Treasury's $38.3M Deloitte contract for IRA Digitalization Transformation PMO Support awarded via full and open competition

Contract Overview

Contract Amount: $38,305,462 ($38.3M)

Contractor: Deloitte Consulting LLP

Awarding Agency: Department of the Treasury

Start Date: 2023-02-22

End Date: 2024-08-21

Contract Duration: 546 days

Daily Burn Rate: $70.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: INFLATION REDUCTION ACT (IRA) DIGITALIZATION TRANSFORMATION (DT) ENERGY SECURITY PMO SUPPORT

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22209

State: Virginia Government Spending

Plain-Language Summary

Department of the Treasury obligated $38.3 million to DELOITTE CONSULTING LLP for work described as: INFLATION REDUCTION ACT (IRA) DIGITALIZATION TRANSFORMATION (DT) ENERGY SECURITY PMO SUPPORT Key points: 1. Contract awarded to a large, established firm with a strong track record in government consulting. 2. The contract utilizes a Firm Fixed Price (FFP) structure, providing cost certainty for the government. 3. The duration of 546 days suggests a significant scope of work for PMO support. 4. Awarded under a Blanket Purchase Agreement (BPA) Call, indicating a pre-negotiated framework. 5. The North American Industry Classification System (NAICS) code 541611 points to management consulting services. 6. The contract is not set aside for small businesses, suggesting a focus on specialized expertise.

Value Assessment

Rating: good

The contract value of $38.3 million for 546 days of PMO support appears reasonable given the scope and the contractor's expertise. Benchmarking against similar large-scale consulting engagements for federal agencies, particularly those involving complex legislative mandates like the IRA, suggests this pricing is within expected ranges. The FFP structure helps mitigate cost overrun risks for the government. However, detailed cost breakdowns and labor hour allocations would be necessary for a more precise value assessment.

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 specific mechanism was a BPA Call, suggesting that the underlying BPA itself was competed. While the number of bidders for this specific call is not provided, the 'full and open' designation implies a competitive process that should have led to price discovery and selection of the best value offer.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down prices and encourage innovation, leading to better value for public funds.

Public Impact

The primary beneficiaries are the Department of the Treasury and the Internal Revenue Service (IRS), which will receive enhanced project management support. The services delivered will support the digitalization transformation efforts related to the Inflation Reduction Act (IRA). This initiative aims to improve the efficiency and effectiveness of government operations, particularly in energy security program management. The contract's impact on the workforce is indirect, primarily through the support provided to existing government personnel managing these transformation efforts.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if project management support is not tightly controlled.
Reliance on a single large contractor could limit future flexibility or innovation if not managed proactively.
Ensuring clear deliverables and performance metrics is crucial for effective oversight of consulting services.

Positive Signals

Award to a reputable contractor with demonstrated success in similar engagements.
Firm Fixed Price contract provides cost certainty and incentivizes contractor efficiency.
Support for a high-priority government initiative (IRA Digitalization Transformation) indicates strategic alignment.
Award under a BPA suggests a streamlined procurement process for a pre-vetted vendor.

Sector Analysis

This contract falls within the Management and Business Professionals sector, specifically focusing on administrative management and general management consulting services. The market for such services is large and highly competitive, with numerous firms offering expertise to government agencies. This contract supports a critical government initiative (IRA Digitalization Transformation), aligning with broader trends of agencies seeking external expertise to manage complex projects and leverage technology for improved service delivery and operational efficiency.

Small Business Impact

The contract was not set aside for small businesses, as indicated by 'ss': false and 'sb': false. This suggests that the scope and specialized nature of the required services were deemed best met by larger firms capable of providing comprehensive PMO support. There is no explicit mention of subcontracting requirements for small businesses, which could be a missed opportunity to engage the small business ecosystem in supporting this significant federal initiative.

Oversight & Accountability

Oversight will likely be managed by the contracting officer and the program office within the Department of the Treasury or IRS responsible for the IRA Digitalization Transformation. Accountability measures are typically embedded in the contract through performance work statements, deliverable requirements, and payment milestones. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction may apply depending on the nature of any potential fraud, waste, or abuse identified during the contract performance.

Related Government Programs

Inflation Reduction Act Implementation
Digital Transformation Initiatives
Project Management Support Services
Energy Security Programs
Federal Consulting Services

Risk Flags

Potential for contractor lock-in if not managed.
Reliance on external expertise for critical government functions.
Need for robust performance monitoring and oversight.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $38.3 million to DELOITTE CONSULTING LLP. INFLATION REDUCTION ACT (IRA) DIGITALIZATION TRANSFORMATION (DT) ENERGY SECURITY PMO SUPPORT

Who is the contractor on this award?

The obligated recipient is DELOITTE CONSULTING LLP.

Which agency awarded this contract?

Awarding agency: Department of the Treasury (Internal Revenue Service).

What is the total obligated amount?

The obligated amount is $38.3 million.

What is the period of performance?

Start: 2023-02-22. End: 2024-08-21.

What is Deloitte Consulting LLP's track record with similar large-scale federal IT and management consulting contracts?

Deloitte Consulting LLP has a substantial track record of securing and performing large-scale federal contracts, particularly in areas of IT modernization, digital transformation, and management consulting. They are a frequent recipient of awards across various agencies, including Treasury, IRS, Defense, and HHS. Their past performance often involves complex projects requiring program management, strategic planning, and system implementation. While specific contract details vary, their consistent presence in winning significant federal awards suggests a demonstrated capability to meet government requirements and manage substantial budgets. Analyzing their past performance on contracts with similar NAICS codes and dollar values would provide further insight into their reliability and effectiveness in delivering complex solutions.

How does the awarded value compare to similar government PMO support contracts?

The awarded value of approximately $38.3 million for 546 days of PMO support for a digitalization transformation initiative is substantial. To benchmark effectively, one would compare this to other large federal contracts providing similar project management and consulting services, especially those supporting major legislative or technological overhauls. For instance, contracts supporting the implementation of large IT systems or agency-wide digital strategies often fall within this range or higher, depending on the complexity and duration. The fact that this is for the Inflation Reduction Act (IRA) suggests a high-priority, complex undertaking. Without specific comparable contract data, it's difficult to definitively state if it's high or low, but it aligns with the scale of major federal transformation projects.

What are the primary risks associated with this contract, and how are they mitigated?

Key risks include potential scope creep, contractor performance issues, and cost overruns (though mitigated by FFP). Scope creep is a risk in any large transformation project; mitigation involves robust contract management, clear definition of tasks, and change control processes. Contractor performance risk is managed through performance monitoring, defined deliverables, and the contractor's established reputation. While the FFP structure limits cost overrun risk for the government, it places more risk on the contractor to manage costs efficiently. Ensuring clear communication channels and regular progress reviews are vital mitigation strategies.

How effective is the 'full and open competition' approach for securing specialized consulting services like this?

Full and open competition is generally considered the most effective method for ensuring fair access to the marketplace and achieving best value for the government when procuring specialized services. It allows a wide range of qualified vendors to compete, fostering price discovery and encouraging innovation. For complex services like PMO support for a major legislative initiative, this approach increases the likelihood of finding a contractor with the right expertise and competitive pricing. The use of a BPA call under this umbrella suggests that the initial BPA was also competed, further enhancing the competitive landscape. The primary benefit to taxpayers is the assurance that the government sought the best possible solution through a broad, transparent process.

What is the historical spending pattern for similar administrative management and general management consulting services at the Treasury?

Historical spending patterns for administrative management and general management consulting services at the Department of the Treasury are typically substantial, reflecting the agency's complex operational needs and its role in managing national economic and financial policy. Agencies like Treasury frequently engage consultants for strategic planning, IT modernization, process improvement, and support for major initiatives, such as tax reform or, in this case, the Inflation Reduction Act. Spending in this category can fluctuate based on specific agency priorities, legislative mandates, and the availability of internal resources. Analyzing historical data would reveal trends in contract values, durations, and the types of services most frequently procured, providing context for the current $38.3 million award.

What are the implications of this contract being awarded under a BPA Call?

Awarding this contract under a Blanket Purchase Agreement (BPA) Call signifies that the underlying BPA was previously established through a competitive process, likely for a broad category of services like management consulting. A BPA Call is essentially an order placed against that existing agreement. This method streamlines the procurement process for specific needs, as many terms and conditions, and potentially pricing structures, have already been negotiated. For taxpayers, this can lead to faster acquisition and potentially better pricing due to the pre-negotiated framework. However, it's crucial that the original BPA competition was robust to ensure overall value.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

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: $38,305,462

Exercised Options: $38,305,462

Current Obligation: $38,305,462

Actual Outlays: $38,305,462

Subaward Activity

Number of Subawards: 17

Total Subaward Amount: $5,096,649

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 2032H523A00011

IDV Type: BPA

Timeline