DHS awards $50.7M IT contract to Deloitte for EBMSS support, raising value-for-money questions

Contract Overview

Contract Amount: $50,688,920 ($50.7M)

Contractor: Deloitte Consulting LLP

Awarding Agency: Department of Homeland Security

Start Date: 2019-09-30

End Date: 2021-06-29

Contract Duration: 638 days

Daily Burn Rate: $79.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: OFO EBMSS SUPPORT SERVICES

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20229

State: District of Columbia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $50.7 million to DELOITTE CONSULTING LLP for work described as: OFO EBMSS SUPPORT SERVICES Key points: 1. Contract value appears high relative to duration and scope, warranting further value-for-money assessment. 2. Sole-source award to Deloitte suggests limited competition, potentially impacting price discovery. 3. Risk indicators are moderate, with no immediate red flags but a need for performance monitoring. 4. The contract supports critical border management systems, highlighting its importance to national security. 5. Positioned within the IT services sector, specifically focusing on computer systems design. 6. The contract's fixed-price nature offers some cost certainty but may limit flexibility.

Value Assessment

Rating: fair

The contract's total value of $50.7 million over approximately two years (638 days) suggests a significant investment in IT support. Benchmarking against similar IT support contracts for large federal agencies is crucial to determine if the pricing is competitive. Without specific details on the services rendered and the complexity of the EBMSS system, a definitive value assessment is challenging. However, the per-day cost is substantial, indicating a need for rigorous performance and cost oversight to ensure taxpayer funds are used efficiently.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, which is a positive sign for robust price discovery. However, the data indicates only 3 bids were received. While competition existed, a low number of bidders could still lead to less aggressive pricing than a more crowded field. Further analysis would be beneficial to understand why only three entities submitted proposals for this significant IT support contract.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages multiple vendors to bid, driving down prices. However, with only three bidders, the potential for significant cost savings may have been limited compared to a scenario with many more competitive offers.

Public Impact

Benefits U.S. Customs and Border Protection (CBP) by ensuring the operational continuity of the Electronic Border Management Systems. Delivers essential computer systems design and support services critical for border security operations. Geographic impact is national, supporting CBP's nationwide border management functions. Workforce implications include the potential for Deloitte to utilize its IT specialists, impacting the federal IT workforce landscape.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if scope creep occurs within the fixed-price contract.
Dependence on a single contractor for critical IT systems could pose a risk if performance falters.
Limited number of bidders may indicate market concentration or barriers to entry for other firms.

Positive Signals

Awarded through full and open competition, suggesting a fair process.
Fixed-price contract type provides cost certainty for the government.
Contract supports a critical national security function for CBP.

Sector Analysis

This contract falls within the IT services sector, specifically Computer Systems Design Services (NAICS 541512). This sector is characterized by high demand for specialized technical expertise to support complex government systems. The market size for federal IT services is substantial, with agencies continually investing in modernization and maintenance of critical infrastructure. This contract represents a significant portion of spending within this niche, supporting the operational needs of a major component of the Department of Homeland Security.

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 arising from a set-aside provision. The prime contractor, Deloitte Consulting LLP, is a large business. Analysis of subcontracting plans, if any were required, would be necessary to determine the extent of small business participation.

Oversight & Accountability

Oversight for this contract would primarily reside with the U.S. Customs and Border Protection (CBP) contracting officers and program managers within the Department of Homeland Security. Transparency is facilitated through contract award databases like FPDS. Accountability measures are typically embedded in the contract terms, including performance standards and payment schedules. The Inspector General for DHS would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Department of Homeland Security IT Modernization Programs
U.S. Customs and Border Protection Systems Modernization
Federal Civilian IT Services Contracts
Computer Systems Design and Related Services

Risk Flags

Potential for limited competition despite full and open award.
High daily cost warrants scrutiny of value for money.
Dependence on contractor for critical systems.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $50.7 million to DELOITTE CONSULTING LLP. OFO EBMSS SUPPORT SERVICES

Who is the contractor on this award?

The obligated recipient is DELOITTE CONSULTING LLP.

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (U.S. Customs and Border Protection).

What is the total obligated amount?

The obligated amount is $50.7 million.

What is the period of performance?

Start: 2019-09-30. End: 2021-06-29.

What is the specific nature of the EBMSS support services provided by Deloitte?

The EBMSS (Electronic Border Management Systems) support services provided by Deloitte Consulting LLP under this contract encompass a range of computer systems design and related services. While the specific tasks are not detailed in the provided data, typical services in this category include system analysis, design, development, integration, testing, and maintenance of complex IT systems. For EBMSS, this likely involves ensuring the functionality, reliability, and security of systems used for managing border crossings, cargo tracking, and other critical border operations. The contract's duration and value suggest ongoing support, potentially including software updates, bug fixes, system enhancements, and user support to maintain the operational effectiveness of these vital border management tools.

How does the $50.7 million contract value compare to similar IT support contracts within DHS or CBP?

Benchmarking the $50.7 million contract value requires comparing it to similar IT support and systems design contracts awarded by DHS and CBP, considering factors like contract duration, scope of services, and complexity. Without access to a comprehensive database of comparable contracts, a precise comparison is difficult. However, for a two-year contract (638 days), this value translates to approximately $79,450 per day. This daily rate is substantial and suggests a high level of service or specialized expertise is required. Agencies often award multi-year IT support contracts in the tens to hundreds of millions of dollars, depending on the criticality and scale of the systems involved. Further analysis of contracts for similar border management or law enforcement IT systems would be needed to determine if this rate is competitive or indicative of premium pricing.

What are the key performance indicators (KPIs) or service level agreements (SLAs) associated with this contract?

The provided data does not specify the Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) for this contract. However, for a critical IT support contract like EBMSS for CBP, one would expect robust KPIs and SLAs to be in place. These would likely focus on system availability and uptime (e.g., 99.9% availability), response times for issue resolution (e.g., critical issues resolved within 4 hours), performance metrics (e.g., system processing speed), and security compliance. Adherence to these metrics would typically be tied to contractor performance evaluations and potentially payment schedules, ensuring that Deloitte meets the operational requirements for the EBMSS.

What is Deloitte Consulting LLP's track record with similar large-scale IT contracts for federal agencies?

Deloitte Consulting LLP has a significant track record of performing large-scale IT contracts for various federal agencies, including the Department of Homeland Security. They are a major federal contractor known for providing a wide range of professional services, including IT consulting, systems integration, and cybersecurity. Their experience often involves complex, mission-critical systems. While specific performance details for this particular EBMSS contract are not in the provided data, Deloitte's general standing as a large, established federal IT service provider suggests they possess the resources and expertise to handle such engagements. However, as with any large contract, ongoing performance monitoring is essential.

Given the 'full and open competition' award type, why were there only 3 bids received?

The fact that only three bids were received for a contract awarded under 'full and open competition' could stem from several factors. Firstly, the technical complexity and specialized nature of the EBMSS support services might limit the number of qualified bidders. Developing and submitting a compliant proposal for such a system requires significant expertise and resources. Secondly, the contract's value and duration, while substantial, might not have been large enough to attract a wider array of large prime contractors, or perhaps the specific requirements favored a niche set of capabilities. Thirdly, there could be existing relationships or market dynamics that favor certain players. Finally, the bidding process itself, including pre-solicitation notices and industry days, may not have reached a broader audience, or potential bidders may have assessed the requirements as too challenging or the profit margins too low.

What is the historical spending trend for EBMSS support services at CBP?

The provided data only pertains to a single contract award for OFO EBMSS SUPPORT SERVICES valued at $50.7 million. It does not offer historical spending trends for EBMSS support services at CBP. To understand historical spending, one would need to analyze contract awards for EBMSS or similar systems over multiple fiscal years. This would involve searching federal procurement databases for prior contracts related to EBMSS, identifying the awarded amounts, contract types, and durations, and then aggregating this data to identify patterns, increases, or decreases in spending. Without this historical context, it's difficult to determine if the current $50.7 million award represents a typical, increased, or decreased level of investment.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 70B03C19Q00000164

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Deloitte Financial Advisory Services LLP

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: $50,688,920

Exercised Options: $50,688,920

Current Obligation: $50,688,920

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: GS35F0617Y

IDV Type: FSS

Timeline