HHS awards $18M for financial systems support, with KEARNEY & COMPANY P.C. securing the BPA call contract

Contract Overview

Contract Amount: $18,044,321 ($18.0M)

Contractor: Kearney & Company, P.C.

Awarding Agency: Department of Health and Human Services

Start Date: 2020-03-30

End Date: 2025-09-29

Contract Duration: 2,009 days

Daily Burn Rate: $9.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: TIME AND MATERIALS

Sector: Other

Official Description: FINANCIAL SYSTEMS POLICY AND COMPLIANCE PROGRAM SUPPORT

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20201

State: District of Columbia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $18.0 million to KEARNEY & COMPANY, P.C. for work described as: FINANCIAL SYSTEMS POLICY AND COMPLIANCE PROGRAM SUPPORT Key points: 1. Contract awarded via a Blanket Purchase Agreement (BPA) Call, suggesting a pre-competed framework. 2. The contract type is Time and Materials, which can pose cost control challenges if not managed closely. 3. The duration of the contract, spanning over 5 years, indicates a long-term need for these services. 4. The contractor, KEARNEY & COMPANY, P.C., is a known entity in public accounting and consulting. 5. The North American Industry Classification System (NAICS) code 541211 points to accounting services. 6. The contract is managed by the Office of the Assistant Secretary for Administration within HHS.

Value Assessment

Rating: fair

The total award amount is $18,044,321.12 over approximately 5.5 years. Without specific deliverables or performance metrics, a direct value-for-money assessment is difficult. However, the average annual cost is roughly $3.28 million. Benchmarking this against similar financial systems policy and compliance support contracts across federal agencies would provide a clearer picture of its competitiveness. The Time and Materials pricing structure necessitates robust oversight to ensure costs remain aligned with the value delivered.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a 'Full and Open Competition' through a BPA Call. This indicates that the underlying BPA was likely competed broadly, and this specific call leveraged that existing competition. The fact that it's a BPA Call suggests multiple vendors may have been eligible, but the specific number of bidders for this particular call is not provided. Full and open competition generally promotes price discovery and allows for a wider range of potential contractors to bid.

Taxpayer Impact: A full and open competition process is generally favorable for taxpayers as it encourages competitive pricing and potentially leads to better value. It ensures that the government is not limited to a single provider, increasing the likelihood of obtaining services at a reasonable cost.

Public Impact

The primary beneficiaries are the Department of Health and Human Services (HHS) and its various operating divisions, which will receive enhanced financial systems policy and compliance support. The services delivered are crucial for maintaining the integrity and efficiency of HHS's financial operations, including compliance with regulations and policies. The geographic impact is primarily within the District of Columbia, where the contract is managed and likely where key personnel are located. The contract supports the workforce within HHS by ensuring that financial systems are well-managed, allowing agency personnel to focus on their core missions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and Materials (T&M) contract type can lead to cost overruns if not closely monitored and managed.
The long contract duration (over 5 years) increases the risk of scope creep or evolving requirements not being adequately addressed.
Lack of specific performance metrics in the provided data makes it difficult to assess contractor performance objectively.
The BPA Call mechanism, while efficient, might limit the depth of competition for this specific task order compared to a standalone solicitation.

Positive Signals

Awarded under Full and Open Competition, indicating a competitive process was utilized.
The contractor, KEARNEY & COMPANY, P.C., has established experience in government contracting and financial services.
The contract supports critical administrative functions within a major federal agency (HHS), suggesting a stable and important requirement.
The BPA Call structure implies that the initial BPA was already vetted, potentially streamlining the procurement process and ensuring qualified vendors.

Sector Analysis

The federal IT and professional services sector is vast, with significant spending on financial management, compliance, and administrative support. This contract falls under the professional services category, specifically accounting and auditing services (NAICS 541211). The market for these services is competitive, with a mix of large consulting firms and specialized accounting practices. HHS, as one of the largest federal agencies, represents a substantial client within this sector. Comparable spending benchmarks would typically involve analyzing the average cost per hour or per project for similar financial system support services across government agencies.

Small Business Impact

The data indicates that this contract was not specifically set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications mandated by a small business set-aside. However, the prime contractor, KEARNEY & COMPANY, P.C., may choose to engage small businesses as subcontractors to fulfill certain aspects of the contract, depending on their own business practices and the specific needs of the BPA Call. The absence of a set-aside means the primary competition was not focused on increasing small business participation.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Health and Human Services (HHS), specifically the Office of the Assistant Secretary for Administration, which awarded the contract. As a Time and Materials contract, rigorous oversight of labor hours, rates, and incurred costs is essential to ensure accountability and prevent overspending. Transparency would be facilitated through contract reporting mechanisms and potentially through the Federal Procurement Data System (FPDS). The Inspector General for HHS would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

HHS Financial Management Support
Federal Accounting and Auditing Services
Administrative Support Services
IT Policy and Compliance Contracts
Blanket Purchase Agreements (BPAs)

Risk Flags

Time and Materials Pricing
Long Contract Duration
Limited Scope Detail Provided
Potential for Cost Overruns

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $18.0 million to KEARNEY & COMPANY, P.C.. FINANCIAL SYSTEMS POLICY AND COMPLIANCE PROGRAM SUPPORT

Who is the contractor on this award?

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

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Office of the Assistant Secretary for Administration).

What is the total obligated amount?

The obligated amount is $18.0 million.

What is the period of performance?

Start: 2020-03-30. End: 2025-09-29.

What is the track record of KEARNEY & COMPANY, P.C. with federal contracts, particularly within HHS?

KEARNEY & COMPANY, P.C. has a significant history of federal contracting, primarily focused on financial auditing, accounting, and management consulting services. They have held numerous contracts across various federal agencies, including substantial work with the Department of Defense, Department of Justice, and other health and human services-related entities. Their experience often involves supporting complex financial systems, compliance initiatives, and audit readiness. Within HHS, they have likely provided similar financial and administrative support services, leveraging their expertise in accounting standards and government regulations. A detailed review of their contract history in systems like FPDS would reveal specific past performance metrics, contract values, and agencies served, providing a clearer picture of their reliability and capability in fulfilling government requirements.

How does the $18M award compare to similar financial systems support contracts at HHS or other large agencies?

The $18 million award over approximately 5.5 years, averaging around $3.28 million annually, places this contract in the mid-to-large tier for specialized professional services. To benchmark effectively, one would compare it to contracts for financial system modernization, compliance support, policy development, and general accounting services at agencies of similar size and complexity, such as CMS, NIH, or even departments like Treasury or Defense. Factors like the specific scope of work (e.g., system implementation vs. ongoing support), the labor categories required, and the contract vehicle used (e.g., GSA Schedule, IDIQ, BPA) heavily influence pricing. A Time and Materials (T&M) contract, as used here, can be more variable than fixed-price contracts. Without detailed scope comparison, it's challenging to definitively state if $18M is high or low, but it reflects a significant investment in maintaining robust financial operations.

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

The primary risks with a T&M contract of this size ($18M) and duration (over 5 years) revolve around cost control and scope management. T&M contracts pay the contractor for the actual labor hours expended and the cost of materials used. This structure inherently lacks a fixed ceiling on the total cost, making it susceptible to cost overruns if the effort required is greater than anticipated or if work is inefficiently performed. For taxpayers, this means the final cost could exceed the initial estimate. Effective risk mitigation requires stringent oversight from the government contracting officer and administrative team to monitor hours, validate rates, ensure efficient performance, and manage scope creep diligently. Without robust government oversight, the potential for increased costs without a commensurate increase in value is significant.

How does the BPA Call mechanism impact competition and potential value for this contract?

A Blanket Purchase Agreement (BPA) Call is essentially a task order issued against a pre-existing BPA. The BPA itself is typically established through a competitive process, allowing multiple vendors to pre-qualify for certain types of services. When a specific need arises, an agency can issue a 'call' or task order against that BPA. This mechanism can streamline procurement and potentially offer better pricing due to the pre-negotiated terms of the BPA. However, the level of competition for the *specific* BPA Call depends on how many BPA holders were solicited and how many responded. While the initial BPA competition ensures qualified vendors, a single BPA Call might not always achieve the same breadth of competition as a standalone, full-and-open solicitation for a large requirement. For taxpayers, the value depends on the competitiveness of the original BPA and the specific solicitation process for this call.

What are the implications of the NAICS code 541211 (Offices of Certified Public Accountants) for the services provided?

The NAICS code 541211 signifies that the primary services procured under this contract are related to accounting, auditing, bookkeeping, and payroll preparation. For HHS's 'Financial Systems Policy and Compliance Program Support,' this implies the contractor will be involved in ensuring the accuracy and compliance of financial data, potentially assisting with audits, developing financial policies, managing financial systems' integrity, and ensuring adherence to accounting standards (like GAAP) and federal regulations. This focus on CPA-related services suggests the contract aims to bolster the financial integrity, reporting accuracy, and regulatory compliance of HHS's complex operations, rather than broader IT system development or general management consulting.

What is the significance of the contract being awarded in Washington D.C. (ST: DC)?

The contract's designation in Washington D.C. (ST: DC) typically indicates the primary place of performance or the administrative location for the contract. For a contract supporting HHS's financial systems policy and compliance, this often means the work is performed in close proximity to the agency's headquarters or key administrative offices, facilitating direct collaboration and oversight. It suggests that the contractor's personnel may be working on-site or in a nearby location to engage directly with HHS staff, attend meetings, and provide immediate support. While some work might be performed remotely, the D.C. location points towards a significant physical presence requirement for effective service delivery in policy and compliance matters.

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

Offers Received: 2

Pricing Type: TIME AND MATERIALS (Y)

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: $18,044,321

Exercised Options: $18,044,321

Current Obligation: $18,044,321

Actual Outlays: $13,294,899

Subaward Activity

Number of Subawards: 19

Total Subaward Amount: $10,824,090

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 75P00119A00028

IDV Type: BPA

Timeline