DHS TSA awards $37M contract for HR consulting services to Deloitte, raising questions about competition

Contract Overview

Contract Amount: $37,093,742 ($37.1M)

Contractor: Deloitte Consulting LLP

Awarding Agency: Department of Homeland Security

Start Date: 2022-06-11

End Date: 2023-11-30

Contract Duration: 537 days

Daily Burn Rate: $69.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: THE PURPOSE OF THE CONTRACT IS TO PROVIDE PERSONNEL, PAYROLL AND BENEFITS (PP&B) OPERATIONAL SERVICES TO THE DEPARTMENT OF HOMELAND SECURITY (DHS) TRANSPORTATION SECURITY ADMINISTRATION (TSA)

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22209

State: Virginia Government Spending

Plain-Language Summary

Department of Homeland Security obligated $37.1 million to DELOITTE CONSULTING LLP for work described as: THE PURPOSE OF THE CONTRACT IS TO PROVIDE PERSONNEL, PAYROLL AND BENEFITS (PP&B) OPERATIONAL SERVICES TO THE DEPARTMENT OF HOMELAND SECURITY (DHS) TRANSPORTATION SECURITY ADMINISTRATION (TSA) Key points: 1. The contract focuses on essential personnel, payroll, and benefits operational services. 2. A significant portion of the contract value is tied to a single award. 3. The firm fixed-price contract type suggests a defined scope and cost structure. 4. The duration of the contract is substantial, spanning over a year. 5. The services provided are critical for the operational continuity of TSA. 6. The lack of competition is a key area for further scrutiny.

Value Assessment

Rating: questionable

The contract value of $37 million for HR consulting services appears substantial. Benchmarking this against similar contracts for payroll and benefits administration within large federal agencies is crucial. Without comparative data on per-unit costs for services like payroll processing or benefits management, it is difficult to definitively assess value for money. The firm fixed-price nature suggests cost certainty, but the absence of competition limits the ability to determine if the price reflects market rates.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. The data explicitly states 'NOT COMPETED'. This means there was no opportunity for other qualified vendors to bid on the services. Consequently, the government did not benefit from a competitive bidding process that could potentially drive down costs or foster innovation through multiple proposals.

Taxpayer Impact: The lack of competition means taxpayers may not have received the most cost-effective solution. Without a competitive process, there is a risk that the awarded price is higher than it would have been if multiple firms had vied for the contract.

Public Impact

The primary beneficiaries are the Department of Homeland Security (DHS) and its Transportation Security Administration (TSA), ensuring the smooth operation of their HR functions. The services delivered include personnel management, payroll processing, and benefits administration, which are critical for employee support and retention. The geographic impact is primarily within the TSA's operational footprint, supporting its workforce nationwide. Workforce implications include ensuring TSA employees receive accurate and timely pay and benefits, contributing to morale and operational readiness.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competitive bidding raises concerns about potential overpayment and missed opportunities for cost savings.
Sole-source awards can limit the government's access to a wider range of innovative solutions and specialized expertise.
The substantial contract value without competition warrants close examination of the justification for the sole-source award.

Positive Signals

The contract is awarded to a well-known consulting firm, Deloitte, which may bring established expertise and reliability.
The firm fixed-price contract type provides cost certainty for the government, mitigating budget risks associated with cost overruns.
The services are essential for the operational continuity of a critical federal agency (TSA).

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 firms offering expertise in areas such as HR strategy, talent management, payroll, benefits administration, and compliance. The market size for federal HR consulting services is significant, driven by the need for agencies to manage large workforces efficiently and effectively. This contract represents a notable investment by TSA in ensuring its HR operations are robust and compliant.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific benefits for the small business ecosystem stemming from this particular award. The focus appears to be on a large, established prime contractor.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Homeland Security's internal procurement and program management offices. The contracting officer is responsible for ensuring performance and compliance. Transparency regarding the justification for the sole-source award and ongoing performance monitoring would be key oversight mechanisms. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

DHS Payroll and Benefits Administration Contracts
Federal HR Consulting Services
Transportation Security Administration Operational Support
Deloitte Consulting Contracts with Federal Government

Risk Flags

Sole-source award without clear justification
Potential for non-competitive pricing
Lack of transparency in procurement process

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $37.1 million to DELOITTE CONSULTING LLP. THE PURPOSE OF THE CONTRACT IS TO PROVIDE PERSONNEL, PAYROLL AND BENEFITS (PP&B) OPERATIONAL SERVICES TO THE DEPARTMENT OF HOMELAND SECURITY (DHS) TRANSPORTATION SECURITY ADMINISTRATION (TSA)

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 (Transportation Security Administration).

What is the total obligated amount?

The obligated amount is $37.1 million.

What is the period of performance?

Start: 2022-06-11. End: 2023-11-30.

What was the specific justification for awarding this contract on a sole-source basis?

The provided data does not include the specific justification for the sole-source award. Typically, sole-source contracts are awarded when only one responsible source is available to meet the government's needs. This could be due to unique capabilities, urgent requirements, or specific circumstances where competition is not feasible or practical. A thorough review of the contract file and any associated justifications (e.g., Justification for Other Than Full and Open Competition - JOFOC) would be necessary to understand the rationale behind this decision. Without this information, it is difficult to assess whether the sole-source award was appropriate and in the government's best interest.

How does the $37 million contract value compare to historical spending on similar HR services by TSA or other DHS components?

The provided data does not contain historical spending information for TSA or other DHS components on similar HR services. To conduct a meaningful comparison, one would need to access historical contract databases and analyze spending patterns for payroll, benefits administration, and HR consulting services over previous fiscal years. Such an analysis would help determine if this $37 million award represents an increase, decrease, or stable level of investment in these critical functions. It would also provide context for assessing whether the current award is in line with past budgetary allocations for these types of services.

What are the key performance indicators (KPIs) and 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. These are critical components of any service contract, defining the expected standards of performance and the metrics by which the contractor's success will be measured. For a contract involving payroll and benefits, KPIs might include accuracy rates for payroll processing, timeliness of benefit enrollment, and response times for employee inquiries. SLAs would outline the consequences for failing to meet these performance standards. Without this information, it is challenging to evaluate the effectiveness of Deloitte's service delivery and ensure accountability.

What is Deloitte Consulting LLP's track record with federal HR consulting contracts, particularly with DHS or TSA?

Deloitte Consulting LLP is a large and established professional services firm with a significant history of contracting with the federal government across various agencies and service areas, including HR consulting. While the provided data confirms this specific award to Deloitte for TSA, it does not detail their broader track record with federal HR services. A comprehensive assessment would require reviewing other federal contracts awarded to Deloitte for similar services, examining past performance evaluations, and looking for any reported issues or successes in previous engagements with DHS or TSA. Their extensive experience suggests a high likelihood of capability, but specific performance history is key.

Given the sole-source nature, what mechanisms are in place to ensure Deloitte is providing competitive pricing and high-quality service?

Even with a sole-source award, the government employs several mechanisms to ensure competitive pricing and high-quality service. These include robust contract oversight by the Contracting Officer's Representative (COR) and the contracting office, adherence to the contract's firm fixed-price terms, and potentially the use of cost-plus-incentive-fee or award-fee structures if performance metrics are tied to financial incentives. Furthermore, the government may conduct market research periodically to ensure the pricing remains fair and reasonable, even without a competitive bidding process. Performance evaluations and regular communication channels are also vital for maintaining service quality and addressing any issues promptly.

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: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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: $38,692,238

Exercised Options: $37,093,742

Current Obligation: $37,093,742

Actual Outlays: $39,171,629

Subaward Activity

Number of Subawards: 20

Total Subaward Amount: $12,887,893

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline