financial systems and IT infrastructure can evolve rapidly, potentially making the contracted services or technologies outdated before the contract ends. Secondly, requirements can change substantially over such a long period due to evolving agency needs, legislative changes, or shifts in federal policy. Managing scope creep and ensuring that the contract remains relevant and cost-effective becomes more challenging. Thirdly, there's a risk of contractor performance degradation over time, or a loss of institutional knowledge if key personnel depart. Finally, a long-term commitment ties up significant government resources, potentially limiting flexibility to adopt newer, more efficient solutions that might emerge during the contract's term.

What is the potential impact of the Firm Fixed Price (FFP) contract type on cost control and contractor performance?

The Firm Fixed Price (FFP) contract type is generally favored for services where the scope of work is well-defined and unlikely to change significantly. For this financial management support contract, FFP provides the government with cost certainty, as the price is set and not subject to adjustment based on the contractor's actual costs. This shifts the risk of cost overruns to the contractor. For taxpayers, this means predictable budgeting. However, FFP can incentivize contractors to minimize costs, potentially leading to quality compromises if not adequately monitored. It also means the government may not benefit from cost savings if the contractor performs more efficiently than anticipated. Effective performance monitoring by the government is crucial to ensure that the contractor meets quality standards while managing their costs under the FFP structure.

How does the 'Other Computer Related Services' NAICS code (541519) typically encompass financial management support functions?

The North American Industry Classification System (NAICS) code 541519, 'Other Computer Related Services,' is a broad category designed to capture a wide array of IT services not specifically classified under other codes. Financial management support, when delivered through IT systems, often falls under this umbrella. This can include services such as developing, implementing, or maintaining financial software; providing IT support for accounting and budgeting systems; data analysis and reporting for financial operations; and IT consulting related to financial process optimization. Because financial management is increasingly reliant on sophisticated IT infrastructure and software, many companies providing these services are classified under this NAICS code, reflecting the blend of financial expertise and technological capability required.

What are the implications of the contract being awarded by the General Services Administration (GSA) Federal Acquisition Service (FAS)?

An award by the GSA Federal Acquisition Service (FAS) signifies that the contract was likely procured through GSA's established procurement vehicles and processes, which are designed for efficiency and compliance. GSA FAS often acts as a central procurement agent for other federal agencies, leveraging its expertise and purchasing power to obtain goods and services. For taxpayers, this can mean potentially better pricing due to GSA's volume and negotiation capabilities. It also implies that the contract has undergone GSA's rigorous review processes, including market research and competition analysis. Oversight and administration are typically handled by GSA personnel, ensuring adherence to federal acquisition regulations.

Industry Classification

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

Solicitation ID: ID05180010

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1360 TECHNOLOGY CT, BEAVERCREEK, OH, 45430

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

Financial Breakdown

Contract Ceiling: $58,407,250

Exercised Options: $50,882,837

Current Obligation: $50,797,545

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: GS35F396DA

IDV Type: FSS

Timeline