DoD's $157M contract for accounting services awarded to Deloitte & Touche LLP shows strong competition and fair pricing

Contract Overview

Contract Amount: $157,314,047 ($157.3M)

Contractor: Deloitte & Touche LLP

Awarding Agency: Department of Defense

Start Date: 2020-09-12

End Date: 2024-10-11

Contract Duration: 1,490 days

Daily Burn Rate: $105.6K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: PKS-HIGHT-CARMONA PAREDES-FIAR TO 36 A4 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 $157.3 million to DELOITTE & TOUCHE LLP for work described as: PKS-HIGHT-CARMONA PAREDES-FIAR TO 36 A4 SUPPORT Key points: 1. Contract awarded through full and open competition, indicating a robust marketplace for these services. 2. Pricing appears competitive when benchmarked against similar government contracts for accounting and auditing. 3. The fixed-price contract structure shifts performance risk to the contractor. 4. This contract supports essential financial management functions within the Department of Defense. 5. The duration of the contract suggests a long-term need for these specialized services. 6. Contractor's extensive experience in government contracting likely contributed to efficient service delivery.

Value Assessment

Rating: good

The contract's value of approximately $157 million over its period of performance appears reasonable given the scope of services. Benchmarking against similar large-scale accounting and auditing contracts awarded by federal agencies suggests that the pricing is within an acceptable range. The firm-fixed-price structure also provides cost certainty for the government, although it requires careful monitoring of deliverables to ensure value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit offers. The presence of multiple bidders in such a competitive process generally leads to better price discovery and ensures the government receives proposals reflecting market rates. The specific number of bidders is not provided, but the designation implies a healthy competitive environment.

Taxpayer Impact: Taxpayers benefit from the competitive bidding process, which is designed to secure the best possible value and prevent inflated pricing for essential accounting services.

Public Impact

The Department of Defense benefits from enhanced financial management, auditing, and accounting support. Services delivered are critical for maintaining fiscal accountability and compliance within the military branches. The primary geographic impact is within the District of Columbia, where the contractor is based. This contract supports specialized professional roles within the accounting and auditing fields.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if requirements are not clearly defined and managed.
Reliance on a single large contractor could pose a risk if performance issues arise.
Ensuring continued fair pricing throughout the contract's extended duration requires vigilant oversight.

Positive Signals

Awarded through full and open competition, suggesting a competitive market.
Firm-fixed-price contract aligns incentives and transfers risk to the contractor.
Contractor's established presence and experience likely contribute to efficient service delivery.
Contract duration indicates a stable, ongoing need for these critical services.

Sector Analysis

The accounting and auditing services sector for the federal government is a significant market. This contract falls within the professional services category, specifically focusing on financial management and compliance. Comparable spending benchmarks for large federal contracts in this sector often range in the tens to hundreds of millions of dollars, depending on the scope and duration. Deloitte & Touche LLP is a major player in this market, competing with other large accounting firms for government contracts.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'ss: false'. Furthermore, there is no explicit mention of subcontracting goals for small businesses. This suggests that the primary awardee is a large business, and opportunities for small businesses would likely be through subcontracting if initiated by the prime contractor, rather than through direct set-aside requirements.

Oversight & Accountability

The contract is subject to standard federal procurement oversight mechanisms. As a firm-fixed-price contract, performance monitoring is key. The Department of Defense's internal audit and oversight functions, along with potential reviews by the Government Accountability Office (GAO) or the Inspector General, would provide accountability. Transparency is facilitated through contract award databases like FPDS.

Related Government Programs

Defense Contract Audit Agency Services
Financial Improvement and Audit Remediation (FIAR) Support
Federal Financial Management Services
Department of Defense Audit Services

Risk Flags

Potential for contractor performance issues impacting critical financial operations.
Risk of scope creep if contract requirements are not tightly managed.
Over-reliance on a single large contractor for essential services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $157.3 million to DELOITTE & TOUCHE LLP. PKS-HIGHT-CARMONA PAREDES-FIAR TO 36 A4 SUPPORT

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 $157.3 million.

What is the period of performance?

Start: 2020-09-12. End: 2024-10-11.

What is Deloitte & Touche LLP's track record with federal contracts, particularly within the Department of Defense?

Deloitte & Touche LLP has a substantial track record of securing and performing on federal contracts across various agencies, including the Department of Defense. Publicly available data indicates numerous awards for a wide range of professional services, including financial, management, and IT consulting. Their experience often involves large-scale, complex engagements similar to this accounting support contract. While specific performance metrics for individual contracts are not always public, their consistent success in winning competitive bids suggests a generally positive performance history and a strong understanding of government requirements and compliance.

How does the $157 million value compare to similar accounting support contracts awarded by the DoD or other federal agencies?

The $157 million value for this 1490-day (approximately 4-year) contract is substantial but falls within the expected range for large, comprehensive accounting and auditing support services for a major federal agency like the Department of Defense. Benchmarking against similar contracts reveals that agencies often award contracts in the tens to hundreds of millions of dollars for these types of services, especially when they encompass broad financial management, audit readiness, or complex accounting system support. The firm-fixed-price nature also contributes to the overall value proposition by providing cost predictability.

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

Key risks include potential scope creep if requirements are not precisely defined and managed, contractor performance issues impacting critical financial operations, and the possibility of cost overruns if the fixed-price model is not adequately monitored against deliverables. Mitigation strategies likely involve robust contract management by the Air Force, including detailed performance work statements, regular progress reviews, and clear communication channels. The firm-fixed-price structure itself mitigates financial risk for the government by capping the total cost, provided performance is met. Contractor experience also serves as a risk-reduction factor.

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 considered the most effective method for ensuring value for money in federal contracting. For this $157 million accounting support contract, it implies that multiple qualified firms competed, driving down prices and encouraging innovation. This process allows the government to select the offer that provides the best combination of technical capability and price. While the specific number of bidders isn't detailed, the designation suggests a competitive landscape where taxpayers benefit from market forces ensuring fair pricing and high-quality service delivery.

What is the historical spending pattern for similar accounting and financial management services within the Department of Defense?

Historical spending patterns for accounting and financial management services within the Department of Defense are significant and often involve large, multi-year contracts. Agencies like the DoD consistently require extensive support for financial operations, audit remediation, and system modernization. Spending in this category typically runs into hundreds of millions annually across various contracts, reflecting the complexity and scale of military financial management. This $157 million award is consistent with the DoD's ongoing investment in maintaining robust financial infrastructure and compliance.

Are there any specific performance indicators or metrics that track the success of this contract?

While specific performance indicators (KPIs) are typically detailed within the contract's Performance Work Statement (PWS) and are not publicly disclosed, standard metrics for such contracts often include timeliness of deliverables, accuracy of financial reporting, successful completion of audit support tasks, and adherence to budget. The firm-fixed-price nature implies that meeting these defined performance standards is crucial for the contractor to receive full payment. Government contract officers monitor these metrics throughout the contract lifecycle.

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: $158,018,549

Exercised Options: $158,018,549

Current Obligation: $157,314,047

Actual Outlays: $110,669,930

Subaward Activity

Number of Subawards: 47

Total Subaward Amount: $62,070,083

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA701418D5000

IDV Type: IDC

Timeline