DHS's $35M Deloitte contract for financial management services awarded competitively, with a high per-unit cost

Contract Overview

Contract Amount: $35,216,586 ($35.2M)

Contractor: Deloitte Consulting LLP

Awarding Agency: Department of Homeland Security

Start Date: 2008-09-29

End Date: 2013-09-14

Contract Duration: 1,811 days

Daily Burn Rate: $19.4K/day

Competition Type: COMPETITIVE DELIVERY ORDER

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: FINANCIAL MANAGEMENT AND PORTFOLIO MANAGEMENT SERVICES

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20024

State: District of Columbia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $35.2 million to DELOITTE CONSULTING LLP for work described as: FINANCIAL MANAGEMENT AND PORTFOLIO MANAGEMENT SERVICES Key points: 1. The contract provided essential financial and portfolio management services to U.S. Immigration and Customs Enforcement. 2. Awarded to a large, established contractor, indicating a focus on experience and capability. 3. The contract duration of over 5 years suggests a long-term need for these services. 4. The fixed-price contract type aims to control costs, but the per-unit cost warrants scrutiny. 5. Competition was robust, with 5 bidders, which should have driven better pricing. 6. The services provided are critical for the agency's operational and financial integrity.

Value Assessment

Rating: fair

The contract's total value of $35.2 million over approximately 5 years for financial management services appears substantial. Benchmarking against similar contracts for portfolio and financial management services is challenging without more granular data on the specific tasks performed. However, the relatively high per-unit cost suggests that while the contractor is experienced, the pricing may not be the most cost-effective available in the market. Further analysis of the specific deliverables and their market rates would be needed for a definitive value assessment.

Cost Per Unit: $19,446 per year (estimated based on total award and duration)

Competition Analysis

Competition Level: full-and-open

This contract was awarded through a competitive process, with five bids received. The full and open competition indicates that multiple vendors had the opportunity to bid, which is generally a positive sign for price discovery and value for taxpayers. The presence of five bidders suggests a healthy level of interest and capability in the market for these types of services.

Taxpayer Impact: The competitive nature of this award is beneficial for taxpayers, as it likely led to a more favorable price than a sole-source or limited competition scenario. The agency received multiple proposals, allowing for comparison and selection of the best value.

Public Impact

U.S. Immigration and Customs Enforcement (ICE) benefits directly through improved financial and portfolio management capabilities. The services delivered ensure the agency's financial operations are managed efficiently and compliantly. The contract supports the agency's mission to secure borders and enforce immigration laws. Workforce implications include the utilization of specialized financial and management consultants.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if scope creep occurs within the fixed-price contract.
Reliance on a single large contractor may limit future flexibility or innovation.
The significant contract value could indicate a high level of complexity or specialized expertise required.

Positive Signals

Awarded through full and open competition, suggesting a fair and transparent process.
The contractor, Deloitte Consulting LLP, is a well-established firm with extensive experience.
Fixed-price contract type provides cost certainty for the government.
The contract duration indicates a stable, ongoing need for these critical services.

Sector Analysis

The federal IT and professional services sector is vast, with significant spending on financial management, consulting, and portfolio management. Contracts like this are common across many agencies requiring specialized expertise to manage complex financial operations and large-scale projects. Benchmarks for similar services vary widely based on scope, duration, and contractor, but this contract falls within a typical range for large-scale financial consulting engagements.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. The award to a large prime contractor like Deloitte suggests that the focus was on extensive experience and broad capabilities, which may not always align with opportunities for small business participation as prime contractors. Future contracts in this area could explore set-aside options to increase small business involvement.

Oversight & Accountability

The contract was awarded by the Department of Homeland Security, U.S. Immigration and Customs Enforcement. Oversight would typically involve contract officers, program managers, and potentially agency-level financial oversight bodies. Transparency is facilitated by public contract databases. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse related to the contract's performance.

Related Government Programs

Financial Management Services
Portfolio Management Services
Management and Financial Consulting, Acquisition and Technology Services
Department of Homeland Security Financial Systems

Risk Flags

High per-unit cost warrants further value assessment.
Long contract duration may reduce flexibility.
Potential for scope creep in fixed-price contracts.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $35.2 million to DELOITTE CONSULTING LLP. FINANCIAL MANAGEMENT AND PORTFOLIO MANAGEMENT SERVICES

Who is the contractor on this award?

The obligated recipient is DELOITTE CONSULTING LLP.

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (U.S. Immigration and Customs Enforcement).

What is the total obligated amount?

The obligated amount is $35.2 million.

What is the period of performance?

Start: 2008-09-29. End: 2013-09-14.

What specific financial and portfolio management services were included under this contract?

The contract broadly covered financial management and portfolio management services. This likely encompassed a range of activities such as financial planning and analysis, budget formulation and execution, accounting operations, financial reporting, internal controls, risk management, and potentially program portfolio analysis and optimization. The specific tasks would have been detailed in the Statement of Work (SOW) and subsequent task orders, defining the precise support provided to U.S. Immigration and Customs Enforcement (ICE) to ensure efficient and compliant financial operations and strategic resource allocation.

How does the per-unit cost of $19,446 compare to similar federal contracts for financial management services?

The estimated annual per-unit cost of $19,446 is a benchmark derived from the total award value and contract duration. Comparing this figure directly to similar contracts requires careful consideration of the specific services rendered, the level of expertise required, and the geographic location of service delivery. Contracts for high-level strategic financial consulting or complex portfolio management in high-cost-of-living areas like Washington D.C. (where the contractor is based) might command higher rates. However, without a detailed breakdown of the services and labor categories, it's difficult to definitively state if this rate is high or low. Generally, for routine financial support, this rate might be considered on the higher end, suggesting specialized expertise or significant overhead associated with the contractor.

What is Deloitte Consulting LLP's track record with federal financial management contracts?

Deloitte Consulting LLP is a major federal contractor with a long history of providing a wide array of professional services, including extensive experience in financial management, consulting, and IT solutions across numerous government agencies. They have consistently secured large, complex contracts, demonstrating a strong capability to meet government requirements. Their track record includes managing significant financial systems implementations, providing strategic financial advice, and supporting budget and accounting operations for agencies like the Department of Defense, Health and Human Services, and Homeland Security. This specific contract with ICE builds upon that established expertise.

What are the potential risks associated with a fixed-price contract of this magnitude and duration?

While fixed-price contracts offer cost certainty, risks can still emerge. For a contract of this magnitude ($35.2M) and duration (over 5 years), potential risks include scope creep, where the government requests additional work not originally defined, potentially leading to disputes or the need for contract modifications. Contractor underestimation of effort or unforeseen complexities could lead to reduced profit margins for Deloitte, potentially impacting service quality or their willingness to go above and beyond. Conversely, if the initial pricing was too high, taxpayers could be overpaying for the services. Ensuring a clear and well-defined Statement of Work (SOW) and robust contract management are crucial to mitigate these risks.

How has spending on financial management services by U.S. Immigration and Customs Enforcement evolved over time?

Analyzing historical spending patterns for financial management services by U.S. Immigration and Customs Enforcement (ICE) requires access to detailed historical contract data. This specific contract, awarded in 2008 and ending in 2013, represents a significant investment during that period. To understand the evolution, one would need to examine prior contracts for similar services, identify any trends in contract values, durations, and the number of competitors over time. Factors such as agency growth, changes in financial regulations, and shifts in technology could influence spending levels and the nature of services procured. Without broader historical data, it's challenging to pinpoint specific evolutionary trends for ICE's financial management spending.

Industry Classification

NAICS: Finance and Insurance › Other Financial Investment Activities › Miscellaneous Financial Investment Activities

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

Competition & Pricing

Extent Competed: COMPETITIVE DELIVERY ORDER

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Deloitte LLP (UEI: 014127109)

Address: 4301 N FAIRFAX DR STE 210, ARLINGTON, VA, 08

Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership

Financial Breakdown

Contract Ceiling: $35,216,586

Exercised Options: $35,216,586

Current Obligation: $35,216,586

Parent Contract

Parent Award PIID: GS23F0016J

IDV Type: FSS

Timeline