KPMG LLP awarded $169M for FIAR Program Services, with a significant portion allocated to accounting services

Contract Overview

Contract Amount: $169,027,077 ($169.0M)

Contractor: Kpmg LLP

Awarding Agency: Department of Defense

Start Date: 2018-09-07

End Date: 2024-03-23

Contract Duration: 2,024 days

Daily Burn Rate: $83.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: TIME AND MATERIALS

Sector: Other

Official Description: FIAR PROGRAM SERVICES - BASE PERIOD

Place of Performance

Location: MCLEAN, FAIRFAX County, VIRGINIA, 22102

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $169.0 million to KPMG LLP for work described as: FIAR PROGRAM SERVICES - BASE PERIOD Key points: 1. Value for money appears fair given the extensive duration and scope of services. 2. Competition dynamics indicate a full and open process, suggesting potential for competitive pricing. 3. Risk indicators are moderate, with a long contract duration and time-and-materials pricing structure. 4. Performance context shows a long-term engagement for critical financial improvement and audit readiness. 5. Sector positioning places this contract within the broader professional services supporting government financial management.

Value Assessment

Rating: fair

The contract's total value of approximately $169 million over its full duration suggests a substantial investment. Benchmarking against similar large-scale financial improvement and audit readiness contracts is challenging without more granular data on specific deliverables. However, the time-and-materials pricing structure, while flexible, can sometimes lead to higher costs if not managed closely. The contract's duration of over five years indicates a long-term need for these services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. The presence of multiple bidders generally fosters price discovery and can lead to more competitive pricing for the government. The specific number of bidders is not provided, but the award type suggests a robust competitive environment.

Taxpayer Impact: A full and open competition process is beneficial for taxpayers as it increases the likelihood of securing services at the best possible price through market forces.

Public Impact

The Department of Defense is the primary beneficiary, receiving critical support for its financial improvement and audit readiness initiatives. Services delivered include accounting, auditing, and financial management support essential for compliance and operational efficiency. The geographic impact is primarily within the Department of Defense's operational areas, likely supporting various commands and agencies. Workforce implications include the employment of skilled accounting and financial professionals by KPMG LLP to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and materials pricing can lead to cost overruns if not diligently managed and monitored.
The long contract duration increases the risk of scope creep or evolving requirements not being adequately addressed.
Reliance on a single contractor for such a critical function may pose a risk if performance issues arise.

Positive Signals

Awarded through full and open competition, suggesting a competitive process that likely yielded a fair price.
The contract supports a critical government function (FIAR), indicating a recognized need and strategic importance.
The contractor, KPMG LLP, is a well-established firm with significant experience in accounting and auditing services.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically accounting services. The government's need for financial improvement and audit readiness (FIAR) is a significant area of spending, driven by legislative mandates and the need for greater financial transparency and accountability. Comparable spending benchmarks would involve looking at other large federal contracts for similar financial advisory and auditing services across various agencies.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a specific set-aside. However, as a large prime contractor, KPMG LLP may engage small businesses as subcontractors for specialized services, though this is not explicitly detailed in the provided data.

Oversight & Accountability

Oversight for this contract is likely managed by the Defense Contract Management Agency (DCMA), as indicated by the 'sa' field. Accountability measures would be embedded in the contract's performance work statement and delivery schedules. Transparency is generally facilitated through contract award databases, though specific performance metrics and detailed spending breakdowns may be less publicly accessible.

Related Government Programs

Financial Improvement and Audit Readiness (FIAR) Programs
Department of Defense Financial Management
Government Auditing Services
Accounting and Auditing Services Contracts
Professional Services Contracts

Risk Flags

Long contract duration
Time and Materials pricing
Potential for cost overruns
Reliance on single contractor for critical function

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $169.0 million to KPMG LLP. FIAR PROGRAM SERVICES - BASE PERIOD

Who is the contractor on this award?

The obligated recipient is KPMG LLP.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $169.0 million.

What is the period of performance?

Start: 2018-09-07. End: 2024-03-23.

What is the historical spending trend for FIAR Program Services under this contract and similar contracts?

Historical spending for this specific contract, awarded as a delivery order under a larger vehicle, shows a total value of approximately $169 million from its start date in September 2018 to its end date in March 2024. This averages to roughly $28 million per year. Analyzing trends for similar FIAR contracts across the Department of Defense would require a broader dataset. However, federal spending on FIAR initiatives has generally been increasing over the past decade as agencies work towards auditability mandates. This trend is driven by legislative requirements and a push for greater financial accountability within government.

How does the per-hour billing rate for KPMG LLP compare to market rates for similar accounting services?

Determining the exact per-hour billing rate for KPMG LLP under this time-and-materials contract is not possible with the provided data, as it only shows the total contract value and duration. To compare with market rates, one would need to know the specific labor categories billed (e.g., senior accountant, auditor, project manager), the number of hours billed for each, and their associated rates. Market rate comparisons would typically involve benchmarking against rates charged by other large accounting firms (e.g., the 'Big Four') for similar government contracts, considering factors like geographic location, security clearances, and the complexity of the work. Without this granular data, a precise comparison is not feasible.

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

The provided data does not specify the key performance indicators (KPIs) for this contract. Typically, for Financial Improvement and Audit Readiness (FIAR) services, KPIs would focus on achieving specific auditability milestones, reducing audit findings, improving financial reporting accuracy, timely submission of financial statements, and adherence to established financial management standards. Performance would likely be assessed through regular progress reports, client feedback, and the achievement of defined deliverables within the contract's Statement of Work (SOW). The Defense Contract Management Agency (DCMA) would be responsible for monitoring performance against these KPIs.

What is KPMG LLP's track record with the Department of Defense and other federal agencies for similar large-scale financial services contracts?

KPMG LLP is a major global professional services firm with extensive experience providing a wide range of services, including accounting, auditing, and financial advisory, to both the private sector and government agencies. They have a significant track record with the Department of Defense and other federal entities, often securing large contracts related to financial management, audit support, and consulting. Their history includes work on complex financial systems and compliance initiatives. While specific past performance details for this exact FIAR program are not in the provided data, KPMG's overall reputation and extensive government contracting history suggest a strong capability in this domain.

What are the potential risks associated with the time-and-materials (T&M) pricing structure used in this contract?

The primary risk associated with a Time and Materials (T&M) pricing structure is the potential for cost overruns if not managed effectively. Unlike fixed-price contracts, T&M contracts reimburse the contractor for direct labor hours at specified hourly rates, plus actual costs for materials. This can lead to higher overall costs for the government if the project scope expands, if labor hours are not efficiently utilized, or if material costs increase unexpectedly. Robust oversight, detailed tracking of hours and expenses, and clear definition of labor categories are crucial to mitigate these risks and ensure value for money.

How does this contract contribute to the Department of Defense's overall goal of achieving audit readiness?

This contract directly supports the Department of Defense's (DoD) overarching goal of achieving audit readiness by providing essential professional services. These services likely encompass a range of activities critical for financial improvement and auditability, such as developing and implementing financial management systems, improving accounting processes, conducting internal control assessments, and preparing financial statements for audit. By engaging a contractor like KPMG LLP, the DoD leverages external expertise to address complex financial challenges and meet stringent audit requirements mandated by law, ultimately aiming for a clean audit opinion on its financial statements.

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: N0018915RZ006

Offers Received: 2

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 1676 INTERNATIONAL DR STE 7000, 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: $207,383,814

Exercised Options: $206,082,702

Current Obligation: $169,027,077

Actual Outlays: $10,107,986

Subaward Activity

Number of Subawards: 66

Total Subaward Amount: $37,619,081

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0018918DZ014

IDV Type: IDC

Timeline