Treasury's $37.7M accounting services contract with KPMG LLP awarded competitively

Contract Overview

Contract Amount: $37,680,010 ($37.7M)

Contractor: Kpmg LLP

Awarding Agency: Department of the Treasury

Start Date: 2008-04-17

End Date: 2013-01-31

Contract Duration: 1,750 days

Daily Burn Rate: $21.5K/day

Competition Type: COMPETITIVE DELIVERY ORDER

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: FINANCIAL AUDIT

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20036, UNITED STATES OF AMERICA

State: District of Columbia Government Spending

Plain-Language Summary

Department of the Treasury obligated $37.7 million to KPMG LLP for work described as: FINANCIAL AUDIT Key points: 1. Contract awarded at a fixed price, indicating clear cost expectations. 2. Competition dynamics suggest potential for favorable pricing for the government. 3. Contract duration of 1750 days (approx. 4.8 years) indicates a long-term need. 4. Services provided fall under standard accounting practices, suggesting low inherent risk. 5. The contract is a delivery order under a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle, common for ongoing support. 6. The award was made to a single contractor, but the initial award mechanism is competitive. 7. The contractor, KPMG LLP, is a major accounting firm with extensive federal experience.

Value Assessment

Rating: good

The contract's fixed-price nature provides cost certainty. Benchmarking against similar accounting services contracts for federal agencies of this size and scope would be necessary for a definitive value assessment. However, the competitive award suggests that pricing was vetted against market alternatives. The total award amount of $37.7 million over approximately 4.8 years averages to roughly $7.85 million annually, which appears reasonable for comprehensive accounting services provided by a large firm.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded as a competitive delivery order, implying that the underlying IDIQ contract was competed on a full and open basis. The specific delivery order likely involved a competitive process among pre-qualified vendors on that IDIQ. The number of bidders for this specific delivery order is not detailed, but the initial competition for the IDIQ vehicle would have established a baseline for price discovery.

Taxpayer Impact: A competitive award process generally leads to better pricing for taxpayers by fostering a market-driven environment where contractors vie for the business.

Public Impact

Federal agencies, specifically the Bureau of the Fiscal Service, benefit from essential accounting and auditing services. The services ensure financial integrity and compliance for government operations. The contract supports the financial management of the Department of the Treasury. Workforce implications are likely internal to KPMG LLP, with specialized accountants and auditors assigned to the contract.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if the IDIQ vehicle is not re-competed effectively.
Reliance on a single large firm for critical accounting functions could pose a risk if performance falters.

Positive Signals

Award to a reputable and experienced contractor (KPMG LLP) suggests a lower risk of performance issues.
Competitive initial award process indicates a focus on achieving value for money.
Fixed-price contract structure aligns incentives for efficient service delivery.

Sector Analysis

The accounting services sector for the federal government is robust, with major firms like KPMG, Deloitte, EY, and PwC holding significant contracts. These services are critical for financial reporting, auditing, and compliance across all federal agencies. Spending in this sector is consistent, driven by regulatory requirements and the need for independent financial oversight. This contract fits within the broader category of professional services, specifically accounting and auditing, which represents a substantial portion of federal contracting.

Small Business Impact

This contract does not appear to have a small business set-aside component, as it was awarded to KPMG LLP, a large public accounting firm. There is no explicit information regarding subcontracting plans for small businesses. The focus on a large, established firm for these critical services suggests that opportunities for small businesses in this specific contract are limited, though they may participate in other federal accounting contracts or subcontracts.

Oversight & Accountability

Oversight for this contract would typically be managed by the Bureau of the Fiscal Service's contracting officers and program managers. Performance reviews, regular reporting, and adherence to contract terms are standard accountability measures. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any financial impropriety or fraud were suspected.

Related Government Programs

Federal Financial Management Services
Government Auditing Services
Financial Audit Services
Accounting and Auditing Services

Risk Flags

Potential for vendor lock-in
Reliance on a single large contractor for critical functions

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $37.7 million to KPMG LLP. FINANCIAL AUDIT

Who is the contractor on this award?

The obligated recipient is KPMG LLP.

Which agency awarded this contract?

Awarding agency: Department of the Treasury (Bureau of the Fiscal Service).

What is the total obligated amount?

The obligated amount is $37.7 million.

What is the period of performance?

Start: 2008-04-17. End: 2013-01-31.

What is KPMG LLP's track record with federal accounting contracts?

KPMG LLP has a significant history of contracting with the U.S. federal government, providing a wide range of professional services including accounting, auditing, and consulting. They are one of the 'Big Four' accounting firms and regularly secure large federal contracts across various agencies. Their track record generally indicates experience in handling complex financial operations and compliance requirements. Specific performance metrics for past federal contracts would require detailed review of contract performance reports and agency evaluations, but their continued success in winning federal bids suggests a generally positive performance history.

How does the $37.7 million award compare to similar federal accounting contracts?

The $37.7 million award for accounting services over approximately 4.8 years, averaging around $7.85 million annually, is substantial but not unusual for a large federal agency like the Department of the Treasury, particularly for the Bureau of the Fiscal Service which handles significant financial operations. Comparable contracts for similar scope and duration awarded to 'Big Four' accounting firms by agencies such as the Department of Defense or Health and Human Services often fall within a similar multi-million dollar range annually. The specific value proposition depends heavily on the detailed scope of work, but the scale aligns with the needs of a major federal financial entity.

What are the primary risks associated with this contract?

The primary risks associated with this contract include potential over-reliance on a single large contractor, which could lead to vendor lock-in or reduced negotiating leverage in the future. Performance risk, though mitigated by KPMG's reputation, always exists; any significant lapse in service could impact the Treasury's financial operations. There's also a risk related to the scope of work evolving beyond the initial contract terms, potentially leading to cost overruns if not managed carefully through contract modifications. Finally, the concentration of critical accounting functions with one firm could pose a business continuity risk if unforeseen events impact the contractor's ability to perform.

How effective are competitive delivery orders in ensuring value for money?

Competitive delivery orders, especially when issued under a well-competed IDIQ contract, are generally effective in ensuring value for money. The initial competition for the IDIQ establishes a baseline of qualified vendors and pricing structures. When a specific task or requirement arises, issuing a competitive delivery order allows agencies to solicit proposals from these pre-qualified vendors, fostering price competition for that specific order. This process helps ensure that the government receives competitive pricing for the services rendered at the time of need, avoiding sole-source awards unless justified.

What is the historical spending pattern for accounting services at the Bureau of the Fiscal Service?

Historical spending patterns for accounting services at the Bureau of the Fiscal Service (BFS) would likely show consistent, significant investment in these functions due to its core mission. BFS manages the nation's finances, requiring continuous support for accounting, auditing, financial reporting, and compliance. Spending would typically be allocated through a mix of contract vehicles, including IDIQs and task orders, often awarded to large, reputable accounting firms. Annual spending would fluctuate based on specific project needs, audit cycles, and government-wide financial management initiatives, but a sustained multi-million dollar annual expenditure on such services is expected.

Does the fixed-price contract type adequately address potential scope creep?

A firm-fixed-price (FFP) contract type is designed to provide price certainty, but it can be less effective in managing scope creep if not carefully administered. While the contractor is obligated to perform the defined scope for the agreed price, any expansion of that scope typically requires a formal contract modification, often involving negotiation of additional costs and time. The government's contracting officer must diligently manage the scope of work and resist informal requests for additional services. If scope creep occurs without proper modification, it can lead to the contractor performing extra work without additional compensation, or conversely, the government paying more than initially anticipated if modifications are approved.

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: RFQ-OIG-08-0002

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Kpmg L.L.P. (UEI: 001667906)

Address: 1676 INTERNATIONAL DR, MCLEAN, VA, 22102

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $37,838,986

Exercised Options: $37,680,010

Current Obligation: $37,680,010

Parent Contract

Parent Award PIID: GS23F8127H

IDV Type: FSS

Timeline