DoD's $48.4M Financial Audit Remediation Contract with Deloitte Raises Value and Competition Questions
Contract Overview
Contract Amount: $48,403,468 ($48.4M)
Contractor: Deloitte & Touche LLP
Awarding Agency: Department of Defense
Start Date: 2019-05-09
End Date: 2024-11-14
Contract Duration: 2,016 days
Daily Burn Rate: $24.0K/day
Competition Type: COMPETED UNDER SAP
Number of Offers Received: 2
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: FINANCIAL AND AUDIT REMEDIATION SUPPORT
Place of Performance
Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22202
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $48.4 million to DELOITTE & TOUCHE LLP for work described as: FINANCIAL AND AUDIT REMEDIATION SUPPORT Key points: 1. High contract value for audit remediation services. 2. Competition method (SAP) may limit price discovery. 3. Potential risk in reliance on a single large firm. 4. IT/Professional Services sector context.
Value Assessment
Rating: fair
The contract value of $48.4M for financial and audit remediation support appears substantial. Benchmarking against similar large-scale audit remediation contracts is needed to fully assess value, as pricing can vary significantly based on scope and complexity.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was competed under SAP (Simplified Acquisition Procedures), which typically involves fewer vendors and potentially less robust price competition than full and open competition. This method may not have yielded the best possible price for the government.
Taxpayer Impact: The use of SAP for a contract of this size could mean taxpayers are not receiving the most cost-effective solution, depending on the actual services rendered and market rates.
Public Impact
Ensures compliance with financial regulations for the Department of Defense. Supports critical audit remediation efforts, potentially impacting government financial reporting. Utilizes a major accounting firm, indicating a focus on established expertise.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition for a large contract.
- Potential for overpayment due to SAP.
- Reliance on a single contractor for critical services.
Positive Signals
- Contract addresses a critical government need (audit remediation).
- Utilizes a well-known and experienced contractor.
Sector Analysis
This contract falls within the professional services sector, specifically accounting and auditing. Spending in this area is often driven by regulatory requirements and the need for specialized expertise to manage complex financial systems.
Small Business Impact
The contract does not indicate any specific set-asides or participation goals for small businesses. Given the nature of the services and the contractor, it is unlikely that small businesses were significantly involved in this specific award.
Oversight & Accountability
Oversight is crucial for a contract of this magnitude and duration. Regular performance reviews and audits are necessary to ensure the contractor is meeting objectives and that funds are being used efficiently and effectively.
Related Government Programs
- Offices of Certified Public Accountants
- Department of Defense Contracting
- Washington Headquarters Services Programs
Risk Flags
- Limited competition.
- Potential for cost overruns.
- Contract duration and value.
- Lack of small business participation.
- Over-reliance on a single vendor.
Tags
offices-of-certified-public-accountants, department-of-defense, va, bpa-call, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $48.4 million to DELOITTE & TOUCHE LLP. FINANCIAL AND AUDIT REMEDIATION SUPPORT
Who is the contractor on this award?
The obligated recipient is DELOITTE & TOUCHE LLP.
Which agency awarded this contract?
Awarding agency: Department of Defense (Washington Headquarters Services).
What is the total obligated amount?
The obligated amount is $48.4 million.
What is the period of performance?
Start: 2019-05-09. End: 2024-11-14.
What is the specific scope of 'Financial and Audit Remediation Support' and how does it align with DoD's audit challenges?
The scope likely includes identifying audit deficiencies, developing remediation plans, implementing corrective actions, and providing ongoing support to achieve audit readiness. This directly addresses the DoD's persistent challenges with financial statement audits, aiming to improve accuracy, transparency, and accountability in its vast financial operations.
Could a more competitive bidding process have resulted in significant cost savings for this $48.4M contract?
It is possible. While SAP allows for efficiency, its limitations on the number of bidders and public visibility may have restricted the pool of potential offerors. A full and open competition, especially if structured to encourage multiple large firms or joint ventures, might have driven down prices through more aggressive bidding and better price discovery.
What are the long-term implications of relying on a single firm for extensive audit remediation support?
Long-term reliance on one firm can lead to vendor lock-in, reduced incentive for innovation, and potential knowledge gaps if the firm's personnel change frequently. It also concentrates risk; if the firm underperforms or faces issues, the government's remediation progress could be severely impacted. Diversifying support or building internal capacity could mitigate these risks.
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: COMPETED UNDER SAP
Solicitation Procedures: SIMPLIFIED ACQUISITION
Offers Received: 2
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: $48,403,468
Exercised Options: $48,403,468
Current Obligation: $48,403,468
Actual Outlays: $411,903
Subaward Activity
Number of Subawards: 12
Total Subaward Amount: $4,242,341
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: HQ003419A0006
IDV Type: BPA
Timeline
Start Date: 2019-05-09
Current End Date: 2024-11-14
Potential End Date: 2024-11-14 00:00:00
Last Modified: 2025-03-27
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