DOT awards $8M contract to Ernst & Young for AVS Data Modernization, focusing on administrative management consulting

Contract Overview

Contract Amount: $8,006,057 ($8.0M)

Contractor: Ernst & Young LLP

Awarding Agency: Department of Transportation

Start Date: 2023-08-01

End Date: 2026-07-31

Contract Duration: 1,095 days

Daily Burn Rate: $7.3K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: AVS DATA MODERNIZATION

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20005

State: District of Columbia Government Spending

Plain-Language Summary

Department of Transportation obligated $8.0 million to ERNST & YOUNG LLP for work described as: AVS DATA MODERNIZATION Key points: 1. Contract value appears reasonable for a multi-year data modernization effort. 2. Full and open competition suggests a competitive bidding process. 3. Potential risks include contractor performance and scope creep over the contract duration. 4. This contract supports the Federal Aviation Administration's critical data infrastructure. 5. The administrative management consulting sector is a common area for federal IT modernization. 6. The contract is a delivery order, indicating it's part of a larger indefinite-delivery contract.

Value Assessment

Rating: good

The contract value of approximately $8 million over three years for data modernization services is within a reasonable range for a project of this scope. Benchmarking against similar administrative management consulting contracts for large-scale data initiatives suggests this pricing is competitive. The firm-fixed-price structure provides cost certainty, although the overall value will depend on the successful delivery of modernization milestones and the realization of anticipated efficiencies.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. While the specific number of bidders is not provided, this method generally fosters a competitive environment, which should lead to better pricing and service offerings for the government. The open nature of the competition suggests that the FAA sought the best value proposition available in the market for its data modernization needs.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure the most cost-effective solution for modernizing critical data systems, potentially leading to reduced long-term operational costs and improved service delivery.

Public Impact

The Federal Aviation Administration (FAA) is the primary beneficiary, gaining modernized data systems. Services delivered include administrative management and general management consulting, crucial for data infrastructure. The geographic impact is primarily within the District of Columbia, where the FAA's headquarters are located. Workforce implications may involve upskilling existing FAA personnel or leveraging external expertise from Ernst & Young.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for contractor lock-in if data systems become highly proprietary.
Risk of cost overruns if project scope expands beyond initial estimates.
Dependency on contractor expertise could pose challenges during transition phases.

Positive Signals

Ernst & Young is a well-established consulting firm with experience in large-scale projects.
The firm-fixed-price contract provides budget predictability.
The contract duration allows for phased implementation and learning.
Modernizing data systems is a strategic investment that can yield long-term efficiencies.

Sector Analysis

The administrative management and general management consulting services sector is a significant market for federal agencies undertaking digital transformation and data infrastructure improvements. This contract fits within the broader trend of government agencies investing in modernizing their IT systems to enhance efficiency, security, and data analysis capabilities. Comparable spending in this sector often involves large sums for complex IT projects, with contracts ranging from millions to hundreds of millions of dollars depending on the agency and scope.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of specific subcontracting requirements for small businesses in the provided data. Therefore, the direct impact on the small business ecosystem is likely minimal. However, large prime contractors like Ernst & Young often engage small businesses for specialized services, which could indirectly benefit some small firms.

Oversight & Accountability

Oversight for this contract will likely be managed by the Federal Aviation Administration's contracting officers and program managers. Accountability measures are embedded within the firm-fixed-price delivery order structure, requiring the contractor to meet defined milestones and deliverables. Transparency is generally maintained through federal procurement databases, though specific performance metrics and oversight reports may not always be publicly accessible.

Related Government Programs

FAA Data Modernization Initiatives
Administrative Management Consulting Services
Federal IT Modernization Programs
Government Data Infrastructure Projects

Risk Flags

Potential for scope creep
Contractor performance risk
Dependency on external expertise

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $8.0 million to ERNST & YOUNG LLP. AVS DATA MODERNIZATION

Who is the contractor on this award?

The obligated recipient is ERNST & YOUNG LLP.

Which agency awarded this contract?

Awarding agency: Department of Transportation (Federal Aviation Administration).

What is the total obligated amount?

The obligated amount is $8.0 million.

What is the period of performance?

Start: 2023-08-01. End: 2026-07-31.

What is Ernst & Young's track record with similar federal data modernization contracts?

Ernst & Young (EY) has a substantial track record in providing consulting services to federal agencies, including significant engagements in IT modernization, data analytics, and digital transformation. While specific details on past FAA data modernization projects with EY are not immediately available in this dataset, the firm has a history of working with various government entities on complex projects. Their experience often spans areas like cloud migration, data warehousing, cybersecurity, and process optimization. To fully assess their track record for this specific contract, a deeper dive into their past performance on similar-sized and scoped federal contracts, including client feedback and any past performance issues, would be necessary. This would involve reviewing contract databases and agency performance reports.

How does the $8 million contract value compare to similar data modernization efforts within the federal government?

The $8 million contract value for the AVS Data Modernization project appears to be a moderate investment for a three-year data modernization effort. Federal IT modernization projects can vary widely in cost, from smaller, targeted upgrades costing hundreds of thousands to comprehensive overhauls running into hundreds of millions or even billions of dollars. For a project focused on administrative management and general consulting services related to data systems, $8 million over three years suggests a scope that is significant but not at the highest end of federal IT spending. It implies a focus on strategic planning, process improvement, and potentially the initial phases of system integration or upgrade, rather than a complete ground-up system rebuild across the entire agency.

What are the primary risks associated with this contract for the Federal Aviation Administration?

The primary risks associated with this contract include potential contractor performance issues, where Ernst & Young may not deliver the modernization outcomes as specified, leading to delays or suboptimal results. Scope creep is another significant risk; the project's objectives could expand beyond the initial agreement, leading to cost overruns or extended timelines, despite the firm-fixed-price structure. There's also a risk of technical obsolescence if the chosen modernization path is not future-proof or if implementation is significantly delayed. Furthermore, a dependency on external consultants for critical data infrastructure knowledge could pose challenges for long-term internal management and maintenance of the modernized systems once the contract ends.

How effective is the 'full and open competition' strategy likely to be in ensuring value for taxpayers on this contract?

The 'full and open competition' strategy is generally considered the most effective method for ensuring value for taxpayers in federal contracting. By allowing all responsible sources to bid, it maximizes the pool of potential offerors, thereby increasing the likelihood of receiving competitive pricing and innovative solutions. This approach fosters price discovery and encourages contractors to offer their best value proposition to win the contract. For this $8 million AVS Data Modernization contract, open competition suggests that the FAA sought to leverage market forces to secure high-quality consulting services at a reasonable cost. The success in achieving value will ultimately depend on the clarity of the requirements, the evaluation criteria used, and the rigor of post-award contract management.

What are the historical spending patterns for administrative management and general management consulting services by the FAA?

Historical spending patterns for administrative management and general management consulting services by the FAA, and the broader Department of Transportation, typically reflect the agency's needs for strategic planning, organizational efficiency improvements, IT modernization support, and program management. Agencies like the FAA often contract for these services to augment internal expertise, manage complex projects, or implement new government-wide initiatives. While the specific historical dollar amounts for the FAA in this particular NAICS code (541611) are not provided here, it's common for such agencies to allocate significant portions of their budget to consulting services, especially during periods of technological change or organizational restructuring. Analyzing past spending trends would reveal the frequency and scale of such contracts, helping to contextualize the current $8 million award.

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) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

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: $8,580,877

Exercised Options: $8,006,057

Current Obligation: $8,006,057

Actual Outlays: $6,550,907

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: 693KA919D00004

IDV Type: IDC

Timeline