Ernst & Young LLP awarded $120.7M for Entity Validation Services by GSA, highlighting a need for robust data integrity

Contract Overview

Contract Amount: $120,735,953 ($120.7M)

Contractor: Ernst & Young LLP

Awarding Agency: General Services Administration

Start Date: 2019-03-18

End Date: 2026-03-17

Contract Duration: 2,556 days

Daily Burn Rate: $47.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 7

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: ENTITY VALIDATION SERVICES - BASE CONTRACT AWARD

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20405

State: District of Columbia Government Spending

Plain-Language Summary

General Services Administration obligated $120.7 million to ERNST & YOUNG LLP for work described as: ENTITY VALIDATION SERVICES - BASE CONTRACT AWARD Key points: 1. The contract's value suggests a significant demand for comprehensive entity validation, crucial for government operations. 2. A firm-fixed-price structure aims to provide cost certainty for the government. 3. The duration of the contract (over 7 years) indicates a long-term strategic need for these services. 4. Competition was robust, with 7 bidders vying for this significant award. 5. The services provided fall under credit bureaus and data processing, a critical but often unseen sector. 6. The award to a large, established firm like Ernst & Young suggests a focus on reliability and proven capability.

Value Assessment

Rating: good

The $120.7 million award over approximately 7 years represents a substantial investment in entity validation. While specific performance metrics are not detailed, the firm-fixed-price nature suggests an attempt to control costs. Benchmarking against similar large-scale data validation contracts would be necessary for a definitive value assessment, but the competitive nature of the award implies a reasonable market price was achieved.

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 bids. With seven bidders participating, the competition level appears healthy, suggesting that multiple firms possessed the capabilities to meet the government's requirements. This level of competition generally fosters price discovery and encourages competitive pricing.

Taxpayer Impact: A competitive bidding process for entity validation services helps ensure that taxpayer dollars are used efficiently by driving down costs and promoting innovation among service providers.

Public Impact

Federal agencies benefit from enhanced data integrity and reduced risk of fraud or errors in their operations. The services ensure the accuracy and validity of entities interacting with government systems, supporting a wide range of administrative functions. The primary geographic impact is national, as federal agencies operate across the United States. While not directly a workforce-creation contract, it supports roles in data analysis, cybersecurity, and compliance within the contractor's organization.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration could lead to vendor lock-in if not managed carefully.
Reliance on a single large contractor for critical validation services may pose a risk if the contractor faces operational issues.
The complexity of entity validation means potential for errors if quality control is not rigorously maintained.

Positive Signals

Awarded through full and open competition, indicating a competitive market for these services.
Firm-fixed-price contract provides cost predictability for the government.
The selection of a well-established firm like Ernst & Young suggests a focus on proven expertise and reliability.

Sector Analysis

Entity validation services are a critical component of the broader information technology and professional services sector. This contract addresses the growing need for accurate and secure data management, particularly in government contexts where identity verification and compliance are paramount. The market for such services is competitive, driven by regulatory requirements and the increasing digitization of government operations. Comparable spending benchmarks would likely be found within IT services, data management, and professional support categories for federal agencies.

Small Business Impact

This contract was awarded to Ernst & Young LLP and does not indicate any specific small business set-aside provisions. As a large prime contractor, Ernst & Young may engage small businesses for subcontracting opportunities, but the primary award is not directed towards small businesses. Further analysis of subcontracting plans would be needed to assess the direct impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the General Services Administration's Federal Acquisition Service. Mechanisms likely include regular performance reviews, contract management reviews, and adherence to the terms of the firm-fixed-price agreement. Transparency is generally maintained through contract award databases, though specific operational oversight details are typically internal.

Related Government Programs

Data Management Services
Identity Verification Services
Credit Bureau Services
Information Technology Professional Services
Contract Administration Services

Risk Flags

Potential for technological obsolescence over the contract's long duration.
Risk of vendor lock-in due to the extended contract term.
Dependence on a single large contractor for critical data validation functions.

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $120.7 million to ERNST & YOUNG LLP. ENTITY VALIDATION SERVICES - BASE CONTRACT AWARD

Who is the contractor on this award?

The obligated recipient is ERNST & YOUNG LLP.

Which agency awarded this contract?

Awarding agency: General Services Administration (Federal Acquisition Service).

What is the total obligated amount?

The obligated amount is $120.7 million.

What is the period of performance?

Start: 2019-03-18. End: 2026-03-17.

What is Ernst & Young LLP's track record with similar federal contracts, particularly in data validation and identity services?

Ernst & Young LLP (EY) has a significant history of performing complex professional services for the federal government, including areas related to data analytics, cybersecurity, and financial management. While specific contract details for 'entity validation' might vary, EY's broader portfolio includes work in risk advisory, forensic services, and IT consulting, all of which touch upon data integrity and verification. Their experience often involves large-scale engagements requiring robust quality control and compliance with federal regulations. A review of federal procurement databases would reveal past performance on contracts with agencies like the Department of Treasury, IRS, and various defense components, which often require stringent data validation protocols.

How does the $120.7 million award compare to historical federal spending on entity validation services?

The $120.7 million award to Ernst & Young LLP for entity validation services represents a substantial, but not unprecedented, level of federal spending in this domain. Federal agencies consistently invest in data integrity and identity verification to prevent fraud, ensure compliance, and maintain accurate records. Historical spending patterns show significant outlays in areas like credit reporting, background checks, and data management services, which are closely related. While this specific contract is large, it aligns with the government's ongoing commitment to secure and reliable data infrastructure. To provide a precise comparison, one would need to aggregate spending across similar NAICS codes (like 561450 - Credit Bureaus, or related IT/professional services) over multiple fiscal years.

What are the primary risks associated with a long-term (7-year) contract for entity validation services?

A primary risk with a long-term contract for entity validation is the potential for technological obsolescence. The landscape of data validation and cybersecurity evolves rapidly, and a 7-year contract might lock the government into outdated methods or technologies if the contractor does not proactively adapt. Another significant risk is vendor lock-in, making it difficult and costly to switch providers if performance degrades or better solutions emerge. Furthermore, reliance on a single entity for such critical data validation could pose a systemic risk if the contractor experiences financial instability, data breaches, or significant operational failures. Ensuring robust performance standards and exit strategies within the contract is crucial to mitigate these risks.

How effective are firm-fixed-price contracts in ensuring value for money in complex service procurements like entity validation?

Firm-fixed-price (FFP) contracts are generally favored for their cost control benefits, aiming to provide price certainty for the government. In theory, they incentivize the contractor to manage costs efficiently to maximize profit. For entity validation services, where the scope of work can be relatively well-defined, an FFP contract can be effective in ensuring value for money by setting a clear ceiling on expenditure. However, the effectiveness hinges on the accuracy of the initial scope definition and cost estimation. If the scope is underestimated or unforeseen complexities arise, the contractor may face challenges meeting requirements within the fixed price, potentially impacting quality or leading to change orders. Conversely, if the price is set too high, the government may overpay. Robust market research and a clear statement of work are critical for FFP success.

What are the implications of awarding this contract under 'full and open competition' with seven bidders?

Awarding this contract under 'full and open competition' with seven bidders is a positive indicator for the government and taxpayers. It signifies that the procurement process was designed to attract a wide range of qualified vendors, fostering a competitive environment. Having seven bidders suggests that the market has multiple capable providers for entity validation services, which typically leads to more competitive pricing and potentially higher quality solutions as vendors vie for the award. This level of competition helps ensure that the selected contractor, Ernst & Young LLP, was chosen based on a combination of technical merit and cost-effectiveness, rather than a lack of alternatives. It also reduces the risk of perceived favoritism and enhances the overall integrity of the procurement.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Business Support Services › Credit Bureaus

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: ID15170001

Offers Received: 7

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1101 NEW YORK AVENUE, NW, WASHINGTON, DC, 20005

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

Financial Breakdown

Contract Ceiling: $126,415,777

Exercised Options: $124,322,163

Current Obligation: $120,735,953

Actual Outlays: $81,187,857

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline