DHS awards $68.6M to Deloitte for technical and operational support, with 2 bids received

Contract Overview

Contract Amount: $68,565,143 ($68.6M)

Contractor: Deloitte Consulting LLP

Awarding Agency: Department of Homeland Security

Start Date: 2018-09-29

End Date: 2023-12-31

Contract Duration: 1,919 days

Daily Burn Rate: $35.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: TIME AND MATERIALS

Sector: Other

Official Description: TECHNICAL AND OPERATIONAL PROFESSIONAL SUPPORT SERVICES

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20229

State: District of Columbia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $68.6 million to DELOITTE CONSULTING LLP for work described as: TECHNICAL AND OPERATIONAL PROFESSIONAL SUPPORT SERVICES Key points: 1. Contract value of $68.6M over 5 years suggests a significant, long-term need for specialized support. 2. The award to a single, large incumbent contractor raises questions about potential price escalation and limited innovation. 3. A Time and Materials contract type can increase cost uncertainty if not closely managed. 4. The relatively low number of bids (2) for a contract of this size may indicate barriers to entry or limited market interest. 5. The contract's duration of nearly 2000 days points to a critical, ongoing operational requirement. 6. The primary recipient, U.S. Customs and Border Protection, indicates a focus on border security and related operational functions.

Value Assessment

Rating: fair

The contract value of $68.6 million over approximately five years averages to about $13.7 million annually. Benchmarking this against similar technical and operational support contracts is challenging without more specific service details. However, the Time and Materials pricing structure, while flexible, can lead to higher costs if not rigorously managed and monitored for efficiency. The limited competition further complicates a direct value assessment, as it may have suppressed more competitive pricing.

Cost Per Unit: N/A

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 bids. However, only two bids were received. This limited number of bidders for a contract of this magnitude suggests potential challenges in the market, such as high barriers to entry, specialized requirements that only a few firms can meet, or perhaps a lack of aggressive outreach to potential competitors.

Taxpayer Impact: While full and open competition was advertised, the low number of bids may have resulted in less downward pressure on pricing than a more robust competition would have achieved, potentially costing taxpayers more than optimal.

Public Impact

U.S. Customs and Border Protection (CBP) benefits directly through the provision of essential technical and operational support services. The services delivered are critical for maintaining and enhancing the operational capabilities of CBP, likely impacting border security and trade facilitation. The contract's primary geographic impact is likely within the District of Columbia, where Deloitte Consulting LLP is headquartered, but operational support could extend to CBP's nationwide activities. The contract supports a workforce of highly skilled professionals in technical and operational fields, contributing to the federal government's capacity in these areas.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and Materials contract type introduces cost uncertainty and requires diligent oversight to prevent overruns.
Limited competition (2 bidders) may have resulted in a higher price than a more competitive scenario.
The long duration of the contract could lead to vendor lock-in and reduced flexibility for future needs.
Lack of specific performance metrics in the provided data makes it difficult to assess the quality and effectiveness of services delivered.

Positive Signals

Awarded under full and open competition, ensuring a broad initial opportunity for vendors.
The incumbent contractor, Deloitte Consulting LLP, likely possesses significant institutional knowledge and experience with CBP's requirements.
The contract value indicates a substantial investment in critical operational support for a key federal agency.

Sector Analysis

The federal IT and professional services market is vast and highly competitive, with significant spending allocated to technical, engineering, and operational support. This contract falls within the broader professional services category, specifically engineering services (NAICS 541330). Major consulting firms like Deloitte are key players in this sector, often competing for large-scale government contracts that require specialized expertise. Spending benchmarks for similar support services vary widely based on scope, duration, and specific technical requirements.

Small Business Impact

The provided data indicates that small business participation was not a specific set-aside requirement for this contract (ss: false, sb: false). There is no information on subcontracting plans or actual performance. Therefore, the direct impact on the small business ecosystem is likely minimal unless the prime contractor voluntarily engages small businesses for subcontracting opportunities, which is not evident from the data.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Homeland Security and U.S. Customs and Border Protection contracting officers and program managers. The Time and Materials pricing structure necessitates close monitoring of labor hours and costs to ensure value for money. Transparency is generally facilitated through contract award databases like FPDS, but detailed performance reports and specific oversight mechanisms are not publicly available in this summary data. The Inspector General's office for DHS may conduct audits or investigations if performance or cost concerns arise.

Related Government Programs

Department of Homeland Security - Other Services
U.S. Customs and Border Protection - Operational Support
Engineering Services Contracts
Technical Support Services
Professional Services Contracts

Risk Flags

Limited Competition
Time and Materials Pricing
Potential for Cost Overruns
Lack of Detailed Performance Data

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $68.6 million to DELOITTE CONSULTING LLP. TECHNICAL AND OPERATIONAL PROFESSIONAL SUPPORT SERVICES

Who is the contractor on this award?

The obligated recipient is DELOITTE CONSULTING LLP.

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (U.S. Customs and Border Protection).

What is the total obligated amount?

The obligated amount is $68.6 million.

What is the period of performance?

Start: 2018-09-29. End: 2023-12-31.

What specific technical and operational support services does Deloitte Consulting LLP provide under this contract?

The provided data classifies this contract under NAICS code 541330 (Engineering Services) and describes the service as 'TECHNICAL AND OPERATIONAL PROFESSIONAL SUPPORT SERVICES'. While the specific deliverables are not detailed, this typically encompasses a range of activities such as systems engineering, technical consulting, program management support, operational analysis, process improvement, and potentially IT infrastructure support related to CBP's mission. Given the agency (CBP), these services likely relate to border security technology, data analysis, logistics, or operational efficiency improvements for border operations.

How does the $68.6 million contract value compare to historical spending by CBP on similar services?

Without access to historical spending data specifically for 'technical and operational professional support services' by CBP, a direct comparison is difficult. However, $68.6 million over approximately five years represents a significant annual investment averaging around $13.7 million. This suggests a substantial and ongoing requirement for specialized external support. To provide a precise comparison, one would need to analyze CBP's contracting history for similar NAICS codes and service descriptions over previous fiscal years to identify trends and outliers.

What are the potential risks associated with a Time and Materials (T&M) contract of this size and duration?

Time and Materials contracts carry inherent risks, primarily related to cost control. The government pays for the actual time and materials used, which can lead to cost overruns if not managed diligently. For a $68.6 million contract spanning nearly five years, the risks include: scope creep where tasks expand without formal modification, inefficient labor utilization, inflated material costs, and difficulty in accurately forecasting the total expenditure. Robust oversight, clear task definitions, and regular performance reviews are crucial to mitigate these risks and ensure the government receives good value.

Given only two bids were received, what does this imply about the contractor's track record and market competition?

The receipt of only two bids under a full and open solicitation suggests that the market for these specific services may be concentrated among a few large firms, or that barriers to entry (e.g., security clearances, specialized expertise, past performance requirements) are high. For Deloitte, as one of the two bidders, it implies they were well-positioned to meet these requirements. From a competition standpoint, limited bidders can reduce price pressure, potentially leading to a higher contract price than if more firms had competed. It may also indicate that other potential bidders found the requirements too demanding or the potential reward insufficient.

What is the significance of the contract being awarded to Deloitte Consulting LLP, a known large federal contractor?

Awarding a contract of this magnitude to Deloitte Consulting LLP signifies the agency's reliance on established, large-scale service providers with demonstrated capabilities. Large contractors like Deloitte often have the resources, personnel, and infrastructure to handle complex, long-term government requirements. While this can ensure stability and expertise, it also means that smaller, potentially more agile or specialized firms may have limited opportunities. It aligns with a common trend in federal contracting where large, comprehensive support needs are often met by major players in the industry.

How does the contract's performance period (1919 days) influence its strategic importance for CBP?

A performance period of 1919 days (approximately 5 years and 3 months) indicates that the services provided are critical for the sustained operations and strategic objectives of U.S. Customs and Border Protection. Such long-term contracts are typically awarded for functions that are core to the agency's mission and require continuity, such as maintaining complex systems, providing ongoing analytical support, or managing essential operational processes. This duration suggests that the support is not a short-term fix but an integral part of CBP's long-term planning and execution capabilities.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

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: 70B01C18Q00000106

Offers Received: 2

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: Deloitte Touche Tohmatsu Limited

Address: 1919 N LYNN ST, ARLINGTON, VA, 22209

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

Financial Breakdown

Contract Ceiling: $87,534,639

Exercised Options: $68,565,143

Current Obligation: $68,565,143

Actual Outlays: $18,739,319

Subaward Activity

Number of Subawards: 13

Total Subaward Amount: $16,207,753

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS00Q14OADU113

IDV Type: IDC

Timeline