DoD's $22.8M accounting services contract awarded to Kearney & Company, spanning 5 years

Contract Overview

Contract Amount: $22,790,810 ($22.8M)

Contractor: Kearney & Company, P.C.

Awarding Agency: Department of Defense

Start Date: 2008-09-01

End Date: 2013-09-30

Contract Duration: 1,855 days

Daily Burn Rate: $12.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: TRANSITION ACTIVITY

Place of Performance

Location: INDIANAPOLIS, MARION County, INDIANA, 46249, UNITED STATES OF AMERICA

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $22.8 million to KEARNEY & COMPANY, P.C. for work described as: TRANSITION ACTIVITY Key points: 1. Contract value represents a significant investment in specialized accounting services for defense finance. 2. The full and open competition suggests a robust market for these services. 3. A long contract duration may indicate a need for sustained support and potential for contractor lock-in. 4. Fixed-price contract type shifts risk to the contractor, potentially impacting final cost. 5. The specific accounting code (541219) points to a niche but critical support function within the agency.

Value Assessment

Rating: good

The contract value of approximately $22.8 million over five years for accounting services appears reasonable given the scope and duration. Benchmarking against similar large-scale federal accounting support contracts would provide a more precise value-for-money assessment. The fixed-price nature of the contract suggests that the initial bid was deemed competitive and that cost overruns would primarily be borne by the contractor, which is generally favorable for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors were likely invited to bid. The presence of six bidders, as suggested by the data, points to a healthy competitive environment for these specialized accounting services. This level of competition is generally expected to drive down prices and ensure the government receives a fair market rate for the services rendered.

Taxpayer Impact: The full and open competition process is beneficial for taxpayers as it encourages a wider pool of contractors to participate, leading to potentially lower prices and better service quality through competitive pressure.

Public Impact

The Department of Defense benefits from enhanced financial management and accounting accuracy. Services provided likely support critical defense finance and accounting operations. The contract's impact is primarily national, supporting federal financial infrastructure. The workforce implications include employment for accounting professionals within the contractor's firm.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for contractor dependency over the long contract term.
Ensuring consistent quality and performance across the full five-year period.
Monitoring adherence to fixed-price contract terms to prevent scope creep.

Positive Signals

Awarded through full and open competition, indicating market validation.
Fixed-price contract type aligns incentives for cost control.
Long-term award suggests a stable and reliable service provider was selected.

Sector Analysis

The accounting services sector within the federal government is a critical component of financial management and oversight. This contract falls under the 'Other Accounting Services' NAICS code (541219), which encompasses a broad range of financial support functions. Federal spending in this area is substantial, driven by the complexity of government finances and regulatory requirements. Comparable contracts often involve large, multi-year engagements to ensure continuity of essential financial operations.

Small Business Impact

The data indicates this contract was not set aside for small businesses and that small business subcontracting was not a requirement ('sb': false). This suggests the primary award went to a larger entity, and opportunities for small businesses would likely be through direct subcontracting if initiated by the prime contractor, rather than mandated by the contract terms.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Defense Finance and Accounting Service (DFAS) and potentially the Department of Defense Inspector General. Accountability measures would be defined in the contract clauses, focusing on performance metrics, deliverables, and adherence to financial regulations. Transparency is generally maintained through contract award databases and reporting requirements.

Related Government Programs

Defense Finance and Accounting Service Operations
Federal Financial Management
Government Accounting Services
Department of Defense Auditing and Compliance

Risk Flags

Long contract duration may limit flexibility and opportunities for reassessment.
Fixed-price nature could incentivize cost-cutting over quality if not closely monitored.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.8 million to KEARNEY & COMPANY, P.C.. TRANSITION ACTIVITY

Who is the contractor on this award?

The obligated recipient is KEARNEY & COMPANY, P.C..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Finance and Accounting Service).

What is the total obligated amount?

The obligated amount is $22.8 million.

What is the period of performance?

Start: 2008-09-01. End: 2013-09-30.

What is the historical spending trend for accounting services by the Department of Defense?

Analyzing historical spending for accounting services by the Department of Defense (DoD) requires examining contract awards over multiple fiscal years. While this specific contract represents a $22.8 million outlay from 2008 to 2013, broader trends would involve aggregating data from similar contracts across various DoD components. Factors influencing spending include changes in accounting regulations, audit requirements, and the complexity of defense operations. Historically, the DoD has consistently allocated significant resources to financial management and accounting support, often through large, multi-year contracts awarded via competitive processes. Fluctuations in spending can also be attributed to shifts in defense budgets, modernization efforts, and the need for specialized financial expertise in areas like procurement and personnel pay.

How does the per-unit cost of this contract compare to similar federal accounting service contracts?

Determining the precise per-unit cost for this contract is challenging without specific details on the units of service delivered (e.g., hours, reports, audits). However, we can infer value by considering the total contract value ($22.8 million) against its duration (1855 days, approximately 5 years). This averages to roughly $4.56 million per year. When compared to other large federal accounting service contracts, this annual figure appears within a reasonable range, especially considering the specialized nature of defense accounting. Contracts for similar services, particularly those involving complex financial systems or large-scale data management, often command significant annual expenditures. A detailed benchmark would require comparing specific service deliverables and contractor overhead rates across multiple contracts.

What are the key performance indicators (KPIs) typically used to evaluate contractors for accounting services?

Key Performance Indicators (KPIs) for federal accounting service contracts commonly focus on accuracy, timeliness, compliance, and efficiency. For a contract like this one with Kearney & Company, KPIs might include the error rate in financial reporting, the percentage of deadlines met for submitting financial statements or reports, adherence to Generally Accepted Accounting Principles (GAAP) and specific DoD financial regulations, and the efficiency of processing financial transactions. Responsiveness to audit findings and the effectiveness of implemented financial controls are also critical. The government typically monitors these KPIs through regular performance reviews, audits, and feedback mechanisms to ensure the contractor is meeting the contract's objectives and delivering value.

What is the track record of Kearney & Company in performing federal accounting service contracts?

Kearney & Company, P.C. has a significant track record in providing accounting, auditing, and financial management services to federal agencies. Their experience often includes supporting complex financial operations within large government departments, including the Department of Defense. Prior to this $22.8 million contract, the firm likely held other federal contracts, demonstrating their capability to meet government requirements. Their specialization in government accounting suggests a deep understanding of federal regulations, financial reporting standards, and audit requirements. A thorough review of their contract history, including past performance evaluations and any reported issues, would provide a comprehensive understanding of their reliability and effectiveness as a federal contractor.

What are the potential risks associated with a long-term (5-year) fixed-price contract for accounting services?

A long-term, fixed-price contract for accounting services presents several potential risks. For the government, the primary risk is that the fixed price may become uncompetitive over the five-year period if market rates decrease or if the contractor's efficiency significantly outpaces initial estimates, leading to the government overpaying. Conversely, if unforeseen complexities arise or costs increase substantially for the contractor, they might cut corners on quality or service delivery to maintain profitability, impacting the accuracy and reliability of the accounting services. For the contractor, the risk lies in underestimating the effort required or facing unexpected cost increases, which could erode profit margins. Additionally, long-term contracts can sometimes lead to complacency or reduced innovation from the contractor over time.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Accounting, Tax Preparation, Bookkeeping, and Payroll Services › Other Accounting Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1701 DUKE ST STE 500, ALEXANDRIA, VA, 22314

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $22,790,810

Exercised Options: $22,790,810

Current Obligation: $22,790,810

Parent Contract

Parent Award PIID: GS23F0092J

IDV Type: FSS

Timeline