Navy Financial Statement Audit by EY for FYs 2017-2021 Totals $110.7M

Contract Overview

Contract Amount: $110,671,948 ($110.7M)

Contractor: Ernst & Young LLP

Awarding Agency: Department of Defense

Start Date: 2017-07-20

End Date: 2020-12-31

Contract Duration: 1,260 days

Daily Burn Rate: $87.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: LABOR HOURS

Sector: Other

Official Description: IGF::CT::IGF AUDIT OF THE US DEPARTMENT OF THE NAVY FINANCIAL STATEMENTS AND SCHEDULES FOR FYS 2017-2021

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20005

State: District of Columbia Government Spending

Plain-Language Summary

Department of Defense obligated $110.7 million to ERNST & YOUNG LLP for work described as: IGF::CT::IGF AUDIT OF THE US DEPARTMENT OF THE NAVY FINANCIAL STATEMENTS AND SCHEDULES FOR FYS 2017-2021 Key points: 1. The audit contract for the Navy's financial statements over five fiscal years was awarded to Ernst & Young LLP. 2. This contract falls under the 'Offices of Certified Public Accountants' NAICS code (541211). 3. The contract was awarded using full and open competition, indicating a competitive bidding process. 4. The total award amount is approximately $110.7 million, covering a period from July 2017 to December 2020.

Value Assessment

Rating: good

The award amount of $110.7M for a multi-year financial audit appears reasonable given the scope and duration. Benchmarking against similar large-scale government financial statement audits would provide further context on pricing efficiency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through full and open competition, suggesting a robust price discovery process. This method allows multiple qualified bidders to compete, potentially leading to more favorable pricing for the government.

Taxpayer Impact: The competitive nature of this award is expected to ensure taxpayer funds are used efficiently for essential audit services.

Public Impact

Ensures financial accountability and transparency for the Department of the Navy. Provides an independent assessment of the Navy's financial health and reporting accuracy. Supports efforts to achieve auditable financial statements for the Department of Defense. The audit findings can inform future financial management improvements within the Navy.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep in multi-year audits.
Reliance on contractor expertise for complex financial data.

Positive Signals

Awarded via full and open competition.
Experienced contractor selected.
Covers a significant period for comprehensive review.

Sector Analysis

This contract falls within the professional services sector, specifically accounting and auditing. Government spending on financial audits is crucial for maintaining fiscal integrity and compliance, with benchmarks often set by the Federal Audit Clearinghouse and agency-specific requirements.

Small Business Impact

The data indicates this contract was not set aside for small businesses and was awarded to a large public accounting firm. There is no direct indication of small business participation in this specific award.

Oversight & Accountability

The Inspector General's office is responsible for overseeing audits of the Department of the Navy. The selection of a reputable firm like Ernst & Young suggests adherence to established procurement and oversight protocols.

Related Government Programs

Offices of Certified Public Accountants
Department of Defense Contracting
Defense Finance and Accounting Service Programs

Risk Flags

Audit scope and duration.
Contractor performance history.
Potential for findings impacting Navy operations.
Adherence to auditing standards.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $110.7 million to ERNST & YOUNG LLP. IGF::CT::IGF AUDIT OF THE US DEPARTMENT OF THE NAVY FINANCIAL STATEMENTS AND SCHEDULES FOR FYS 2017-2021

Who is the contractor on this award?

The obligated recipient is ERNST & YOUNG LLP.

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 $110.7 million.

What is the period of performance?

Start: 2017-07-20. End: 2020-12-31.

What specific audit standards were applied, and how do they compare to industry best practices for government financial statement audits?

The audit likely adhered to Generally Accepted Auditing Standards (GAAS) and Government Auditing Standards (the 'Yellow Book'). These standards ensure independence, objectivity, and a rigorous examination of financial statements. Comparison to industry best practices would involve assessing the scope of testing, materiality levels, and reporting requirements against those typically seen in large-scale public sector financial audits.

What are the key risks associated with a multi-year audit of this magnitude, and how are they being mitigated?

Key risks include potential changes in accounting standards, evolving Navy operations, and contractor personnel turnover impacting consistency. Mitigation strategies likely involve clear contract modifications clauses, robust knowledge transfer processes within the audit firm, and regular communication between the Navy and the auditors to address emerging issues promptly.

How effectively does this audit contribute to the Navy's overall financial management improvement goals?

The audit's effectiveness is measured by its ability to identify material weaknesses and provide actionable recommendations. By highlighting areas for improvement in internal controls and financial reporting, it directly supports the Navy's efforts to achieve auditable financial statements and enhance overall financial stewardship, ultimately benefiting taxpayer accountability.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: HQ042316T0036

Offers Received: 2

Pricing Type: LABOR HOURS (Z)

Evaluated Preference: NONE

Contractor Details

Address: 1 MANHATTAN WEST, NEW YORK, NY, 10001

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

Financial Breakdown

Contract Ceiling: $149,031,902

Exercised Options: $110,671,948

Current Obligation: $110,671,948

Actual Outlays: $2,978,993

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Parent Contract

Parent Award PIID: GS00F290CA

IDV Type: FSS

Timeline