DoD's $27.5M DCSA FM Transformation contract awarded to KPMG LLP for consulting services

Contract Overview

Contract Amount: $27,546,103 ($27.5M)

Contractor: Kpmg LLP

Awarding Agency: Department of Defense

Start Date: 2021-07-21

End Date: 2027-01-20

Contract Duration: 2,009 days

Daily Burn Rate: $13.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: PKS-BERISH-TERRY - DCSA FM TRANSFORMATION

Place of Performance

Location: QUANTICO, PRINCE WILLIAM County, VIRGINIA, 22134

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $27.5 million to KPMG LLP for work described as: PKS-BERISH-TERRY - DCSA FM TRANSFORMATION Key points: 1. Contract awarded via full and open competition, suggesting a robust market for these services. 2. The contract's duration of approximately 5.5 years indicates a long-term need for transformation support. 3. Fixed-price contract type may offer cost certainty but could limit flexibility for evolving requirements. 4. The award to a large, established firm like KPMG suggests a focus on experience and capability. 5. The specific NAICS code (541611) points to a focus on management consulting, a critical area for large organizations. 6. The contract is a delivery order, implying it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle.

Value Assessment

Rating: good

Benchmarking the value of this $27.5 million contract for administrative management and general management consulting services is challenging without specific deliverables. However, the award to KPMG LLP, a major consulting firm, suggests a competitive selection process. The fixed-price nature of the contract provides cost predictability for the Department of Defense. Further analysis would require comparing the scope of work and expected outcomes against similar transformation initiatives within the federal government or large private sector organizations.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified vendors had the opportunity to bid. The presence of three bidders (implied by 'no': 3) suggests a reasonable level of competition for this type of specialized consulting service. A competitive process generally leads to better price discovery and ensures the government selects the most capable and cost-effective solution.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure the best value for public funds by encouraging multiple firms to offer their best pricing and solutions.

Public Impact

The Department of Defense, specifically the Defense Contract Service Agency (DCSA), is the primary beneficiary, aiming to transform its financial management systems. The services delivered are critical for modernizing federal financial operations, improving efficiency, and ensuring compliance. The geographic impact is primarily within the DCSA's operational areas, likely supporting federal financial management across various locations. Workforce implications may include the need for specialized financial and IT personnel within DCSA to manage and implement the transformation, as well as the employment of consultants from KPMG.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep in long-term transformation projects, which could increase costs beyond initial estimates.
Dependence on a single large contractor may limit future flexibility or innovation if not managed carefully.
Ensuring effective knowledge transfer from the contractor to government personnel is crucial for long-term sustainability.

Positive Signals

Awarded through full and open competition, indicating a strong market response and potential for competitive pricing.
Fixed-price contract type provides cost certainty for the government, reducing financial risk.
The selection of a reputable firm like KPMG suggests a focus on proven expertise and successful delivery of complex projects.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically management consulting. This sector is a significant component of federal spending, supporting a wide range of government functions from IT modernization to policy implementation. The market for such services is large and competitive, with numerous firms capable of undertaking complex federal projects. Benchmarks for similar transformation initiatives often vary widely based on scope, duration, and the specific agency's needs.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. The award to a large firm like KPMG LLP suggests that the primary focus was on the capabilities and experience required for a large-scale transformation project. There is no explicit information on subcontracting plans for small businesses, which would typically be detailed in the contract's statement of work or performance requirements.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the contracting officer's representative (COR) within the Department of Defense. Performance monitoring, deliverable reviews, and adherence to the contract terms are standard oversight mechanisms. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

DCSA Financial Management Systems
DoD Financial Improvement and Audit Readiness (FIAR) initiatives
Federal Financial Management Modernization Programs
Government Management Consulting Services

Risk Flags

Potential for cost overruns if scope is not tightly managed.
Risk of vendor lock-in for long-term transformation projects.
Dependency on contractor expertise for critical financial system modernization.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $27.5 million to KPMG LLP. PKS-BERISH-TERRY - DCSA FM TRANSFORMATION

Who is the contractor on this award?

The obligated recipient is KPMG LLP.

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 $27.5 million.

What is the period of performance?

Start: 2021-07-21. End: 2027-01-20.

What is the track record of KPMG LLP in delivering similar large-scale financial management transformation projects for the federal government?

KPMG LLP has a significant track record in providing management consulting services to federal agencies, including extensive experience in financial management, IT modernization, and business process re-engineering. They have been involved in numerous large-scale transformation initiatives across various departments and agencies, often focusing on improving efficiency, compliance, and audit readiness. While specific project details and outcomes are often proprietary or subject to confidentiality agreements, KPMG's consistent presence as a prime contractor on major federal contracts suggests a demonstrated ability to meet complex requirements and deliver results. Their work often involves strategic planning, system implementation, change management, and data analytics to support financial transformation goals.

How does the $27.5 million contract value compare to similar federal financial management consulting contracts?

The $27.5 million contract value for financial management transformation consulting is substantial but falls within the typical range for large-scale, multi-year federal IT and management consulting projects. Contracts of this nature often span several years and involve complex system integrations, process overhauls, and extensive change management efforts. For instance, similar transformation initiatives in agencies like the IRS, GSA, or other large DoD components have seen contract values ranging from tens to hundreds of millions of dollars over their lifecycles. The value is influenced by factors such as the number of systems involved, the scope of process re-engineering, the duration of the engagement, and the specific expertise required. This contract's value appears commensurate with a significant, long-term modernization effort.

What are the primary risks associated with this contract, and how are they being mitigated?

Primary risks include potential for scope creep, as transformation projects can evolve, leading to cost overruns if not managed tightly. Another risk is the contractor's ability to effectively integrate with existing DCSA systems and personnel, and ensure successful knowledge transfer. Delays in implementation due to unforeseen technical challenges or bureaucratic hurdles are also a concern. Mitigation strategies likely involve robust contract management by the COR, clearly defined milestones and deliverables, regular performance reviews, and a fixed-price contract structure that incentivizes the contractor to manage costs. The use of a delivery order under an existing IDIQ may also imply pre-vetted capabilities and terms, reducing some initial risks.

How effective is the 'full and open competition' approach in ensuring value for money for this type of specialized consulting service?

The 'full and open competition' approach is generally considered the most effective method for ensuring value for money in federal contracting, especially for specialized services like management consulting. It allows a wide range of qualified vendors to submit proposals, fostering a competitive environment that drives down prices and encourages innovation. For this $27.5 million DCSA FM Transformation contract, this approach likely resulted in multiple firms vying for the opportunity, leading to better pricing and a stronger pool of candidates from which to select the best fit. The presence of three bidders indicates a healthy level of competition, suggesting that the government received competitive offers and selected a vendor based on a combination of technical merit and cost.

What are the historical spending patterns for financial management consulting services within the Department of Defense?

The Department of Defense historically represents one of the largest federal spenders on professional services, including financial management consulting. Driven by mandates like the Federal Financial Management Improvement Act and the need for audit readiness, DoD agencies frequently engage contractors for system modernization, process improvements, and financial reporting enhancements. Spending in this category has been consistently high over the past decade, often in the billions of dollars annually across the various branches and components. Contracts range from large enterprise-wide transformation efforts, like this one, to smaller, more focused engagements addressing specific audit findings or system upgrades. The trend indicates a sustained need for external expertise to manage the complexity of DoD's financial operations.

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

Solicitation ID: FA701421STS39

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 8350 BROAD ST STE 900, MCLEAN, VA, 22102

Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $54,095,303

Exercised Options: $44,236,440

Current Obligation: $27,546,103

Actual Outlays: $19,841,911

Subaward Activity

Number of Subawards: 8

Total Subaward Amount: $2,478,628

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA701420D0009

IDV Type: IDC

Timeline