SSA's $15.8M financial audit contract awarded to PricewaterhouseCoopers LLP for 5 years

Contract Overview

Contract Amount: $15,854,271 ($15.9M)

Contractor: Pricewaterhousecoopers LLP

Awarding Agency: Social Security Administration

Start Date: 2005-11-10

End Date: 2010-02-28

Contract Duration: 1,571 days

Daily Burn Rate: $10.1K/day

Competition Type: COMPETITIVE DELIVERY ORDER

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: AUDIT OF SSA'S FY 2006 FINANCIAL STATEMENTS

Place of Performance

Location: MC LEAN, FAIRFAX County, VIRGINIA, 22102, UNITED STATES OF AMERICA

State: Virginia Government Spending

Plain-Language Summary

Social Security Administration obligated $15.9 million to PRICEWATERHOUSECOOPERS LLP for work described as: AUDIT OF SSA'S FY 2006 FINANCIAL STATEMENTS Key points: 1. Value for money assessed by comparing audit costs to similar government financial statement audits. 2. Competition dynamics indicate a competitive delivery order, suggesting potential for price negotiation. 3. Risk indicators include the contract duration and the nature of financial auditing services. 4. Performance context relies on the successful completion of audit objectives and adherence to standards. 5. Sector positioning places this contract within the professional services sector, specifically accounting and auditing. 6. The contract's fixed-price nature aims to control costs for the agency.

Value Assessment

Rating: good

The contract value of $15.8 million over five years for a comprehensive financial audit by a major accounting firm appears reasonable when benchmarked against similar large-scale government audits. While specific per-unit costs for audit hours are not detailed, the firm-fixed-price structure suggests a negotiated value. The selection of a reputable firm like PricewaterhouseCoopers also implies a certain level of quality assurance. However, a deeper dive into the specific audit tasks and hours billed would provide a more precise value assessment.

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 were likely considered or competed for this specific task order. The 'full-and-open' competition suggests a robust process where any qualified firm could submit a bid. The presence of competition generally drives down prices and encourages better service offerings as contractors vie for the award. The number of bidders (2 indicated) suggests a moderate level of competition for this particular order.

Taxpayer Impact: A competitive award process helps ensure that taxpayer dollars are used efficiently by securing the best possible price for essential audit services.

Public Impact

The Social Security Administration (SSA) benefits from an independent audit of its financial statements, enhancing accountability and transparency. The services delivered include a comprehensive audit of the SSA's FY 2006 financial statements. The geographic impact is primarily national, focusing on the SSA's operations across the United States. Workforce implications are minimal for the SSA, as the audit is performed by an external contractor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if audit objectives are not clearly defined and managed.
Reliance on contractor's internal quality controls for audit accuracy.
Risk of findings that may require significant corrective action from the agency.

Positive Signals

Award to a reputable 'Big Four' accounting firm suggests high professional standards.
Firm-fixed-price contract provides cost certainty for the agency.
Competitive award process likely resulted in a favorable price.

Sector Analysis

This contract falls within the professional services sector, specifically accounting and auditing services. The market for federal government audits is substantial, with numerous large accounting firms competing for these engagements. The SSA's need for an independent financial audit is a recurring requirement for large federal agencies, driven by legislative mandates and the need for fiscal accountability. Benchmarks for similar audits would typically consider the size of the agency's budget and the complexity of its financial operations.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'ss': false. The prime contractor, PricewaterhouseCoopers LLP, is a large, well-established firm. There is no explicit information regarding subcontracting plans for small businesses within this data, though large firms often engage smaller specialized firms for certain aspects of audits. The impact on the small business ecosystem is likely minimal unless specific subcontracting opportunities were mandated and utilized.

Oversight & Accountability

Oversight for this contract would primarily be managed by the Social Security Administration's contracting officers and program managers. They are responsible for monitoring the contractor's performance, ensuring adherence to the contract terms, and verifying the quality of the audit work. Transparency is generally achieved through the public release of audit reports. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to the contract were suspected.

Related Government Programs

Federal Financial Statement Audits
Government Accountability Office (GAO) Audits
Office of Management and Budget (OMB) Circular A-136
Federal Information Security Management Act (FISMA) Audits

Risk Flags

Potential for findings requiring significant corrective action
Reliance on contractor's internal quality control mechanisms

Frequently Asked Questions

What is this federal contract paying for?

Social Security Administration awarded $15.9 million to PRICEWATERHOUSECOOPERS LLP. AUDIT OF SSA'S FY 2006 FINANCIAL STATEMENTS

Who is the contractor on this award?

The obligated recipient is PRICEWATERHOUSECOOPERS LLP.

Which agency awarded this contract?

Awarding agency: Social Security Administration (Social Security Administration).

What is the total obligated amount?

The obligated amount is $15.9 million.

What is the period of performance?

Start: 2005-11-10. End: 2010-02-28.

What is the track record of PricewaterhouseCoopers LLP in performing federal financial audits?

PricewaterhouseCoopers LLP (PwC) is one of the 'Big Four' accounting firms and has extensive experience auditing large organizations, including numerous federal agencies. They regularly perform financial statement audits for various government entities, often competing for and winning significant contracts. Their track record generally includes adherence to Generally Accepted Auditing Standards (GAAS) and Government Auditing Standards. While specific performance metrics for every federal contract are not publicly aggregated, their continued success in winning large federal audit contracts suggests a strong performance history and established reputation within the federal contracting space. Agencies typically evaluate past performance as a key factor in the source selection process for such critical services.

How does the awarded amount compare to similar federal financial audits?

The awarded amount of approximately $15.8 million over five years for the SSA's financial audit translates to an average annual cost of roughly $3.16 million. Benchmarking this against similar large federal agency financial statement audits requires access to detailed contract data, which is not always publicly available. However, considering the scale and complexity of the SSA's operations and financial statements, this figure appears to be within a reasonable range for a comprehensive audit conducted by a 'Big Four' firm. Audits for agencies with comparable budget sizes and transaction volumes often fall within a multi-million dollar annual range. Factors influencing cost include the number of audit hours, complexity of systems, and specific audit requirements mandated by regulations.

What are the primary risks associated with this financial audit contract?

The primary risks associated with this financial audit contract include: 1. **Audit Quality Risk:** The risk that the audit may not be performed with sufficient rigor or adherence to standards, potentially leading to inaccurate financial reporting or missed material misstatements. This is mitigated by the reputation of the firm and oversight. 2. **Timeliness Risk:** The risk that the audit may not be completed by the required deadlines, impacting the agency's ability to meet its reporting obligations. 3. **Scope Creep:** The potential for the audit's scope to expand beyond the initial agreement without corresponding adjustments to cost or timeline, although the fixed-price nature aims to control this. 4. **Independence and Objectivity:** Ensuring the auditor maintains independence and objectivity throughout the audit process is crucial to the credibility of the findings. 5. **Findings and Corrective Actions:** The risk that the audit uncovers significant issues requiring substantial corrective actions by the SSA, which could be resource-intensive.

How effective is the competitive delivery order process in ensuring value for the SSA?

The competitive delivery order process is generally effective in ensuring value for the SSA, especially when awarded under a full-and-open competition. This method allows multiple qualified vendors to bid on a specific task order, fostering price competition and encouraging vendors to offer their best terms and services. The fact that this was a competitive delivery order, with 2 bidders indicated, suggests that the SSA received proposals from more than one firm, allowing for a comparison of price and technical approach. This competitive pressure typically leads to a more favorable price than a sole-source or non-competitive award. The firm-fixed-price contract type further enhances value by providing cost certainty.

What is the historical spending pattern for financial audits at the SSA?

Analyzing historical spending patterns for financial audits at the SSA would require access to multi-year contract databases. However, it is standard practice for large federal agencies like the SSA to undergo annual financial statement audits. The duration of this contract (2005-2010) suggests a multi-year engagement, which is common for such services. Prior to this contract, the SSA would have had audits performed, likely by other large accounting firms or potentially the same firm under different contracts. Post-2010, the SSA would continue to procure audit services. The total spending on audits can fluctuate based on audit complexity, regulatory changes, and the competitive landscape, but a consistent need for these services is expected.

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

Solicitation ID: SSA-RFQ-06-1006

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1800 TYSON BLVD 9TH FL, MCLEAN, VA, 22102

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $19,733,997

Exercised Options: $19,733,997

Current Obligation: $15,854,271

Parent Contract

Parent Award PIID: GS23F0165N

IDV Type: FSS

Timeline