DoD's $26.6M audit readiness contract awarded to Guidehouse LLP shows fair value with 3 bidders

Contract Overview

Contract Amount: $26,601,099 ($26.6M)

Contractor: Guidehouse LLP

Awarding Agency: Department of Defense

Start Date: 2012-08-24

End Date: 2015-08-26

Contract Duration: 1,097 days

Daily Burn Rate: $24.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::CT::IGF AF FIAR- TASK ORDER 0002 SBR AUDIT READINESS

Place of Performance

Location: ANDREWS AFB, PRINCE GEORGES County, MARYLAND, 20762

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $26.6 million to GUIDEHOUSE LLP for work described as: IGF::CT::IGF AF FIAR- TASK ORDER 0002 SBR AUDIT READINESS Key points: 1. The contract's value appears reasonable given the specialized nature of audit readiness services. 2. Full and open competition suggests a healthy market for these services, potentially driving competitive pricing. 3. The fixed-price contract type mitigates cost overrun risks for the government. 4. The duration of the contract (nearly 3 years) indicates a significant, ongoing need for these services. 5. The contract falls within the 'Offices of Certified Public Accountants' NAICS code, aligning with its service scope. 6. The award was a delivery order against a larger contract vehicle, suggesting a streamlined procurement process.

Value Assessment

Rating: good

The contract's total value of $26.6 million over approximately three years suggests a significant investment in audit readiness. Benchmarking against similar contracts for large-scale federal audit support indicates that this pricing is within a reasonable range, especially considering the specialized expertise required. The firm-fixed-price structure further enhances value by transferring risk to the contractor and providing cost certainty.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with three bidders vying for the work. The presence of multiple bidders indicates a competitive market for audit readiness services within the federal space. This level of competition is generally favorable for price discovery and ensures that the government receives proposals from a range of qualified firms.

Taxpayer Impact: The full and open competition for this contract is beneficial for taxpayers as it likely led to more competitive pricing and a wider selection of qualified contractors, ensuring the government obtains the best value for its investment.

Public Impact

The Department of the Air Force benefits from improved financial statement audit readiness. The contract supports the government's broader efforts to achieve auditable financial statements. Services delivered include specialized accounting and auditing expertise. The primary geographic impact is within the Department of Defense's operational and financial reporting structures. The contract supports a workforce of highly skilled accounting and auditing professionals.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if audit requirements evolve significantly during the contract period.
Reliance on a single contractor for critical audit readiness tasks could pose a risk if performance issues arise.
Ensuring consistent application of audit standards across different Air Force units may present challenges.

Positive Signals

The firm-fixed-price contract type provides cost certainty and reduces the risk of budget overruns.
Awarding under full and open competition suggests a robust selection process and competitive pricing.
The contractor, Guidehouse LLP, likely possesses specialized expertise in federal financial management and audit readiness.

Sector Analysis

This contract falls within the professional services sector, specifically focusing on accounting and auditing. The federal government, particularly the Department of Defense, has significantly increased spending in this area to meet financial statement audit requirements mandated by law. The market for these services includes large accounting firms and specialized government contractors, with significant spending allocated annually across various agencies for audit support and financial system improvements.

Small Business Impact

The data indicates this contract was not set aside for small businesses, and there is no explicit mention of subcontracting requirements for small businesses. This suggests that the primary award went to a large business, and the direct impact on the small business ecosystem may be limited unless Guidehouse LLP engages small businesses as subcontractors.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program office within the Department of the Air Force. The firm-fixed-price nature of the contract provides a degree of accountability through adherence to the defined scope and deliverables. Transparency is generally maintained through contract award databases, though specific performance metrics and oversight reports may not always be publicly accessible.

Related Government Programs

Federal Financial Management
Audit Remediation Services
Financial Improvement and Audit Remediation (FIAR)
Department of Defense Financial Improvement

Risk Flags

Potential for scope creep
Contractor performance risk
Complexity of federal financial systems
Data integration challenges
Ensuring consistent application of standards

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.6 million to GUIDEHOUSE LLP. IGF::CT::IGF AF FIAR- TASK ORDER 0002 SBR AUDIT READINESS

Who is the contractor on this award?

The obligated recipient is GUIDEHOUSE LLP.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $26.6 million.

What is the period of performance?

Start: 2012-08-24. End: 2015-08-26.

What is Guidehouse LLP's track record with similar federal audit readiness contracts?

Guidehouse LLP, formerly Navigant Consulting, has a substantial track record in providing professional services to the federal government, including extensive work in financial management, audit support, and regulatory compliance. They have been involved in numerous large-scale federal contracts, often focusing on complex financial system modernization, audit remediation, and achieving auditable financial statements for agencies like the Department of Defense and others. Their experience typically involves navigating intricate federal regulations and accounting standards, positioning them as a key player in supporting agencies' audit readiness initiatives. Specific contract details and performance reviews would be available through federal procurement databases, but their consistent presence in this space indicates a recognized capability.

How does the $26.6 million value compare to other federal audit readiness contracts?

The $26.6 million contract value for audit readiness services awarded to Guidehouse LLP is substantial, reflecting the complexity and scale of financial statement audit support required by the Department of the Air Force. When compared to similar large federal contracts for audit remediation and financial improvement, this figure is within the expected range. Agencies like the Department of Defense, Health and Human Services, and others often award contracts in the tens to hundreds of millions of dollars for comprehensive audit readiness programs. The value is influenced by factors such as the scope of work, the number of systems and business processes involved, the duration of the contract, and the level of expertise required. This particular contract's value appears commensurate with the significant undertaking of preparing a major military branch for a full financial statement audit.

What are the primary risks associated with this type of audit readiness contract?

Key risks associated with this audit readiness contract include the potential for evolving audit requirements that may necessitate scope adjustments, leading to potential cost increases or schedule delays, although the firm-fixed-price structure aims to mitigate this. There's also a risk related to contractor performance; if Guidehouse LLP fails to deliver the expected expertise or meet critical milestones, it could impede the Air Force's progress towards auditability. Furthermore, the complexity of federal financial systems and data integration presents inherent technical risks. Ensuring consistent application of audit standards across diverse Air Force operations and maintaining effective communication and collaboration between the contractor and government personnel are also critical risk areas that require diligent management.

How effective are contracts like this in helping agencies achieve auditable financial statements?

Contracts like this are generally considered essential tools for helping federal agencies achieve auditable financial statements, particularly for large and complex organizations like the Department of the Air Force. These contracts provide specialized expertise, resources, and methodologies that agencies often lack internally. They focus on areas such as establishing robust internal controls, reconciling financial data, implementing necessary system enhancements, and preparing documentation for auditors. While the contract provides the necessary support, the ultimate success and effectiveness depend on strong government oversight, active participation from agency personnel, and the contractor's ability to deliver tailored solutions. These engagements are critical components of the broader Financial Improvement and Audit Remediation (FIAR) efforts across the government.

What has been the historical spending trend for audit readiness services within the DoD?

Historical spending trends for audit readiness services within the Department of Defense (DoD) have shown a significant and sustained increase over the past decade. Driven by legislative mandates and a push for greater financial accountability, the DoD has allocated billions of dollars towards achieving auditable financial statements. This spending encompasses a wide range of services, including financial system modernization, internal control assessments, data reconciliation, and direct audit support. Contracts for these services are awarded across various components of the DoD, including the Army, Navy, Air Force, and other defense agencies. The trend indicates a long-term commitment to financial reform, with ongoing investments expected to continue as the department works towards full auditability.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: FA489012R0006

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Pricewaterhousecoopers LLP (UEI: 001863794)

Address: 1800 TYSONS BLVD 6TH FL, MCLEAN, VA, 22102

Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $53,576,350

Exercised Options: $26,601,099

Current Obligation: $26,601,099

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA489012D0031

IDV Type: IDC

Timeline