DoD's $262.7M Cloud Services Contract with Accenture Faces Scrutiny Over Value and Competition
Contract Overview
Contract Amount: $262,695,096 ($262.7M)
Contractor: Accenture Federal Services LLC
Awarding Agency: Department of Defense
Start Date: 2024-09-11
End Date: 2026-06-10
Contract Duration: 637 days
Daily Burn Rate: $412.4K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: ENTERPRISE CLOUD SERVICE PROVIDER RESELLER AND SOFTWARE MANAGEMENT
Place of Performance
Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22203
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $262.7 million to ACCENTURE FEDERAL SERVICES LLC for work described as: ENTERPRISE CLOUD SERVICE PROVIDER RESELLER AND SOFTWARE MANAGEMENT Key points: 1. Significant contract value of $262.7 million for enterprise cloud services. 2. Accenture Federal Services LLC is the sole awardee, raising questions about competition. 3. The contract's duration extends to June 2026, impacting long-term value. 4. Focus on IT services within the Department of Defense, specifically the Air Force.
Value Assessment
Rating: questionable
The contract value of $262.7 million for cloud services needs further justification. Benchmarking against similar enterprise cloud reseller and software management contracts is crucial to determine if the pricing is competitive and reflects fair market value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
Despite being awarded via a delivery order under a full and open competition, the specific awardee is Accenture Federal Services LLC. Further analysis is needed to understand if the competition truly drove down costs or if the pricing reflects a limited number of responsive bids.
Taxpayer Impact: The substantial $262.7 million price tag necessitates careful oversight to ensure taxpayer funds are used efficiently and effectively for essential cloud services.
Public Impact
Taxpayers may be overpaying for enterprise cloud services if competition was not robust. The long-term nature of the contract could lock the DoD into specific solutions, potentially hindering future innovation. Dependence on a single provider for critical cloud infrastructure raises security and operational risks. The effectiveness of the cloud services in meeting the Air Force's mission needs requires ongoing evaluation.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of clear justification for high contract value.
- Potential for limited competition despite 'full and open' designation.
- Long contract duration may limit flexibility.
- No small business participation noted.
Positive Signals
- Contract awarded under a full and open competition.
- Clear end date provides a defined project scope.
- Firm Fixed Price contract type offers cost predictability.
Sector Analysis
This contract falls within the IT sector, specifically focusing on computer systems design services and cloud management. Spending benchmarks for similar enterprise cloud solutions within the Department of Defense are essential for evaluating the reasonableness of this $262.7 million award.
Small Business Impact
The data indicates that small businesses were not directly involved in this contract, as the 'sb' field is false. Opportunities for small business participation in future cloud service procurements or subcontracting roles should be explored to foster broader economic impact.
Oversight & Accountability
Oversight is critical for this large contract. The Department of the Air Force must ensure robust monitoring of performance, costs, and adherence to contract terms to maintain accountability and maximize value for the taxpayer.
Related Government Programs
- Computer Systems Design Services
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Potential for inflated pricing due to limited demonstrated competition.
- Risk of vendor lock-in and reduced technological adaptability.
- Lack of small business participation.
- Significant taxpayer investment requires rigorous value assessment.
Tags
computer-systems-design-services, department-of-defense, va, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $262.7 million to ACCENTURE FEDERAL SERVICES LLC. ENTERPRISE CLOUD SERVICE PROVIDER RESELLER AND SOFTWARE MANAGEMENT
Who is the contractor on this award?
The obligated recipient is ACCENTURE FEDERAL SERVICES LLC.
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 $262.7 million.
What is the period of performance?
Start: 2024-09-11. End: 2026-06-10.
What specific cloud services are being procured, and how do they align with the Air Force's strategic IT modernization goals?
The contract is for Enterprise Cloud Service Provider Reseller and Software Management. This likely encompasses services such as cloud infrastructure provisioning, software licensing management, and potentially cloud migration support. Alignment with modernization goals would depend on whether these services enable the Air Force to adopt more agile, scalable, and secure IT solutions, potentially reducing legacy system costs and improving operational efficiency.
Given the 'full and open' competition, what factors led to Accenture Federal Services LLC being the sole awardee, and how was price discovery ensured?
While the contract was competed 'full and open,' the sole award to Accenture suggests either a highly specialized offering, a limited number of bidders, or a specific set of evaluation criteria that favored Accenture. Price discovery would have been influenced by the bids received; however, without knowing the number of bids or the competitive range, it's difficult to assess if the final price truly reflects optimal market value or if further negotiation could have yielded better terms.
What are the potential risks associated with a long-term (nearly two-year) contract for cloud services with a single provider, particularly concerning vendor lock-in and adaptability?
A significant risk is vendor lock-in, where switching providers becomes costly and complex, limiting the Air Force's ability to adopt newer, potentially more cost-effective technologies. Adaptability can also be hampered if the provider's roadmap doesn't align with evolving Air Force needs. Furthermore, reliance on a single entity for critical cloud infrastructure could pose security vulnerabilities or operational disruptions if the vendor experiences issues.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - APLLICATIONS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Solicitation ID: FA872624RB011
Offers Received: 2
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Novetta Solutions, LLC
Address: 800 N GLEBE RD STE 300, ARLINGTON, VA, 22203
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Not Designated a Small Business, Special Designations
Financial Breakdown
Contract Ceiling: $1,468,242,613
Exercised Options: $295,686,634
Current Obligation: $262,695,096
Subaward Activity
Number of Subawards: 1
Total Subaward Amount: $287,475
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Parent Contract
Parent Award PIID: GS35F540GA
IDV Type: FSS
Timeline
Start Date: 2024-09-11
Current End Date: 2026-06-10
Potential End Date: 2026-06-10 00:00:00
Last Modified: 2026-01-15
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