State Department awards $193.8M IT advisory contract to Deloitte Consulting, highlighting a significant investment in planning and technical support

Contract Overview

Contract Amount: $193,815,116 ($193.8M)

Contractor: Deloitte Consulting LLP

Awarding Agency: Department of State

Start Date: 2021-09-24

End Date: 2026-09-27

Contract Duration: 1,829 days

Daily Burn Rate: $106.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: THIS IS A TASK ORDER FOR PROVIDING IT BUSINESS, PLANNING, AND TECHNICAL ADVISORY SUPPORT SERVICES.

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20006

State: District of Columbia Government Spending

Plain-Language Summary

Department of State obligated $193.8 million to DELOITTE CONSULTING LLP for work described as: THIS IS A TASK ORDER FOR PROVIDING IT BUSINESS, PLANNING, AND TECHNICAL ADVISORY SUPPORT SERVICES. Key points: 1. The contract focuses on critical IT business, planning, and technical advisory support, indicating a need for strategic guidance in the agency's technology infrastructure. 2. Deloitte Consulting LLP, a major player in the consulting space, secured this award, suggesting a competitive selection process for high-level expertise. 3. The contract duration of approximately five years (through September 2026) points to a long-term commitment to enhancing IT capabilities. 4. Awarded under full and open competition, this contract suggests a robust market response and potential for competitive pricing. 5. The 'Computer Systems Design Services' NAICS code indicates a focus on the design and integration of IT systems. 6. The Time and Materials pricing structure may require close monitoring to ensure cost efficiency over the contract's life.

Value Assessment

Rating: good

The contract value of $193.8 million over roughly five years represents a substantial investment in IT advisory services for the Department of State. Benchmarking this against similar large-scale IT support contracts within federal agencies suggests that the per-year cost is within a reasonable range for specialized consulting. However, the Time and Materials (T&M) pricing model necessitates careful oversight to prevent cost overruns and ensure that the services delivered align with the anticipated value. Without specific performance metrics or detailed breakdowns of labor categories and rates, a precise value-for-money assessment is challenging, but the competitive award process provides some assurance.

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 offers. The fact that it was competed broadly suggests a healthy market for these specialized IT advisory services. While the number of bidders is not specified, a full and open competition generally leads to a wider pool of potential contractors, fostering price discovery and potentially driving down costs compared to sole-source or limited competition awards. This approach allows the agency to select the offer that best meets its technical requirements and offers the most advantageous price.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure the best possible services at a fair market price, reducing the risk of overpayment and ensuring that agency funds are used efficiently.

Public Impact

The Department of State's IT infrastructure and strategic planning will benefit from enhanced advisory support. Federal employees within the Department of State will receive improved tools and guidance for managing IT projects and systems. The contract supports the modernization and efficiency of government IT operations, indirectly benefiting citizens through better service delivery. Geographic impact is primarily within the District of Columbia, where the Department of State is headquartered, but IT improvements can have global implications for diplomatic operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The Time and Materials (T&M) pricing structure can lead to cost unpredictability if not managed diligently, potentially exceeding initial budget estimates.
The broad scope of 'IT business, planning, and technical advisory support' requires clear definition of deliverables and performance metrics to ensure accountability.
Reliance on a single large contractor for critical advisory services could create vendor lock-in or reduce flexibility in adapting to future needs.

Positive Signals

Awarded through full and open competition, indicating a robust market and competitive pricing potential.
The contractor, Deloitte Consulting LLP, is a well-established firm with extensive experience in government IT consulting.
The multi-year duration suggests a strategic commitment to improving IT capabilities, potentially leading to sustained enhancements.
The contract aims to provide essential support for IT business, planning, and technical advisory services, addressing key agency needs.

Sector Analysis

This contract falls within the broader Information Technology (IT) services sector, specifically focusing on IT consulting and systems design. The federal IT services market is substantial, with agencies consistently investing in modernization, cybersecurity, and digital transformation. Contracts like this are crucial for agencies like the Department of State to navigate complex technological landscapes, plan strategic IT investments, and ensure their systems are efficient and secure. Comparable spending benchmarks for IT advisory services often vary widely based on scope, duration, and contractor expertise, but large-scale awards like this reflect the significant resources dedicated to maintaining and upgrading federal IT infrastructure.

Small Business Impact

This contract was awarded under full and open competition and does not indicate a specific small business set-aside. While the prime contractor is Deloitte Consulting LLP, a large business, there may be opportunities for small businesses to participate as subcontractors. The extent of small business subcontracting will depend on Deloitte's subcontracting plan and the specific requirements of the task orders issued under this contract. Agencies are encouraged to promote small business participation, but without explicit set-aside provisions or detailed subcontracting goals, the direct impact on the small business ecosystem for this specific award is uncertain.

Oversight & Accountability

Oversight for this contract will primarily be managed by the Department of State's contracting officers and program managers responsible for IT services. They will monitor performance, review invoices, and ensure compliance with contract terms. The Time and Materials (T&M) pricing model necessitates particularly rigorous oversight to track labor hours and costs against the ceiling amount. Transparency is facilitated through contract award databases and reporting requirements. While no specific Inspector General jurisdiction is mentioned, the Department of State's Office of Inspector General (OIG) has broad authority to investigate waste, fraud, and abuse within the department's contracts.

Related Government Programs

IT Management Consulting Services
Computer Systems Design Services
Information Technology Professional Services
Strategic Planning Support
Federal IT Modernization Programs

Risk Flags

Potential for cost overruns due to Time and Materials pricing structure.
Need for robust oversight to manage scope and ensure efficient labor utilization.
Complexity of defining and measuring success for broad advisory services.
Dependence on a single large contractor for critical IT strategic guidance.

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $193.8 million to DELOITTE CONSULTING LLP. THIS IS A TASK ORDER FOR PROVIDING IT BUSINESS, PLANNING, AND TECHNICAL ADVISORY SUPPORT SERVICES.

Who is the contractor on this award?

The obligated recipient is DELOITTE CONSULTING LLP.

Which agency awarded this contract?

Awarding agency: Department of State (Department of State).

What is the total obligated amount?

The obligated amount is $193.8 million.

What is the period of performance?

Start: 2021-09-24. End: 2026-09-27.

What is Deloitte Consulting LLP's track record with the Department of State and other federal agencies for similar IT advisory contracts?

Deloitte Consulting LLP has a significant track record of performing IT advisory and systems design services for the Department of State and numerous other federal agencies. They are a major government contractor known for handling large, complex IT projects. Past performance reviews and contract databases would provide specific details on their success rates, adherence to schedules, and quality of deliverables on similar engagements. Generally, their extensive experience suggests a high likelihood of meeting the technical requirements of this contract. However, a detailed review of their specific past performance on contracts of comparable size and scope would be necessary for a comprehensive assessment of their suitability and potential risks.

How does the $193.8 million contract value compare to historical spending on IT advisory services by the Department of State?

The $193.8 million contract value represents a substantial, but not unprecedented, investment in IT advisory services for the Department of State. Federal agencies, particularly large departments like State, consistently allocate significant budgets towards IT modernization, strategic planning, and technical support. To provide a precise comparison, one would need to analyze historical spending data for the Department of State's IT services over the past 5-10 years, specifically isolating expenditures on consulting, planning, and advisory roles. This contract's value should be viewed in the context of the agency's overall IT budget and the increasing complexity and demands placed on federal IT systems. It suggests a continued emphasis on leveraging external expertise for critical IT functions.

What are the primary risks associated with a Time and Materials (T&M) contract of this magnitude and duration?

The primary risk associated with a Time and Materials (T&M) contract of this magnitude ($193.8 million) and duration (approx. 5 years) is cost escalation. T&M contracts pay the contractor for the actual labor hours and materials used, plus a fixed fee or percentage for profit. Without stringent oversight, robust reporting, and clear performance metrics, there is a risk that costs could exceed initial estimates or budgeted amounts. Scope creep, inefficient labor utilization, or extended project timelines can significantly inflate the final cost to the government. Additionally, the government bears more risk in T&M contracts compared to fixed-price contracts, as it is less predictable. Effective management requires diligent monitoring of hours, rates, and deliverables to ensure value for money.

What specific IT business, planning, and technical advisory support services are expected under this contract?

The contract description indicates a broad scope encompassing IT business, planning, and technical advisory support. This likely includes services such as IT strategy development, enterprise architecture planning, IT investment analysis, business process re-engineering related to IT, technology roadmapping, cybersecurity strategy consultation, IT governance framework development, and advice on the implementation of new technologies. The 'Computer Systems Design Services' NAICS code suggests a focus on the design and integration aspects of IT systems. Specific deliverables would be detailed in the individual task orders issued against this contract, tailored to the Department of State's evolving needs for modernizing its global IT infrastructure and operations.

How does the 'full and open competition' award mechanism impact the potential for cost savings for taxpayers?

Awarding a contract through 'full and open competition' generally enhances the potential for cost savings for taxpayers. This mechanism allows any responsible source to submit an offer, creating a competitive environment where multiple companies vie for the contract. This competition typically drives down prices as contractors seek to offer the most attractive bid to win the award. Furthermore, it allows the government to explore a wider range of solutions and innovations, potentially leading to more efficient and cost-effective approaches. While the Time and Materials pricing structure introduces some inherent cost uncertainty, the competitive nature of the award process itself is a key mechanism for ensuring that the government secures services at a fair and reasonable price, maximizing taxpayer value.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 19AQMM21Q0163

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

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: $338,883,436

Exercised Options: $292,529,411

Current Obligation: $193,815,116

Actual Outlays: $65,241,923

Subaward Activity

Number of Subawards: 9

Total Subaward Amount: $21,177,600

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: 47QTCK18D0029

IDV Type: GWAC

Timeline