DOJ's $11.3M accounting services contract awarded to Grant Thornton LLP shows fair value and strong competition

Contract Overview

Contract Amount: $11,287,370 ($11.3M)

Contractor: Grant Thornton LLP

Awarding Agency: Department of Justice

Start Date: 2006-08-24

End Date: 2010-05-14

Contract Duration: 1,359 days

Daily Burn Rate: $8.3K/day

Competition Type: COMPETITIVE DELIVERY ORDER

Number of Offers Received: 3

Pricing Type: LABOR HOURS

Sector: Other

Official Description: OC-GRANT THORTON

Place of Performance

Location: ALEXANDRIA, ALEXANDRIA (CITY) County, VIRGINIA, 22314, UNITED STATES OF AMERICA

State: Virginia Government Spending

Plain-Language Summary

Department of Justice obligated $11.3 million to GRANT THORNTON LLP for work described as: OC-GRANT THORTON Key points: 1. Contract awarded competitively, indicating potential for good pricing. 2. Services align with standard accounting practices, suggesting predictable performance. 3. Duration of contract (over 3 years) implies a stable, ongoing need. 4. Awarded to a large, established firm, suggesting lower performance risk. 5. Geographic location in Virginia is typical for federal service contracts. 6. Contract type (delivery order) suggests it's part of a larger framework agreement.

Value Assessment

Rating: good

The contract's total value of approximately $11.3 million over its duration suggests a reasonable annual spend for specialized accounting services. Benchmarking against similar contracts for 'Other Accounting Services' (NAICS 541219) within the Department of Justice or similar agencies would be necessary for a precise value-for-money assessment. However, the competitive nature of the award implies that pricing was scrutinized against market rates. The use of 'Labor Hours' as the payment type is common for services where scope can fluctuate, but it necessitates careful monitoring to ensure efficiency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded as a competitive delivery order, indicating that it was competed under a broader contract vehicle, likely allowing for full and open competition among eligible vendors. The presence of 3 bidders suggests a healthy level of competition for this specific task order. This competitive environment generally leads to better price discovery and encourages vendors to offer competitive terms and pricing to secure the award.

Taxpayer Impact: The competitive award process for this contract is beneficial for taxpayers as it likely resulted in a more favorable price than a sole-source or limited competition scenario. Multiple bidders typically drive down costs and improve the quality of services offered.

Public Impact

The Department of Justice benefits from specialized accounting services to support its complex financial operations. These services likely contribute to accurate financial reporting, auditing support, and compliance within the agency. The contract supports the agency's mission by ensuring sound financial management. The workforce implications are primarily for the contractor, Grant Thornton LLP, who will provide the accounting expertise.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if labor hours are not managed efficiently.
Dependence on a single large contractor could limit future competitive options if not managed strategically.

Positive Signals

Award to a reputable firm like Grant Thornton suggests a high likelihood of successful service delivery.
Competitive award process indicates a fair market price was likely achieved.
Clear contract duration provides predictability for both the agency and the contractor.

Sector Analysis

The accounting services sector is a critical support function for all government agencies. NAICS code 541219 covers a broad range of accounting services, including tax preparation, bookkeeping, and payroll services. Federal spending in this area is consistent across departments, supporting essential administrative and financial operations. The market is characterized by a mix of large, established firms like Grant Thornton and smaller specialized accounting practices. This contract fits within the broader category of professional services procured by the government.

Small Business Impact

The data indicates this contract was awarded competitively and does not specify any small business set-aside provisions (ss: false, sb: false). While Grant Thornton LLP is a large business, the competitive nature of the award means that opportunities for small business subcontracting may have been considered or encouraged by the prime contractor as part of their proposal. Further analysis would be needed to determine if subcontracting plans were a factor in the award or if small businesses were involved in the competitive bidding process.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Department of Justice's contracting officers and program managers. The Office of the Inspector General (OIG) for the DOJ may also conduct audits or investigations related to financial management and contract performance. Transparency is generally maintained through contract award databases and reporting requirements, though specific performance metrics and detailed oversight reports are often internal.

Related Government Programs

Department of Justice Financial Management
Federal Accounting Services
Professional Services Contracts
Government Auditing Services

Risk Flags

Potential for cost overruns with Labor Hours pricing.
Contract duration may limit flexibility for future needs.
Reliance on a single large contractor.

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $11.3 million to GRANT THORNTON LLP. OC-GRANT THORTON

Who is the contractor on this award?

The obligated recipient is GRANT THORNTON LLP.

Which agency awarded this contract?

Awarding agency: Department of Justice (Office of Justice Programs).

What is the total obligated amount?

The obligated amount is $11.3 million.

What is the period of performance?

Start: 2006-08-24. End: 2010-05-14.

What is Grant Thornton LLP's track record with federal contracts, particularly within the Department of Justice?

Grant Thornton LLP is a well-established professional services firm with a significant history of performing federal contracts across various agencies. Their experience often spans financial auditing, tax advisory, and management consulting services. Within the Department of Justice, they have likely been involved in numerous engagements supporting financial operations, compliance, and potentially investigative support. A review of federal procurement data (like FPDS or SAM.gov) would reveal the full scope and value of their past and present federal awards, including specific task orders and performance history. Their long-standing presence suggests a generally positive track record, though specific contract performance can vary.

How does the $11.3 million total award value compare to similar accounting service contracts within the federal government?

The $11.3 million total award value for accounting services over the contract's duration (approximately 3.7 years) translates to an average annual value of roughly $3 million. This figure is moderate within the context of federal professional services. Larger agencies with extensive financial operations, such as the Department of Defense or Treasury, often award significantly larger contracts for similar services. However, for a specific division like the Office of Justice Programs within DOJ, this amount appears reasonable, especially considering it was awarded competitively. Benchmarking against contracts for NAICS code 541219 across different agencies and contract types would provide a more precise comparison.

What are the primary risks associated with this type of 'Other Accounting Services' contract, and how were they mitigated?

Key risks include potential cost overruns due to the 'Labor Hours' pricing model if not managed diligently, scope creep, and the risk of subpar service quality impacting financial integrity. Mitigation strategies typically involve robust contract oversight, clearly defined performance work statements (PWS), regular progress reviews, and performance metrics. The competitive award process itself helps mitigate the risk of poor value by selecting a qualified vendor at a fair price. Grant Thornton's established reputation also serves as a mitigating factor, suggesting a lower risk of performance failure compared to an unknown entity.

How effective is the 'Labor Hours' contract type for procuring accounting services, and what are its implications for price certainty?

The 'Labor Hours' (LH) contract type is often used when the extent or duration of the work cannot be determined in advance. For accounting services, this can be beneficial if the scope of tasks fluctuates based on agency needs or unforeseen financial events. It provides flexibility. However, it offers less price certainty for the government compared to fixed-price contracts. The government pays for the actual hours worked by the contractor's personnel at pre-negotiated rates. Effective management, including setting ceilings on hours and close monitoring, is crucial to control costs and ensure value. This type necessitates strong government oversight to prevent inefficiencies.

What is the historical spending trend for 'Other Accounting Services' (NAICS 541219) within the Department of Justice?

Historical spending data for NAICS 541219 within the Department of Justice would reveal trends in the agency's reliance on external accounting support. Analyzing spending over several fiscal years would indicate whether the need for such services is increasing, decreasing, or remaining stable. It would also highlight the typical contract values and types (e.g., competitive vs. sole-source) utilized. This specific $11.3 million contract represents a significant, but potentially typical, investment for specialized accounting needs within the DOJ. Understanding past spending patterns helps in forecasting future requirements and budgeting effectively.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Accounting, Tax Preparation, Bookkeeping, and Payroll Services › Other Accounting Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: COMPETITIVE DELIVERY ORDER

Offers Received: 3

Pricing Type: LABOR HOURS (Z)

Contractor Details

Parent Company: Grant Thornton International Ltd (UEI: 347201258)

Address: 333 JOHN CARLYLE ST STE 500, ALEXANDRIA, VA, 22314

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $11,287,370

Exercised Options: $11,287,370

Current Obligation: $11,287,370

Parent Contract

Parent Award PIID: GS23F8196H

IDV Type: FSS

Timeline