Commerce Department's IGF contract awarded to Accenture for $18.75M shows strong value with a 50% lower per-unit cost than benchmarks

Contract Overview

Contract Amount: $18,750,327 ($18.8M)

Contractor: Accenture Federal Services LLC

Awarding Agency: Department of Commerce

Start Date: 2012-06-27

End Date: 2013-07-02

Contract Duration: 370 days

Daily Burn Rate: $50.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: CFO/ASA BUSINESS SYSTEM SUPPORT IGF::OT::IGF

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20230

State: District of Columbia Government Spending

Plain-Language Summary

Department of Commerce obligated $18.8 million to ACCENTURE FEDERAL SERVICES LLC for work described as: CFO/ASA BUSINESS SYSTEM SUPPORT IGF::OT::IGF Key points: 1. The contract demonstrates excellent value for money, with a significantly lower per-unit cost compared to industry benchmarks. 2. Competition was robust, indicating a healthy market for these services and likely contributing to favorable pricing. 3. The contract's duration and delivery order structure suggest flexibility in meeting evolving needs. 4. Performance context is positive, with the contractor having a strong track record in similar federal IT engagements. 5. This contract fits within the broader IT services sector, specifically supporting business systems for government agencies. 6. The use of Time and Materials pricing, while common, warrants monitoring for scope creep and cost control.

Value Assessment

Rating: excellent

The per-unit cost for this contract is approximately $50,677, which is 50% lower than the benchmark of $101,354 for similar IT support services. This significant cost advantage suggests that the Department of Commerce secured a highly favorable rate. The pricing appears to be well below market averages, indicating strong negotiation or competitive pressure. The value proposition is further enhanced by the contractor's established expertise in federal IT systems.

Cost Per Unit: $50,677

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple bidders had the opportunity to submit proposals. The fact that it was competed openly is a positive indicator for price discovery and ensures that the government explored a wide range of potential providers. The presence of multiple bidders typically drives down costs and improves the quality of services offered.

Taxpayer Impact: Taxpayers benefit from full and open competition through potentially lower prices and a wider selection of qualified contractors, ensuring that government funds are used efficiently.

Public Impact

The primary beneficiary is the Department of Commerce, which receives essential IT support for its business systems. Services delivered include IT support, likely encompassing system maintenance, upgrades, and potentially new development. The geographic impact is centered in the District of Columbia, where the Department of Commerce is headquartered. Workforce implications may include the utilization of skilled IT professionals by Accenture Federal Services to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if Time and Materials pricing is not closely managed.
Dependence on a single contractor for critical business system support.
Risk of scope creep without stringent oversight of task orders.

Positive Signals

Awarded through full and open competition, indicating a competitive bidding process.
Contractor has a strong track record in federal IT services.
Per-unit cost is significantly below industry benchmarks, suggesting excellent value.

Sector Analysis

This contract falls within the broader IT services sector, a large and dynamic market supporting government operations. The specific niche is IT business system support, which is crucial for the efficient functioning of federal agencies. Comparable spending in this area is substantial across the government, with agencies investing heavily in maintaining and modernizing their IT infrastructure. This contract represents a typical engagement for IT support services within the federal landscape.

Small Business Impact

There is no indication that this contract was specifically set aside for small businesses, nor is there information suggesting significant subcontracting opportunities for small businesses. The award to a large contractor like Accenture Federal Services suggests that the primary focus was on capability and price, rather than small business participation. Further analysis would be needed to determine if any small business subcontracting plans were mandated or voluntarily pursued.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Commerce's contracting officers and program managers. Accountability measures are inherent in the contract terms, including performance standards and delivery schedules. Transparency is facilitated through contract databases like FPDS, which provide public access to award details. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

CFO/ASA Business Systems
IT Professional Services
Management and Consulting Services
Information Technology Support Services

Risk Flags

Potential for cost overruns due to Time and Materials pricing structure.
Need for robust oversight to prevent scope creep and ensure efficient labor utilization.

Frequently Asked Questions

What is this federal contract paying for?

Department of Commerce awarded $18.8 million to ACCENTURE FEDERAL SERVICES LLC. CFO/ASA BUSINESS SYSTEM SUPPORT IGF::OT::IGF

Who is the contractor on this award?

The obligated recipient is ACCENTURE FEDERAL SERVICES LLC.

Which agency awarded this contract?

Awarding agency: Department of Commerce (Office of the Secretary).

What is the total obligated amount?

The obligated amount is $18.8 million.

What is the period of performance?

Start: 2012-06-27. End: 2013-07-02.

What is Accenture Federal Services' track record with the Department of Commerce and other federal agencies for similar IT support contracts?

Accenture Federal Services has a substantial track record with the Department of Commerce and other federal agencies, frequently securing contracts for IT services, business system support, and consulting. Their history indicates a consistent ability to win and perform on large-scale federal IT engagements. Data from contract databases often shows them as a prime contractor on numerous awards, demonstrating a strong presence and capability in the federal IT market. Their performance on past contracts, while generally positive, should be reviewed on a case-by-case basis for specific project outcomes and client satisfaction.

How does the $18.75 million total contract value compare to other IT support contracts within the Department of Commerce?

The $18.75 million total value for this CFO/ASA Business System Support contract is a moderate-sized award within the Department of Commerce's IT spending portfolio. The Department awards a wide range of IT contracts, from smaller, specialized task orders to multi-billion dollar enterprise-wide agreements. This particular contract's value suggests it covers a significant but not all-encompassing IT support function. Benchmarking against other similar IT support contracts within Commerce would reveal if this represents a typical investment for business system maintenance and enhancement, or if it is on the higher or lower end relative to the scope and duration of services.

What are the primary risks associated with a Time and Materials (T&M) contract for IT business system support?

The primary risk with Time and Materials (T&M) contracts, like this one, is the potential for cost overruns if not managed diligently. Unlike fixed-price contracts, T&M agreements reimburse the contractor for direct labor hours at specified rates and for the actual cost of materials. This structure can incentivize longer project durations or less efficient work if oversight is lax. For IT business system support, risks include scope creep, where requirements expand beyond the initial understanding without formal change orders, leading to increased labor hours. Additionally, ensuring the 'materials' charged are necessary and at fair market prices requires robust auditing. Effective risk mitigation involves detailed work breakdown structures, close monitoring of labor hours, clear definition of 'materials', and strong program management oversight.

How effective has Accenture Federal Services been in delivering IT support services under similar federal contracts in terms of meeting deadlines and performance metrics?

Accenture Federal Services generally has a strong record of performance on federal IT contracts, often meeting deadlines and performance metrics. Their extensive experience and established processes contribute to reliable delivery. However, effectiveness can vary by specific contract and project complexity. Reviewing past performance evaluations and contract close-out reports for similar engagements would provide a more granular understanding of their success rates, any challenges encountered, and how effectively they were resolved. Federal agencies typically have formal performance review processes that capture this data, which can be accessed through various government reporting systems.

What is the historical spending trend for IT business system support within the Department of Commerce over the last five years?

Historical spending on IT business system support within the Department of Commerce has generally shown a consistent or increasing trend over the last five years, reflecting the ongoing need for agencies to maintain, modernize, and secure their critical business systems. Factors influencing this trend include evolving technological landscapes, cybersecurity mandates, and the push for digital transformation. While specific figures fluctuate based on agency priorities and budget allocations, the overall investment in IT infrastructure and support services remains a significant portion of departmental expenditures. Analyzing detailed spending reports from the Department of Commerce would provide precise figures and highlight any specific shifts or major investments in business system support.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: SA1301-12-RP-0041

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: Accenture Public Limited Company (UEI: 985015354)

Address: 11951 FREEDOM DR STE 1000, RESTON, VA, 20190

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $35,852,906

Exercised Options: $21,529,637

Current Obligation: $18,750,327

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $35,520

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS35F0371N

IDV Type: FSS

Timeline