DoD's $59M audit contract for retiree health care funds awarded to Kearney & Company via full and open competition
Contract Overview
Contract Amount: $59,003,835 ($59.0M)
Contractor: Kearney & Company, P.C.
Awarding Agency: Department of Defense
Start Date: 2022-01-01
End Date: 2026-12-31
Contract Duration: 1,825 days
Daily Burn Rate: $32.3K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: LABOR HOURS
Sector: Other
Official Description: DEFENSE HEALTH PROGRAM, MEDICARE-ELIGIBLE RETIREE HEALTH CARE FUND AND CONTRACT RESOURCE MANAGEMENT FINANCIAL STATEMENT AUDITS FISCAL YEARS 2022-2026.
Place of Performance
Location: ALEXANDRIA, ALEXANDRIA CITY County, VIRGINIA, 22314
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $59.0 million to KEARNEY & COMPANY, P.C. for work described as: DEFENSE HEALTH PROGRAM, MEDICARE-ELIGIBLE RETIREE HEALTH CARE FUND AND CONTRACT RESOURCE MANAGEMENT FINANCIAL STATEMENT AUDITS FISCAL YEARS 2022-2026. Key points: 1. The contract supports financial statement audits for critical DoD health programs. 2. Kearney & Company, a CPA firm, holds the contract. 3. Awarded through full and open competition, suggesting market-driven pricing. 4. The contract spans five fiscal years (2022-2026), indicating long-term support.
Value Assessment
Rating: good
The contract value of $59M over five years appears reasonable for comprehensive financial statement audits of large programs. Benchmarking against similar government audit contracts would provide a more precise assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded using full and open competition, which typically fosters competitive pricing and ensures the government receives best value. The use of delivery orders allows for flexibility in tasking.
Taxpayer Impact: Ensuring accurate financial reporting for retiree health care funds protects taxpayer investments and maintains trust in program management.
Public Impact
Ensures financial integrity of vital defense health programs for retirees. Supports accountability for taxpayer funds allocated to healthcare. Provides assurance on the accuracy of financial statements for these significant funds. Facilitates informed decision-making by DoD leadership regarding financial resources.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for scope creep in audit requirements over the five-year period.
- Reliance on a single contractor for a critical, long-term function.
Positive Signals
- Awarded through full and open competition.
- Supports essential financial oversight functions.
- Long-term contract provides stability for audit services.
Sector Analysis
This contract falls within the professional services sector, specifically accounting and auditing. Government spending on audit services is substantial, driven by regulatory requirements and the need for financial transparency.
Small Business Impact
The data indicates this contract was not specifically set aside for small businesses. Large CPA firms typically compete for and win these types of extensive audit contracts.
Oversight & Accountability
The contract is subject to standard government oversight for financial audits. The Defense Finance and Accounting Service (DFAS) is responsible for managing and overseeing this contract to ensure compliance and quality.
Related Government Programs
- Offices of Certified Public Accountants
- Department of Defense Contracting
- Defense Finance and Accounting Service Programs
Risk Flags
- Long-term contract duration.
- Potential for contractor complacency.
- Audit scope may evolve.
- No specific small business set-aside.
Tags
offices-of-certified-public-accountants, department-of-defense, va, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $59.0 million to KEARNEY & COMPANY, P.C.. DEFENSE HEALTH PROGRAM, MEDICARE-ELIGIBLE RETIREE HEALTH CARE FUND AND CONTRACT RESOURCE MANAGEMENT FINANCIAL STATEMENT AUDITS FISCAL YEARS 2022-2026.
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 $59.0 million.
What is the period of performance?
Start: 2022-01-01. End: 2026-12-31.
What is the average annual cost per fiscal year for these audit services?
The total contract value is $59,003,834.65 over five fiscal years (2022-2026). This averages to approximately $11.8 million per year. This figure represents the total estimated cost for the audit services across the contract duration.
What are the primary risks associated with relying on one firm for five years of audits?
Key risks include potential complacency from the contractor, a lack of fresh perspectives on audit procedures, and the possibility of the contractor's expertise becoming misaligned with evolving program needs. However, full and open competition at award mitigates initial pricing risks.
How does this contract contribute to the overall effectiveness of the Defense Health Program?
By ensuring the accuracy and reliability of financial statements, this contract enhances the program's accountability and transparency. This, in turn, builds confidence in the management of resources, supports efficient resource allocation, and ultimately contributes to the effective delivery of healthcare services to beneficiaries.
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: HQ042321R0036
Offers Received: 1
Pricing Type: LABOR HOURS (Z)
Evaluated Preference: NONE
Contractor Details
Parent Company: E.F. Kearney, Limited
Address: 1701 DUKE ST STE 500, ALEXANDRIA, VA, 22314
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $59,003,835
Exercised Options: $59,003,835
Current Obligation: $59,003,835
Subaward Activity
Number of Subawards: 20
Total Subaward Amount: $45,714,854
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Parent Contract
Parent Award PIID: GS00F031DA
IDV Type: FSS
Timeline
Start Date: 2022-01-01
Current End Date: 2026-12-31
Potential End Date: 2026-12-31 00:00:00
Last Modified: 2025-12-18
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