Agriculture awards $33.4M for financial services IT sustainment to Deloitte, highlighting a 2033 completion date

Contract Overview

Contract Amount: $33,434,404 ($33.4M)

Contractor: Deloitte Consulting LLP

Awarding Agency: Department of Agriculture

Start Date: 2020-11-05

End Date: 2026-05-31

Contract Duration: 2,033 days

Daily Burn Rate: $16.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: FINANCIAL SERVICES IT SUSTAINMENT SUPPORT.

Place of Performance

Location: NEW ORLEANS, ORLEANS County, LOUISIANA, 70129

State: Louisiana Government Spending

Plain-Language Summary

Department of Agriculture obligated $33.4 million to DELOITTE CONSULTING LLP for work described as: FINANCIAL SERVICES IT SUSTAINMENT SUPPORT. Key points: 1. The contract's long duration suggests a need for stable, ongoing IT support. 2. Deloitte's extensive experience in government contracting positions them well for this role. 3. The firm-fixed-price structure aims to control costs and provide predictable spending. 4. Competition was full and open, indicating a robust bidding process. 5. The contract's value is moderate within the context of large federal IT procurements. 6. Performance is tied to the Office of the Chief Financial Officer, emphasizing critical financial operations.

Value Assessment

Rating: good

The contract value of $33.4 million over approximately 6.5 years represents a moderate annual spend of around $5.1 million. Benchmarking against similar IT sustainment contracts for financial systems within federal agencies suggests this pricing is within a reasonable range, especially considering the scope of services likely required for a Chief Financial Officer's office. The firm-fixed-price contract type helps to ensure cost predictability for the government.

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 a bid. The presence of two bidders suggests a competitive environment, though more bidders would typically indicate broader market engagement and potentially stronger price discovery. The open competition is a positive sign for achieving fair market value.

Taxpayer Impact: Taxpayers benefit from the assurance that the government sought the best possible offer through a competitive process, rather than being limited to a restricted pool of contractors.

Public Impact

Federal financial operations are supported through the sustainment of critical IT systems. The Office of the Chief Financial Officer within the Department of Agriculture is the primary beneficiary. IT professionals and support staff will be engaged in delivering these services. The contract ensures the continuity of essential financial management and reporting capabilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (ending 2026, but with a 2033 reference) could indicate potential for scope creep or evolving requirements that may not be fully captured in initial pricing.
The BPA Call award mechanism, while efficient, can sometimes obscure the specific details of the underlying task order competition if not carefully managed.

Positive Signals

Awarded to a well-established contractor with significant federal IT experience.
Firm-fixed-price contract type provides cost certainty.
Full and open competition suggests a fair and transparent procurement process.
The contract supports critical financial functions within a major federal agency.

Sector Analysis

This contract falls within the IT services sector, specifically focusing on computer systems design and related services. The federal IT services market is vast, with agencies consistently investing in maintaining and upgrading their technological infrastructure. This contract for financial services IT sustainment is a typical example of ongoing operational support required by large organizations to ensure the reliability and efficiency of their core financial systems. Comparable spending benchmarks for similar sustainment contracts can vary widely based on system complexity and agency size.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a result, small businesses are unlikely to be direct prime contractors. However, the prime contractor, Deloitte, may engage small businesses as subcontractors, depending on their subcontracting plans and the specific needs of the IT sustainment services. The absence of a small business set-aside means the primary competition was open to all eligible large businesses.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Agriculture's contracting officers and the Office of the Chief Financial Officer, who are the end-users of the IT services. Transparency is facilitated through contract award databases like FPDS. Accountability is managed through performance metrics and deliverables outlined in the contract. While specific Inspector General jurisdiction isn't detailed here, the USDA OIG typically oversees agency spending and program performance.

Related Government Programs

Financial Management Systems
IT Infrastructure Support
Enterprise Resource Planning (ERP) Systems
Cloud Computing Services
Cybersecurity Services

Risk Flags

Long contract duration may increase risk of technological obsolescence.
Potential for scope creep in evolving IT environments.
Dependence on a single contractor for critical financial systems.

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $33.4 million to DELOITTE CONSULTING LLP. FINANCIAL SERVICES IT SUSTAINMENT SUPPORT.

Who is the contractor on this award?

The obligated recipient is DELOITTE CONSULTING LLP.

Which agency awarded this contract?

Awarding agency: Department of Agriculture (Office of the Chief Financial Officer).

What is the total obligated amount?

The obligated amount is $33.4 million.

What is the period of performance?

Start: 2020-11-05. End: 2026-05-31.

What is Deloitte's track record with similar IT sustainment contracts for federal financial systems?

Deloitte Consulting LLP has a substantial track record of performing IT sustainment and modernization services for various federal agencies, including those with complex financial systems. They have held numerous contracts involving financial management, accounting, and enterprise resource planning (ERP) systems. Their experience often includes managing large-scale IT operations, ensuring system uptime, implementing upgrades, and providing help desk support. Specific to financial systems, Deloitte's past performance indicates a capability to handle the critical nature of these applications, which require high levels of security, accuracy, and compliance with federal financial regulations. Reviewing their past performance on similar contracts would involve examining contract vehicles, award values, performance evaluations, and the specific services rendered to assess their suitability for this ongoing sustainment requirement.

How does the annual cost of this contract compare to similar federal financial IT sustainment efforts?

This contract has an approximate annual value of $5.1 million ($33.4M / ~6.5 years). When compared to similar federal financial IT sustainment contracts, this figure appears to be within a moderate range. Larger agencies or those with more complex, bespoke financial systems might see annual sustainment costs ranging from $10 million to upwards of $50 million or more, depending on the scope, number of users, and criticality. Smaller agencies or those utilizing COTS (Commercial Off-The-Shelf) solutions with less customization might have lower sustainment costs. The $5.1 million annual spend suggests a significant but not exceptionally large contract, likely supporting a substantial set of financial IT services for the USDA's CFO office.

What are the primary risks associated with a contract of this duration and scope?

The primary risks associated with a contract of this duration (approximately 6.5 years) and scope (financial IT sustainment) include technological obsolescence, potential for cost overruns if requirements evolve significantly, and contractor performance degradation over time. Technological obsolescence is a risk as IT systems and software can become outdated quickly; the contract needs mechanisms to address necessary upgrades. Cost overruns can occur if the initial scope is not comprehensive enough or if unforeseen issues arise in maintaining complex financial systems. Contractor performance risk is managed through oversight and performance metrics, but a long duration increases the chance of performance issues emerging. Additionally, there's a risk of vendor lock-in if the contractor becomes deeply embedded in the agency's systems, making future transitions difficult or costly.

How effective is a firm-fixed-price contract for IT sustainment services like this?

A firm-fixed-price (FFP) contract is generally considered effective for IT sustainment services when the scope of work is well-defined and unlikely to change significantly. For sustainment, where the goal is to maintain existing systems, FFP provides cost certainty to the government, shifting the risk of cost overruns to the contractor. This encourages the contractor to manage resources efficiently. However, if the sustainment requires significant adaptation, upgrades, or integration with new technologies, an FFP contract might become less effective, potentially leading to change orders or the contractor resisting necessary modifications to protect their profit margin. In this case, for routine sustainment, FFP is likely a suitable choice for cost control.

What does the 'BPA CALL' award type signify in terms of competition and pricing?

A 'BPA CALL' indicates that this contract was awarded using a Blanket Purchase Agreement (BPA). BPAs are simplified acquisition methods that allow federal agencies to fill anticipated repetitive needs for supplies or services. A 'call order' or 'task order' is then issued against the established BPA. If the BPA itself was established through full and open competition, then task orders placed against it can leverage that initial competitive pricing. However, the specific competition for this individual call order might vary. In this instance, the data states 'FULL AND OPEN COMPETITION' for the award, suggesting that either the BPA itself was competed broadly, or this specific call order was competed under a BPA that allowed for full and open competition among pre-qualified vendors. This generally leads to better pricing than sole-source or limited competition awards.

What is the historical spending trend for financial services IT sustainment within the Department of Agriculture?

Analyzing historical spending trends for financial services IT sustainment within the Department of Agriculture (USDA) would require examining procurement data over several fiscal years. Generally, federal agencies like the USDA face consistent needs for IT sustainment due to the critical nature of their operations, including financial management. Spending in this area tends to be relatively stable, though it can increase with major system modernizations or decrease during periods of budget austerity. The USDA, being a large department with extensive financial operations, likely maintains a steady investment in IT sustainment. Trends might show shifts towards cloud-based solutions or increased spending on cybersecurity as threats evolve. Without specific historical data for the USDA's financial IT sustainment, it's reasonable to assume a consistent, significant expenditure reflecting the ongoing need to maintain these vital systems.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - IT MANAGEMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 12314420Q0085

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1919 N LYNN ST, ARLINGTON, VA, 22209

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

Financial Breakdown

Contract Ceiling: $33,434,404

Exercised Options: $33,434,404

Current Obligation: $33,434,404

Actual Outlays: $30,354,346

Subaward Activity

Number of Subawards: 5

Total Subaward Amount: $7,774,422

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: AG3144B170007

IDV Type: BPA

Timeline