State Department's $200M Deloitte Consulting contract for program management support shows fair value with 2 bidders

Contract Overview

Contract Amount: $199,719,780 ($199.7M)

Contractor: Deloitte Consulting LLP

Awarding Agency: Department of State

Start Date: 2021-03-16

End Date: 2026-09-29

Contract Duration: 2,023 days

Daily Burn Rate: $98.7K/day

Competition Type: COMPETED UNDER SAP

Number of Offers Received: 2

Pricing Type: TIME AND MATERIALS

Sector: Other

Official Description: PROGRAM MANAGEMENT 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 $199.7 million to DELOITTE CONSULTING LLP for work described as: PROGRAM MANAGEMENT SUPPORT SERVICES Key points: 1. The contract offers fair value, with a benchmarked per-unit cost that is not significantly higher than comparable services. 2. Competition was limited to two bidders, suggesting potential for price negotiation but not a fully open market. 3. The contract's duration and time-and-materials pricing introduce some risk of cost overruns if not closely managed. 4. Performance context is crucial, as the effectiveness of program management support directly impacts the State Department's operational efficiency. 5. This contract falls within the administrative management and general management consulting services sector, a common area for federal procurement.

Value Assessment

Rating: fair

The contract's value appears fair, with a benchmarked per-unit cost of $98,725. While this is not exceptionally low, it is within a reasonable range for specialized program management support services. Comparing this to similar contracts awarded by other agencies for comparable services would provide a more definitive assessment of value for money. The time-and-materials pricing structure, however, introduces a degree of uncertainty regarding the final cost, necessitating robust oversight to ensure efficiency.

Cost Per Unit: $98,725

Competition Analysis

Competition Level: limited

This contract was competed under a Blanket Purchase Agreement (BPA) Call, which typically involves a more streamlined process than full and open competition. With only two bidders, the level of competition was limited. This suggests that while some price discovery occurred, the State Department may not have achieved the most competitive pricing possible compared to a scenario with a larger number of interested parties. The limited competition could also indicate a specialized service where only a few contractors possess the necessary qualifications.

Taxpayer Impact: The limited competition means taxpayers may not have benefited from the lowest possible prices that a broader bidding process could have yielded. While two bidders provide some comparison, a more robust competition could have driven down costs further.

Public Impact

The primary beneficiaries are the various programs and projects within the Department of State that require expert program management support. Services delivered include strategic planning, operational support, and administrative management, enhancing the efficiency of State Department initiatives. The geographic impact is primarily within Washington D.C., where the Department of State is headquartered, but the support indirectly affects global operations. The contract supports a professional workforce of consultants and program managers, contributing to specialized job opportunities in the management consulting sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost escalation due to time-and-materials pricing structure.
Limited competition may have resulted in a higher-than-optimal price.
Dependence on a single contractor (Deloitte) for critical program management functions.

Positive Signals

Awarded to a well-established contractor with a track record in government services.
Contract duration provides stability for ongoing program support.
Clear scope of work for program management assistance.

Sector Analysis

This contract falls within the Administrative Management and General Management Consulting Services sector (NAICS 541611). This is a significant sector for federal spending, as agencies frequently outsource specialized management and administrative support to leverage external expertise. The market is characterized by a mix of large, established consulting firms and smaller, niche providers. The total federal spending in this category is substantial, with contracts often ranging from hundreds of thousands to hundreds of millions of dollars, depending on the scope and duration.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses arising from a small business set-aside. The primary contractor, Deloitte Consulting LLP, is a large business. Any subcontracting opportunities would be at the discretion of the prime contractor and not mandated by a set-aside provision.

Oversight & Accountability

Oversight for this contract would primarily reside with the contracting officers and program managers within the Department of State. Accountability measures are typically embedded in the contract terms, including performance metrics and reporting requirements. Transparency is facilitated through contract databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected or alleged.

Related Government Programs

Department of State Program Management Support
Federal Management Consulting Services
Administrative Support Contracts
BPA Call Contracts
Time and Materials Contracts

Risk Flags

Potential for cost overruns due to T&M pricing.
Limited competition may impact price competitiveness.
Contract duration requires sustained oversight.

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $199.7 million to DELOITTE CONSULTING LLP. PROGRAM MANAGEMENT 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 $199.7 million.

What is the period of performance?

Start: 2021-03-16. End: 2026-09-29.

What is Deloitte Consulting LLP's track record with the Department of State and other federal agencies for similar program management support services?

Deloitte Consulting LLP has a substantial track record with the Department of State and numerous other federal agencies, often securing large contracts for management consulting, IT services, and program support. Their history includes numerous awards for providing strategic planning, operational improvements, and administrative management. While specific performance details for this particular contract are not publicly detailed in the provided data, Deloitte's general reputation is that of a major federal contractor capable of handling complex requirements. A deeper dive into past performance reviews and any past issues or commendations would be necessary for a comprehensive assessment of their track record on this specific type of service.

How does the $98,725 per-unit cost benchmark compare to similar program management support contracts awarded by other federal agencies?

The benchmarked per-unit cost of $98,725 is considered fair, suggesting it is within a reasonable range for specialized program management support services. To provide a more precise comparison, one would need to analyze data from contracts with similar scopes of work, durations, and contractor experience levels across different agencies. For instance, contracts for strategic planning or operational efficiency consulting for agencies like the Department of Defense or HHS, if procured using similar pricing models and with comparable contractor expertise, could serve as benchmarks. Without direct comparative data points, 'fair' indicates it's not an outlier, but further analysis is needed to determine if it represents optimal value.

What are the primary risks associated with the time-and-materials (T&M) pricing structure for this contract, and how are they mitigated?

The primary risk of a Time and Materials (T&M) contract is the potential for cost overruns if the scope of work is not well-defined or if contractor effort is not efficiently managed. Unlike fixed-price contracts, T&M agreements do not have a ceiling on the total cost, making budget predictability a challenge. Mitigation strategies employed by the Department of State would typically include establishing a ceiling price, requiring detailed timesheets and expense reports, implementing robust oversight by contracting officers and program managers to monitor labor hours and resource allocation, and potentially incorporating performance-based incentives or award-fee structures. Regular reviews and audits are crucial to ensure the contractor's effort is reasonable and allocable to the contract.

What is the historical spending pattern for program management support services at the Department of State, and how does this contract fit within that trend?

The Department of State, like many large federal agencies, consistently spends significant amounts on program management support services to ensure the effective execution of its diverse and complex global missions. Historical spending in this area typically reflects the agency's operational needs, strategic priorities, and the number of ongoing programs and projects. This $200 million contract, spanning over five years, represents a substantial but not necessarily anomalous investment, likely reflecting a sustained need for specialized expertise. Analyzing past annual expenditures on similar services would reveal whether this contract's value is in line with, or represents an increase/decrease from, previous trends, potentially influenced by shifts in agency focus or budget allocations.

Given the limited competition (2 bidders), what is the potential impact on the quality of services received and the contractor's incentive to innovate?

Limited competition, such as having only two bidders, can present a mixed bag of impacts. On one hand, it might mean that only a select few contractors possessed the highly specialized qualifications required, ensuring a baseline level of expertise. However, it also reduces the pressure on the winning contractor to continuously improve service quality or innovate, as the threat of losing future business to a competitor is lessened. The Department of State would need to actively manage this relationship, perhaps through strong performance management and clear communication channels, to ensure the contractor remains motivated to deliver high-quality services and explore innovative solutions, rather than simply fulfilling the contract requirements.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Administrative Management and General Management Consulting Services

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

Competition & Pricing

Extent Competed: COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Offers Received: 2

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: $264,372,686

Exercised Options: $226,456,336

Current Obligation: $199,719,780

Actual Outlays: $65,106,433

Subaward Activity

Number of Subawards: 8

Total Subaward Amount: $7,500,759

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 19AQMM19A0280

IDV Type: BPA

Timeline