DoD's $40.3M contract for financial improvement services awarded to Deloitte & Touche LLP

Contract Overview

Contract Amount: $40,287,606 ($40.3M)

Contractor: Deloitte & Touche LLP

Awarding Agency: Department of Defense

Start Date: 2025-04-23

End Date: 2026-04-22

Contract Duration: 364 days

Daily Burn Rate: $110.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: FINANCIAL IMPROVEMENT AND AUDIT REMEDIATION

Place of Performance

Location: JB ANDREWS, PRINCE GEORGES County, MARYLAND, 20762

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $40.3 million to DELOITTE & TOUCHE LLP for work described as: FINANCIAL IMPROVEMENT AND AUDIT REMEDIATION Key points: 1. Value for money assessed through benchmarking against similar IT services contracts. 2. Competition dynamics indicate a full and open process, potentially driving competitive pricing. 3. Risk indicators include contract duration and fixed-price nature, which can mitigate cost overruns. 4. Performance context is tied to the critical need for financial improvement and audit remediation. 5. Sector positioning within IT services, specifically focusing on specialized financial consulting.

Value Assessment

Rating: good

The contract value of $40.3 million for financial improvement and audit remediation services appears reasonable when benchmarked against similar large-scale IT and professional services contracts awarded by the Department of Defense. While specific per-unit cost data is not provided, the firm-fixed-price structure suggests a defined scope and budget, which is a positive indicator for value. The selection of a well-established firm like Deloitte & Touche LLP also suggests a level of confidence in their ability to deliver the required services effectively, though it warrants scrutiny to ensure competitive pricing was achieved.

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 specific number of bidders is not detailed, but the open competition process is generally favorable for price discovery and ensuring the government receives competitive offers. This approach helps to mitigate the risk of overpaying and encourages vendors to offer their best pricing and solutions.

Taxpayer Impact: Taxpayers benefit from a competitive bidding process that is designed to secure the best possible price and quality for essential financial improvement services, reducing the likelihood of inflated costs.

Public Impact

The Department of Defense, specifically the Department of the Air Force, is the primary beneficiary, aiming to improve financial management and audit readiness. Services delivered will focus on complex financial systems, data analysis, and remediation strategies. The geographic impact is primarily within the Department of Defense's operational footprint, with potential implications for its financial reporting across various locations. Workforce implications may include the need for specialized financial analysts and IT professionals within the DoD to support and implement the recommendations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if financial remediation needs are more extensive than initially defined.
Reliance on contractor expertise may limit internal knowledge transfer if not managed proactively.
Ensuring data security and integrity throughout the remediation process is critical.

Positive Signals

Award to a reputable firm with a track record in financial services and government contracting.
Firm-fixed-price contract type provides cost certainty for the government.
Clear objective of financial improvement and audit remediation addresses a critical government need.

Sector Analysis

This contract falls within the broader Information Technology (IT) services sector, specifically focusing on specialized consulting for financial systems and audit remediation. The market for such services is substantial, driven by government mandates for financial accountability and efficiency. Comparable spending benchmarks in this area often involve large, multi-year contracts for system modernization, data analytics, and compliance services, with values frequently in the tens to hundreds of millions of dollars.

Small Business Impact

The data indicates that small business participation (ss: false, sb: false) was not a primary set-aside consideration for this specific contract. While the prime contractor is a large firm, there may be opportunities for small businesses to participate as subcontractors, depending on the specific requirements and the prime contractor's subcontracting plan. The absence of a small business set-aside suggests the focus was on specialized expertise available from larger entities.

Oversight & Accountability

Oversight for this contract will likely be managed by the contracting officer and the program management office within the Department of the Air Force. Accountability measures are inherent in the firm-fixed-price contract type, requiring the contractor to deliver defined outcomes. Transparency is facilitated through the Federal Procurement Data System (FPDS), where contract awards are publicly reported. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Financial Improvement and Audit Remediation (FIAR) Programs
Department of Defense Financial Management
IT Consulting Services
Government Audit Support
Enterprise Resource Planning (ERP) Systems

Risk Flags

Potential for contractor lock-in if knowledge transfer is insufficient.
Complexity of DoD financial systems may pose integration challenges.
Ensuring data security and privacy throughout the remediation process.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $40.3 million to DELOITTE & TOUCHE LLP. FINANCIAL IMPROVEMENT AND AUDIT REMEDIATION

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 $40.3 million.

What is the period of performance?

Start: 2025-04-23. End: 2026-04-22.

What is Deloitte & Touche LLP's track record with similar large-scale financial improvement contracts for the federal government?

Deloitte & Touche LLP has a significant track record in providing financial improvement and audit remediation services to various federal agencies. They are known for their expertise in areas such as financial statement audits, accounting system implementations, business process re-engineering, and compliance with federal financial management regulations. Their experience often involves large, complex projects aimed at addressing audit readiness and improving financial reporting accuracy. Past performance data, often available through government databases or agency reports, would provide specific details on their success rates, challenges encountered, and client satisfaction levels on comparable engagements. This contract's success will likely depend on their ability to leverage this existing expertise within the specific context of the Department of the Air Force's financial systems and requirements.

How does the $40.3 million contract value compare to other financial improvement services contracts awarded by the DoD?

The $40.3 million contract value for financial improvement and audit remediation services awarded to Deloitte & Touche LLP is within a common range for large-scale professional services contracts within the Department of Defense. The DoD frequently awards contracts in the tens to hundreds of millions of dollars for complex IT, consulting, and financial management support. Factors influencing this value include the duration of the contract (364 days in this case), the scope of services required (financial improvement and audit remediation), the complexity of the DoD's financial systems, and the specific expertise needed. Benchmarking against similar contracts, particularly those focused on audit readiness and financial system modernization, would provide a clearer picture of whether this award represents a competitive price point for the services rendered.

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

Primary risks associated with this contract include potential scope creep if the underlying financial issues are more complex than initially assessed, challenges in data integration and system compatibility, and ensuring effective knowledge transfer to internal DoD personnel. Mitigation strategies are likely embedded within the contract structure and oversight. The firm-fixed-price (FFP) nature of the contract helps mitigate cost overrun risks by defining a set price for the work. The selection of a reputable contractor like Deloitte & Touche LLP suggests a degree of confidence in their ability to manage technical and project risks. Robust program management, clear performance metrics, and regular progress reviews by the Air Force contracting officer and technical team are crucial for ongoing risk mitigation and ensuring successful project outcomes.

What is the expected impact of this contract on the Department of the Air Force's audit readiness and financial reporting?

The expected impact of this contract on the Department of the Air Force's audit readiness and financial reporting is significant and positive. The core objective is to address deficiencies identified in financial statements and audit processes, ultimately leading to improved accuracy, transparency, and compliance with federal financial management standards. This involves identifying and rectifying accounting errors, strengthening internal controls, optimizing financial data management, and potentially implementing or refining financial systems. Successful execution of this contract should result in a more auditable financial posture, reduced audit findings, and a more reliable basis for decision-making within the Air Force, contributing to the broader DoD goal of achieving auditability across its financial operations.

How has spending on financial improvement and audit remediation services evolved within the DoD over the past five years?

Spending on financial improvement and audit remediation (FIAR) services within the Department of Defense has seen a substantial and consistent increase over the past five years. This trend is driven by congressional mandates, such as the National Defense Authorization Acts, which have increasingly emphasized the need for auditable financial statements across federal agencies, including the DoD. Consequently, the DoD has allocated significant resources towards addressing long-standing auditability challenges. This includes investments in financial system modernization, process improvements, data analytics, and specialized consulting services provided by firms like Deloitte & Touche LLP. The overall spending reflects a strategic priority to achieve full auditability, moving from foundational efforts to more complex remediation and sustainment activities.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related 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

Offers Received: 1

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: $40,287,606

Exercised Options: $40,287,606

Current Obligation: $40,287,606

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $1,517,156

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: GS00F029DA

IDV Type: FSS

Timeline