DOT awards $6.3M contract for enterprise services support to Ernst & Young LLP

Contract Overview

Contract Amount: $6,286,164 ($6.3M)

Contractor: Ernst & Young LLP

Awarding Agency: Department of Transportation

Start Date: 2024-01-17

End Date: 2027-01-11

Contract Duration: 1,090 days

Daily Burn Rate: $5.8K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: TIME AND MATERIALS

Sector: Other

Official Description: AJM-3 ENTERPRISE SERVICES SUPPORT

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20591

State: District of Columbia Government Spending

Plain-Language Summary

Department of Transportation obligated $6.3 million to ERNST & YOUNG LLP for work described as: AJM-3 ENTERPRISE SERVICES SUPPORT Key points: 1. Contract awarded via full and open competition, suggesting a robust market for these services. 2. The contract duration of approximately three years provides a stable period for service delivery. 3. The use of Time and Materials pricing may present cost control challenges if not closely managed. 4. The North American Industry Classification System (NAICS) code 541611 indicates a focus on management consulting. 5. The contract's value is relatively modest within the broader federal consulting landscape. 6. Performance is expected in Washington D.C., indicating a concentrated geographic impact.

Value Assessment

Rating: good

The contract value of $6.3 million over approximately three years for administrative management and general management consulting services appears reasonable. Benchmarking against similar contracts for enterprise services support within the Department of Transportation or other agencies would provide a more precise value-for-money assessment. However, the full and open competition suggests that pricing was likely scrutinized by multiple bidders, which typically drives competitive rates. The Time and Materials (T&M) pricing model, while flexible, requires diligent oversight to ensure costs remain within expectations and do not escalate beyond the anticipated value.

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 a bid. The specific number of bidders is not provided, but the nature of the competition suggests that multiple firms likely vied for this opportunity. This level of competition is generally favorable for price discovery and ensures that the government receives proposals from a wide range of qualified contractors, potentially leading to better service offerings and more competitive pricing.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down costs and improve the quality of services received. It ensures that public funds are used efficiently by selecting the most cost-effective and capable provider.

Public Impact

The Federal Aviation Administration (FAA) within the Department of Transportation is the primary beneficiary of these enterprise services. The contract will deliver administrative management and general management consulting services to support the agency's operations. Services are expected to be performed in Washington D.C., impacting the local professional services workforce. The contract aims to enhance the efficiency and effectiveness of the FAA's management functions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and Materials (T&M) pricing can lead to cost overruns if not managed rigorously, as contractor effort is billed directly.
The specific deliverables and performance metrics are not detailed, which could impact accountability.
Reliance on a single contractor for enterprise services support could create vendor lock-in risks.

Positive Signals

Awarded through full and open competition, indicating a competitive bidding process.
The contract duration of over two years provides stability for service delivery and planning.
Ernst & Young LLP is a well-established firm with significant experience in management consulting.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically management consulting. This sector is a significant component of federal spending, with agencies frequently contracting for expertise in areas like administrative management, strategic planning, and operational efficiency. The market for these services is competitive, with numerous large and small firms offering specialized capabilities. The value of this contract, approximately $6.3 million, is moderate within the context of large federal consulting engagements, but it represents a crucial investment for the FAA's internal operations.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false) and there is no indication of small business subcontracting requirements (sb: false). Therefore, this award does not directly benefit the small business ecosystem through set-asides or mandated subcontracting. The prime contractor, Ernst & Young LLP, is a large business, and the contract's structure does not appear to prioritize small business participation.

Oversight & Accountability

Oversight for this contract will likely be managed by the contracting officer and the program office within the Federal Aviation Administration. Performance monitoring, invoice review, and adherence to contract terms are standard oversight mechanisms. Transparency is generally maintained through contract award databases and public reporting, although detailed performance metrics may not always be publicly disclosed. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Federal Aviation Administration Operations Support
Department of Transportation Management Consulting Services
Administrative Management and General Management Consulting Services Contracts
Enterprise Resource Planning Support Contracts

Risk Flags

Potential for cost overruns due to Time and Materials pricing.
Lack of detailed public information on specific deliverables and performance metrics.
Risk of vendor lock-in if services become deeply integrated without clear exit strategy.

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $6.3 million to ERNST & YOUNG LLP. AJM-3 ENTERPRISE SERVICES SUPPORT

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 $6.3 million.

What is the period of performance?

Start: 2024-01-17. End: 2027-01-11.

What is the track record of Ernst & Young LLP in performing similar federal contracts, particularly within the Department of Transportation?

Ernst & Young LLP (EY) is a major global professional services firm with extensive experience in providing management consulting, technology, and advisory services to both government and commercial clients. Within the federal sector, EY has a significant history of performing contracts across various agencies, including the Department of Transportation (DOT). Their experience often encompasses areas such as financial management, strategic planning, IT modernization, cybersecurity, and operational efficiency improvements. While specific details of past DOT contracts would require deeper database analysis, EY's overall federal portfolio suggests a strong capability to handle complex enterprise services support. Their performance on previous government contracts is typically assessed through contract performance evaluations (e.g., CPARS), which would provide insights into their reliability, quality of work, and adherence to schedule and budget on similar engagements.

How does the awarded amount of $6.3 million compare to similar enterprise services support contracts within the FAA or DOT?

The awarded amount of $6.3 million for enterprise services support over approximately three years represents a moderate investment for a federal agency like the FAA. To benchmark this value effectively, one would need to compare it against contracts with similar scope, duration, and service categories (NAICS 541611) awarded by the FAA, DOT, or comparable agencies. For instance, contracts for broader IT modernization or large-scale program management might reach tens or hundreds of millions of dollars. Conversely, smaller, more specialized consulting tasks could be in the hundreds of thousands. Given the 'Administrative Management and General Management Consulting Services' classification, $6.3 million suggests a substantial but not massive engagement, likely focused on improving internal processes, strategic guidance, or operational support rather than a complete system overhaul. Without direct comparative contract data, it's difficult to definitively state if it's high or low, but it falls within a common range for significant consulting support.

What are the primary risks associated with the Time and Materials (T&M) pricing structure used in this contract?

The primary risk associated with the Time and Materials (T&M) pricing structure is the potential for cost overruns and a lack of definitive cost control. In a T&M contract, the government pays the contractor for the actual labor hours expended at agreed-upon hourly rates, plus the cost of materials used. This structure offers flexibility, allowing for adjustments in scope and effort as needs evolve. However, it places a significant burden on the government to closely monitor contractor performance, ensure efficient work practices, and validate the necessity of all hours billed and materials consumed. If oversight is insufficient, contractors may have less incentive to control costs or optimize efficiency, potentially leading to expenditures exceeding initial estimates or the value derived. This contrasts with fixed-price contracts, where the contractor assumes more risk for cost overruns.

What specific enterprise services will Ernst & Young LLP be providing under this contract?

The contract specifies 'Administrative Management and General Management Consulting Services' under NAICS code 541611. While the specific deliverables are not detailed in the provided summary data, this classification typically encompasses a range of services aimed at improving an organization's efficiency, effectiveness, and strategic direction. These could include areas such as organizational analysis, process improvement, strategic planning, policy development, program management support, financial management consulting, human capital strategy, and change management. The 'enterprise services support' designation suggests these services are intended to enhance the overall operational framework and management functions of the Federal Aviation Administration, rather than focusing on a single, isolated project. The exact nature of the services will be defined in the contract's Statement of Work (SOW).

How does this contract fit into the broader spending patterns for management consulting services within the federal government?

This $6.3 million contract for enterprise services support aligns with a significant and consistent trend of federal agencies utilizing external expertise for management consulting. Federal spending on management and professional services, often categorized under NAICS codes like 541611, is substantial, reflecting the complexity of government operations and the need for specialized skills. Agencies frequently contract for support in areas like strategic planning, organizational reform, IT strategy, financial management, and operational efficiency. The Department of Transportation, and specifically the FAA, regularly procures such services to manage its vast infrastructure and regulatory responsibilities. This contract represents a typical investment within this category, contributing to the overall federal expenditure on consulting, which aims to improve government performance and achieve policy objectives.

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: TIME AND MATERIALS (Y)

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: $13,426,470

Exercised Options: $6,286,164

Current Obligation: $6,286,164

Actual Outlays: $5,024,758

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: 693KA919D00004

IDV Type: IDC

Timeline