DoD's $343M IT contract with Accenture shows mixed value, with high per-unit costs but strong competition

Contract Overview

Contract Amount: $343,868,897 ($343.9M)

Contractor: Accenture LLP

Awarding Agency: Department of Defense

Start Date: 2005-07-14

End Date: 2009-12-31

Contract Duration: 1,631 days

Daily Burn Rate: $210.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: IT

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22203

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $343.9 million to ACCENTURE LLP for work described as: Key points: 1. The contract's total value of $343.8 million over its lifespan indicates significant investment in IT services. 2. While the contract was fully competed, the per-unit cost analysis suggests potential for cost efficiencies. 3. The fixed-price contract type generally mitigates cost overrun risks for the government. 4. The duration of 1631 days suggests a long-term need for these IT services. 5. The contract falls under the 'Computer Systems Design Services' category, a common area for federal IT spending. 6. The award to a large, established contractor like Accenture suggests a focus on capability and reliability.

Value Assessment

Rating: fair

The total award of $343.8 million for Computer Systems Design Services over 1631 days appears substantial. Benchmarking against similar contracts is challenging without more specific service details, but the implied per-unit cost is high. While Accenture is a capable contractor, the pricing warrants scrutiny to ensure optimal value for the taxpayer. Further analysis of the specific services rendered would be needed for a more definitive 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 bidders had the opportunity to compete. The presence of 4 bids suggests a reasonably competitive environment, which typically helps in achieving fair market prices. The full and open nature of the competition is a positive indicator for price discovery and ensuring the government receives competitive offers.

Taxpayer Impact: Taxpayers benefit from full and open competition as it drives down prices through market forces, ensuring that the government is not overpaying for services.

Public Impact

The Department of the Army benefits from enhanced computer systems design services, crucial for its operational efficiency. Military personnel and civilian staff likely experience improved IT infrastructure and support, enabling better mission execution. The contract supports IT modernization efforts within the Department of Defense. The geographic impact is primarily within the Department of Defense's operational areas, potentially nationwide or global. The contract supports a significant number of jobs within the IT services sector, particularly at Accenture and its potential subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

High total contract value could indicate potential for cost overruns if not managed tightly.
The per-unit cost, while not explicitly detailed, appears high based on the total award and duration, suggesting a need for careful performance monitoring.
Reliance on a single large contractor, even with competition, can sometimes limit flexibility and innovation compared to a more diverse vendor pool.

Positive Signals

Awarded under full and open competition, ensuring a competitive bidding process.
The contract is firm fixed price, which transfers most of the cost risk to the contractor.
Accenture is a well-established contractor with a significant track record in government IT services.
The contract duration suggests a stable, long-term requirement, allowing for focused service delivery.

Sector Analysis

The federal IT services market is vast, with agencies consistently investing in systems design, integration, and maintenance. This contract for Computer Systems Design Services falls within a critical segment of this market. Spending in this area is driven by the need for modernization, cybersecurity, and efficient data management across all government functions. Comparable spending benchmarks would typically involve analyzing other large-scale IT service contracts awarded by the Department of Defense and other federal agencies for similar scope and duration.

Small Business Impact

There is no indication that this contract included a small business set-aside. The award to Accenture, a large business, suggests that small businesses were likely not the primary focus for the prime contract. However, there may be opportunities for small businesses to participate as subcontractors to Accenture, depending on the subcontracting plan negotiated for this award.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Army contracting officers and program managers. Accountability measures are embedded in the firm fixed-price structure and performance requirements outlined in the contract. Transparency is generally provided through contract award databases, though detailed performance metrics may not always be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense IT Modernization Programs
General Services Administration (GSA) IT Schedule Contracts
Army Enterprise Systems Integration
Defense Information Systems Agency (DISA) Contracts

Risk Flags

Potential for high per-unit costs requires careful monitoring.
Long contract duration may introduce risks of obsolescence or changing requirements.
Reliance on a single large prime contractor could limit agility.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $343.9 million to ACCENTURE LLP. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is ACCENTURE LLP.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $343.9 million.

What is the period of performance?

Start: 2005-07-14. End: 2009-12-31.

What specific computer systems design services were provided under this contract?

The contract, NAICS code 541512, specifies 'Computer Systems Design Services.' This broad category typically encompasses designing and integrating computer hardware and software systems. Services could include needs analysis, system design, hardware and software integration, and potentially project management for IT system development. Without access to the specific statement of work (SOW) or task orders issued under this contract, the precise nature of the services remains general. However, given the Department of the Army as the client, these services likely supported critical defense and administrative IT infrastructure, potentially involving network design, database management systems, software development lifecycle support, or the implementation of new enterprise resource planning (ERP) systems.

How does the $343.8 million total award compare to similar IT contracts for the Department of Defense?

The $343.8 million total award for Computer Systems Design Services is a substantial figure, indicative of a significant IT undertaking. To compare it effectively, one would need to benchmark against other large-scale IT service contracts awarded by the Department of Defense (DoD) over similar timeframes (approximately 4.5 years). Contracts for enterprise resource planning (ERP) implementation, large-scale network modernization, or cybersecurity infrastructure development within the DoD often reach hundreds of millions of dollars. While this contract's value is significant, it may fall within the typical range for major IT service procurements supporting a large military branch like the Army. A more precise comparison would require analyzing contracts with identical NAICS codes and similar scope, which can be difficult due to the varied nature of IT projects.

What is the assessed risk level associated with this contract, considering its value and duration?

The risk level for this contract can be assessed as moderate. The firm fixed-price (FFP) contract type is a positive factor, as it shifts cost overrun risks to the contractor, Accenture. The contract's duration of 1631 days (over 4.5 years) is substantial, which can introduce risks related to technological obsolescence, changing requirements, and contractor performance degradation over time. However, the fact that it was awarded under full and open competition with 4 bidders suggests a robust vetting process. Accenture's established track record as a large government contractor also mitigates some performance risks. Key risks to monitor would include scope creep if not managed tightly, potential for underperformance on complex technical tasks, and ensuring continued alignment with evolving DoD IT strategies.

What does the competition level (4 bidders) imply about the contractor's track record and the government's negotiation power?

Having 4 bidders for this contract indicates a healthy level of competition within the market for Computer Systems Design Services for the Department of the Army. This number suggests that the opportunity was attractive enough for multiple capable firms to invest resources in preparing proposals. For the government, this level of competition generally translates to better price discovery and negotiation leverage. It implies that the government was likely able to secure competitive pricing and favorable terms. For the winning contractor, Accenture, it signifies that they were able to present a compelling technical and cost proposal that outperformed at least three other qualified competitors, reinforcing their position as a capable provider in this space.

How has historical spending in 'Computer Systems Design Services' by the Department of the Army evolved?

Historical spending by the Department of the Army (DoA) on 'Computer Systems Design Services' (NAICS 541512) has generally been substantial and consistent, reflecting the critical role of IT in modern military operations. Over the past decade, federal IT spending, including this category, has seen fluctuations driven by budget priorities, technological advancements (like cloud computing and AI), and specific modernization initiatives. The DoA, as one of the largest components of the DoD, consistently ranks among the top federal agencies for IT expenditures. Spending in this sector is often characterized by large, long-term contracts for system design, integration, and maintenance, similar to the Accenture award. Trends may show an increasing emphasis on cybersecurity, data analytics, and agile development methodologies within these service contracts.

Industry Classification

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

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SIMPLIFIED ACQUISITION

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Accenture Public Limited Company (UEI: 985015354)

Address: 11951 FREEDOM DR, RESTON, VA, 20190

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0010404AZF12

IDV Type: IDC

Timeline