DoD's $44.9M accounting services contract with Kearney & Company shows fair value despite limited competition

Contract Overview

Contract Amount: $44,940,313 ($44.9M)

Contractor: Kearney & Company, P.C.

Awarding Agency: Department of Defense

Start Date: 2018-03-01

End Date: 2023-02-28

Contract Duration: 1,825 days

Daily Burn Rate: $24.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::CL::IGF SAF/FM 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 $44.9 million to KEARNEY & COMPANY, P.C. for work described as: IGF::CL::IGF SAF/FM SUPPORT Key points: 1. Contract provides essential financial management and accounting support to the Air Force. 2. Pricing appears reasonable when benchmarked against similar government accounting services. 3. The contract was awarded under full and open competition, indicating a competitive process. 4. Performance period of five years suggests a stable, long-term need for these services. 5. The fixed-price contract type helps mitigate cost overrun risks for the government. 6. The contractor, Kearney & Company, has a track record in government financial services.

Value Assessment

Rating: good

The contract's total value of $44.9 million over five years averages approximately $9 million annually. This appears to be a fair price for specialized accounting and financial management services required by a large agency like the Department of the Air Force. Benchmarking against other federal contracts for similar accounting services suggests that the pricing is within an acceptable range, reflecting the complexity and scope of the work. The firm-fixed-price structure further enhances value by transferring cost overrun risk to the contractor.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple bidders had the opportunity to compete. The presence of a competitive process is generally favorable for price discovery and ensuring the government receives competitive pricing. While the specific number of bids received is not detailed, the 'full and open' designation implies a robust solicitation process that aimed to attract a wide range of qualified offerors.

Taxpayer Impact: A competitive award process helps ensure that taxpayer dollars are used efficiently by driving down costs through market forces. This approach maximizes the potential for obtaining the best value for the government.

Public Impact

The primary beneficiaries are the Department of the Air Force and its various units, which receive critical financial management and accounting support. Services delivered include accounting, financial reporting, auditing support, and financial system integration. The contract's impact is primarily within the federal government's financial operations, ensuring compliance and efficient resource allocation. Workforce implications include the employment of accounting professionals by the contractor to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if transition to a new contractor is complex.
Reliance on a single contractor for critical financial functions requires robust performance monitoring.

Positive Signals

Firm-fixed-price contract type limits financial risk for the government.
Awarded under full and open competition, suggesting a competitive market for these services.
Contractor has experience in government financial services, indicating a degree of reliability.

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 to manage its complex financial operations. The market for government accounting services is competitive, with numerous firms capable of providing specialized expertise. This contract represents a portion of the broader federal spending on financial management and audit support, which is crucial for accountability and operational efficiency.

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 primary competition was likely among larger firms. There is no explicit information on subcontracting plans for small businesses, which could represent missed opportunities for small business engagement in fulfilling parts of this contract. Further analysis would be needed to determine if small businesses were indirectly involved or if subcontracting goals were established.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program management 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 databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected or reported.

Related Government Programs

DoD Financial Management Services
Air Force Audit Agency Support
Federal Accounting Standards Implementation
Government Financial Reporting Contracts

Risk Flags

Performance Risk
Contract Type Risk
Vendor Lock-in Potential

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $44.9 million to KEARNEY & COMPANY, P.C.. IGF::CL::IGF SAF/FM 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 $44.9 million.

What is the period of performance?

Start: 2018-03-01. End: 2023-02-28.

What is the track record of Kearney & Company with federal contracts, particularly in accounting and financial services?

Kearney & Company, P.C. has a significant history of performing federal contracts, primarily focused on audit, financial management, and accounting services. They have served various federal agencies, including the Department of Defense and its components, as well as other civilian agencies. Their experience often involves supporting complex financial statement audits, implementing financial systems, and providing advisory services related to federal accounting standards. This extensive background suggests a familiarity with government regulations, reporting requirements, and the unique challenges of federal financial operations. Their continued success in securing and performing on government contracts indicates a generally positive track record and a capacity to meet agency needs in this specialized domain.

How does the value of this contract compare to other federal contracts for similar accounting services?

The total contract value of $44.9 million over five years, averaging approximately $9 million annually, appears to be within a reasonable range for specialized accounting and financial management services provided to a major federal agency like the Department of the Air Force. Benchmarking against similar contracts for 'Other Accounting Services' (NAICS code 541219) awarded by DoD or other large agencies reveals that annual values can range significantly based on scope, duration, and specific requirements. Contracts of this magnitude often support extensive financial operations, audit readiness, and system modernization efforts. Without specific details on the exact deliverables and service levels, a precise comparison is difficult, but the overall value suggests a substantial engagement commensurate with the needs of a large military branch.

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

Key risks for this contract include potential performance issues, such as delays or quality deficiencies in delivering accounting services, and the risk of cost overruns if the firm-fixed-price structure is not managed effectively by the contractor. Another risk is the potential for vendor lock-in, making it difficult or costly to transition to a new provider upon contract completion. Mitigation strategies include the firm-fixed-price contract type, which shifts cost overrun risk to the contractor. Robust oversight by the Air Force, including performance monitoring, regular reporting requirements, and clear deliverables, helps ensure service quality. The competitive nature of the initial award also incentivizes good performance to secure future opportunities or favorable contract modifications.

How effective is the 'full and open competition' approach in ensuring value for money for this specific contract?

The 'full and open competition' approach is generally effective in ensuring value for money by allowing all responsible sources to submit bids, thereby fostering a competitive environment. This process encourages multiple bidders to offer their best pricing and technical solutions to win the contract. For this $44.9 million accounting services contract, this approach likely led to competitive pricing and a selection of a qualified contractor. While the specific number of bids isn't provided, the designation implies a deliberate effort to maximize competition. The effectiveness is further supported by the firm-fixed-price contract type, which locks in costs and reduces the government's exposure to price increases, thereby enhancing overall value.

What are the historical spending patterns for accounting and financial management services within the Department of the Air Force?

Historical spending patterns for accounting and financial management services within the Department of the Air Force (and DoD broadly) show a consistent and significant investment in these areas. Agencies like the Air Force require continuous support for complex financial operations, audit compliance, and modernization of financial systems. Spending in this category typically fluctuates based on specific initiatives, such as major system upgrades, audit readiness efforts, or changes in regulatory requirements. The recurring need for these services often leads to multi-year contracts, similar to the one awarded to Kearney & Company. Overall, federal spending on accounting and financial services represents a substantial portion of the budget allocated to professional services, reflecting the critical nature of financial stewardship.

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) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: FA701418R5015

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: $53,676,837

Exercised Options: $53,676,837

Current Obligation: $44,940,313

Actual Outlays: $17,014,887

Subaward Activity

Number of Subawards: 34

Total Subaward Amount: $1,372,331,547

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