Deloitte & Touche LLP awarded $102.4M contract for accounting services by the Department of Defense

Contract Overview

Contract Amount: $102,412,111 ($102.4M)

Contractor: Deloitte & Touche LLP

Awarding Agency: Department of Defense

Start Date: 2023-07-23

End Date: 2025-07-22

Contract Duration: 730 days

Daily Burn Rate: $140.3K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: PKS - ROSS - CARMONA PAREDES - FIAR TO 0060

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 $102.4 million to DELOITTE & TOUCHE LLP for work described as: PKS - ROSS - CARMONA PAREDES - FIAR TO 0060 Key points: 1. Contract awarded to a large, established firm, suggesting a focus on capacity and expertise. 2. Full and open competition indicates a broad search for qualified bidders. 3. Fixed-price contract type shifts performance risk to the contractor. 4. Contract duration of two years provides a defined period for service delivery. 5. Services align with standard accounting and auditing functions critical for government operations. 6. Geographic location in Washington D.C. may indicate a focus on high-level or agency-specific support.

Value Assessment

Rating: good

The contract value of $102.4 million over two years averages to approximately $51.2 million annually. Benchmarking this against similar large-scale federal accounting and auditing contracts suggests this is within a reasonable range for a firm of Deloitte's size and scope, especially given the complexity often associated with Department of Defense requirements. The firm-fixed-price structure implies that the government has negotiated a set price, which can be advantageous if the contractor manages costs effectively. However, without specific deliverables or performance metrics, a precise value-for-money assessment is challenging.

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 bids. This approach is generally favored for maximizing competition and potentially achieving better pricing and service quality. The number of bidders is not specified, but the use of full and open competition suggests a robust process was intended to attract multiple qualified firms. The outcome of this competition, leading to an award to Deloitte & Touche LLP, implies they offered the best value proposition among the competing entities.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it aims to drive down costs and improve service delivery through a wide range of potential providers vying for the contract. This process increases the likelihood of securing competitive pricing and innovative solutions.

Public Impact

The Department of Defense benefits from professional accounting and auditing services, ensuring financial integrity and compliance. Services likely include financial statement audits, accounting advisory, and potentially support for financial management systems. The primary geographic impact is within the District of Columbia, suggesting support for national-level defense financial operations. The contract supports a significant workforce within Deloitte & Touche LLP, contributing to employment in the professional services sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the fixed-price contract does not adequately account for unforeseen complexities in DoD financial systems.
Dependence on a single large contractor for critical financial functions could pose a risk if performance issues arise.
The broad scope of accounting services might lead to less specialized attention compared to smaller, niche contracts.

Positive Signals

Award to a reputable 'Big Four' accounting firm suggests a high level of expertise and established processes.
The firm-fixed-price contract type provides cost certainty for the government.
Full and open competition indicates a thorough vetting process and potential for competitive pricing.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically accounting, tax preparation, bookkeeping, and payroll services (NAICS 541211). The federal government is a significant consumer of these services, requiring them for financial management, auditing, and compliance across all agencies. The market for these services is large and competitive, dominated by major accounting firms like Deloitte, as well as numerous smaller specialized firms. This contract represents a substantial portion of spending within this sub-sector for the Department of Defense.

Small Business Impact

The contract data indicates that small business participation (ss: false, sb: false) was not a specific set-aside or requirement for this particular award. As a large-value contract awarded to a major firm, it is unlikely to involve significant subcontracting opportunities for small businesses unless explicitly mandated or pursued by the prime contractor. The absence of small business considerations in the award details suggests that the primary focus was on the capabilities and capacity of the large firm to meet the extensive requirements of the Department of Defense.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the contract administration office within the Department of the Air Force. Performance monitoring, deliverable reviews, and financial oversight are standard mechanisms. Transparency is generally maintained through contract award databases like FPDS. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arise during the contract's performance.

Related Government Programs

Department of Defense Financial Improvement and Audit Readiness (FIAR) initiatives
Federal government accounting and auditing services
Professional services contracts for large federal agencies
Contracting for financial management support

Risk Flags

Potential for scope creep if not clearly defined.
Reliance on contractor expertise may limit internal government knowledge transfer.
Performance quality dependent on contractor's resource allocation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $102.4 million to DELOITTE & TOUCHE LLP. PKS - ROSS - CARMONA PAREDES - FIAR TO 0060

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 $102.4 million.

What is the period of performance?

Start: 2023-07-23. End: 2025-07-22.

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

Deloitte & Touche LLP, as one of the 'Big Four' accounting firms, has an extensive history of performing large-scale contracts for various federal agencies, including the Department of Defense. They are frequently awarded contracts for auditing, financial management, consulting, and IT services. Their track record generally indicates a capacity to handle complex, high-value engagements. Specific to the DoD, they have been involved in significant initiatives related to financial improvement and audit readiness. While generally considered a reliable contractor, like any large firm, they have experienced scrutiny and occasional performance challenges on specific projects, which are often detailed in contract performance reports and agency evaluations not publicly accessible in full detail.

How does the $102.4 million value compare to similar accounting service contracts awarded by the DoD?

The $102.4 million contract value for Deloitte & Touche LLP, spread over two years, equates to an average annual value of approximately $51.2 million. This figure is substantial but falls within the expected range for large, comprehensive accounting and auditing services required by a major federal entity like the Department of Defense. The DoD procures numerous contracts in the hundreds of millions, and sometimes billions, for various professional services. Contracts for financial statement audits, advisory services, and system implementation for entities of the DoD's scale often reach these figures. Therefore, this award appears commensurate with the scope and complexity typically associated with supporting the DoD's vast financial operations.

What are the primary risks associated with this firm-fixed-price contract for the government?

The primary risk for the government with a firm-fixed-price (FFP) contract is that the contractor may not perform optimally if the price is too high relative to the effort required, or conversely, if the contractor cuts corners to maximize profit on a price that was set too low. For this specific contract, the risk lies in ensuring that Deloitte & Touche LLP delivers the full scope and quality of accounting services as defined, without compromising standards to maintain profitability. While FFP shifts cost risk to the contractor, the government still bears the risk of inadequate performance, potential disputes over scope, and the need for robust oversight to ensure all contractual obligations are met to the required standard.

What is the expected impact of this contract on the DoD's financial management and audit readiness?

This contract is expected to significantly bolster the Department of Defense's financial management capabilities and its ongoing efforts towards audit readiness. By engaging a firm with extensive expertise like Deloitte & Touche LLP, the DoD aims to improve the accuracy and reliability of its financial reporting, strengthen internal controls, and facilitate the complex process of auditing its vast array of assets and liabilities. The services provided will likely encompass areas such as accounting policy implementation, transaction processing, financial statement preparation, and advisory support for financial system enhancements, all critical components for achieving and sustaining auditability.

How has federal spending on accounting and auditing services evolved over the past five years, and where does this contract fit?

Federal spending on accounting and auditing services has remained consistently high over the past five years, driven by legislative mandates (like the Federal Information System Controls Audit Manual - FISCAM), ongoing audit requirements for government agencies, and initiatives such as the DoD's Financial Improvement and Audit Readiness (FIAR) program. Spending in this category often fluctuates based on specific agency needs, audit cycles, and the complexity of financial systems. This $102.4 million contract for the DoD fits within the higher end of annual spending for such services, reflecting the scale and complexity of the department's financial operations and its commitment to improving financial transparency and accountability.

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: $102,412,111

Exercised Options: $102,412,111

Current Obligation: $102,412,111

Actual Outlays: $8,316,540

Subaward Activity

Number of Subawards: 8

Total Subaward Amount: $19,792,932

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA701418D5000

IDV Type: IDC

Timeline