VA awards $351M contract for IT support services to Accenture Federal Services, highlighting a significant investment in digital infrastructure

Contract Overview

Contract Amount: $351,032,718 ($351.0M)

Contractor: Accenture Federal Services LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2023-12-30

End Date: 2026-12-29

Contract Duration: 1,095 days

Daily Burn Rate: $320.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: VBA DGIB SUPPORT SERVICES PURCHASE

Place of Performance

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

State: District of Columbia Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $351.0 million to ACCENTURE FEDERAL SERVICES LLC for work described as: VBA DGIB SUPPORT SERVICES PURCHASE Key points: 1. The contract value represents a substantial commitment to IT support, suggesting a critical need for these services within the VA. 2. Accenture Federal Services, a large established contractor, secured this award, indicating a competitive but ultimately successful bid. 3. The duration of the contract (1095 days) points to a long-term strategy for IT system maintenance and development. 4. The fixed-price nature of the contract aims to provide cost certainty for the government, though it may limit flexibility. 5. This award falls within the Computer Systems Design Services NAICS code, a common area for federal IT procurement. 6. The contract's focus on IT support suggests a direct impact on the operational efficiency of VA systems and services.

Value Assessment

Rating: good

The contract value of $351 million over three years for IT support services appears to be within a reasonable range for a contract of this scope and duration, especially considering the complexity of the Department of Veterans Affairs' systems. Benchmarking against similar large-scale IT support contracts awarded by other federal agencies for comparable services would provide a more precise value-for-money assessment. The firm fixed-price structure suggests an effort to control costs, but the ultimate value will depend on the effective delivery of services and the avoidance of scope creep.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified vendors had the opportunity to bid. The fact that it resulted in a single award suggests that Accenture Federal Services presented the most advantageous offer based on the evaluation criteria. The level of competition, while not explicitly detailed in terms of the number of bidders, is generally expected to drive competitive pricing and encourage high-quality service delivery.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically leads to better pricing and a wider range of innovative solutions being considered, maximizing the value received for public funds.

Public Impact

Veterans will benefit from improved reliability and performance of VA IT systems, which underpin critical healthcare and benefits services. The contract ensures the continued operation and potential enhancement of the digital infrastructure supporting the Department of Veterans Affairs. The geographic impact is national, as VA IT systems serve veterans across the United States and its territories. This contract will likely support a significant workforce within Accenture Federal Services, including IT professionals, system administrators, and support staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if transition planning is not robust.
Risk of cost overruns if the scope of work expands beyond initial projections.
Dependence on a single contractor for critical IT infrastructure.

Positive Signals

Award to a large, experienced contractor with a proven track record in federal IT.
Firm fixed-price contract structure provides cost predictability.
Long-term contract duration allows for stable service delivery and system development.

Sector Analysis

This contract falls within the IT services sector, specifically computer systems design and related services. The federal government is a major consumer of IT services, with spending often concentrated in areas like system integration, software development, and IT support. The Department of Veterans Affairs, like other large federal agencies, relies heavily on robust IT infrastructure to deliver its mission. This contract represents a significant portion of the VA's IT support spending, reflecting the ongoing need for modernization and maintenance of complex systems.

Small Business Impact

This contract was awarded under full and open competition and does not appear to have a specific small business set-aside. While the prime contractor is a large business, there may be opportunities for small businesses to participate as subcontractors. The extent of small business subcontracting will depend on Accenture Federal Services' subcontracting plan and the specific needs of the IT support services required.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of Veterans Affairs' contracting officers and program managers. The firm fixed-price nature of the contract provides a degree of accountability for performance against agreed-upon deliverables. Transparency is generally maintained through contract award databases and public reporting, though specific performance metrics may not always be publicly disclosed. The VA's Office of Inspector General may also conduct audits or investigations related to contract performance and financial management.

Related Government Programs

VA IT Modernization Initiatives
Federal Civilian IT Services
Computer Systems Design Services
IT Support and Maintenance Contracts

Risk Flags

Potential for scope creep
Vendor lock-in risk
Performance variability

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $351.0 million to ACCENTURE FEDERAL SERVICES LLC. VBA DGIB SUPPORT SERVICES PURCHASE

Who is the contractor on this award?

The obligated recipient is ACCENTURE FEDERAL SERVICES LLC.

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $351.0 million.

What is the period of performance?

Start: 2023-12-30. End: 2026-12-29.

What is Accenture Federal Services' track record with the Department of Veterans Affairs and other federal agencies for similar IT support contracts?

Accenture Federal Services has a substantial history of contracting with the Department of Veterans Affairs and other federal agencies, often securing large and complex IT services contracts. Their track record includes work on various IT modernization efforts, system integration, and support services across civilian and defense sectors. For the VA specifically, Accenture has been involved in projects related to electronic health records, claims processing systems, and digital transformation initiatives. While specific performance details for past contracts are not always publicly detailed, their consistent award of significant contracts suggests a generally positive performance history and a strong understanding of federal IT requirements. However, like any large contractor, they may have faced challenges or criticisms on specific projects, which would be detailed in contract performance reports or IG investigations if publicly available.

How does the awarded price of $351 million compare to similar IT support contracts awarded by other federal agencies?

Comparing the $351 million contract value requires careful consideration of the scope, duration, and specific services included. For a three-year contract (1095 days) providing comprehensive IT support services to a large agency like the VA, this figure appears to be within the expected range for large-scale federal IT procurements. For instance, similar contracts for IT infrastructure management, cybersecurity support, or application development for agencies such as the Department of Defense or Health and Human Services can also run into hundreds of millions of dollars over similar periods. Factors influencing the price include the complexity of the VA's existing systems, the level of support required (e.g., 24/7 operations, specialized technical expertise), and the specific deliverables outlined in the contract. A detailed benchmark would involve analyzing the per-year cost and the specific service categories against comparable contracts.

What are the primary risks associated with this contract, and what mitigation strategies are in place?

The primary risks associated with this contract include potential scope creep, where the requirements may expand beyond the initial agreement, leading to cost overruns despite the firm fixed-price structure. Another risk is vendor lock-in, where the VA becomes overly dependent on Accenture Federal Services, making future transitions difficult or costly. Performance issues, such as service disruptions or failure to meet service level agreements (SLAs), also pose a risk. Mitigation strategies likely include robust contract management by the VA, including clear definition of scope, regular performance reviews, and strict change control processes. The firm fixed-price contract itself acts as a cost mitigation tool. For vendor lock-in, the VA would need to ensure clear exit strategies and data portability clauses are included in the contract. Performance risks are managed through defined SLAs and potential penalties for non-compliance.

How effective is the firm fixed-price contract type in ensuring value for money for this IT support service?

The firm fixed-price (FFP) contract type is generally considered effective in ensuring value for money for IT support services when the scope of work is well-defined and unlikely to change significantly. For the VA's VBA DGIB SUPPORT SERVICES PURCHASE, an FFP contract provides cost certainty to the government, as the contractor assumes most of the risk for cost overruns. This incentivizes the contractor to perform efficiently and manage costs effectively to maximize their profit margin. For taxpayers, this means a predictable expenditure. However, if unforeseen technical challenges arise or the VA's needs evolve rapidly, an FFP contract can be less flexible, potentially leading to the need for costly change orders or a less-than-optimal solution if the contractor is unwilling to adapt without additional compensation. The effectiveness hinges on the initial clarity and completeness of the SOW.

What are the historical spending patterns for IT support services within the Department of Veterans Affairs?

The Department of Veterans Affairs has consistently allocated significant portions of its budget to IT services, including support and maintenance, reflecting the critical role technology plays in its operations. Historical spending patterns show a trend towards increased investment in IT modernization, cloud migration, and digital service delivery to improve veteran experiences and operational efficiency. This includes substantial outlays for system maintenance, cybersecurity, data management, and the development of new applications. The VA's IT budget has generally grown over the years, driven by the need to upgrade legacy systems, enhance data security, and implement new technologies to better serve veterans. Contracts for IT support services, like the one awarded to Accenture, are a recurring and substantial component of this overall IT spending.

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

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Novetta Solutions, LLC

Address: 800 N GLEBE RD STE 300, ARLINGTON, VA, 22203

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $539,166,354

Exercised Options: $351,032,718

Current Obligation: $351,032,718

Actual Outlays: $234,514,297

Subaward Activity

Number of Subawards: 64

Total Subaward Amount: $76,579,214

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: 47QTCK18D0036

IDV Type: GWAC

Timeline