DHS awarded $150M+ to Deloitte for program management support, raising value-for-money questions

Contract Overview

Contract Amount: $150,276,892 ($150.3M)

Contractor: Deloitte Consulting LLP

Awarding Agency: Department of Homeland Security

Start Date: 2008-09-23

End Date: 2014-07-04

Contract Duration: 2,110 days

Daily Burn Rate: $71.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: PROGRAM MANAGEMENT SUPPORT FOR THE OFFICE OF SECURITY TECHNOLOGY

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22204

State: Virginia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $150.3 million to DELOITTE CONSULTING LLP for work described as: PROGRAM MANAGEMENT SUPPORT FOR THE OFFICE OF SECURITY TECHNOLOGY Key points: 1. The contract's significant value suggests a need for robust performance monitoring. 2. Deloitte's extensive experience may offer benefits, but also warrants scrutiny for potential complacency. 3. The long duration of the contract (over 6 years) could indicate a stable, ongoing need or a lack of agile adaptation. 4. The fixed-price contract type aims to control costs, but requires careful scope management to avoid overruns. 5. The contract's focus on administrative management suggests a critical support function for TSA's operations. 6. Benchmarking against similar management consulting contracts is essential to assess value. 7. The absence of small business involvement warrants examination of subcontracting opportunities.

Value Assessment

Rating: fair

This contract represents a substantial investment in program management support for the TSA. While the total value is high, a direct comparison to similar contracts is difficult without more granular data on the specific services rendered. The firm-fixed-price structure is generally favorable for cost control, but the long duration and significant total amount necessitate close oversight to ensure that the pricing remains competitive and reflects actual value delivered. Without specific performance metrics or benchmarks, it's challenging to definitively assess the value-for-money proposition.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of two bids suggests a moderate level of competition for this significant contract. While full and open competition is generally preferred, the specific number of bidders can influence price discovery. A higher number of bidders typically leads to more competitive pricing.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it encourages a wider range of vendors to offer their services, potentially driving down costs and improving the quality of services received.

Public Impact

The Office of Security Technology within the TSA benefits from enhanced program management capabilities. Services delivered likely include strategic planning, operational support, and administrative oversight for technology programs. The geographic impact is primarily within the TSA's operational areas, likely concentrated in Virginia where the contractor is based. Workforce implications may include support for government program managers and potentially the integration of contractor personnel into TSA's project teams.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in due to the long contract duration and specialized nature of support.
Risk of scope creep if not managed tightly, potentially increasing costs beyond initial projections.
Dependency on a single contractor for critical program management functions could pose a risk if performance falters.

Positive Signals

Awarded through full and open competition, suggesting a competitive bidding process.
Firm-fixed-price contract type helps to establish cost certainty.
Deloitte is a large, established firm with significant experience in government contracting.
The contract supports a critical function within the TSA, indicating alignment with agency priorities.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically management consulting. This sector is characterized by a wide range of service providers, from large multinational corporations to smaller specialized firms. The market size for government management consulting is substantial, driven by agencies' needs for expertise in areas like program management, strategic planning, and administrative support. This contract represents a significant portion of spending within this niche for the TSA.

Small Business Impact

The contract was not set aside for small businesses, and the data indicates no small business participation (sb: false). This suggests that opportunities for small businesses to subcontract on this large contract may be limited or non-existent. Further investigation into subcontracting plans would be necessary to understand the full impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program managers within the TSA. Accountability measures are inherent in the firm-fixed-price structure, requiring the contractor to deliver defined services within budget. Transparency is generally facilitated through contract award databases and reporting requirements, though specific performance details may be less public. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Homeland Security - Program Management Support
Transportation Security Administration - Administrative Services
Federal Management Consulting Contracts
IT Program Support Services

Risk Flags

High contract value warrants close scrutiny of performance and cost-effectiveness.
Long contract duration may indicate potential for vendor lock-in or misalignment with evolving needs.
Lack of small business participation noted; requires review of subcontracting opportunities.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $150.3 million to DELOITTE CONSULTING LLP. PROGRAM MANAGEMENT SUPPORT FOR THE OFFICE OF SECURITY TECHNOLOGY

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 $150.3 million.

What is the period of performance?

Start: 2008-09-23. End: 2014-07-04.

What is Deloitte Consulting LLP's track record with the Department of Homeland Security and the TSA specifically?

Deloitte Consulting LLP has a substantial track record with the Department of Homeland Security (DHS) and its various components, including the Transportation Security Administration (TSA). As a large, established government contractor, Deloitte has secured numerous awards across different agencies for a wide array of services, including management consulting, IT support, and program management. For the TSA, their involvement often centers on enhancing operational efficiency, modernizing systems, and providing strategic guidance. Analyzing past performance reviews, contract modifications, and any past performance issues associated with Deloitte's work for DHS and TSA would provide a clearer picture of their reliability and effectiveness in fulfilling complex requirements. Their extensive experience suggests a deep understanding of the federal procurement landscape and agency-specific needs, but also necessitates rigorous oversight to ensure continued high performance and value.

How does the $150M+ value of this contract compare to similar program management support contracts within DHS or other federal agencies?

The $150 million+ value of this contract for program management support is substantial and places it among significant federal procurements in the consulting services category. To benchmark its value, one would compare it to other contracts awarded by DHS, TSA, or similar agencies (e.g., Federal Aviation Administration, Customs and Border Protection) for comparable services like program management, strategic planning, and administrative support. Key comparison points would include the contract duration, the specific scope of work, the number of bidders, and the pricing structures. Contracts of this magnitude often involve complex, long-term support needs. If similar agencies are procuring comparable services for a lower total cost or over a shorter duration, it could indicate that this contract's pricing or scope might be less competitive. Conversely, if the scope is broader or the duration longer than typical benchmarks, the cost may be justified.

What are the primary risks associated with a firm-fixed-price contract of this duration and value?

The primary risks associated with a firm-fixed-price (FFP) contract of this duration (over 6 years) and value ($150M+) revolve around scope definition and contractor performance. For the government, the main risk is that the contractor may deliver substandard services or attempt to cut corners to maximize profit, especially if the initial price was set too high or if oversight is lax. Conversely, if the scope of work was underestimated by the contractor, they could incur significant losses, potentially leading to performance issues or requests for contract modifications. For a long-duration FFP contract, there's also a risk of the defined scope becoming misaligned with evolving agency needs over time, requiring costly and complex modifications. Effective risk mitigation relies heavily on precise initial scope definition, robust performance monitoring, and clear communication channels between the government and the contractor.

What does the 'Administrative Management and General Management Consulting Services' NAICS code (541611) imply about the services provided under this contract?

The North American Industry Classification System (NAICS) code 541611, 'Administrative Management and General Management Consulting Services,' indicates that the services procured under this contract are focused on providing expert advice and assistance to government clients on organization, planning, and management systems. This typically includes services such as strategic and organizational planning, business process reengineering, administrative management, executive-level policy management, and general management consulting. For the TSA, this likely translates to support in areas like improving operational efficiency, developing strategic initiatives, managing complex programs, and enhancing administrative functions within the Office of Security Technology. It suggests the contractor is not providing highly specialized technical or scientific consulting, but rather broader management expertise to help the agency function more effectively and achieve its objectives.

Given the contract's duration and value, what are the potential implications for TSA's long-term program management capabilities?

A contract of this magnitude and duration ($150M+, over 6 years) for program management support can have significant long-term implications for the TSA's internal capabilities. On the positive side, it can provide consistent, high-level expertise that augments the agency's ability to manage complex technology programs effectively, potentially leading to better project outcomes and more efficient resource allocation. However, there's also a risk of over-reliance on external contractors, which could lead to an erosion of internal expertise and institutional knowledge over time. If not managed carefully, the agency might become dependent on the contractor for critical functions, making it difficult to transition services in-house or to a different vendor in the future. Therefore, the TSA must ensure robust knowledge transfer mechanisms and maintain strong government oversight to balance the benefits of external support with the need to build and sustain its own program management capacity.

What is the significance of the contract being awarded as a 'Delivery Order' (aw: DELIVERY ORDER)?

The designation 'Delivery Order' (aw: DELIVERY ORDER) typically implies that this contract is a task order issued under a larger, pre-existing indefinite-delivery/indefinite-quantity (IDIQ) contract or a similar type of multiple-award contract vehicle. This means that the $150 million+ figure represents the total value of orders placed against this specific delivery order, which itself is part of a broader contract. IDIQ contracts allow agencies to procure a range of supplies or services over a set period, with specific quantities and delivery dates defined by individual task or delivery orders. This approach offers flexibility for the agency to order services as needed. The fact that this is a delivery order suggests that the underlying contract vehicle was likely competed previously, and this order represents a specific call for services within that framework. It also implies that the total value could potentially exceed the stated amount if subsequent orders are placed under the parent contract.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Administrative Management and General Management 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

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Deloitte LLP (UEI: 014127109)

Address: 12010 SUNSET HILLS RD, RESTON, VA, 20190

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $337,875,161

Exercised Options: $150,276,892

Current Obligation: $150,276,892

Parent Contract

Parent Award PIID: GS10F06LPA0005

IDV Type: BPA

Timeline