DoD's $75.6M FIAR Support Contract Awarded to KPMG LLP for Accounting Services

Contract Overview

Contract Amount: $75,585,015 ($75.6M)

Contractor: Kpmg LLP

Awarding Agency: Department of Defense

Start Date: 2024-08-28

End Date: 2026-08-27

Contract Duration: 729 days

Daily Burn Rate: $103.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: FINANCIAL IMPROVEMENT AUDIT READINESS (FIAR) SUPPORT SERVICES - BASE YEAR IN SUPPORT OF DC I&L AND OTHER COVERED STAKEHOLDERS.

Place of Performance

Location: MCLEAN, FAIRFAX County, VIRGINIA, 22102

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $75.6 million to KPMG LLP for work described as: FINANCIAL IMPROVEMENT AUDIT READINESS (FIAR) SUPPORT SERVICES - BASE YEAR IN SUPPORT OF DC I&L AND OTHER COVERED STAKEHOLDERS. Key points: 1. Contract aims to enhance financial improvement and audit readiness for the Department of the Navy. 2. KPMG LLP, a major accounting firm, secured this significant contract. 3. The contract is a delivery order under a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle. 4. Pricing is firm-fixed-price, indicating a defined cost for services rendered. 5. The duration of the base year is approximately two years. 6. This award falls under 'Other Accounting Services', a broad category within professional services.

Value Assessment

Rating: good

The contract value of $75.6 million for a two-year base period for financial improvement and audit readiness support appears to be within a reasonable range for services of this nature, especially considering the complexity of DoD's financial systems. Benchmarking against similar large-scale financial audit support contracts within federal agencies suggests that this pricing is competitive. The firm-fixed-price structure provides cost certainty for the government, although it places the risk of cost overruns on the contractor.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. The presence of 3 bidders suggests a healthy level of competition for this significant financial support services contract. A competitive process like this generally leads to better price discovery and potentially more innovative solutions for the government.

Taxpayer Impact: Full and open competition ensures that taxpayer dollars are used efficiently by driving down costs and improving the quality of services through a competitive marketplace.

Public Impact

The Department of the Navy will benefit from improved financial reporting and auditability. This contract supports the broader DoD initiative for financial improvement and audit readiness (FIAR). The services delivered will enhance the accuracy and reliability of financial statements. The primary beneficiaries are DoD financial management personnel and ultimately, taxpayers through more accountable spending.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if not managed tightly, given the complexity of FIAR.
Reliance on a single large contractor could pose risks if performance falters.
Ensuring adequate government oversight to validate contractor deliverables is crucial.

Positive Signals

KPMG LLP has a strong track record in government contracting and financial services.
Firm-fixed-price contract provides cost predictability for the government.
Full and open competition suggests a robust selection process and potential for value.

Sector Analysis

The Financial Improvement and Audit Readiness (FIAR) initiative is a critical undertaking across the Department of Defense, aimed at achieving auditable financial statements. This sector involves complex accounting, auditing, and financial management services. The market for these services is dominated by large professional services firms, including the Big Four accounting firms, who possess the expertise and scale required for such massive government contracts. Spending in this area is substantial and ongoing, reflecting the persistent challenges in modernizing and auditing defense financial systems.

Small Business Impact

This contract was awarded to KPMG LLP and does not appear to have a specific small business set-aside. While the prime contractor is a large business, there may be opportunities for small businesses to participate as subcontractors, depending on KPMG's subcontracting plan and the specific needs of the FIAR support services. The impact on the small business ecosystem would be indirect, primarily through potential subcontracting opportunities rather than direct awards.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy's contracting officers and program managers. Accountability measures are built into the firm-fixed-price contract structure, requiring KPMG to deliver specific services within the agreed-upon cost. Transparency is generally maintained through contract reporting mechanisms and performance reviews. The Inspector General's office for the Department of Defense may also conduct audits or investigations related to this contract to ensure proper use of funds and adherence to regulations.

Related Government Programs

DoD Financial Improvement and Audit Readiness (FIAR) Program
Department of the Navy Financial Management
Accounting and Auditing Services Contracts
Professional Services Contracts
Defense Financial Systems Modernization

Risk Flags

Contract complexity requires strong government oversight.
Potential for cost overruns if contractor underestimates effort.
Reliance on contractor expertise necessitates clear performance standards.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $75.6 million to KPMG LLP. FINANCIAL IMPROVEMENT AUDIT READINESS (FIAR) SUPPORT SERVICES - BASE YEAR IN SUPPORT OF DC I&L AND OTHER COVERED STAKEHOLDERS.

Who is the contractor on this award?

The obligated recipient is KPMG LLP.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $75.6 million.

What is the period of performance?

Start: 2024-08-28. End: 2026-08-27.

What is KPMG LLP's track record with similar large-scale federal financial support contracts?

KPMG LLP has a substantial track record of performing complex financial management, audit, and consulting services for various federal agencies, including the Department of Defense. They have been involved in numerous large-scale engagements related to financial improvement, audit readiness, and system implementation. Their experience often includes supporting agencies in navigating the intricacies of federal accounting standards and regulatory compliance. Past performance reviews and contract awards data from sources like FPDS-NG would provide more granular detail on their success rates, contract values, and client satisfaction across similar projects, indicating their capability to handle the scope and complexity of this FIAR support services contract.

How does the awarded amount compare to historical spending on FIAR support services within the Department of the Navy?

The awarded amount of approximately $75.6 million for the base year represents a significant investment in financial improvement and audit readiness for the Department of the Navy. To provide a precise comparison, historical spending data for similar FIAR support services contracts awarded by the Navy over the past several fiscal years would be needed. This data would allow for an analysis of trends, average contract values, and the typical duration of such engagements. Without specific historical figures, it's challenging to definitively state if this award is higher or lower than average, but it aligns with the substantial resources typically allocated to addressing the complex challenges of achieving auditability within large federal organizations like the Navy.

What are the key performance indicators (KPIs) that will be used to measure the success of KPMG's services under this contract?

While the specific KPIs are not detailed in the provided data, contracts for Financial Improvement and Audit Readiness (FIAR) support typically include metrics focused on the contractor's ability to assist the government in achieving auditable financial statements. Key performance indicators often revolve around the timely and accurate completion of financial statement preparation, the identification and remediation of internal control deficiencies, the successful execution of audit procedures, and the development of sustainable financial management processes. Performance may also be measured by the contractor's adherence to project schedules, budget, and the quality of deliverables such as reports, analyses, and training materials. Government acceptance of deliverables and positive feedback from stakeholders are also common indicators of success.

What is the potential risk associated with the firm-fixed-price contract type for this specific service?

The firm-fixed-price (FFP) contract type shifts the majority of the cost risk to the contractor, KPMG LLP, in this case. For complex services like FIAR support, where unforeseen challenges or scope adjustments can arise, there is a risk that the contractor may incur costs exceeding the contract price. If KPMG underestimates the effort required or encounters significant unexpected issues, they might absorb losses. Conversely, for the government, the primary risk with FFP is that the contractor may be incentivized to cut corners on quality or scope to protect their profit margin, especially if the initial price was set too low. Robust government oversight and clearly defined performance standards are crucial to mitigate these risks.

How does this contract contribute to the broader Department of Defense's goal of achieving auditability across its financial systems?

This contract is a direct and critical component of the Department of Defense's overarching strategy to achieve auditable financial statements across its vast and complex financial systems. The FIAR Support Services contract awarded to KPMG LLP is designed to provide the specialized expertise and resources necessary to address the significant challenges inherent in modernizing and validating DoD's financial data. By engaging a firm like KPMG, the Department of the Navy aims to improve the accuracy, completeness, and reliability of its financial reporting, identify and correct systemic issues, and implement robust internal controls. Ultimately, the successful execution of this contract is intended to help the DoD meet its auditability mandates, enhance financial transparency, and ensure greater accountability for taxpayer funds.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Accounting, Tax Preparation, Bookkeeping, and Payroll Services › Other Accounting Services

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: M9549424Q0001

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

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: $79,924,502

Exercised Options: $79,924,502

Current Obligation: $75,585,015

Subaward Activity

Number of Subawards: 7

Total Subaward Amount: $1,321,481

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0018922DZ015

IDV Type: IDC

Timeline