Air Force awards $11M+ contract to KPMG for strategic transformation support amidst great power competition

Contract Overview

Contract Amount: $11,062,114 ($11.1M)

Contractor: Kpmg LLP

Awarding Agency: Department of Defense

Start Date: 2023-09-27

End Date: 2025-07-26

Contract Duration: 668 days

Daily Burn Rate: $16.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: PKS-HILL-BECK - AIR FORCE STRATEGIC TRANSFORMATION SUPPORT (AFSTS) - FA701423STS67 - GREAT POWER COMPETITION TASK ORDER AWARD.

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20301

State: District of Columbia Government Spending

Plain-Language Summary

Department of Defense obligated $11.1 million to KPMG LLP for work described as: PKS-HILL-BECK - AIR FORCE STRATEGIC TRANSFORMATION SUPPORT (AFSTS) - FA701423STS67 - GREAT POWER COMPETITION TASK ORDER AWARD. Key points: 1. Contract aims to bolster Air Force's strategic transformation efforts, aligning with national security priorities. 2. Awarded under full and open competition, suggesting a competitive bidding process. 3. The fixed-price contract structure shifts performance risk to the contractor. 4. Duration of 668 days indicates a medium-term engagement for strategic advisory services. 5. Focus on administrative management and general management consulting services. 6. Geographic focus on the District of Columbia highlights proximity to key decision-making centers.

Value Assessment

Rating: good

The contract value of approximately $11 million over roughly two years appears reasonable for strategic transformation support services provided by a major consulting firm like KPMG. Benchmarking against similar large-scale strategic advisory contracts within the federal government would provide a more precise value-for-money assessment. The firm-fixed-price structure is generally favorable for the government when scope is well-defined, as it caps costs.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 5 bids suggests a healthy level of competition for this strategic support requirement. A competitive process like this typically drives better pricing and service offerings as contractors vie for the award.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it generally leads to more competitive pricing and ensures the government receives the best value for its investment.

Public Impact

The primary beneficiary is the Department of the Air Force, receiving expert advisory services to enhance its strategic capabilities. Services delivered include strategic planning, organizational assessment, and management consulting to support transformation initiatives. The geographic impact is concentrated in the District of Columbia, facilitating close collaboration with Air Force leadership. Workforce implications may involve leveraging internal Air Force personnel alongside external consultants for knowledge transfer and implementation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if strategic objectives are not clearly defined and managed.
Reliance on external consultants may limit long-term organic capability development within the Air Force.
Ensuring effective knowledge transfer from KPMG to Air Force personnel is crucial for sustained impact.

Positive Signals

Award to a reputable firm like KPMG suggests a high likelihood of competent service delivery.
The firm-fixed-price contract provides cost certainty for the government.
Strategic focus aligns with critical national defense objectives, potentially leading to significant improvements in Air Force operations.

Sector Analysis

This contract falls within the management and consulting services sector, a significant area of federal spending. The market for strategic advisory services is robust, with numerous large and small firms competing for government contracts. The Air Force's need for transformation support is driven by evolving geopolitical landscapes and the imperative to modernize its capabilities, making this contract a key component of its strategic modernization efforts.

Small Business Impact

The data indicates this contract was not set aside for small businesses and was awarded to a large prime contractor, KPMG LLP. While there is no explicit mention of subcontracting plans, large federal contracts often include provisions for small business participation. The impact on the small business ecosystem will depend on whether KPMG actively seeks small business subcontractors for specialized support or if the primary focus remains on internal resource allocation.

Oversight & Accountability

Oversight will likely be managed by the contracting officer and the designated Air Force program office responsible for strategic transformation. Accountability measures are embedded in the firm-fixed-price contract, requiring KPMG to deliver defined services within the agreed budget. Transparency is generally maintained through contract award databases, though specific performance metrics and internal deliberations may not be publicly disclosed.

Related Government Programs

Air Force Strategic Planning and Transformation Initiatives
DoD Management and Consulting Services
Great Power Competition Strategy Support
Federal Strategic Advisory Contracts

Risk Flags

Potential for knowledge transfer gaps
Risk of scope creep in strategic initiatives
Dependence on external expertise for core functions

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.1 million to KPMG LLP. PKS-HILL-BECK - AIR FORCE STRATEGIC TRANSFORMATION SUPPORT (AFSTS) - FA701423STS67 - GREAT POWER COMPETITION TASK ORDER AWARD.

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 $11.1 million.

What is the period of performance?

Start: 2023-09-27. End: 2025-07-26.

What is KPMG's track record with similar large-scale strategic transformation contracts within the Department of Defense?

KPMG LLP has a significant history of providing consulting services to various branches of the U.S. military and the Department of Defense. They have been involved in numerous large-scale transformation, modernization, and strategic planning efforts across different agencies. Their experience often includes areas such as digital transformation, organizational restructuring, and process improvement. While specific details of past performance on contracts of identical scope and value are often proprietary, KPMG's established presence and repeated awards suggest a generally positive track record in delivering complex advisory services to federal clients. Further analysis would involve reviewing past performance evaluations and contract histories available through federal procurement databases.

How does the $11 million contract value compare to similar strategic transformation support contracts awarded by the Air Force or DoD?

The $11 million value for this 668-day (approximately 22-month) contract for strategic transformation support is within a typical range for large-scale advisory services provided by major consulting firms to federal agencies. Contracts of this nature, especially those involving strategic planning and organizational change, can easily reach multi-million dollar figures. For instance, similar engagements focusing on enterprise-wide modernization or strategic realignment within large federal organizations have historically ranged from $5 million to $20 million or more, depending on the complexity, duration, and specific deliverables. The firm-fixed-price nature also suggests a defined scope, which can influence the overall cost compared to cost-plus contracts.

What are the key performance indicators (KPIs) or deliverables expected under this contract, and how will success be measured?

Specific Key Performance Indicators (KPIs) and detailed deliverables are typically outlined in the Performance Work Statement (PWS) or Statement of Work (SOW) attached to the contract, which are not fully detailed in the provided data. However, for a strategic transformation support contract, common deliverables might include strategic plans, assessment reports, organizational design recommendations, implementation roadmaps, and process improvement analyses. Success is generally measured against the achievement of these defined deliverables, adherence to timelines, and the quality of the work product as assessed by the government's technical point of contact. Performance evaluations, often conducted at milestones or upon completion, would formally assess whether KPMG met the contract's objectives and requirements.

What is the potential risk associated with relying on an external contractor like KPMG for critical strategic transformation efforts?

The primary risks associated with relying on an external contractor for strategic transformation include potential misalignment with internal organizational culture and long-term goals, insufficient knowledge transfer leading to a lack of sustained capability within the agency, and the possibility of vendor lock-in. There's also a risk that the contractor's recommendations, while theoretically sound, may not be practical for the specific operational environment of the Air Force. Furthermore, the cost can escalate if the scope is not tightly managed. Mitigating these risks involves clear contract definition, active government oversight, robust communication channels, and a deliberate strategy for internalizing knowledge and capabilities developed during the engagement.

How does this contract align with the broader context of the Air Force's modernization and readiness initiatives, particularly in relation to 'Great Power Competition'?

This contract directly addresses the Air Force's strategic imperative to adapt and modernize in the face of evolving global threats, often framed within the context of 'Great Power Competition.' Strategic transformation support is crucial for reorienting resources, developing new operational concepts, and enhancing technological capabilities to maintain a competitive edge against peer adversaries. This includes areas like advanced air and space capabilities, resilient command and control, and agile acquisition processes. By engaging expert consultants, the Air Force aims to accelerate these changes, ensuring its force structure, doctrine, and operational readiness are optimized for the contemporary security environment.

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: 5

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: $11,062,114

Exercised Options: $11,062,114

Current Obligation: $11,062,114

Actual Outlays: $2,102,427

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $31,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA701420D0009

IDV Type: IDC

Timeline