DoD's $20M accounting services contract awarded to Guidehouse Inc. shows strong competition and fair pricing

Contract Overview

Contract Amount: $20,028,113 ($20.0M)

Contractor: Guidehouse Inc.

Awarding Agency: Department of Defense

Start Date: 2022-09-24

End Date: 2024-09-23

Contract Duration: 730 days

Daily Burn Rate: $27.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: FM&C-LABOR

Place of Performance

Location: WASHINGTON NAVY YARD, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20374

State: District of Columbia Government Spending

Plain-Language Summary

Department of Defense obligated $20.0 million to GUIDEHOUSE INC. for work described as: FM&C-LABOR Key points: 1. The contract demonstrates a competitive award process, suggesting favorable pricing for the government. 2. Pricing appears reasonable when benchmarked against similar federal accounting service contracts. 3. The fixed-price contract type mitigates cost overrun risks for the Department of Defense. 4. This award falls within the typical range for accounting and financial consulting services. 5. The contractor, Guidehouse Inc., has a history of performing similar federal contracts. 6. The contract's duration and value align with standard practices for these types of services.

Value Assessment

Rating: good

The $20 million contract for accounting services appears to represent good value. Benchmarking against similar contracts for financial and management consulting services awarded by the Department of Defense and other agencies suggests that the pricing is competitive. The firm fixed-price structure further enhances value by transferring risk to the contractor and ensuring cost certainty for the government. While specific performance metrics are not detailed here, the competitive award process implies that the selected vendor was deemed capable of delivering services at a reasonable cost.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors were eligible to bid. The presence of 5 bidders suggests a healthy level of competition for this requirement. A competitive process generally leads to better price discovery and ensures that the government receives offers from a range of qualified contractors, increasing the likelihood of obtaining a fair and reasonable price.

Taxpayer Impact: Taxpayers benefit from full and open competition as it drives down costs through market forces. This process ensures that the government is not locked into a single provider, fostering a more efficient use of public funds.

Public Impact

The Department of the Navy benefits from enhanced accounting and financial management capabilities. Services delivered include essential accounting functions critical for defense operations. The contract's impact is primarily within the District of Columbia, where the services are likely performed. The contract supports professional roles within the accounting and financial services sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if requirements are not clearly defined and managed.
Reliance on a single contractor for critical accounting functions could pose a risk if performance falters.

Positive Signals

Awarded through full and open competition, indicating a robust selection process.
Firm fixed-price contract type provides cost certainty and limits financial risk to the government.
Contractor has prior experience with federal contracts, suggesting familiarity with government requirements.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically under accounting services. The federal government is a significant consumer of these services, utilizing them for financial management, auditing, and advisory functions across various agencies. The market for accounting and financial consulting services is large and competitive, with numerous firms capable of supporting government needs. This award to Guidehouse Inc. is consistent with broader government spending trends in professional services.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned. This suggests that the primary award went to a large business. While not a direct set-aside, the prime contractor may still engage small businesses as subcontractors, but this is not explicitly detailed in the provided information. The impact on the small business ecosystem would depend on any such subcontracting activities.

Oversight & Accountability

The contract is subject to standard federal procurement oversight mechanisms. As a Department of Defense contract, it likely falls under the purview of the Department of Defense Inspector General for audits and investigations. The firm fixed-price nature of the contract provides a degree of financial oversight by limiting potential cost increases. Transparency is generally maintained through contract award databases and reporting requirements.

Related Government Programs

Federal Financial Management Services
Department of Defense Accounting Operations
Professional and Management Consulting Services
Government Financial Auditing Support

Risk Flags

Potential for performance issues if contractor capabilities are overestimated.
Risk of inadequate competition if market entry barriers are high for future similar contracts.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.0 million to GUIDEHOUSE INC.. FM&C-LABOR

Who is the contractor on this award?

The obligated recipient is GUIDEHOUSE INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $20.0 million.

What is the period of performance?

Start: 2022-09-24. End: 2024-09-23.

What is Guidehouse Inc.'s track record with federal contracts, particularly in accounting services?

Guidehouse Inc. has a substantial track record with federal contracts, including numerous awards for professional, scientific, and technical services, which encompass accounting and financial consulting. Their history with agencies like the Department of Defense, Department of Health and Human Services, and others indicates a familiarity with government contracting processes and requirements. The provided data shows this specific contract is a delivery order under a larger vehicle, suggesting a continued relationship or successful bidding on multiple opportunities. Their performance on previous contracts would be a key indicator of their capability to fulfill this current award effectively.

How does the $20 million value of this contract compare to similar federal accounting service awards?

The $20 million value for a two-year contract (730 days duration) for accounting services is within a reasonable range for federal procurements of this nature. Larger agencies like the Department of Defense often award contracts in the multi-million dollar range for specialized professional services. Benchmarking against similar contracts for 'Other Accounting Services' (NAICS code 541219) or broader 'Management and Financial Consulting, Acquisition and Public Policy Services' (NAICS 541611) reveals that contracts of this size are common, especially when they involve comprehensive support or support to major commands. The firm fixed-price structure also suggests that the scope was well-defined, contributing to a predictable cost.

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

The primary risks associated with this contract include potential performance issues, such as delays or quality deficiencies in delivering accounting services, and the risk of contractor overcharging if the firm fixed-price structure is not adequately managed. Mitigation strategies are inherent in the contract type and the competitive award process. The firm fixed-price nature shifts cost overrun risk to the contractor. The full and open competition with multiple bidders suggests that the government selected a capable contractor at a competitive price. Furthermore, standard government oversight, performance monitoring, and the potential for contract termination for default serve as additional risk mitigators.

How effective is the firm fixed-price contract type in ensuring value for money in this context?

The firm fixed-price (FFP) contract type is generally considered effective in ensuring value for money for well-defined services like accounting. It establishes a ceiling price that the contractor cannot exceed, incentivizing them to control costs and perform efficiently to maximize profit. This contrasts with cost-reimbursement contracts where the government bears more financial risk. For accounting services, where the scope of work can often be clearly delineated, FFP provides cost certainty to the government and encourages the contractor to deliver the specified services within the agreed budget. This structure directly supports the goal of achieving good value by minimizing the risk of unexpected cost increases.

What is the historical spending pattern for 'Other Accounting Services' by the Department of the Navy?

Historical spending patterns for 'Other Accounting Services' (NAICS 541219) by the Department of the Navy, and the broader Department of Defense, typically show consistent and significant investment. Agencies require ongoing accounting support for financial reporting, compliance, auditing, and operational finance. Spending in this category often fluctuates based on specific program needs, audit cycles, and modernization efforts. While this specific $20 million award is for a defined period, the Navy's overall expenditure on accounting services is substantial year-over-year, reflecting the critical nature of these functions within a large military organization. Analyzing trends over several fiscal years would reveal the scale and consistency of this spending.

What does the competition level (5 bidders) imply about the market for federal accounting services?

A competition level of 5 bidders for this federal accounting services contract suggests a moderately competitive market. It indicates that there are several firms capable and interested in performing such work for the government. This level of competition is generally sufficient to drive reasonable pricing and encourage quality service delivery. It implies that the market is not overly concentrated among a few dominant players, nor is it so niche that only one or two firms can compete. This healthy competition benefits taxpayers by ensuring that the government has options and can negotiate favorable terms.

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: N0018921RZ050

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Peraton Technology Services Inc.

Address: 1676 INTERNATIONAL DR STE 800, MCLEAN, VA, 22102

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $21,328,244

Exercised Options: $20,238,890

Current Obligation: $20,028,113

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0018922DZ018

IDV Type: IDC

Timeline