DoD Awards $128.5M ERP Migration to Deloitte, Raising Value and Oversight Questions
Contract Overview
Contract Amount: $128,517,161 ($128.5M)
Contractor: Deloitte & Touche LLP
Awarding Agency: Department of Defense
Start Date: 2023-09-18
End Date: 2026-09-29
Contract Duration: 1,107 days
Daily Burn Rate: $116.1K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 4
Pricing Type: COST PLUS FIXED FEE
Sector: IT
Official Description: FLEET-RESFOR ERP MIGRATION SVCS
Place of Performance
Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22209
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $128.5 million to DELOITTE & TOUCHE LLP for work described as: FLEET-RESFOR ERP MIGRATION SVCS Key points: 1. Significant contract value of $128.5M for ERP migration services. 2. Competition was full and open, but award type is a delivery order. 3. Potential risks include cost overruns and effectiveness of services. 4. IT services sector, specifically accounting and financial systems.
Value Assessment
Rating: questionable
The contract is Cost Plus Fixed Fee, which can lead to higher costs if not managed tightly. Benchmarking against similar large-scale ERP migrations is difficult without more granular data, but the total value is substantial.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a competitive bidding process. However, the award is a delivery order against a larger contract, which may limit direct price discovery for this specific task.
Taxpayer Impact: Taxpayer funds are being used for a large-scale IT modernization effort. The effectiveness and efficiency of the spending will determine the ultimate value for taxpayers.
Public Impact
Modernization of critical financial systems for the Navy. Potential for improved operational efficiency and data management. Impacts personnel involved in financial operations and system users.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee structure
- Large contract value
- Delivery Order award
Positive Signals
- Full and open competition
- Modernization of critical systems
Sector Analysis
This contract falls within the IT services sector, specifically focusing on accounting and financial system modernization. Benchmarks for large ERP migrations vary widely, but $128.5M represents a significant investment in this area.
Small Business Impact
The contract was awarded to Deloitte & Touche LLP, a large business. There is no indication of small business participation in this specific award, which is common for large-scale IT system integrations.
Oversight & Accountability
Oversight will be critical given the Cost Plus Fixed Fee structure and the complexity of ERP migrations. The Department of the Navy will need robust project management and performance monitoring to ensure value and control costs.
Related Government Programs
- Other Accounting Services
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Potential for cost overruns due to CPFF structure
- Complexity of ERP migration projects
- Dependence on a single large contractor
- Ensuring effective user adoption and training
Tags
other-accounting-services, department-of-defense, va, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $128.5 million to DELOITTE & TOUCHE LLP. FLEET-RESFOR ERP MIGRATION SVCS
Who is the contractor on this award?
The obligated recipient is DELOITTE & TOUCHE 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 $128.5 million.
What is the period of performance?
Start: 2023-09-18. End: 2026-09-29.
What specific metrics will be used to measure the success and value of this ERP migration?
Success metrics should include system uptime, data accuracy, user adoption rates, reduction in manual processes, and achievement of projected cost savings or efficiency gains. Regular performance reviews against these KPIs are essential for demonstrating value and ensuring accountability throughout the project lifecycle.
What are the primary risks associated with a Cost Plus Fixed Fee contract for ERP migration, and how are they being mitigated?
The primary risk is cost escalation, as the contractor is reimbursed for allowable costs plus a fixed fee. Mitigation strategies include stringent cost controls, detailed scope definition, regular audits, and performance incentives tied to cost efficiency. Clear communication and proactive issue resolution are also crucial.
How will the effectiveness of Deloitte's services be assessed post-implementation to ensure long-term benefits?
Effectiveness will be assessed through post-implementation reviews focusing on user satisfaction, system performance against requirements, achievement of business objectives (e.g., improved reporting, streamlined workflows), and return on investment. Ongoing support and system optimization efforts will also be evaluated.
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: 4
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Deloitte Financial Advisory Services LLP
Address: 1919 N LYNN ST, ARLINGTON, VA, 22209
Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $142,494,161
Exercised Options: $142,494,161
Current Obligation: $128,517,161
Subaward Activity
Number of Subawards: 13
Total Subaward Amount: $28,027,103
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0018922DZ017
IDV Type: IDC
Timeline
Start Date: 2023-09-18
Current End Date: 2026-09-29
Potential End Date: 2027-03-17 00:00:00
Last Modified: 2025-09-30
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