GSA awards $448.6M IT services contract to Deloitte, highlighting potential for cost efficiencies in system design

Contract Overview

Contract Amount: $448,599,121 ($448.6M)

Contractor: Deloitte Consulting LLP

Awarding Agency: General Services Administration

Start Date: 2019-09-27

End Date: 2025-09-26

Contract Duration: 2,191 days

Daily Burn Rate: $204.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS AWARD FEE

Sector: IT

Official Description: AWARD AND IF

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20520

State: District of Columbia Government Spending

Plain-Language Summary

General Services Administration obligated $448.6 million to DELOITTE CONSULTING LLP for work described as: AWARD AND IF Key points: 1. Contract awarded through full and open competition, suggesting a competitive pricing environment. 2. Focus on computer systems design services indicates a need for specialized IT expertise. 3. The contract's duration of nearly six years suggests a long-term strategic IT investment. 4. Cost Plus Award Fee (CPAF) structure incentivizes performance but requires careful oversight. 5. Awarded by the General Services Administration (GSA), a key agency for federal IT procurement. 6. The contract is a delivery order, implying it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle.

Value Assessment

Rating: good

The contract's value of $448.6 million over approximately six years places it as a significant IT services award. Benchmarking against similar large-scale IT system design contracts is crucial. The Cost Plus Award Fee (CPAF) structure, while common for complex services, necessitates rigorous performance monitoring to ensure value for money. Without specific performance metrics and award fee criteria, a precise value-for-money assessment is challenging, but the competitive award process provides a baseline for fair pricing.

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 suggests a healthy market for these services. The number of bidders is not specified, but the competitive nature of the award process generally leads to better price discovery and potentially more favorable terms for the government.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically drives down prices through market forces and encourages a wider range of innovative solutions.

Public Impact

Federal agencies requiring advanced computer systems design and integration services will benefit. The contract supports the modernization and efficiency of federal IT infrastructure. Services are likely to be delivered within the District of Columbia, impacting the local IT workforce. Deloitte Consulting LLP, as the awardee, will leverage its expertise to deliver critical IT solutions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The Cost Plus Award Fee (CPAF) structure can lead to cost overruns if not managed with stringent oversight and clear performance metrics.
The long duration of the contract (nearly six years) may present risks related to technological obsolescence or changing agency needs.
Lack of specific details on the number of bidders in the full and open competition makes it difficult to fully assess the intensity of price competition.

Positive Signals

Awarded through full and open competition, indicating a robust and competitive procurement process.
The contract's focus on computer systems design services addresses critical federal IT needs.
The General Services Administration's involvement suggests adherence to established procurement best practices.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on computer systems design services. This is a critical area for government operations, encompassing the development, integration, and maintenance of complex IT systems. The market for IT services is highly competitive, with numerous large and small firms vying for federal contracts. The value of this award is substantial, reflecting the complexity and strategic importance of the services provided. Comparable spending benchmarks would involve looking at other large-scale IT system design and integration contracts awarded by federal agencies.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a set-aside. However, the prime contractor, Deloitte Consulting LLP, may engage small businesses as subcontractors to fulfill specific aspects of the contract, depending on the scope of work and their subcontracting plans. The absence of a small business set-aside means the primary competition was open to all responsible sources, including large businesses.

Oversight & Accountability

The General Services Administration (GSA) typically employs robust oversight mechanisms for its contracts. As a delivery order under a larger IDIQ, oversight would likely involve contract officers, program managers, and potentially contracting specialists within GSA's Federal Acquisition Service. The Cost Plus Award Fee (CPAF) structure necessitates detailed performance monitoring and evaluation to determine award fees, ensuring accountability. Transparency is generally maintained through contract databases like FPDS, though specific performance metrics and award fee decisions may not always be publicly detailed.

Related Government Programs

IT Professional Services
Computer Systems Design
Software Development
IT Consulting Services
Cloud Computing Services
Cybersecurity Services

Risk Flags

Potential for cost overruns due to CPAF structure
Risk of technological obsolescence over contract duration
Need for robust performance monitoring and evaluation

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $448.6 million to DELOITTE CONSULTING LLP. AWARD AND IF

Who is the contractor on this award?

The obligated recipient is DELOITTE CONSULTING LLP.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $448.6 million.

What is the period of performance?

Start: 2019-09-27. End: 2025-09-26.

What is Deloitte Consulting LLP's track record with the General Services Administration (GSA) for IT services?

Deloitte Consulting LLP has a significant history of contracting with the General Services Administration (GSA) across various IT service categories. Their awards often span complex system design, integration, and modernization projects. Analyzing past GSA contracts awarded to Deloitte would reveal their performance trends, including on-time delivery, adherence to budget, and overall client satisfaction. For instance, reviewing previous delivery orders or task orders under similar IDIQ vehicles can provide insights into their capabilities and reliability in executing large-scale federal IT initiatives. Their extensive experience suggests a strong understanding of federal procurement processes and IT requirements.

How does the $448.6 million award compare to other federal IT system design contracts?

The $448.6 million award to Deloitte Consulting LLP for computer systems design services is a substantial figure, placing it among significant federal IT procurements. To benchmark its value, one would compare it to other large-scale IT system design and integration contracts awarded by agencies like the Department of Defense, Department of Homeland Security, or other civilian agencies over the past few fiscal years. Factors such as contract duration, scope of services (e.g., cloud migration, legacy system modernization, new system development), and the specific IT domains involved (e.g., data analytics, AI, cybersecurity) are crucial for a meaningful comparison. The number of bidders and the competition level also influence price points, making direct comparisons challenging without detailed context.

What are the primary risks associated with a Cost Plus Award Fee (CPAF) contract of this magnitude?

The primary risks associated with a Cost Plus Award Fee (CPAF) contract of this magnitude ($448.6 million) revolve around cost control and performance accountability. CPAF contracts allow the contractor to recover allowable costs plus a fee that is composed of a fixed base fee and an award amount that is earned based on meeting or exceeding performance objectives. The risk lies in the government's ability to accurately define and measure these performance objectives. If objectives are poorly defined or metrics are not rigorously applied, costs can escalate beyond initial expectations without commensurate improvements in service quality or outcomes. Effective oversight, clear communication, and a robust performance evaluation process are critical to mitigating these risks and ensuring the government receives good value.

What is the expected impact of this contract on federal IT modernization efforts?

This $448.6 million contract for computer systems design services is expected to significantly contribute to federal IT modernization efforts. By engaging a major IT services provider like Deloitte Consulting LLP, federal agencies can leverage advanced technological expertise to upgrade or replace outdated systems, implement new digital services, and enhance overall IT infrastructure. Such contracts are crucial for agencies aiming to improve operational efficiency, enhance data security, and deliver better services to the public. The focus on system design implies a foundational role in building or revamping the technological backbone required for modern government functions, potentially leading to more agile, secure, and cost-effective IT operations in the long run.

How has federal spending on computer systems design services evolved, and where does this award fit?

Federal spending on computer systems design services has seen a consistent upward trend over the past decade, driven by the increasing digitization of government operations and the need to modernize legacy IT systems. This $448.6 million award to Deloitte Consulting LLP fits within this broader trend, representing a significant investment in critical IT infrastructure. It aligns with government-wide initiatives focused on digital transformation, cloud adoption, and cybersecurity enhancements. Analyzing historical spending data for similar services, particularly from the General Services Administration (GSA), would provide context on the scale and frequency of such awards. This contract's value suggests it addresses a substantial and complex IT requirement, likely supporting a major agency program or a cross-agency initiative.

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: 2

Pricing Type: COST PLUS AWARD FEE (R)

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: $506,153,397

Exercised Options: $503,672,212

Current Obligation: $448,599,121

Actual Outlays: $-7,296

Subaward Activity

Number of Subawards: 22

Total Subaward Amount: $111,748,503

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 47QTCK18D0029

IDV Type: GWAC

Timeline