DHS awards $5.4M contract for customized compensation analysis, building on prior work

Contract Overview

Contract Amount: $5,395,953 ($5.4M)

Contractor: AON Consulting, Inc.

Awarding Agency: Department of Homeland Security

Start Date: 2021-05-25

End Date: 2026-05-24

Contract Duration: 1,825 days

Daily Burn Rate: $3.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: TIME AND MATERIALS

Sector: Other

Official Description: CONTRACTOR SUPPORT IS NEEDED FOR ONGOING CUSTOMIZED COMPENSATION ANALYSIS SERVICES BASED ON WORK COMPLETED BY DHS AND PERFORMED BY A PRIOR CONTRACTOR. REQUIRED SERVICES WILL COVER SEVERAL CATEGORIES OF WORK: COMPENSATION DESIGN, ANALYSIS/IMPLEMENTATI

Place of Performance

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

State: District of Columbia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $5.4 million to AON CONSULTING, INC. for work described as: CONTRACTOR SUPPORT IS NEEDED FOR ONGOING CUSTOMIZED COMPENSATION ANALYSIS SERVICES BASED ON WORK COMPLETED BY DHS AND PERFORMED BY A PRIOR CONTRACTOR. REQUIRED SERVICES WILL COVER SEVERAL CATEGORIES OF WORK: COMPENSATION DESIGN, ANALYSIS/IMPLEMENTATI Key points: 1. Contract focuses on compensation design and analysis, leveraging previous contractor's efforts. 2. Full and open competition was utilized, suggesting a broad market search. 3. The contract duration of five years indicates a need for sustained support. 4. Services are categorized under Human Resources Consulting, a specialized field. 5. The contract type is Time and Materials, which can pose cost control challenges. 6. This award represents a significant investment in understanding and refining compensation structures.

Value Assessment

Rating: good

The contract value of $5.4 million over five years for specialized compensation analysis appears reasonable given the scope. Benchmarking against similar HR consulting contracts is challenging without more granular data on specific deliverables. However, the agency is building on prior work, which can lead to efficiencies and potentially better value than starting from scratch. The Time and Materials pricing structure warrants close monitoring to ensure costs remain aligned with the work performed.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. This approach generally fosters a competitive environment, which can lead to more favorable pricing and innovative solutions. The fact that two bids were received suggests a moderate level of competition for this specialized service.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it increases the likelihood of obtaining services at a fair market price and encourages a wider pool of qualified contractors to participate.

Public Impact

Federal employees within DHS will benefit from potentially improved and more equitable compensation structures. The services delivered will support the development and analysis of customized compensation plans. The geographic impact is primarily within the District of Columbia, where DHS headquarters is located. Workforce implications include ensuring competitive and fair compensation to attract and retain talent within DHS.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and Materials contract type can lead to cost overruns if not closely managed.
Reliance on prior contractor's work may limit innovation if not critically assessed.
The specific metrics for success in compensation analysis are not detailed, posing potential performance ambiguity.

Positive Signals

Building on existing work by a prior contractor can lead to faster service delivery and reduced ramp-up time.
Full and open competition suggests a thorough vetting process for potential contractors.
The five-year duration indicates a strategic commitment to addressing compensation challenges.

Sector Analysis

This contract falls within the Human Resources Consulting Services sector, a segment of the broader professional services market. This sector is characterized by specialized expertise in areas like compensation, benefits, and organizational development. The market size for HR consulting is substantial, with government contracts forming a significant portion. This specific award is for customized compensation analysis, a niche requiring deep understanding of public sector pay scales and structures.

Small Business Impact

The contract was awarded to AON CONSULTING, INC., and there is no indication of a small business set-aside. Given the specialized nature of compensation analysis and the prime contractor's likely size, it is possible that subcontracting opportunities for small businesses may exist, particularly for specific data collection or analytical support tasks. However, the primary focus appears to be on the prime contractor's expertise.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of Homeland Security's Office of Procurement Operations and the program office responsible for compensation. The Time and Materials contract type necessitates diligent monitoring of labor hours and costs to ensure value for money. Transparency will depend on the agency's reporting practices and the availability of contract performance data. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Human Resources Consulting Services
Compensation and Benefits Analysis
DHS Workforce Management
Federal Employee Compensation

Risk Flags

Potential for cost overruns due to Time and Materials contract type.
Need for robust oversight to ensure value for money.
Reliance on prior contractor's work requires careful validation.
Defining clear performance metrics for compensation analysis can be challenging.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $5.4 million to AON CONSULTING, INC.. CONTRACTOR SUPPORT IS NEEDED FOR ONGOING CUSTOMIZED COMPENSATION ANALYSIS SERVICES BASED ON WORK COMPLETED BY DHS AND PERFORMED BY A PRIOR CONTRACTOR. REQUIRED SERVICES WILL COVER SEVERAL CATEGORIES OF WORK: COMPENSATION DESIGN, ANALYSIS/IMPLEMENTATI

Who is the contractor on this award?

The obligated recipient is AON CONSULTING, INC..

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (Office of Procurement Operations).

What is the total obligated amount?

The obligated amount is $5.4 million.

What is the period of performance?

Start: 2021-05-25. End: 2026-05-24.

What is the specific track record of AON CONSULTING, INC. in performing similar compensation analysis for federal agencies?

AON CONSULTING, INC. has a significant history of providing consulting services, including compensation analysis, to various entities. While specific details on past federal contracts for this exact service are not provided in the summary data, Aon Hewitt (a predecessor or related entity) has been involved in large-scale compensation studies and benefits consulting for both public and private sector clients. Their expertise typically spans market analysis, pay equity assessments, and the design of executive and broad-based compensation programs. To fully assess their track record for this specific DHS contract, a deeper dive into their past performance evaluations, client references, and any documented successes or challenges on similar government engagements would be necessary. This would include examining their experience with federal pay regulations and reporting requirements.

How does the awarded amount of $5.4 million compare to the cost of similar compensation analysis contracts awarded by other federal agencies?

Benchmarking the $5.4 million award for customized compensation analysis against similar federal contracts requires access to a broader dataset of government procurements. However, for a five-year engagement involving specialized HR consulting, this figure appears to be within a reasonable range, especially considering the complexity of federal compensation structures and the need for ongoing analysis. Contracts for comprehensive HR consulting services, particularly those involving detailed compensation studies, can range from hundreds of thousands to several million dollars depending on the scope, duration, and number of employees or agencies covered. The fact that this contract builds on prior work may indicate a more efficient pricing structure compared to a completely new initiative. Without specific details on the deliverables and the number of personnel assigned, a precise comparison is difficult, but the amount suggests a substantial and sustained effort.

What are the primary risks associated with a Time and Materials (T&M) contract for compensation analysis, and how are they mitigated?

The primary risk with a Time and Materials (T&M) contract for compensation analysis is the potential for cost overruns, as the final price is not fixed and depends on the actual labor hours and material costs incurred. This can lead to budget uncertainty for the agency. Another risk is the contractor potentially extending the time spent on tasks to increase billable hours. Mitigation strategies typically involve robust oversight from the contracting officer and the program team, including detailed review of timesheets, regular progress reports, and clear definition of tasks and deliverables. Setting not-to-exceed (NTE) limits on the contract and establishing performance metrics that tie payment to successful outcomes can also help manage risks. For this specific contract, the agency's decision to build on prior work might imply a clearer understanding of the effort required, potentially reducing the risk of unforeseen cost increases.

How effective is the current compensation structure at DHS in attracting and retaining talent, and how will this contract contribute to improving it?

The effectiveness of DHS's current compensation structure in attracting and retaining talent is a key driver for this contract. While the provided data doesn't detail current effectiveness metrics, the need for 'ongoing customized compensation analysis services' suggests that DHS recognizes potential challenges or opportunities for improvement. This contract aims to provide the analytical foundation for refining compensation strategies. By analyzing existing pay scales, market competitiveness, and internal equity, the contractor will help DHS identify areas where compensation may be falling short. The insights gained will inform decisions on adjustments to base pay, locality pay, bonuses, and other incentives, ultimately supporting DHS's goal of maintaining a skilled and motivated workforce. The success of this contract will be measured by its ability to provide actionable recommendations that lead to measurable improvements in recruitment and retention.

What is the historical spending pattern for compensation analysis services at DHS, and how does this $5.4 million award fit into that trend?

The provided data indicates this is a new definitive contract awarded in May 2021 for $5.4 million over five years. It explicitly states that the 'CONTRACTOR SUPPORT IS NEEDED FOR ONGOING CUSTOMIZED COMPENSATION ANALYSIS SERVICES BASED ON WORK COMPLETED BY DHS AND PERFORMED BY A PRIOR CONTRACTOR.' This suggests a continuation or enhancement of previous efforts rather than a completely new spending category. Without historical data on prior contracts for similar services, it's difficult to establish a precise spending trend. However, the five-year duration and the substantial award amount imply a significant and sustained commitment by DHS to compensation analysis. This contract likely represents a strategic investment to ensure competitive and equitable compensation practices, indicating that DHS views this as an ongoing requirement critical to its human capital management.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Human Resources Consulting Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: TWO STEP

Solicitation ID: 70RDAD21R00000001

Offers Received: 2

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 2001 K ST NW STE 625 N, WASHINGTON, DC, 20006

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $9,609,757

Exercised Options: $6,254,913

Current Obligation: $5,395,953

Actual Outlays: $2,859,437

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline