DoD awards McKinsey $18.6M for consulting services, raising questions on value and competition
Contract Overview
Contract Amount: $18,639,809 ($18.6M)
Contractor: Mckinsey & Company, Inc. Washington D.C.
Awarding Agency: Department of Defense
Start Date: 2009-06-24
End Date: 2011-02-23
Contract Duration: 609 days
Daily Burn Rate: $30.6K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: COMBINATION (TWO OR MORE)
Sector: Other
Official Description: TFBSO PRIVATE SECTOR ANALYSIS
Place of Performance
Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20005
Plain-Language Summary
Department of Defense obligated $18.6 million to MCKINSEY & COMPANY, INC. WASHINGTON D.C. for work described as: TFBSO PRIVATE SECTOR ANALYSIS Key points: 1. High contract value for consulting services. 2. Competition method impacts price discovery. 3. Potential risks associated with sole-source or limited competition. 4. IT consulting sector is highly competitive.
Value Assessment
Rating: questionable
The contract value of $18.6M for administrative and general management consulting services is substantial. Benchmarking against similar contracts is difficult without more specific service details, but the price appears high for general consulting.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which typically leads to better pricing. However, the specific details of the bidding process and the number of bidders are not provided, making it hard to assess the effectiveness of price discovery.
Taxpayer Impact: Taxpayer funds are used for this contract. While competition is intended to ensure value, the high dollar amount warrants scrutiny to confirm efficient use of public money.
Public Impact
Significant taxpayer investment in consulting services. Potential for improved government operations through expert advice. Need for transparency in how consulting outcomes are measured and utilized.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- High contract value for consulting.
- Lack of specific performance metrics.
- Potential for scope creep.
Positive Signals
- Awarded under full and open competition.
- Experienced contractor selected.
Sector Analysis
The administrative management and general management consulting services sector is broad, encompassing strategic planning, organizational design, and process improvement. Spending in this area can vary widely, but large contracts like this often focus on complex organizational challenges within large agencies like the Department of Defense.
Small Business Impact
This contract does not appear to have specific provisions for small business participation. Large consulting contracts are often awarded to major firms, potentially limiting opportunities for smaller, specialized businesses.
Oversight & Accountability
Oversight is crucial for contracts of this magnitude. The Department of the Air Force is responsible for monitoring performance and ensuring deliverables meet expectations. Robust oversight mechanisms are needed to justify the significant expenditure.
Related Government Programs
- Administrative Management and General Management Consulting Services
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- High contract value.
- Consulting services can be difficult to quantify ROI.
- Potential for contractor dependency.
- Lack of specific performance metrics in provided data.
Tags
administrative-management-and-general-ma, department-of-defense, dc, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $18.6 million to MCKINSEY & COMPANY, INC. WASHINGTON D.C.. TFBSO PRIVATE SECTOR ANALYSIS
Who is the contractor on this award?
The obligated recipient is MCKINSEY & COMPANY, INC. WASHINGTON D.C..
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Air Force).
What is the total obligated amount?
The obligated amount is $18.6 million.
What is the period of performance?
Start: 2009-06-24. End: 2011-02-23.
What specific deliverables were expected from McKinsey, and how was their performance evaluated against these deliverables to ensure value for money?
The provided data lacks specific details on deliverables and performance evaluation metrics. A thorough review would require access to the contract statement of work and performance reports. Without this, it's difficult to definitively assess the value received for the $18.6M expenditure, though the 'full and open competition' suggests an intent to secure competitive pricing.
Given the high cost, what were the key risks identified during the procurement process, and what mitigation strategies were put in place?
Key risks for such a large consulting contract could include cost overruns, failure to achieve desired outcomes, and contractor lock-in. While awarded under full and open competition, the specific risks and mitigation plans are not detailed here. Effective risk management would involve clear performance standards, regular progress reviews, and contingency planning.
How did the services provided by McKinsey contribute to the Department of the Air Force's overall mission effectiveness and efficiency?
The data does not specify the exact nature of the consulting services or their impact on mission effectiveness. To assess this, one would need to examine the project's objectives, the implemented recommendations, and any quantifiable improvements in efficiency or operational capabilities achieved as a direct result of McKinsey's engagement.
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) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 1
Pricing Type: COMBINATION (TWO OR MORE) (2)
Evaluated Preference: NONE
Contractor Details
Parent Company: Mckinsey & Company, Inc. (UEI: 001673920)
Address: 1200 19TH ST NW STE 1100, WASHINGTON, DC, 98
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $18,639,809
Exercised Options: $18,639,809
Current Obligation: $18,639,809
Parent Contract
Parent Award PIID: GS10F0118S
IDV Type: FSS
Timeline
Start Date: 2009-06-24
Current End Date: 2011-02-23
Potential End Date: 2011-02-23 00:00:00
Last Modified: 2012-12-31
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