Army's FY21-25 Audit Contract Awarded to KPMG LLP for $206M Under Full and Open Competition
Contract Overview
Contract Amount: $205,960,790 ($206.0M)
Contractor: Kpmg LLP
Awarding Agency: Department of Defense
Start Date: 2020-11-01
End Date: 2025-12-31
Contract Duration: 1,886 days
Daily Burn Rate: $109.2K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: LABOR HOURS
Sector: Other
Official Description: AUDIT OF THE ARMY FISCAL YEARS 2021-2025
Place of Performance
Location: MCLEAN, FAIRFAX County, VIRGINIA, 22102
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $206.0 million to KPMG LLP for work described as: AUDIT OF THE ARMY FISCAL YEARS 2021-2025 Key points: 1. The Department of Defense awarded a significant contract for audit services to KPMG LLP. 2. The contract spans five fiscal years, indicating a long-term need for financial oversight. 3. Full and open competition was utilized, suggesting a robust process for selecting the vendor. 4. The contract's value of over $205 million highlights the substantial investment in financial auditing.
Value Assessment
Rating: good
The contract value of $205.96 million for 1886 labor hours appears reasonable given the scope of auditing services for a major military branch over five years. Benchmarking against similar large-scale government audit contracts would provide further context.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The use of full and open competition suggests that multiple qualified firms were able to bid, fostering a competitive environment. This method is expected to lead to a fair price discovery process and potentially better value for the government.
Taxpayer Impact: The competitive bidding process aims to ensure taxpayer funds are used efficiently by securing audit services at a reasonable cost.
Public Impact
Ensures financial accountability for the Army's substantial budget. Provides independent verification of financial statements, increasing transparency. Supports the Army's efforts to achieve audit readiness and compliance. Contributes to the overall integrity of federal financial management.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for scope creep in a multi-year audit.
- Reliance on a single contractor for critical audit functions.
- Ensuring consistent quality across all audit phases.
Positive Signals
- Utilizes full and open competition.
- Long-term contract provides stability for audit continuity.
- Awarded to a reputable audit firm (KPMG LLP).
Sector Analysis
This contract falls within the professional services sector, specifically accounting and auditing. Government spending on audit services is crucial for maintaining financial integrity and compliance across federal agencies, with significant investments often made by large departments like Defense.
Small Business Impact
The data indicates this contract was awarded under full and open competition, and there is no specific mention of small business participation or set-asides. Therefore, the direct impact on small businesses is not detailed in this award notice.
Oversight & Accountability
The contract is subject to standard government oversight mechanisms for financial audits. The Defense Finance and Accounting Service (DFAS) will likely monitor performance and deliverables to ensure the contractor meets contractual obligations and quality standards.
Related Government Programs
- Offices of Certified Public Accountants
- Department of Defense Contracting
- Defense Finance and Accounting Service Programs
Risk Flags
- Potential for audit findings to reveal significant financial control weaknesses.
- Long duration of the contract could lead to vendor lock-in.
- Dependence on a single audit firm may limit alternative perspectives.
- Complexity of Army's financial systems presents inherent audit challenges.
Tags
offices-of-certified-public-accountants, department-of-defense, va, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $206.0 million to KPMG LLP. AUDIT OF THE ARMY FISCAL YEARS 2021-2025
Who is the contractor on this award?
The obligated recipient is KPMG 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 $206.0 million.
What is the period of performance?
Start: 2020-11-01. End: 2025-12-31.
What is the specific breakdown of labor hours and rates contributing to the total contract value?
The provided data indicates a total contract value of $205,960,790.45 for 1886 labor hours over 1886 days. However, a detailed breakdown of specific labor categories, their respective hours, and hourly rates is not included. Understanding this granular detail would be essential for a precise cost-effectiveness analysis and to identify potential areas for cost savings or efficiency improvements.
What are the key performance indicators (KPIs) and quality assurance measures in place for this audit contract?
The contract details do not explicitly list the key performance indicators (KPIs) or specific quality assurance measures that KPMG LLP must adhere to. Effective oversight would require clearly defined KPIs related to audit findings, timeliness, accuracy, and compliance with auditing standards. Robust quality assurance processes are critical to ensure the reliability and integrity of the audit results.
How will the audit findings from this contract be used to improve Army financial management processes?
The primary purpose of this audit contract is to provide an independent assessment of the Army's financial statements. The audit findings are expected to identify deficiencies, non-compliance issues, and areas for improvement in financial reporting and internal controls. The Army's leadership and DFAS will then be responsible for developing and implementing corrective action plans based on these findings to enhance financial management.
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: HQ042320Q0010
Offers Received: 3
Pricing Type: LABOR HOURS (Z)
Evaluated Preference: NONE
Contractor Details
Address: 8350 BROAD ST STE 900, MC LEAN, VA, 22102
Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $207,748,742
Exercised Options: $205,960,790
Current Obligation: $205,960,790
Actual Outlays: $14,035,776
Subaward Activity
Number of Subawards: 41
Total Subaward Amount: $16,489,707
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: GS00F275CA
IDV Type: FSS
Timeline
Start Date: 2020-11-01
Current End Date: 2025-12-31
Potential End Date: 2025-12-31 00:00:00
Last Modified: 2026-02-10
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