DOT's FAA awards $10.5M consulting contract to Ernst & Young for administrative management support

Contract Overview

Contract Amount: $10,481,227 ($10.5M)

Contractor: Ernst & Young LLP

Awarding Agency: Department of Transportation

Start Date: 2022-08-17

End Date: 2026-06-30

Contract Duration: 1,413 days

Daily Burn Rate: $7.4K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: TIME AND MATERIALS

Sector: Other

Official Description: BUSINESS PARTNERSHIP SERVICE (BPS) SUPPORT

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20591

State: District of Columbia Government Spending

Plain-Language Summary

Department of Transportation obligated $10.5 million to ERNST & YOUNG LLP for work described as: BUSINESS PARTNERSHIP SERVICE (BPS) SUPPORT Key points: 1. Contract value represents a significant investment in management consulting services for the FAA. 2. Ernst & Young, a large established firm, secured this contract, indicating strong market presence. 3. The contract's duration and value suggest a need for sustained advisory support. 4. Performance will be monitored through delivery orders, allowing for phased execution and oversight. 5. The administrative management and general management consulting services category is crucial for agency operations.

Value Assessment

Rating: good

The contract value of approximately $10.5 million over its period of performance appears reasonable for comprehensive administrative management and general management consulting services. Benchmarking against similar large-scale consulting engagements for federal agencies suggests this pricing is within expected ranges, especially considering the expertise of a major firm like Ernst & Young. The Time and Materials pricing structure allows for flexibility but requires diligent oversight to ensure cost-effectiveness and prevent scope creep. Further analysis of specific task orders would be needed for a more granular value assessment.

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 specific number of bidders is not provided, but the 'full and open' designation suggests a competitive process that likely drove pricing and service quality. This approach is generally favored for ensuring the government receives the best value by leveraging a broad range of potential contractors.

Taxpayer Impact: Full and open competition typically benefits taxpayers by fostering a competitive environment that can lead to more favorable pricing and innovative solutions, maximizing the return on public funds invested in consulting services.

Public Impact

The Federal Aviation Administration (FAA) is the primary beneficiary, receiving expert support for administrative and management functions. Services delivered are expected to enhance operational efficiency and strategic planning within the FAA. The contract's impact is concentrated within the District of Columbia, where the FAA's headquarters and key administrative functions are located. The contract may indirectly support a workforce through the engagement of consulting professionals from Ernst & Young.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if Time and Materials basis is not closely managed.
Dependence on a single large contractor for critical administrative functions.
Scope creep could increase the overall cost beyond initial projections.

Positive Signals

Awarded through full and open competition, suggesting a competitive pricing environment.
Ernst & Young is a reputable firm with extensive experience in government contracting.
The contract duration allows for sustained support and integration of consulting recommendations.

Sector Analysis

The federal consulting services market is substantial, with agencies frequently engaging firms for administrative management, IT, and strategic planning. This contract falls within the administrative management and general management consulting services sector, a critical area for ensuring efficient government operations. Spending in this sector is driven by the need for specialized expertise, process improvement, and support for complex agency initiatives. Benchmarks for similar contracts often range from hundreds of thousands to millions of dollars, depending on scope and duration.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. There is no explicit mention of subcontracting goals for small businesses. This suggests that the primary focus was on securing the best overall solution from a large, established firm rather than specifically promoting small business participation through this particular award.

Oversight & Accountability

Oversight for this contract will likely be managed through the Federal Aviation Administration's contracting officers and program managers. Delivery orders will be reviewed and approved, and performance metrics will be tracked against task requirements. Transparency is facilitated by the contract's public availability and the reporting requirements inherent in federal procurement. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Federal Aviation Administration Management Support Contracts
Department of Transportation Consulting Services
Administrative Management Consulting
General Management Consulting Services

Risk Flags

Potential for cost overruns due to T&M pricing
Need for strong oversight to manage scope and efficiency
Dependence on contractor expertise for critical functions

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $10.5 million to ERNST & YOUNG LLP. BUSINESS PARTNERSHIP SERVICE (BPS) SUPPORT

Who is the contractor on this award?

The obligated recipient is ERNST & YOUNG LLP.

Which agency awarded this contract?

Awarding agency: Department of Transportation (Federal Aviation Administration).

What is the total obligated amount?

The obligated amount is $10.5 million.

What is the period of performance?

Start: 2022-08-17. End: 2026-06-30.

What is Ernst & Young's track record with the Federal Aviation Administration and the Department of Transportation?

Ernst & Young LLP (EY) has a significant history of contracting with various U.S. federal agencies, including the Department of Transportation (DOT) and its sub-agencies like the Federal Aviation Administration (FAA). While specific details of past FAA contracts are not provided in this data snippet, EY's extensive experience in management consulting, financial advisory, and technology services positions them as a frequent awardee for complex government projects. Their track record typically involves providing services related to strategic planning, operational efficiency, financial management, and regulatory compliance. For the FAA, this could translate to support in areas such as air traffic control modernization, safety initiatives, or administrative process improvements. A deeper dive into federal procurement databases like FPDS or SAM.gov would reveal the full scope and value of their prior engagements with these specific entities.

How does the awarded amount of $10.5 million compare to similar administrative management consulting contracts within the federal government?

The $10.5 million contract value for administrative management and general management consulting services awarded to Ernst & Young by the FAA is substantial but falls within the expected range for large-scale, multi-year federal consulting engagements. Contracts of this nature, especially those involving major agencies like the FAA, often span several years and require significant resources and expertise. Similar contracts awarded to large consulting firms (e.g., Deloitte, Accenture, Booz Allen Hamilton) for comparable services to agencies like the Department of Defense, HHS, or GSA can range from several million to tens of millions of dollars. The 'Time and Materials' (T&M) pricing structure, while flexible, means the final cost could fluctuate based on actual hours worked and resources utilized. Therefore, while $10.5 million is a significant figure, it is not an outlier when benchmarked against the broader federal consulting landscape for comprehensive support.

What are the primary risks associated with a Time and Materials (T&M) contract of this magnitude?

The primary risk associated with a Time and Materials (T&M) contract of this magnitude ($10.5 million) is the potential for cost overruns and a lack of definitive cost control. Unlike fixed-price contracts, T&M contracts pay the contractor for the actual time and materials expended. This can lead to increased costs if the project scope expands (scope creep), if contractor efficiency is low, or if the duration of the contract is extended beyond initial estimates. For the FAA, this necessitates robust oversight from contracting officers and program managers to closely monitor labor hours, resource utilization, and task progress. Without diligent management and clear task definitions, the government may end up paying more than anticipated for the services rendered, diminishing the overall value for money. Establishing clear ceilings and regular performance reviews are crucial mitigation strategies.

How does the 'Administrative Management and General Management Consulting Services' NAICS code (541611) typically translate into services delivered for an agency like the FAA?

The NAICS code 541611, 'Administrative Management and General Management Consulting Services,' encompasses a broad range of advisory services aimed at improving an organization's overall management and operational effectiveness. For an agency like the FAA, this could translate into services such as strategic planning and policy development, organizational structure analysis and redesign, business process re-engineering, performance management system implementation, human capital strategy development, and change management initiatives. Consultants under this code might help the FAA streamline administrative processes, enhance decision-making frameworks, improve resource allocation, develop long-term strategic goals, and implement best practices in management. Essentially, they provide expert guidance to help the FAA operate more efficiently, effectively, and adapt to evolving challenges within the aviation sector.

What does the contract duration of approximately 22 months (August 2022 - June 2026, considering delivery orders) imply about the nature of the support needed?

The contract duration, spanning from August 17, 2022, to June 30, 2026, with a total duration of approximately 45 months but likely executed through delivery orders over a shorter period (around 22 months of active performance), suggests a need for sustained, yet potentially phased, support. This timeframe indicates that the administrative management and general management consulting services required are not for a short-term, one-off project but rather for ongoing advisory and implementation assistance. Such durations are typical for strategic initiatives, organizational transformations, or continuous improvement programs where embedding changes and realizing benefits takes time. The use of delivery orders allows the FAA to task Ernst & Young as needed, providing flexibility to adapt the scope and intensity of support based on evolving priorities and project milestones within that overall period.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Administrative Management and General Management Consulting Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 1101 NEW YORK AVENUE, NW, WASHINGTON, DC, 20005

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

Financial Breakdown

Contract Ceiling: $15,801,330

Exercised Options: $10,840,891

Current Obligation: $10,481,227

Actual Outlays: $8,877,029

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: 693KA919D00004

IDV Type: IDC

Timeline