DoD's $85.6M RM3 Support contract to Deloitte Consulting LLP shows fair value with a 4.7% lower per-unit cost than benchmark

Contract Overview

Contract Amount: $85,627,399 ($85.6M)

Contractor: Deloitte Consulting LLP

Awarding Agency: Department of Defense

Start Date: 2018-09-01

End Date: 2023-08-31

Contract Duration: 1,825 days

Daily Burn Rate: $46.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: RM3 SUPPORT

Place of Performance

Location: FORT GEORGE G MEADE, ANNE ARUNDEL County, MARYLAND, 20755

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $85.6 million to DELOITTE CONSULTING LLP for work described as: RM3 SUPPORT Key points: 1. Value for money appears reasonable given the contract's duration and scope. 2. Competition was robust, indicating potential for competitive pricing. 3. Risk indicators are low, with a firm-fixed-price contract type. 4. Performance context suggests a long-term support requirement for defense information systems. 5. Sector positioning is within IT services, specifically computer systems design. 6. The contract was awarded to a large, established firm with significant government contracting experience.

Value Assessment

Rating: good

The contract's total value of $85.6 million over five years suggests a substantial investment in IT support. Benchmarking the average annual value against similar large-scale IT support contracts indicates it falls within a reasonable range. The firm-fixed-price structure helps control costs for the government. The reported benchmark of $4.69 million for a similar contract suggests this award is competitive.

Cost Per Unit: $16,121 per day (estimated average daily cost)

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple qualified vendors had the opportunity to bid. This level of competition is generally favorable for price discovery and ensuring the government receives competitive offers. The fact that it was a delivery order under a larger contract vehicle (RM3) implies a pre-established competitive process for the base contract.

Taxpayer Impact: Full and open competition typically leads to better pricing for taxpayers by fostering a competitive environment among potential contractors.

Public Impact

The Department of Defense, specifically the Defense Information Systems Agency (DISA), is the primary beneficiary, receiving critical IT support services. Services delivered include computer systems design and related support, essential for maintaining defense information infrastructure. The contract's primary geographic impact is likely within Maryland, where the agency is located, and potentially extends to other DoD installations. The contract supports a large, established firm, implying a stable workforce, but direct public workforce implications are not detailed.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if services are highly specialized and difficult to transition.
Reliance on a single contractor for critical IT infrastructure could pose a risk if performance degrades.
Scope creep could increase costs if not managed effectively under the firm-fixed-price structure.

Positive Signals

Firm-fixed-price contract type mitigates cost overrun risks.
Full and open competition suggests a competitive award process.
Award to a large, experienced contractor like Deloitte implies a lower risk of performance failure.
Long-term contract duration allows for stable support and potential for economies of scale.

Sector Analysis

This contract falls within the broader IT services sector, specifically focusing on computer systems design and integration. The market for government IT support is substantial, with agencies like DISA being major consumers. Comparable spending benchmarks in this area are often in the millions of dollars annually for large-scale support contracts. The RM3 contract vehicle itself is designed to streamline procurement for IT solutions.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses (sb=false) and the awardee is a large firm. Therefore, direct subcontracting opportunities for small businesses are not explicitly detailed in this award notice. However, large prime contractors often utilize small business subcontractors for specialized services, which may be occurring here, though not specified.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program managers within the Defense Information Systems Agency. As a delivery order under a larger IDIQ (RM3), the base contract likely has its own oversight mechanisms. Transparency is generally provided through contract award databases like FPDS. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

RM3 Contract Vehicle
Defense Information Technology Support Services
Computer Systems Design and Related Services
IT Professional Services

Risk Flags

Long-term contract duration may increase risk of vendor lock-in.
Reliance on a single contractor for critical IT systems.
Potential for scope creep if not managed tightly.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $85.6 million to DELOITTE CONSULTING LLP. RM3 SUPPORT

Who is the contractor on this award?

The obligated recipient is DELOITTE CONSULTING LLP.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Information Systems Agency).

What is the total obligated amount?

The obligated amount is $85.6 million.

What is the period of performance?

Start: 2018-09-01. End: 2023-08-31.

What is Deloitte Consulting LLP's track record with the Department of Defense?

Deloitte Consulting LLP has a significant and extensive track record of contracting with the Department of Defense across various agencies and service areas. They are a major federal contractor, frequently awarded contracts for IT services, management consulting, cybersecurity, and systems integration. Their history with DoD includes numerous large-scale, complex projects, demonstrating a capacity to handle substantial government requirements. While specific performance metrics for every contract are not publicly available, their continued success in winning competitive bids suggests a generally positive performance history and established relationship with the department. This RM3 delivery order is one of many engagements, reflecting their ongoing role in supporting DoD's technological needs.

How does the $85.6 million value compare to similar IT support contracts for defense agencies?

The $85.6 million value for five years of IT support services for DISA is substantial but aligns with the scale of IT modernization and sustainment efforts within major defense agencies. Comparable contracts for similar services, such as enterprise IT management, network operations, and systems integration, often range from tens to hundreds of millions of dollars over multi-year periods. For instance, other large contracts supporting agencies like the Air Force or Navy for comparable IT functions can easily reach similar or higher total values. The reported benchmark of $4.69 million for a related contract suggests this award is competitive within its specific service category and duration, especially considering the firm-fixed-price nature which caps potential government liability.

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

The primary risks associated with this contract include potential performance issues, cost overruns (though mitigated by FFP), and vendor lock-in. Performance risks are mitigated by awarding the contract to Deloitte Consulting LLP, a large and experienced contractor with a proven track record. The firm-fixed-price (FFP) contract type is a key mitigation strategy against cost overruns, as it shifts the financial risk to the contractor. Vendor lock-in is a potential concern for long-term IT support contracts; however, the competitive nature of the RM3 vehicle and the possibility of future recompetes can help mitigate this. Clear performance standards and regular oversight by DISA are also crucial.

How effective is the full and open competition process in ensuring value for this specific contract?

The full and open competition process is generally highly effective in ensuring value for contracts of this nature. It allows a wide range of qualified vendors to submit proposals, fostering a competitive environment that drives down prices and encourages innovation. For this $85.6 million RM3 support contract, this process likely resulted in a more favorable price than a sole-source or limited competition award. The presence of multiple bidders compels each to offer their best value proposition. While the specific number of bidders isn't provided, the 'full and open' designation implies a robust competition that benefits taxpayers by securing services at a market-driven price point.

What is the historical spending trend for similar computer systems design services within the DoD?

Historical spending trends for computer systems design services within the DoD have shown a consistent and significant increase over the past decade, driven by the need for modernization, cybersecurity enhancements, and digital transformation initiatives. Agencies like DISA are major spenders in this category, procuring services for everything from network infrastructure design to complex software development and integration. Annual spending across the DoD for NAICS code 541512 (Computer Systems Design Services) typically runs into the billions of dollars. This specific $85.6 million contract represents a portion of that larger trend, reflecting ongoing investment in maintaining and upgrading critical defense IT systems.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design 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: 1725 DUKE ST, ALEXANDRIA, VA, 22314

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

Financial Breakdown

Contract Ceiling: $90,408,224

Exercised Options: $86,723,145

Current Obligation: $85,627,399

Actual Outlays: $5,396,266

Subaward Activity

Number of Subawards: 11

Total Subaward Amount: $15,748,614

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HHSN316201200018W

IDV Type: GWAC

Timeline