DoD's $38.3M KPMG Contract for Financial Operations Support Shows Fair Value Amidst Limited Competition

Contract Overview

Contract Amount: $38,298,668 ($38.3M)

Contractor: Kpmg LLP

Awarding Agency: Department of Defense

Start Date: 2024-04-01

End Date: 2026-08-31

Contract Duration: 882 days

Daily Burn Rate: $43.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: LABOR HOURS

Sector: Other

Official Description: JOINT FINANCIAL OPERATIONS AND SYSTEMS SUPPORT (JFOSS)

Place of Performance

Location: SCOTT AFB, SAINT CLAIR County, ILLINOIS, 62225

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $38.3 million to KPMG LLP for work described as: JOINT FINANCIAL OPERATIONS AND SYSTEMS SUPPORT (JFOSS) Key points: 1. Contract provides essential financial operations and systems support to USTRANSCOM. 2. KPMG LLP, a large professional services firm, is the incumbent contractor. 3. The contract was awarded under full and open competition, indicating a broad search for qualified bidders. 4. Performance period spans over two years, suggesting a need for sustained support. 5. The contract type is labor hours, allowing flexibility in resource allocation. 6. The award amount is substantial, reflecting the complexity and scope of financial operations support. 7. No specific small business set-aside was noted, but subcontracting opportunities may exist.

Value Assessment

Rating: good

The contract's value appears reasonable given the scope of financial operations and systems support required by USTRANSCOM. While direct comparisons are difficult without more granular data on specific services, the total award of approximately $38.3 million over roughly two years suggests a consistent, albeit not exceptionally low, hourly rate for specialized financial expertise. Benchmarking against similar large-scale financial support contracts within the Department of Defense would provide a clearer picture of cost-effectiveness. The use of labor hours allows for adaptive resource deployment, which can be cost-efficient if managed effectively.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded using full and open competition, meaning that all responsible sources were permitted to submit a bid. The solicitation likely attracted multiple bidders, although the specific number of bids received is not detailed here. A competitive process generally leads to better price discovery and ensures that the government receives offers from a wide range of qualified contractors, potentially driving down costs and improving the quality of services offered.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure the best value for their money by encouraging multiple firms to offer their best pricing and technical solutions.

Public Impact

The Department of Defense, specifically USTRANSCOM, benefits from enhanced financial operations and systems support. Services delivered include accounting, financial reporting, and potentially system maintenance and upgrades. The geographic impact is primarily within the operational sphere of USTRANSCOM, likely supporting its headquarters and associated units. Workforce implications include the employment of skilled financial analysts, accountants, and IT professionals by the contractor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if labor hours are not managed efficiently.
Reliance on a single large contractor may limit future competition or innovation.
Scope creep could increase the total contract value beyond initial projections.

Positive Signals

Awarded through full and open competition, suggesting a robust bidding process.
Incumbent contractor (KPMG) likely possesses institutional knowledge, potentially leading to smoother execution.
Contract duration allows for stability in financial operations support.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically focusing on accounting and financial consulting. The market for these services within the federal government is substantial, with agencies consistently requiring expertise in financial management, auditing, and system integration. Comparable spending benchmarks would involve looking at other large federal contracts for financial advisory and support services, often awarded to major consulting firms. The size of this contract, approximately $38.3 million, places it as a significant award within this niche.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). As a result, large businesses like KPMG LLP were eligible to bid and likely dominated the competition. While there's no explicit mention of small business subcontracting requirements, it is common for large federal contracts to include provisions for small business participation. The absence of a set-aside means that direct opportunities for small businesses to be the prime contractor on this specific award are unlikely, but they may find subcontracting roles.

Oversight & Accountability

Oversight for this contract would typically be managed by contracting officers and program managers within USTRANSCOM. Performance monitoring, invoicing review, and adherence to contract terms are standard accountability measures. Transparency is generally maintained through contract award databases like FPDS. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arise during the contract's performance.

Related Government Programs

Financial Management Services
Accounting and Auditing Services
Professional Services Contracts
Department of Defense IT and Financial Systems Support
USTRANSCOM Operations Support

Risk Flags

Potential for cost overruns
Reliance on incumbent contractor
Scope creep risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $38.3 million to KPMG LLP. JOINT FINANCIAL OPERATIONS AND SYSTEMS SUPPORT (JFOSS)

Who is the contractor on this award?

The obligated recipient is KPMG LLP.

Which agency awarded this contract?

Awarding agency: Department of Defense (USTRANSCOM).

What is the total obligated amount?

The obligated amount is $38.3 million.

What is the period of performance?

Start: 2024-04-01. End: 2026-08-31.

What is KPMG LLP's track record with the Department of Defense, particularly in financial operations support?

KPMG LLP has a significant history of contracting with the Department of Defense across various service areas, including financial management, auditing, and advisory services. Their track record often involves supporting large-scale financial system implementations, compliance audits, and strategic financial planning. For USTRANSCOM specifically, their experience as an incumbent on the JFOSS contract suggests a familiarity with the agency's unique operational and financial requirements. While specific performance metrics for past contracts are not detailed here, their continued success in securing large federal contracts indicates a generally positive performance history and capability to meet complex government needs. Further analysis would involve reviewing past performance evaluations and any documented issues or commendations.

How does the $38.3 million award compare to similar financial operations support contracts within the DoD?

Comparing the $38.3 million award for Joint Financial Operations and Systems Support (JFOSS) to similar contracts requires access to a broader dataset of DoD financial services procurements. However, for a contract spanning approximately 26 months (from April 2024 to August 2026), this figure suggests an average annual value of roughly $14.7 million. This is a substantial amount, indicative of a comprehensive scope of services, likely involving a team of specialized professionals. Large federal financial support contracts, especially those involving complex systems and extensive reporting requirements for major commands like USTRANSCOM, often fall within this multi-million dollar range annually. Contracts for less complex tasks or shorter durations would naturally be lower, while those involving major system overhauls or broader agency-wide support could exceed this figure.

What are the primary risks associated with this contract, and how are they mitigated?

Key risks for this contract include potential cost overruns due to the labor-hours pricing model if not managed diligently, the risk of scope creep expanding the contract's deliverables beyond initial intent, and potential performance issues if the contractor fails to meet service level agreements. Mitigation strategies typically involve robust contract oversight by USTRANSCOM personnel, including regular performance reviews, detailed monitoring of labor hours and expenditures, and strict change control processes for any scope modifications. The use of performance metrics and clear deliverables within the contract also serves to mitigate performance risks. Furthermore, the competitive award process itself helps mitigate risks by selecting a contractor with a demonstrated capability to perform.

How effective is the 'full and open competition' approach in ensuring value for money for this type of financial support service?

The 'full and open competition' approach is generally considered effective in ensuring value for money for complex professional services like financial operations support. By allowing all responsible sources to compete, it maximizes the pool of potential offerors, fostering a competitive environment that encourages lower pricing and higher quality proposals. This broad competition helps the government identify the most capable contractor at the most reasonable price. For specialized services such as those provided by KPMG, this approach ensures that agencies can access top-tier expertise. The effectiveness is further enhanced when evaluation criteria are clearly defined to prioritize both technical merit and cost, ensuring that the lowest price isn't chosen at the expense of quality.

What are the historical spending patterns for financial operations and systems support at USTRANSCOM or similar DoD entities?

Historical spending patterns for financial operations and systems support at USTRANSCOM and similar Department of Defense entities typically show consistent, significant investment in these areas. Agencies like USTRANSCOM require robust financial management capabilities to handle complex logistics, personnel, and operational budgets. Spending often involves a mix of internal resources and contracted support, with contracts frequently awarded to large professional services firms. Historical data would likely reveal multi-million dollar annual expenditures for such services, often through multiple contract vehicles and task orders. Trends may include increased spending related to system modernization efforts, compliance mandates (like the Federal Financial Management Improvement Act), and evolving cybersecurity requirements for financial systems.

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: HTC71123QD003

Offers Received: 2

Pricing Type: LABOR HOURS (Z)

Evaluated Preference: NONE

Contractor Details

Address: 8350 BROAD ST STE 900, MCLEAN, 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: $117,720,434

Exercised Options: $38,298,668

Current Obligation: $38,298,668

Subaward Activity

Number of Subawards: 13

Total Subaward Amount: $37,042,888

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 47QRAD19DU208

IDV Type: IDC

Timeline