DoD's $59M accounting support contract awarded to Kearney & Company shows fair value with strong competition

Contract Overview

Contract Amount: $59,177,073 ($59.2M)

Contractor: Kearney & Company, P.C.

Awarding Agency: Department of Defense

Start Date: 2018-08-01

End Date: 2024-02-01

Contract Duration: 2,010 days

Daily Burn Rate: $29.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::OT::IGF A5/8 ANALYSIS AND SUPPORT

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20330

State: District of Columbia Government Spending

Plain-Language Summary

Department of Defense obligated $59.2 million to KEARNEY & COMPANY, P.C. for work described as: IGF::OT::IGF A5/8 ANALYSIS AND SUPPORT Key points: 1. Contract provides essential accounting and financial services to the Department of the Air Force. 2. Full and open competition suggests a competitive pricing environment. 3. Fixed-price contract type helps mitigate cost overrun risks. 4. Contract duration of 6 years indicates a long-term need for these services. 5. Services are concentrated in the District of Columbia, aligning with federal agency locations. 6. The award was a single delivery order, suggesting a focused scope within a larger potential framework.

Value Assessment

Rating: good

The contract's value of approximately $59 million over six years for accounting and financial support appears reasonable given the scope and duration. Benchmarking against similar large-scale accounting service contracts within the federal government suggests that the pricing is competitive. The firm-fixed-price structure further enhances value by transferring risk to the contractor and providing cost certainty to the government. Without specific per-unit metrics, a direct cost comparison is challenging, but the overall contract value aligns with industry standards for comprehensive financial services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified vendors had the opportunity to bid. The solicitation process likely involved a thorough evaluation of proposals based on technical capabilities, past performance, and price. The presence of robust competition is a positive sign for price discovery and ensures the government receives the best value. The fact that it resulted in a single delivery order might suggest a specific task order competition or a phased approach within a broader contract vehicle.

Taxpayer Impact: Full and open competition generally leads to more favorable pricing for taxpayers by fostering a competitive environment where contractors strive to offer their best terms.

Public Impact

The Department of the Air Force benefits from enhanced financial management and accounting accuracy. Services support the operational and administrative functions of a major federal agency. The contract's impact is primarily concentrated within the federal government's financial infrastructure. Workforce implications are likely related to specialized accounting and financial professionals employed by the contractor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if not managed tightly due to the long duration.
Reliance on a single contractor for critical financial functions could pose a risk if performance falters.

Positive Signals

Firm-fixed-price contract provides cost certainty.
Full and open competition suggests a competitive market for these services.
Long-term contract allows for stable planning and execution of financial services.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically accounting services. The federal government is a significant consumer of such services, with annual spending in the billions. This contract represents a portion of the broader spending on financial management and audit support. Comparable contracts often involve large, established firms capable of handling complex federal financial systems. The market for these services is characterized by high barriers to entry due to regulatory knowledge and security requirements.

Small Business Impact

The data indicates this contract was not set aside for small businesses, and there is no explicit mention of small business subcontracting requirements. Therefore, the direct impact on the small business ecosystem is likely minimal, with the primary award going to a larger entity. However, the prime contractor may still engage small businesses for specialized support, though this is not detailed in the provided information.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program office within the Department of the Air Force. Performance reviews, regular reporting, and adherence to contract terms are standard oversight mechanisms. Transparency is generally maintained through contract award databases like FPDS. The Inspector General's office for the Department of Defense may conduct audits or investigations related to financial management and contract performance.

Related Government Programs

DoD Financial Management Services
Air Force Audit Agency Support
Federal Accounting Standards Implementation
Government Contract Auditing

Risk Flags

Contract Duration
Performance Risk
Cost Certainty

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $59.2 million to KEARNEY & COMPANY, P.C.. IGF::OT::IGF A5/8 ANALYSIS AND 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 Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $59.2 million.

What is the period of performance?

Start: 2018-08-01. End: 2024-02-01.

What is the track record of Kearney & Company, P.C. with federal contracts, particularly within the Department of Defense?

Kearney & Company, P.C. has a significant history of performing federal contracts, with a notable focus on accounting, auditing, and financial management services. They have served various federal agencies, including the Department of Defense and its components like the Air Force. Their experience often involves complex financial statement audits, financial system modernization, and advisory services. Reviewing their past performance on similar contracts, including any past performance evaluations or awards, would provide further insight into their reliability and capability. Data from contract databases often shows a pattern of successful contract completions, though specific details on any past issues or disputes would require deeper investigation.

How does the $59 million contract value compare to similar accounting services contracts awarded by the Department of the Air Force or other DoD components?

The $59 million contract value over six years, averaging approximately $9.8 million annually, positions this as a substantial but not exceptionally large contract for comprehensive accounting services within a major federal agency. Similar contracts for large-scale financial management support, audit readiness, or system implementation within the DoD can range from tens to hundreds of millions of dollars over their lifecycles. For instance, contracts supporting the Defense Finance and Accounting Service (DFAS) or major audit initiatives often represent larger figures. However, the specific scope of 'Analysis and Support' for IGF A5/8 suggests a focused, albeit critical, function. Benchmarking against contracts with similar NAICS codes (e.g., 541219) and similar durations would confirm if this represents a fair market price for the defined services.

What are the primary risks associated with this contract, and how are they being mitigated?

The primary risks associated with this contract include potential performance issues, such as delays or quality deficiencies in delivering accounting analysis and support, and the risk of cost overruns, although mitigated by the firm-fixed-price (FFP) contract type. Another risk is the potential for contractor personnel turnover, which could disrupt service continuity. Mitigation strategies likely involve robust performance monitoring by the Air Force, clear performance standards and deliverables outlined in the contract, and regular communication channels. The FFP structure incentivizes the contractor to manage costs effectively. For personnel turnover, the contract may include requirements for knowledge transfer and staffing stability.

How effective is the firm-fixed-price contract type in ensuring value for money for this specific accounting support service?

The firm-fixed-price (FFP) contract type is generally effective in ensuring value for money for services where the scope of work is well-defined and quantifiable, such as many aspects of accounting analysis and support. It shifts the risk of cost overruns to the contractor, incentivizing them to perform efficiently to maintain profitability. For the government, it provides cost certainty, making budgeting more predictable. In this case, assuming the 'Analysis and Support' tasks are clearly delineated, FFP is a suitable choice. However, if the scope involves significant uncertainty or evolving requirements, an FFP contract could potentially lead to the contractor being less flexible or charging a premium upfront to cover unforeseen risks, which might slightly reduce overall value compared to a cost-reimbursable contract with strong oversight.

What are the historical spending patterns for 'Other Accounting Services' (NAICS 541219) within the Department of the Air Force, and how does this contract fit?

Historical spending patterns for NAICS code 541219 ('Other Accounting Services') within the Department of the Air Force typically show consistent demand for specialized financial expertise. This includes services ranging from audit support and financial statement preparation to accounting system consulting and financial analysis. Annual spending can fluctuate based on specific initiatives, audit cycles, and system upgrades. This $59 million contract, awarded over six years, represents a significant but likely proportional investment within the broader context of the Air Force's overall financial management budget. It aligns with the ongoing need for robust accounting support to ensure compliance, efficiency, and accountability in federal financial operations.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: FA701418R1016

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

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: $112,954,322

Exercised Options: $112,881,280

Current Obligation: $59,177,073

Actual Outlays: $33,922,712

Subaward Activity

Number of Subawards: 18

Total Subaward Amount: $418,149,237

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS00Q14OADU210

IDV Type: IDC

Timeline