KPMG LLP awarded $45.6M contract by Department of Energy for accounting services
Contract Overview
Contract Amount: $45,564,795 ($45.6M)
Contractor: Kpmg LLP
Awarding Agency: Department of Energy
Start Date: 2002-12-15
End Date: 2007-12-31
Contract Duration: 1,842 days
Daily Burn Rate: $24.7K/day
Competition Type: COMPETITIVE DELIVERY ORDER
Number of Offers Received: 51
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Other
Place of Performance
Location: DISTRICT OF COLUMBIA, UNITED STATES OF AMERICA
Plain-Language Summary
Department of Energy obligated $45.6 million to KPMG LLP for work described as: Key points: 1. Contract value represents a significant investment in accounting and auditing support. 2. Competition dynamics for this contract are crucial for ensuring fair pricing. 3. Performance history and contractor's track record are key risk indicators. 4. This contract falls within the broader context of federal financial management. 5. The accounting services sector is highly competitive, with many established players. 6. Economic price adjustment clauses introduce potential for cost escalation.
Value Assessment
Rating: good
The contract value of $45.6 million over five years suggests a substantial engagement. Benchmarking against similar accounting service contracts awarded by federal agencies is necessary to fully assess value for money. The fixed-price with economic price adjustment structure indicates an attempt to balance cost certainty with market fluctuations, but requires careful monitoring of price index changes.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded as a competitive delivery order, implying a robust bidding process. The number of bidders (51) indicates a healthy level of competition for this type of service. This broad competition is generally expected to drive down prices and encourage innovative solutions from contractors.
Taxpayer Impact: A competitive award process for accounting services helps ensure that taxpayer funds are used efficiently by securing favorable pricing and high-quality service delivery.
Public Impact
The Department of Energy benefits from professional accounting and auditing services, enhancing financial accountability. Services delivered likely include financial statement preparation, auditing, and advisory support. The contract's impact is primarily within the District of Columbia, where the contractor is located. The contract supports a workforce of accounting professionals employed by KPMG LLP.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns due to economic price adjustment clauses.
- Ensuring consistent service quality and performance throughout the contract duration.
- Managing the transition of services if performance issues arise.
Positive Signals
- High number of bidders suggests strong market interest and potential for competitive pricing.
- Award to an established firm like KPMG LLP indicates a level of confidence in their capabilities.
- The competitive nature of the award process is a positive signal for efficient resource allocation.
Sector Analysis
The accounting services sector is a mature and essential component of the federal procurement landscape. Agencies rely heavily on these services for financial management, compliance, and auditing. Spending in this sector is consistent across government, with significant annual outlays for similar professional services. This contract fits within the standard procurement patterns for financial support functions.
Small Business Impact
While this contract was awarded competitively, there is no explicit indication of a small business set-aside. The scale of the contract likely favors larger firms with extensive resources. Subcontracting opportunities for small businesses may exist, but are not guaranteed and would depend on KPMG's specific subcontracting plan.
Oversight & Accountability
Oversight would typically be managed by the contracting officer and program managers within the Department of Energy. Performance reviews, regular reporting, and adherence to contract terms are standard accountability measures. Transparency is generally maintained through contract databases, though specific performance metrics may not always be publicly detailed.
Related Government Programs
- Federal Financial Management Services
- Government Auditing Services
- Professional Services Contracts
- Department of Energy Financial Operations
Risk Flags
- Potential for cost escalation due to economic price adjustment.
- Contract duration may lead to contractor complacency if not actively managed.
- Ensuring adequate performance metrics are tracked and enforced.
Tags
accounting-services, department-of-energy, fixed-price-economic-price-adjustment, competitive-delivery-order, professional-services, financial-management, district-of-columbia, large-contract, kpmg-llp, federal-contracting
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $45.6 million to KPMG LLP. See the official description on USAspending.
Who is the contractor on this award?
The obligated recipient is KPMG LLP.
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $45.6 million.
What is the period of performance?
Start: 2002-12-15. End: 2007-12-31.
What is KPMG LLP's track record with federal contracts, particularly with the Department of Energy?
KPMG LLP has a significant history of performing federal contracts across various agencies, including the Department of Energy. Their experience typically spans financial auditing, accounting advisory, and management consulting services. Analyzing past performance reviews, any past performance issues or commendations, and the overall value of previously awarded contracts can provide insight into their reliability and capability. For this specific contract, the duration and value suggest a substantial and likely successful engagement, but a deeper dive into their performance history with the DOE would be beneficial to confirm consistent quality and adherence to federal regulations.
How does the $45.6 million contract value compare to similar accounting service contracts awarded by the federal government?
The $45.6 million contract value for accounting services over approximately five years is substantial but falls within the typical range for large-scale professional services engagements for federal agencies. Similar contracts for financial statement audits, accounting system support, or financial advisory services can range from tens to hundreds of millions of dollars, depending on the agency's size, complexity, and specific needs. For instance, the Department of Defense or Treasury might award larger contracts due to their scale. However, for an agency like the Department of Energy, this award represents a significant portion of its professional services budget for accounting, indicating a critical need for these services.
What are the primary risks associated with a Fixed Price with Economic Price Adjustment (FPEPA) contract for accounting services?
The primary risk with an FPEPA contract for accounting services lies in the potential for cost escalation beyond initial projections. While the fixed-price component provides a baseline, the economic price adjustment allows for increases based on specific economic indicators (e.g., inflation rates, labor cost indices). This can lead to higher-than-anticipated spending for the government if these indicators rise significantly. For the contractor, the risk is mitigated by the adjustment mechanism. For the government, effective oversight involves closely monitoring the indices used for adjustment and ensuring they accurately reflect market conditions without undue inflation.
How effective are competitive delivery orders in ensuring value for money for accounting services?
Competitive delivery orders are generally effective in ensuring value for money for accounting services because they leverage market competition. By soliciting bids from multiple qualified contractors, agencies can compare proposals based on price, technical approach, and past performance. The presence of 51 bidders in this case suggests a robust competition, which typically drives down prices and encourages contractors to offer their best terms. This process helps prevent overpayment and ensures that the selected contractor provides services that meet the agency's requirements at a reasonable cost, thereby maximizing the value derived from taxpayer funds.
What is the historical spending trend for accounting services at the Department of Energy?
Historical spending on accounting services at the Department of Energy (DOE) has likely been consistent, reflecting the ongoing need for financial management, auditing, and compliance support. While specific year-over-year figures for this contract are not provided, the DOE, like other large federal agencies, dedicates significant resources to these functions. Trends may show fluctuations based on specific audit cycles, system upgrades, or changes in regulatory requirements. Analyzing broader DOE spending on professional services, particularly within financial management categories, would reveal patterns and help contextualize the $45.6 million award as part of a larger, sustained investment in financial integrity.
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: COMPETITIVE DELIVERY ORDER
Offers Received: 51
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)
Contractor Details
Parent Company: Kpmg L.L.P. (UEI: 001667906)
Address: 2001 M ST NW, WASHINGTON, DC, 20036
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $47,391,163
Exercised Options: $47,391,163
Current Obligation: $45,564,795
Parent Contract
Parent Award PIID: GS23F8127H
IDV Type: FSS
Timeline
Start Date: 2002-12-15
Current End Date: 2007-12-31
Potential End Date: 2007-12-31 00:00:00
Last Modified: 2015-04-01
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