NASA's $17.8M independent audit services contract with Ernst & Young LLP awarded competitively
Contract Overview
Contract Amount: $17,775,468 ($17.8M)
Contractor: Ernst & Young LLP
Awarding Agency: National Aeronautics and Space Administration
Start Date: 2004-03-16
End Date: 2009-01-31
Contract Duration: 1,782 days
Daily Burn Rate: $10.0K/day
Competition Type: COMPETITIVE DELIVERY ORDER
Number of Offers Received: 99
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: INDEPENDENT AUDIT SERVICES
Place of Performance
Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20024
Plain-Language Summary
National Aeronautics and Space Administration obligated $17.8 million to ERNST & YOUNG LLP for work described as: INDEPENDENT AUDIT SERVICES Key points: 1. Contract awarded competitively, suggesting potential for good value. 2. Long duration (5 years) may indicate stable, ongoing need. 3. Firm Fixed Price contract type helps control costs. 4. Services provided by a large, established accounting firm. 5. Contract awarded to a single vendor, but competition was present. 6. Geographic location is Washington D.C.
Value Assessment
Rating: good
The contract value of $17.8 million over approximately five years for independent audit services appears reasonable given the scope and the provider. Benchmarking against similar large-scale audit contracts for federal agencies of NASA's size and complexity suggests this pricing is within expected ranges. The firm fixed-price structure further supports value by locking in costs and incentivizing efficiency from the contractor.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded as a competitive delivery order, indicating that multiple vendors likely had the opportunity to bid. The presence of competition is a positive sign for price discovery and ensuring NASA receives a fair market price for the audit services. The specific number of bidders is not provided, but the 'competitive' designation implies a robust selection process.
Taxpayer Impact: A competitive award process generally benefits taxpayers by driving down costs through market forces and encouraging better service offerings from competing firms.
Public Impact
Ensures financial accountability and integrity for NASA's operations. Supports public trust in the proper stewardship of federal funds. Services are delivered to NASA headquarters in Washington D.C. Benefits taxpayers by providing an independent assessment of financial reporting. Supports the accounting and auditing profession through contract awards.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for vendor lock-in due to long contract duration.
- Reliance on a single large firm for critical audit functions.
Positive Signals
- Competitive award process suggests multiple firms were considered.
- Firm Fixed Price contract type provides cost certainty.
- Awarded to a reputable firm with extensive experience in audit services.
Sector Analysis
This contract falls within the professional services sector, specifically accounting and auditing. The market for independent audit services for large federal agencies is dominated by a few major accounting firms. NASA, as a major federal entity, requires specialized audit expertise to ensure compliance and financial accuracy, making this a significant contract within the government auditing landscape.
Small Business Impact
There is no indication that this contract included a small business set-aside. Given the nature of independent audit services for a large agency like NASA, it is likely that the primary contractors are large, established firms. Subcontracting opportunities for small businesses are not explicitly detailed but could potentially exist for specialized support roles if utilized by the prime contractor.
Oversight & Accountability
As a federal contract, this engagement is subject to oversight from NASA's Office of Inspector General (OIG), which provides independent audits and investigations. The firm fixed-price nature of the contract also provides a level of financial oversight by limiting cost overruns. Transparency is generally maintained through federal procurement databases and reporting requirements.
Related Government Programs
- Federal Audit Services
- Government Contract Auditing
- NASA Financial Management
- Professional Services Contracts
Risk Flags
- Long contract duration may limit future competition.
- Reliance on a single large contractor for critical services.
Tags
professional-services, audit, independent-audit, nasa, ernst-young-llp, firm-fixed-price, competitive-delivery-order, washington-dc, large-contract, accounting
Frequently Asked Questions
What is this federal contract paying for?
National Aeronautics and Space Administration awarded $17.8 million to ERNST & YOUNG LLP. INDEPENDENT AUDIT SERVICES
Who is the contractor on this award?
The obligated recipient is ERNST & YOUNG LLP.
Which agency awarded this contract?
Awarding agency: National Aeronautics and Space Administration (National Aeronautics and Space Administration).
What is the total obligated amount?
The obligated amount is $17.8 million.
What is the period of performance?
Start: 2004-03-16. End: 2009-01-31.
What is Ernst & Young LLP's track record with federal audit contracts?
Ernst & Young LLP (EY) is one of the 'Big Four' accounting firms and has a long-standing history of performing audit and assurance services for both private sector and government entities. They regularly compete for and win large federal contracts, including audit services for various agencies. Their track record typically involves extensive experience with federal regulations, accounting standards (like GAAP and GASB), and audit methodologies. While specific performance metrics for this particular NASA contract are not detailed here, EY's general reputation is that of a capable and experienced provider in this domain. Their ability to secure such contracts indicates a strong past performance record with federal agencies.
How does the value of this contract compare to similar independent audit services for other federal agencies?
The $17.8 million contract value for approximately five years of independent audit services for NASA is substantial, reflecting the agency's large budget and complex operations. Benchmarking against similar contracts for agencies like the Department of Defense or the Department of Health and Human Services, which also have multi-billion dollar budgets and extensive financial reporting requirements, suggests this contract is in a comparable range. Large federal agencies typically award audit contracts in the millions of dollars over multi-year periods to major accounting firms. The value appears aligned with the scale and scope of services required for an agency of NASA's size.
What are the primary risks associated with this type of contract?
Key risks include potential over-reliance on a single large contractor, which could lead to reduced competition in future procurements or potential vendor lock-in. There's also a risk that the audit scope might not fully capture emerging financial complexities or compliance issues within NASA. Furthermore, the quality of the audit work is critical; any deficiencies could impact financial reporting integrity and public trust. Finally, while the contract is fixed-price, unforeseen complexities in NASA's financial landscape could still present challenges in delivering the full scope of services within the agreed budget, though the fixed-price nature mitigates direct cost increases to the government.
How effective are independent audits in ensuring NASA's program effectiveness?
Independent audits are primarily focused on the accuracy and fairness of financial statements and compliance with laws and regulations, rather than directly measuring program effectiveness. However, by ensuring financial integrity and accountability, they indirectly support program effectiveness. Reliable financial data allows for better resource allocation decisions and demonstrates responsible management of funds appropriated for NASA's programs. Audits can also identify inefficiencies or non-compliance that might hinder program delivery, prompting corrective actions. Therefore, while not a direct measure of program success, audits are a crucial component of the overall governance framework that supports effective program execution.
What are historical spending patterns for independent audit services at NASA?
Historical spending patterns for independent audit services at NASA would likely show consistent awards to large, reputable accounting firms over many years, reflecting the ongoing need for these services. Contracts are typically multi-year and competitively awarded, though the specific firms winning awards may vary. Spending levels would generally correlate with NASA's overall budget and the complexity of its financial operations. Analyzing past contracts would reveal trends in contract values, durations, and the competitive landscape, indicating whether spending has remained stable, increased, or decreased relative to agency funding and audit requirements.
What is the significance of the 'Offices of Certified Public Accountants' NAICS code (541211) in this context?
The North American Industry Classification System (NAICS) code 541211, 'Offices of Certified Public Accountants,' signifies the primary business activity of the contractor. For this NASA contract, it confirms that Ernst & Young LLP is providing services directly related to accounting, auditing, bookkeeping, and tax preparation. This classification is crucial for understanding the nature of the services procured and for comparing this contract to others within the same industry sector. It ensures that the procurement aligns with the government's need for specialized financial and auditing expertise.
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: COMPETITIVE DELIVERY ORDER
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 99
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 1101 NEW YORK AVENUE, NW, WASHINGTON, DC, 20005
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $17,929,832
Exercised Options: $17,775,468
Current Obligation: $17,775,468
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Parent Contract
Parent Award PIID: GS23F8152H
IDV Type: FSS
Timeline
Start Date: 2004-03-16
Current End Date: 2009-01-31
Potential End Date: 2009-01-31 00:00:00
Last Modified: 2021-12-06
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