DoD's $63.6M accounting services contract with Guidehouse Inc. awarded under full and open competition

Contract Overview

Contract Amount: $63,602,219 ($63.6M)

Contractor: Guidehouse Inc.

Awarding Agency: Department of Defense

Start Date: 2023-04-13

End Date: 2026-07-22

Contract Duration: 1,196 days

Daily Burn Rate: $53.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: TIME AND MATERIALS

Sector: Other

Official Description: CONTRACTOR SUPPORT LABOR

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20310

State: District of Columbia Government Spending

Plain-Language Summary

Department of Defense obligated $63.6 million to GUIDEHOUSE INC. for work described as: CONTRACTOR SUPPORT LABOR Key points: 1. Contract awarded for accounting services, indicating a need for specialized financial expertise within the Department of the Army. 2. The contract's Time and Materials (T&M) pricing structure may pose a risk of cost overruns if not closely managed. 3. Awarded to Guidehouse Inc., a firm with a significant presence in government contracting, suggesting established capabilities. 4. The duration of nearly four years (1196 days) points to a long-term requirement for these accounting services. 5. The contract's value places it in the mid-to-large tier for professional services within the federal government. 6. The use of full and open competition suggests a robust market for these services, potentially leading to competitive pricing.

Value Assessment

Rating: fair

The contract value of $63.6 million over approximately four years averages to about $15.9 million annually. Benchmarking this against similar large-scale accounting service contracts for federal agencies is challenging without more specific service details. However, the Time and Materials (T&M) pricing model, while common, can lead to higher costs compared to fixed-price contracts if not managed diligently. The awarded amount appears substantial, suggesting a significant scope of work or a high level of specialized expertise required.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 3 bids suggests a moderate level of competition for this specific requirement. While three bidders is not a large number, it does provide some basis for price discovery and ensures that the government is not limited to a single provider.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages multiple firms to offer their best pricing and services, potentially driving down costs and improving value.

Public Impact

The Department of the Army benefits from enhanced accounting and financial management capabilities. Services delivered likely include financial reporting, auditing support, accounting system maintenance, and financial analysis. The geographic impact is primarily within the Department of Defense's operational areas, potentially supporting various military branches and installations. Workforce implications may involve the deployment of specialized accounting professionals, both from the contractor and potentially augmenting government staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The Time and Materials (T&M) contract type carries inherent risks of cost escalation if not rigorously monitored and controlled.
The limited number of bidders (3) might indicate potential barriers to entry or a specialized niche, which could impact long-term competition.
The specific details of the accounting services required are not fully elaborated, making a precise value-for-money assessment difficult.

Positive Signals

The contract was awarded through full and open competition, suggesting a fair and accessible process for potential bidders.
The selection of Guidehouse Inc. implies the contractor possesses the necessary qualifications and experience for complex accounting services.
The substantial contract value suggests a significant and critical need for these services within the Department of Defense.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically accounting services (NAICS 541219). This sector is a significant component of federal spending, supporting a wide array of government functions. The market for government accounting services is competitive, with numerous firms offering specialized expertise. The contract's value of $63.6 million is substantial, placing it among larger professional services awards, and reflects the complexity and scale of financial operations within the Department of Defense.

Small Business Impact

This contract does not appear to have a small business set-aside (SS is false, SB is false). There is no explicit information provided regarding subcontracting plans for small businesses. Without specific set-aside goals or subcontracting requirements, the direct impact on the small business ecosystem for this particular contract is likely minimal, though Guidehouse Inc. may engage small businesses as subcontractors based on their own internal policies.

Oversight & Accountability

Oversight for this contract would typically reside with the contracting officer and the relevant program managers within the Department of the Army. Performance monitoring, invoice review, and adherence to contract terms are standard accountability measures. Transparency is facilitated through contract databases like FPDS. Inspector General jurisdiction may apply if allegations of fraud, waste, or abuse arise during the contract's performance.

Related Government Programs

Department of Defense Financial Management
Federal Accounting Standards Advisory Board (FASAB) Support
Government Auditing Services
Defense Contract Audit Agency (DCAA) Support
Financial Improvement and Audit Remediation (FIAR) Initiatives

Risk Flags

Potential for cost overruns due to T&M pricing structure.
Limited number of bidders may reduce competitive pressure.
Scope creep risk in long-duration T&M contracts.
Need for robust oversight to ensure value for money.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $63.6 million to GUIDEHOUSE INC.. CONTRACTOR SUPPORT 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 Army).

What is the total obligated amount?

The obligated amount is $63.6 million.

What is the period of performance?

Start: 2023-04-13. End: 2026-07-22.

What is Guidehouse Inc.'s track record with the Department of Defense and similar federal agencies?

Guidehouse Inc. has a substantial track record of securing contracts with the Department of Defense and other federal agencies, particularly in areas of financial management, consulting, and IT services. Their awards often span complex areas such as audit remediation, cybersecurity, and program management. For the DoD, they have previously been awarded contracts related to financial improvement and audit readiness, indicating a familiarity with the department's specific challenges and requirements. This history suggests a level of established performance and understanding of the federal procurement landscape, which likely contributed to their selection for this accounting services contract.

How does the $63.6 million contract value compare to other federal accounting service contracts?

The $63.6 million contract value for accounting services is a significant award, placing it in the upper tier for individual professional services contracts. While the federal government procures billions in accounting and financial services annually across various agencies, contracts of this magnitude typically involve extensive scope, long durations, or highly specialized expertise. For instance, contracts supporting major financial system modernizations or comprehensive audit remediation efforts often reach or exceed this value. Compared to smaller, agency-specific accounting support contracts, this DoD award suggests a broader or more critical function is being addressed, potentially impacting multiple components or requiring extensive analytical and reporting capabilities.

What are the primary risks associated with a Time and Materials (T&M) contract for accounting services?

The primary risk with a Time and Materials (T&M) contract for accounting services is cost escalation. Unlike fixed-price contracts, T&M agreements reimburse the contractor for direct labor hours at specified rates and for the actual cost of materials. If the scope of work is not clearly defined, or if project timelines extend unexpectedly, the total cost can significantly exceed initial estimates. For accounting services, this could manifest as unforeseen complexities in financial data, extended audit periods, or the need for additional specialized analysis. Effective oversight, including detailed tracking of labor hours and justification for all expenses, is crucial to mitigate these risks and ensure the government receives good value.

How effective is full and open competition in ensuring competitive pricing for specialized accounting services?

Full and open competition is generally the most effective method for ensuring competitive pricing for specialized accounting services, as it allows the widest possible pool of qualified vendors to bid. This broad participation increases the likelihood that multiple firms will offer competitive rates and innovative solutions to win the contract. In this case, with 3 bids received, there was a degree of competition, which should have incentivized bidders to offer favorable terms. However, the effectiveness is also dependent on the number of truly capable and interested firms in the market for the specific services required. If the niche is very specialized, even full and open competition might result in a limited number of bids.

What is the historical spending trend for accounting services within the Department of the Army?

Historical spending data for accounting services within the Department of the Army reveals a consistent and substantial requirement for these functions. Over the past several fiscal years, the Army has allocated significant funds towards financial management, auditing support, and accounting system maintenance. This spending is driven by the complexity of military operations, large-scale financial transactions, and stringent federal financial reporting mandates, including audit readiness initiatives. While specific annual figures fluctuate based on program needs and budget allocations, the overall trend indicates a sustained investment in professional accounting support to ensure fiscal accountability and operational efficiency.

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) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W91CRB22R0002

Offers Received: 3

Pricing Type: TIME AND MATERIALS (Y)

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: $112,669,308

Exercised Options: $63,839,793

Current Obligation: $63,602,219

Actual Outlays: $486,623

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline