DoD's $52.2M contract with Deloitte for accounting services shows strong competition and fair pricing

Contract Overview

Contract Amount: $52,221,720 ($52.2M)

Contractor: Deloitte & Touche LLP

Awarding Agency: Department of Defense

Start Date: 2019-05-20

End Date: 2024-05-19

Contract Duration: 1,826 days

Daily Burn Rate: $28.6K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::OT::IGF

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 $52.2 million to DELOITTE & TOUCHE LLP for work described as: IGF::OT::IGF Key points: 1. Value for money appears strong given the competitive nature of the award. 2. Full and open competition suggests a healthy market for these services. 3. No immediate risk indicators are apparent from the contract details. 4. Performance context is limited to accounting services, a standard government need. 5. This contract fits within the professional services sector for the Department of Defense. 6. The firm fixed-price structure helps manage cost certainty for the government.

Value Assessment

Rating: good

The contract's value of $52.2 million over five years for accounting services is within a reasonable range for a large federal agency like the Department of Defense. While specific benchmarks for 'Offices of Certified Public Accountants' (NAICS 541211) are not provided, the competitive award process suggests that pricing was vetted against market rates. The firm fixed-price contract type also indicates a degree of cost control and predictability for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. This approach typically fosters a competitive environment, leading to better pricing and service quality. The specific number of bidders is not detailed, but the 'full and open' designation implies a robust bidding process.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down costs through market forces and ensuring the government receives the best possible value for its spending.

Public Impact

The Department of Defense benefits from essential accounting and auditing services. These services support financial management and accountability within the Air Force. The contract's impact is primarily administrative, supporting federal financial operations. Workforce implications are likely internal to Deloitte, with no direct public employment generation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if services are highly specialized and not easily transferable.
Reliance on a single large contractor could reduce future competitive options if not managed proactively.

Positive Signals

Awarded through full and open competition, indicating a healthy market.
Firm fixed-price contract provides cost certainty.
Contract duration is defined, allowing for periodic re-evaluation of needs and competition.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically accounting services (NAICS 541211). This sector is a significant component of federal contracting, supporting a wide range of agency functions. The Department of Defense is a major consumer of such services, often requiring specialized expertise for complex financial operations. Benchmarking against similar accounting contracts within the federal government would provide further context on pricing and scope.

Small Business Impact

The contract details indicate that small business participation was not a specific set-aside criterion (ss: false, sb: false). While Deloitte is a large business, there is no information provided on subcontracting plans for small businesses. Further analysis would be needed to determine if small businesses are being utilized in the delivery of these accounting services.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Air Force's contracting and program management offices. The firm fixed-price nature of the contract provides a degree of accountability by fixing the cost. Transparency is generally maintained through contract award databases, though specific performance metrics and oversight reports are not detailed here. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense Financial Management
Federal Audit Services
Professional Services Contracts
Air Force Accounting Operations

Risk Flags

Potential for scope creep in long-term fixed-price contracts.
Reliance on a single large contractor may limit future competition.
Lack of specific performance metrics in summary data hinders effectiveness assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $52.2 million to DELOITTE & TOUCHE LLP. IGF::OT::IGF

Who is the contractor on this award?

The obligated recipient is DELOITTE & TOUCHE LLP.

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 $52.2 million.

What is the period of performance?

Start: 2019-05-20. End: 2024-05-19.

What is Deloitte's track record with the Department of Defense for similar accounting services?

Deloitte & Touche LLP has a significant history of contracting with the U.S. federal government, including the Department of Defense, across various service areas. For accounting and auditing services specifically, their track record often involves large-scale financial statement audits, internal control assessments, and financial system support. While this specific contract is for $52.2 million over five years, Deloitte has likely held numerous other contracts, some potentially larger or smaller, with the DoD and other agencies. A deeper dive into contract databases like FPDS or USASpending would reveal the full scope of their past performance, including any past performance ratings, contract modifications, or disputes, which are crucial for assessing their reliability and expertise in fulfilling this current requirement.

How does the $52.2 million contract value compare to historical spending on accounting services by the Department of the Air Force?

The $52.2 million contract value represents a substantial investment in accounting services over a five-year period. To benchmark this effectively, one would need to analyze historical spending data for the Department of the Air Force (or the broader Department of Defense) specifically for NAICS code 541211 (Offices of Certified Public Accountants) and potentially related professional services codes. Comparing this award to the average contract size, total annual spending, and the number of accounting service contracts awarded in previous years would indicate whether this represents an increase, decrease, or stable level of expenditure. Factors such as inflation, changes in regulatory requirements, and shifts in audit scope could influence historical spending patterns, making a direct comparison require careful contextualization.

What are the primary risks associated with a five-year firm fixed-price contract for accounting services?

A primary risk with a five-year firm fixed-price contract for accounting services is the potential for scope creep or unforeseen complexities that are not adequately captured in the initial fixed price. While the fixed price offers cost certainty, if the scope of work expands significantly due to new regulations, changes in agency operations, or discovery of complex issues, the contractor may face reduced profitability, potentially impacting morale or quality. Conversely, the government risks paying a premium if the contractor's actual costs are significantly lower than anticipated, especially if the initial pricing was conservative. Another risk involves the contractor's ability to maintain service quality and expertise over a long duration, as key personnel may leave, or institutional knowledge might diminish without proactive knowledge transfer mechanisms.

How effective are firm fixed-price contracts in ensuring value for money in accounting services compared to other contract types?

Firm fixed-price (FFP) contracts are generally considered effective for services where the scope of work is well-defined and unlikely to change significantly, such as routine accounting and auditing tasks. They place the risk of cost overruns on the contractor, incentivizing efficiency and cost control, which can lead to better value for money if the initial price is competitive. However, for services with inherent uncertainty or evolving requirements, FFP can be less effective. If the scope is not perfectly defined, it can lead to disputes or require costly change orders. Cost-plus contracts, while offering less price certainty, might be more appropriate for highly complex or R&D-intensive services where the final cost is difficult to predict, potentially ensuring the government gets all necessary work done, albeit at a potentially higher price.

What are the implications of awarding this contract through 'full and open competition' for the small business ecosystem?

Awarding a contract through 'full and open competition' generally means that large businesses are eligible to compete alongside small businesses, and there isn't a specific set-aside for small businesses. In this case, the contract was awarded to Deloitte & Touche LLP, a large firm. While full and open competition is intended to maximize competition and achieve the best value for the government, it can sometimes make it more challenging for small businesses to win prime contracts against larger, more resource-rich competitors. However, it does not preclude small businesses from participating as subcontractors. The extent to which Deloitte utilizes small business subcontractors for specialized tasks within this accounting services contract would determine the direct impact on the small business ecosystem.

Are there specific performance metrics or KPIs associated with this contract that indicate its effectiveness?

The provided data does not include specific performance metrics or Key Performance Indicators (KPIs) associated with this contract. Typically, government contracts, especially those of this duration and value, would include a Performance Work Statement (PWS) or Statement of Work (SOW) that outlines deliverables, standards, and methods for evaluating performance. These might include timeliness of reports, accuracy of financial data, adherence to accounting standards, and responsiveness to inquiries. Without access to the PWS/SOW and any associated performance reports or quality assurance surveillance plans (QASP), it is impossible to definitively assess the effectiveness of the services delivered under this contract beyond the structural elements like competition and pricing type.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: TWO STEP

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Deloitte Financial Advisory Services LLP

Address: 1919 N LYNN ST, ARLINGTON, VA, 22209

Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $104,358,763

Exercised Options: $93,779,862

Current Obligation: $52,221,720

Actual Outlays: $10,090,628

Subaward Activity

Number of Subawards: 4

Total Subaward Amount: $9,985,091

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA701418D5000

IDV Type: IDC

Timeline