Ginnie Mae valuation modeling contract awarded to Ernst & Young LLP for over $14.8 million

Contract Overview

Contract Amount: $14,836,983 ($14.8M)

Contractor: Ernst & Young LLP

Awarding Agency: General Services Administration

Start Date: 2020-12-11

End Date: 2026-06-10

Contract Duration: 2,007 days

Daily Burn Rate: $7.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: GINNIE MAE VALUATION MODELING

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20024

State: District of Columbia Government Spending

Plain-Language Summary

General Services Administration obligated $14.8 million to ERNST & YOUNG LLP for work described as: GINNIE MAE VALUATION MODELING Key points: 1. Contract awarded for valuation modeling services, indicating a need for specialized financial expertise. 2. The duration of the contract spans over five years, suggesting a long-term requirement for these services. 3. Ernst & Young LLP, a large public accounting firm, is the awardee, suggesting established capabilities. 4. The contract was awarded under full and open competition, implying a robust bidding process. 5. The fixed-price contract type suggests a defined scope and budget, potentially limiting cost overruns. 6. The services are categorized under Offices of Certified Public Accountants, aligning with the nature of valuation modeling.

Value Assessment

Rating: good

The contract value of approximately $14.8 million over roughly six years suggests a significant investment in valuation modeling. Benchmarking against similar contracts for specialized financial advisory services is difficult without more specific scope details. However, given the awardee's size and the competitive nature of the award, the pricing is likely within a reasonable range for complex financial modeling. The fixed-price structure provides some assurance of cost control, assuming the scope is well-defined.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, indicating that multiple qualified bidders had the opportunity to submit proposals. The presence of five bidders suggests a healthy level of competition for this specialized service. This competitive environment is generally favorable for price discovery and ensures the government can select the most capable and cost-effective solution.

Taxpayer Impact: A competitive award process helps ensure that taxpayer dollars are used efficiently by driving down costs and encouraging high-quality service delivery.

Public Impact

The primary beneficiaries are Ginnie Mae and its stakeholders, who will receive updated and accurate valuation models. The services delivered include critical financial modeling and valuation expertise for mortgage-backed securities. The geographic impact is national, supporting the operations of a federal agency involved in housing finance. The contract supports a specialized workforce within the financial services sector, specifically in accounting and valuation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if initial valuation models require extensive revisions.
Reliance on a single large contractor for critical financial modeling could pose a risk if performance falters.

Positive Signals

Award to a reputable firm with a strong track record in financial services.
Fixed-price contract structure can help control costs.
Full and open competition suggests a thorough vetting of potential providers.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically focusing on accounting and financial advisory. The market for such services is large and competitive, with major accounting firms and specialized consultancies vying for government contracts. Ginnie Mae's role in the secondary mortgage market necessitates sophisticated financial modeling to accurately value its mortgage-backed securities, making this a critical function within the financial services industry.

Small Business Impact

The awardee, Ernst & Young LLP, is a large business. There is no indication of small business set-asides for this specific contract. The contract does not explicitly mention subcontracting requirements for small businesses, but large prime contractors often utilize small businesses for various support functions. Further analysis would be needed to determine the extent of small business participation.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program office within the General Services Administration (GSA) and Ginnie Mae. Performance reviews, milestone tracking, and adherence to the contract terms are standard accountability measures. Transparency is generally maintained through contract award databases and public reporting, though specific model details may be proprietary.

Related Government Programs

Ginnie Mae Mortgage-Backed Securities Programs
Federal Financial Advisory Services
Government Valuation and Modeling Contracts
Office of Management and Budget (OMB) Financial Management Guidance

Risk Flags

Long contract duration may increase risk of performance degradation or changing needs.
Reliance on a single large firm for critical financial modeling.

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $14.8 million to ERNST & YOUNG LLP. GINNIE MAE VALUATION MODELING

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 $14.8 million.

What is the period of performance?

Start: 2020-12-11. End: 2026-06-10.

What is the historical spending pattern for Ginnie Mae valuation modeling services?

Historical spending data for Ginnie Mae's valuation modeling services prior to this contract award is not directly available in the provided data. However, the duration of this contract (over five years) and its value suggest a consistent and significant need for these services. The previous contract history, if available, would reveal trends in spending, potential increases or decreases in demand, and the types of contractors previously engaged. Understanding past expenditures can help assess if the current award represents a continuation of established spending levels or a significant shift.

How does the cost per year for this contract compare to industry benchmarks for similar valuation modeling services?

The annual cost for this contract is approximately $2.5 million ($14.8 million / ~6 years). Benchmarking this against industry rates for specialized valuation modeling services provided by large accounting firms is challenging without a detailed breakdown of the services rendered and the specific expertise required. However, for complex financial modeling and advisory services, rates can vary significantly. Given the competitive award and the reputation of Ernst & Young, this annual figure is likely within the expected range for high-level financial consulting, but a precise comparison would require access to detailed market rate data for comparable government and private sector engagements.

What are the key performance indicators (KPIs) used to evaluate Ernst & Young's performance on this contract?

The provided data does not specify the key performance indicators (KPIs) for this contract. Typically, for valuation modeling services, KPIs would focus on the accuracy and reliability of the models produced, adherence to deadlines for deliverables, responsiveness to Ginnie Mae's requests for information or revisions, and compliance with all relevant financial regulations and accounting standards. Performance would likely be assessed through regular reviews by the contracting officer's representative (COR) and potentially through user feedback from Ginnie Mae's financial operations teams.

What is Ernst & Young's track record with federal government contracts, particularly in financial services?

Ernst & Young LLP is a major global professional services firm with extensive experience serving federal government clients across various agencies and sectors, including financial services. They have a well-established track record in areas such as auditing, tax, consulting, and advisory services. While specific details of their past performance on similar valuation modeling contracts are not provided here, their status as one of the 'Big Four' accounting firms suggests a high level of capability and a history of successfully managing large and complex government engagements. Agencies often award contracts to such firms based on their demonstrated expertise and past performance.

What are the potential risks associated with relying on a single contractor for Ginnie Mae's valuation modeling?

The primary risk associated with relying on a single contractor, even a reputable one like Ernst & Young, is the potential for vendor lock-in and a reduction in competitive pressure over time. If performance issues arise, transitioning to a new contractor could be disruptive and costly. There's also a risk of knowledge concentration, where critical institutional knowledge resides primarily with the contractor. However, the fixed-price nature of this contract and the oversight mechanisms are designed to mitigate some of these risks by ensuring clear deliverables and accountability. The competitive award process also suggests that the government sought the best available option at the time of award.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Accounting, Tax Preparation, Bookkeeping, and Payroll Services › Offices of Certified Public Accountants

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1 MANHATTAN WEST, NEW YORK, NY, 10001

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

Financial Breakdown

Contract Ceiling: $25,372,003

Exercised Options: $17,654,324

Current Obligation: $14,836,983

Actual Outlays: $343,921

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: GS00F290CA

IDV Type: FSS

Timeline