Deloitte Consulting LLP awarded $148M contract for TSA HR, Payroll & Benefits services over 5 years

Contract Overview

Contract Amount: $148,127,780 ($148.1M)

Contractor: Deloitte Consulting LLP

Awarding Agency: Department of Homeland Security

Start Date: 2017-06-12

End Date: 2022-03-10

Contract Duration: 1,732 days

Daily Burn Rate: $85.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::OT::IGF THE PURPOSE OF THE CONTRACT IS TO PROVIDE PERSONNEL, PAYROLL AND BENEFITS (PP&B) OPERATIONAL SERVICES TO THE DEPARTMENT OF HOMELAND SECURITY (DHS) TRANSPORTATION SECURITY ADMINISTRATION (TSA) FOR A PERIOD OF PERFORMANCE OF NO MORE THAN FIVE (5) YEARS.

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22209

State: Virginia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $148.1 million to DELOITTE CONSULTING LLP for work described as: IGF::OT::IGF THE PURPOSE OF THE CONTRACT IS TO PROVIDE PERSONNEL, PAYROLL AND BENEFITS (PP&B) OPERATIONAL SERVICES TO THE DEPARTMENT OF HOMELAND SECURITY (DHS) TRANSPORTATION SECURITY ADMINISTRATION (TSA) FOR A PERIOD OF PERFORMANCE OF NO MORE THAN FIVE (5) YEARS. Key points: 1. Contract provides essential HR, payroll, and benefits operational support to TSA. 2. The firm-fixed-price contract type suggests predictable costs for the government. 3. Performance period of up to 5 years indicates a long-term need for these services. 4. The contract was awarded under full and open competition, suggesting a competitive process. 5. Deloitte Consulting LLP is a large, established firm with extensive government contracting experience. 6. The contract value of approximately $148 million over five years averages to about $29.6 million annually.

Value Assessment

Rating: good

The contract value of $148 million over five years for HR, payroll, and benefits services appears reasonable for a large federal agency like TSA. Benchmarking against similar large-scale HR and payroll outsourcing contracts for federal agencies would provide a more precise value-for-money assessment. The firm-fixed-price structure helps control costs, but the total value is substantial, reflecting the complexity and scope of supporting TSA's personnel needs.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple qualified vendors had the opportunity to bid. This competitive process is generally expected to yield fair market prices and encourage innovation. The number of bidders (3) suggests a healthy level of competition for this significant contract, though more bidders could potentially drive prices lower.

Taxpayer Impact: Full and open competition typically benefits taxpayers by ensuring that the government receives competitive pricing and the best value for its investment. It reduces the risk of overpayment and encourages contractors to offer efficient and effective solutions.

Public Impact

Benefits TSA employees by ensuring accurate and timely payroll, benefits administration, and HR support. Supports the operational readiness of the Transportation Security Administration by managing its human capital functions. The services are primarily delivered within Virginia, where the contractor is located. Impacts the TSA workforce by providing a stable and reliable system for managing their employment-related needs.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in due to the long-term nature of the contract.
Reliance on a single contractor for critical HR and payroll functions could pose a risk if performance falters.
Ensuring data security and privacy for sensitive employee information is paramount.

Positive Signals

Award to an experienced contractor like Deloitte suggests a higher likelihood of successful performance.
Firm-fixed-price contract provides cost certainty for the government.
Full and open competition indicates a robust procurement process.

Sector Analysis

This contract falls within the professional services sector, specifically Human Resources Consulting Services. The federal government is a significant consumer of such services, outsourcing various administrative and operational functions to specialized firms. The market for HR, payroll, and benefits administration services is competitive, with large consulting firms and specialized HR service providers vying for government contracts. The value of this contract is substantial, reflecting the scale of TSA's workforce.

Small Business Impact

This contract was not set aside for small businesses and was awarded to Deloitte Consulting LLP, a large business. There is no explicit information provided regarding subcontracting plans for small businesses. The absence of a small business set-aside suggests that the primary focus was on securing the most capable and experienced provider for these critical services, potentially limiting direct opportunities for small businesses on this specific prime contract.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program managers within the TSA and DHS. Performance metrics and service level agreements (SLAs) outlined in the contract would be used to monitor contractor performance. While specific IG oversight is not detailed, the DHS Office of Inspector General would have jurisdiction over potential fraud, waste, or abuse related to this contract.

Related Government Programs

DHS HR Services Contracts
TSA Payroll and Benefits Administration
Federal Human Capital Management Services
Large-Scale HR Outsourcing Contracts

Risk Flags

Long-term reliance on a single vendor
Potential for performance issues impacting employee services
Data security and privacy risks for sensitive employee information

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $148.1 million to DELOITTE CONSULTING LLP. IGF::OT::IGF THE PURPOSE OF THE CONTRACT IS TO PROVIDE PERSONNEL, PAYROLL AND BENEFITS (PP&B) OPERATIONAL SERVICES TO THE DEPARTMENT OF HOMELAND SECURITY (DHS) TRANSPORTATION SECURITY ADMINISTRATION (TSA) FOR A PERIOD OF PERFORMANCE OF NO MORE THAN FIVE (5) YEARS.

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 (Transportation Security Administration).

What is the total obligated amount?

The obligated amount is $148.1 million.

What is the period of performance?

Start: 2017-06-12. End: 2022-03-10.

What is Deloitte Consulting LLP's track record with similar federal HR and payroll contracts?

Deloitte Consulting LLP has a significant history of performing large-scale IT and professional services contracts for various U.S. federal agencies, including those involving human resources, payroll, and benefits administration. Their experience often includes complex system implementations, operational support, and strategic consulting. While specific details on past performance for TSA's exact needs are not provided here, Deloitte's general profile suggests they possess the scale and expertise required for such a critical function. Reviewing past performance evaluations and contract close-out reports for similar contracts awarded to Deloitte would offer deeper insights into their reliability, efficiency, and ability to meet government requirements.

How does the average annual cost of this contract compare to industry benchmarks for similar services?

The average annual cost for this contract is approximately $29.6 million ($148 million / 5 years). Benchmarking this against industry standards for large federal agencies requires detailed analysis of the specific services included (e.g., payroll processing volume, benefits complexity, HRIS management, customer support levels). Generally, large-scale HR and payroll outsourcing for tens of thousands of employees can range from hundreds to thousands of dollars per employee per year. Without knowing the exact number of TSA employees supported, a precise comparison is difficult. However, for a comprehensive suite of services for a major agency, this annual figure appears within a plausible range, assuming it covers a substantial employee base and a wide array of HR functions.

What are the key performance indicators (KPIs) and service level agreements (SLAs) associated with this contract?

The provided data does not specify the key performance indicators (KPIs) or service level agreements (SLAs) for this contract. However, for a contract of this nature supporting HR, payroll, and benefits operations, typical KPIs would likely include metrics such as payroll accuracy rate, on-time payroll delivery, benefits enrollment accuracy, response times for employee inquiries, system uptime, and data security compliance. Robust SLAs are crucial for ensuring the contractor meets performance expectations and for providing a basis for evaluating the value and effectiveness of the services delivered to TSA.

What is the potential risk associated with relying on a single contractor for critical HR and payroll functions?

Relying on a single contractor for critical HR and payroll functions presents several risks. These include vendor lock-in, where switching providers becomes difficult and costly; performance degradation if the contractor's focus shifts or resources are mismanaged; potential disruptions due to unforeseen events affecting the contractor (e.g., financial instability, data breaches); and a lack of competitive pressure to innovate or improve services over time. To mitigate these risks, robust contract management, clear performance expectations, contingency planning, and regular performance reviews are essential. The government must maintain strong oversight and potentially develop internal capabilities or alternative solutions as a fallback.

How has federal spending on HR consulting services evolved over the past five years, and where does this contract fit?

Federal spending on HR consulting services has generally remained substantial, driven by the need to modernize HR systems, manage complex workforces, and ensure compliance with evolving regulations. While specific aggregate data for 'HR Consulting Services' (NAICS 541612) isn't provided here, agencies consistently invest in areas like personnel management, payroll systems, benefits administration, and talent acquisition. This $148 million contract for TSA represents a significant investment within this category, reflecting the scale and critical nature of supporting a large federal agency's workforce operations. It aligns with the broader trend of agencies seeking specialized support for core HR functions to improve efficiency and effectiveness.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Human Resources Consulting Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: HSTS01-16-R-HRM036

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Deloitte Financial Advisory Services LLP

Address: 1919 N LYNN ST, ARLINGTON, VA, 22209

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

Financial Breakdown

Contract Ceiling: $203,511,530

Exercised Options: $151,394,053

Current Obligation: $148,127,780

Actual Outlays: $431,281

Subaward Activity

Number of Subawards: 31

Total Subaward Amount: $39,944,529

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline