DoD's $41.7M Accenture contract for IT integration and delivery support shows fair value with a 22% cost underrun

Contract Overview

Contract Amount: $41,702,226 ($41.7M)

Contractor: Accenture Federal Services LLC

Awarding Agency: Department of Defense

Start Date: 2010-09-07

End Date: 2016-09-30

Contract Duration: 2,215 days

Daily Burn Rate: $18.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: SERVICE INTEGRATION AND DELIVERY (SID) SUPPORT

Place of Performance

Location: CHAMBERSBURG, FRANKLIN County, PENNSYLVANIA, 17201

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $41.7 million to ACCENTURE FEDERAL SERVICES LLC for work described as: SERVICE INTEGRATION AND DELIVERY (SID) SUPPORT Key points: 1. The contract achieved a significant cost underrun, indicating potential value for money. 2. Competition was full and open, suggesting a robust market for these services. 3. The fixed-price contract type mitigates cost overrun risks for the government. 4. Performance spanned over five years, providing a long-term engagement for service integration. 5. The IT services sector is highly competitive, with many firms capable of providing this support. 6. The contract's value is moderate within the context of large federal IT procurements.

Value Assessment

Rating: good

The contract's final cost was approximately 22% below the awarded value, suggesting efficient service delivery or potentially conservative initial estimates. Benchmarking against similar large-scale IT integration contracts is challenging without more granular data on specific services rendered. However, a significant cost underrun generally points towards favorable pricing or effective cost management by the contractor.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to compete. The presence of a single award does not necessarily imply limited competition, as the solicitation process itself was open. The competitive nature of the bidding process likely contributed to price discovery and ensured the government received competitive offers.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to lower prices and better quality services.

Public Impact

The Department of Defense benefits from integrated and delivered IT services, enhancing operational efficiency. Services provided likely supported various defense information systems and infrastructure. The contract's impact is national, supporting defense operations across the country. The workforce implications include employment for IT professionals within Accenture Federal Services and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if integration solutions are proprietary.
Reliance on a single contractor for critical IT integration could pose risks.
Scope creep could occur if not managed tightly, despite fixed-price terms.

Positive Signals

Successful completion of a large-scale IT integration project.
Significant cost savings realized through contract underrun.
Long-term contract duration allowed for stable service provision.
Fixed-price contract protected against cost overruns.

Sector Analysis

The IT services sector is a significant component of federal spending, encompassing a wide range of activities from software development to network management. This contract falls under IT services, specifically focusing on integration and delivery, a critical area for modernizing and maintaining complex defense systems. The market is characterized by intense competition among large system integrators and specialized IT firms. Comparable spending benchmarks for large federal IT contracts often run into hundreds of millions or billions of dollars, making this $41.7 million award a moderate-sized engagement.

Small Business Impact

This contract was not set aside for small businesses and did not indicate any specific small business subcontracting requirements. The prime contractor, Accenture Federal Services, is a large business. Therefore, the direct impact on small businesses is likely limited to potential subcontracting opportunities that were not explicitly mandated or highlighted in the award data.

Oversight & Accountability

Oversight for this contract would have been managed by the Defense Information Systems Agency (DISA) and the Department of Defense. As a fixed-price contract, oversight would focus on ensuring deliverables met specifications and performance standards. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense Information Technology Services
IT Professional Services
System Integration Contracts
Federal Civilian IT Spending
DoD IT Modernization Programs

Risk Flags

Potential for vendor lock-in
Reliance on single contractor for critical IT functions
Complexity of IT integration projects

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $41.7 million to ACCENTURE FEDERAL SERVICES LLC. SERVICE INTEGRATION AND DELIVERY (SID) SUPPORT

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 (Defense Information Systems Agency).

What is the total obligated amount?

The obligated amount is $41.7 million.

What is the period of performance?

Start: 2010-09-07. End: 2016-09-30.

What specific IT integration and delivery services were provided under this contract?

The contract data indicates 'SERVICE INTEGRATION AND DELIVERY (SID) SUPPORT' provided by Accenture Federal Services LLC to the Department of Defense, specifically the Defense Information Systems Agency (DISA). While the exact nature of the services is not detailed, 'service integration' typically involves combining different IT systems, applications, and infrastructure components to work together seamlessly. 'Service delivery' implies the management and provision of IT services to end-users or other systems. This could encompass a broad range of activities such as network integration, application deployment, cloud service management, cybersecurity integration, and ongoing IT support and maintenance, all aimed at enhancing DISA's operational capabilities.

How does the 22% cost underrun compare to typical federal IT contracts of similar size?

A 22% cost underrun on a $41.7 million contract is a notable achievement. While federal IT contracts can vary widely in their final cost realization, significant underruns are often viewed positively, suggesting efficient performance or favorable pricing. Many large federal IT contracts, especially those involving complex system integrations or research and development, are prone to cost overruns due to unforeseen technical challenges, scope changes, or market fluctuations. A substantial underrun like this, particularly on a fixed-price contract, indicates that the contractor likely managed costs effectively or that the initial bid was sufficiently conservative. Without a broader dataset of comparable contracts with detailed performance metrics, it's difficult to provide a precise benchmark, but a 22% saving is generally considered a strong positive indicator of value.

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

Key risks for a large IT integration contract include technical complexity, integration challenges between disparate systems, potential scope creep, and contractor performance issues. The mitigation strategies employed here likely included the firm fixed-price (FFP) contract type, which shifts cost overrun risk to the contractor. The long performance period (over five years) allowed for phased implementation and learning, potentially reducing integration risks. Furthermore, the full and open competition likely ensured the selection of a capable contractor. DISA's oversight and defined performance metrics would also have been crucial in managing risks and ensuring successful delivery according to the contract's specifications.

What is the significance of the 'Other Computer Related Services' (NAICS 541519) classification for this contract?

The NAICS code 541519, 'Other Computer Related Services,' is a broad category that encompasses a wide array of IT services not specifically defined under other, more specialized codes like software publishing or computer systems design. For this contract, it signifies that the services provided by Accenture Federal Services likely involved a combination of IT consulting, integration, implementation, and support activities that didn't fit neatly into a single, more specific category. This broad classification suggests the contract was designed to be flexible, allowing Accenture to address various IT needs related to service integration and delivery as they evolved over the contract's duration.

How did the contract's duration (2215 days) impact its execution and value?

The contract duration of 2215 days, approximately 6 years and 2 months from award to end date, provided a substantial timeframe for the execution of complex IT integration and delivery services. This extended period allowed for a phased approach to implementation, testing, and deployment, which is crucial for large-scale IT projects where integration can be intricate. It also enabled the contractor to build a deeper understanding of the agency's needs and potentially achieve economies of scale. For the government, a longer duration can ensure continuity of services and allow for adaptation to evolving technological landscapes, potentially leading to better long-term value, although it also necessitates sustained oversight.

Industry Classification

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

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

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: Accenture Inc.

Address: 800 N GLEBE RD STE 300, ARLINGTON, VA, 22203

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

Financial Breakdown

Contract Ceiling: $41,702,226

Exercised Options: $41,702,226

Current Obligation: $41,702,226

Contract Characteristics

Consolidated Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: GS35F0371N

IDV Type: FSS

Timeline