HUD awards $5M+ contract for management consulting, with a focus on administrative and general management services

Contract Overview

Contract Amount: $5,041,148 ($5.0M)

Contractor: Recursion CO

Awarding Agency: Department of Housing and Urban Development

Start Date: 2023-03-01

End Date: 2027-02-28

Contract Duration: 1,460 days

Daily Burn Rate: $3.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: PROGRAM FINANCIAL ADVISOR

Place of Performance

Location: NEW YORK, NEW YORK County, NEW YORK, 10001

State: New York Government Spending

Plain-Language Summary

Department of Housing and Urban Development obligated $5.0 million to RECURSION CO for work described as: PROGRAM FINANCIAL ADVISOR Key points: 1. The contract value of over $5 million suggests a significant need for specialized consulting expertise. 2. The firm fixed-price contract type indicates that costs were determined upfront, potentially offering budget predictability. 3. The duration of nearly five years allows for sustained support and project continuity. 4. The award was made under full and open competition, implying a robust bidding process. 5. The North American Industry Classification System (NAICS) code 541611 points to a focus on management consulting services. 6. The contract is a delivery order, suggesting it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle.

Value Assessment

Rating: good

The contract's total value of approximately $5 million over its nearly five-year term suggests a moderate investment in administrative management consulting. Without specific benchmarks for similar HUD consulting engagements or detailed service breakdowns, a precise value-for-money assessment is challenging. However, the firm fixed-price structure implies that the contractor bears the risk of cost overruns, which can be a positive indicator for the government. Further analysis would require comparing the hourly rates or project deliverables to industry standards for management consulting services.

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 a bid. This approach generally fosters a competitive environment, encouraging multiple bidders to offer their best pricing and solutions. The fact that it was competed openly suggests that the agency sought a broad range of qualified contractors, which can lead to better price discovery and a higher likelihood of selecting the most advantageous offer for the government.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically drives down costs through market forces and ensures that the government receives competitive pricing. It also promotes fairness and transparency in the award process.

Public Impact

The primary beneficiaries are likely the Department of Housing and Urban Development (HUD) itself, which will receive expert advice to improve its administrative and general management functions. The services delivered will focus on enhancing operational efficiency, strategic planning, and potentially policy implementation within HUD. The geographic impact is primarily centered around HUD's operational headquarters, likely in Washington D.C., and potentially extending to its regional offices. Workforce implications may include the engagement of specialized consultants who will work alongside HUD staff, potentially leading to knowledge transfer and capacity building within the agency.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if project objectives are not clearly defined and managed.
Reliance on external consultants may not build long-term internal capacity if knowledge transfer is insufficient.
The effectiveness of the consulting services is dependent on the quality of the contractor's expertise and the agency's ability to implement recommendations.

Positive Signals

The firm fixed-price contract type provides cost certainty for the government.
Full and open competition suggests a rigorous selection process, likely resulting in a qualified contractor.
The multi-year duration allows for sustained support and the potential for deeper impact on agency operations.

Sector Analysis

This contract falls within the administrative management and general management consulting services sector, a broad category encompassing strategic planning, organizational design, process improvement, and operational efficiency. The market for these services is highly competitive, with numerous firms ranging from large, established consultancies to smaller, specialized boutiques. Spending in this sector by federal agencies is common, as they often require external expertise to navigate complex challenges, implement new initiatives, or improve existing operations. Benchmarks for similar contracts would typically involve comparing hourly rates, project fees, and the scope of services provided.

Small Business Impact

The data indicates that small business participation was not a specific set-aside for this contract (ss: false, sb: false). This suggests that the procurement was not specifically targeted towards small businesses, and the competition was open to all eligible firms. While this doesn't preclude small businesses from bidding, it means they were not given preferential treatment through a set-aside. The implications for the small business ecosystem are that larger, more established firms likely had a stronger position in this competition. Subcontracting opportunities for small businesses may exist if the prime contractor chooses to engage them, but this is not guaranteed by the contract terms.

Oversight & Accountability

Oversight for this contract will primarily reside with the contracting officer and the program officials at the Department of Housing and Urban Development. The firm fixed-price nature of the contract provides a degree of financial oversight by fixing costs upfront. Transparency is generally maintained through the Federal Procurement Data System (FPDS), where contract awards are reported. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse related to the contract arise.

Related Government Programs

Management and Financial Consulting, Acquisition and Commercialization
Professional, Scientific, and Technical Services
Government Management Consulting Services
Administrative Support Services

Risk Flags

Potential for cost overruns if not managed tightly under FFP.
Risk of contractor not delivering expected value if scope is poorly defined.
Dependency on contractor expertise may limit internal knowledge transfer.
Effectiveness hinges on strong government oversight and clear performance metrics.

Frequently Asked Questions

What is this federal contract paying for?

Department of Housing and Urban Development awarded $5.0 million to RECURSION CO. PROGRAM FINANCIAL ADVISOR

Who is the contractor on this award?

The obligated recipient is RECURSION CO.

Which agency awarded this contract?

Awarding agency: Department of Housing and Urban Development (Department of Housing and Urban Development).

What is the total obligated amount?

The obligated amount is $5.0 million.

What is the period of performance?

Start: 2023-03-01. End: 2027-02-28.

What is the track record of RECURSION CO in securing federal contracts, particularly within HUD?

Information regarding RECURSION CO's specific track record with federal contracts, especially with the Department of Housing and Urban Development (HUD), is not detailed in the provided data. A comprehensive analysis would require accessing federal procurement databases like FPDS-NG to review past awards, contract values, performance history, and any reported issues. Understanding their history with similar agencies or contract types would provide insight into their experience and reliability. Without this historical data, it's difficult to assess their established performance within the federal contracting landscape.

How does the awarded value of $5,041,147.66 compare to similar administrative management consulting contracts awarded by HUD or other federal agencies?

Comparing the $5 million award to similar contracts requires access to a broader dataset of federal procurements. However, for a contract of nearly five years with a firm fixed-price structure under full and open competition, this value appears moderate for specialized consulting services. Agencies often award contracts in this range for significant projects requiring expert analysis and strategic guidance. Benchmarking would involve looking at contracts with similar NAICS codes (541611) and durations, considering factors like the specific services rendered, the complexity of the tasks, and the agency's budget for such services. Without direct comparative data, it's challenging to definitively state if this represents exceptional value or is on the higher end.

What are the primary risks associated with a firm fixed-price contract for management consulting services?

The primary risk with a firm fixed-price (FFP) contract for management consulting lies in the potential for the contractor to cut corners on quality or scope to maintain profitability if their initial cost estimates were too low. For the government, the risk is receiving less value than anticipated if the contractor prioritizes cost savings over thoroughness. Conversely, if the contractor's estimates were too high, the government might overpay. Effective oversight, clear performance metrics, and robust communication are crucial to mitigate these risks and ensure the delivery of high-quality services that meet the defined objectives.

What specific administrative or general management challenges is HUD likely seeking to address with this contract?

While the specific challenges are not detailed, HUD, as a large federal agency, likely faces ongoing needs related to operational efficiency, strategic planning, program management, policy implementation, and organizational effectiveness. This contract could be aimed at improving internal processes, developing new strategies for housing initiatives, enhancing data management and analysis capabilities, or addressing specific management issues within various departments. The broad nature of 'Administrative Management and General Management Consulting Services' suggests a focus on the foundational operational aspects of the agency rather than highly specialized technical or programmatic areas.

What is the typical duration for federal contracts of this nature (management consulting), and how does this contract's duration compare?

Federal contracts for management consulting services can vary significantly in duration, often depending on the scope and complexity of the project. Contracts can range from short-term, project-specific engagements lasting a few months to longer-term, strategic partnerships extending over several years. A duration of nearly five years (1460 days) for this contract is on the longer side, suggesting a sustained need for consulting support or a phased approach to implementing significant changes within HUD. This duration allows for deeper engagement and potentially more impactful outcomes compared to shorter-term contracts.

How does the 'Delivery Order' (AW) contract type typically function within the federal procurement system?

A 'Delivery Order' (AW) is a type of task order issued under an existing indefinite-delivery/indefinite-quantity (IDIQ) contract. IDIQ contracts establish the terms and conditions for services or supplies over a period, but the specific quantities and delivery dates are determined by individual delivery orders. This approach provides flexibility for the agency to procure needed services as requirements arise, up to a certain ceiling amount. For the contractor, it offers a stream of potential work. The 'Delivery Order' signifies that this $5M+ award is likely one of potentially many orders placed against a broader IDIQ contract vehicle.

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) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 86615723Q00001

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 224 W 30TH STREET, SUITE 303, NEW YORK, NY, 10001

Business Categories: 8(a) Program Participant, Asian Pacific American Owned Business, Category Business, Corporate Entity Not Tax Exempt, Economically Disadvantaged Women Owned Small Business, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business, Woman Owned Business, Women Owned Small Business

Financial Breakdown

Contract Ceiling: $7,563,425

Exercised Options: $5,041,148

Current Obligation: $5,041,148

Actual Outlays: $3,028,593

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 47QRAA23D000M

IDV Type: FSS

Timeline