DoD's $25.6M IT contract with Deloitte Consulting LLP for computer systems design services shows fair value

Contract Overview

Contract Amount: $25,596,001 ($25.6M)

Contractor: Deloitte Consulting LLP

Awarding Agency: Department of Defense

Start Date: 2012-04-10

End Date: 2016-04-10

Contract Duration: 1,461 days

Daily Burn Rate: $17.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS INCENTIVE FEE

Sector: IT

Official Description: LABOR

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22202

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $25.6 million to DELOITTE CONSULTING LLP for work described as: LABOR Key points: 1. The contract was awarded through full and open competition, suggesting a competitive pricing environment. 2. Deloitte Consulting LLP, a large established firm, was the sole awardee. 3. The contract duration of 1461 days (4 years) indicates a significant, long-term need. 4. The contract type (Cost Plus Incentive Fee) can lead to cost overruns if not managed carefully. 5. The award was a delivery order under a larger contract vehicle, common for IT services. 6. The contract value is moderate within the context of large federal IT procurements.

Value Assessment

Rating: fair

The contract's value of approximately $25.6 million over four years for computer systems design services appears reasonable given the scope and duration. Benchmarking against similar large-scale IT service contracts awarded by the Department of Defense suggests that pricing is within expected ranges, though specific performance metrics and deliverables would be needed for a more precise assessment. The Cost Plus Incentive Fee (CPIF) structure implies that both the contractor and the government share in cost savings or overruns, which can incentivize efficiency but also carries inherent risks if not closely monitored.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, indicating that all responsible sources were permitted to submit offers. While the data does not specify the number of bids received, full and open competition generally fosters a competitive environment that can lead to better pricing and innovation. The fact that it was a delivery order under a larger contract vehicle suggests that the initial competition for the contract vehicle itself was robust.

Taxpayer Impact: Taxpayers benefit from the potential for competitive pricing and a wider pool of qualified contractors vying for the work, which can drive down costs and improve service quality.

Public Impact

The Department of Defense benefits from enhanced computer systems design and support, crucial for its operational effectiveness. Personnel within the Defense Information Systems Agency (DISA) likely receive direct support and improved IT infrastructure. The contract supports IT infrastructure and services critical to national security operations. The geographic impact is primarily within the United States, supporting DoD operations. The contract likely supports a workforce of IT professionals and consultants, contributing to the federal IT labor market.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Incentive Fee (CPIF) contracts require diligent oversight to ensure costs remain controlled and that incentives are effectively aligned with government objectives.
The duration of the contract (4 years) necessitates ongoing performance monitoring to ensure continued value and alignment with evolving DoD needs.
As a delivery order under a larger contract, the specific details of the competition for this particular order are not fully transparent without access to the parent contract's competition history.

Positive Signals

Awarded through full and open competition, indicating a broad market solicitation and potential for competitive pricing.
The contractor, Deloitte Consulting LLP, is a well-established firm with significant experience in government contracting, suggesting a lower risk of performance failure.
The contract is for essential computer systems design services, directly supporting critical defense functions.

Sector Analysis

The federal IT services market is vast and highly competitive, with agencies like the Department of Defense being major consumers. This contract falls within the Computer Systems Design Services category (NAICS 541512), a segment characterized by a mix of large system integrators and specialized IT firms. Spending in this sector is driven by the need for modernization, cybersecurity, and efficient IT operations across government. Comparable contracts often involve significant dollar values and long durations, reflecting the complexity and criticality of defense IT systems.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses (ss: false, sb: false). As a delivery order awarded to a large prime contractor, Deloitte Consulting LLP, the potential for small business subcontracting exists but is not explicitly detailed in this summary. The impact on the small business ecosystem would depend on whether Deloitte actively seeks out and engages small businesses for subcontracting opportunities within the scope of this contract.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the Defense Contract Management Agency (DCMA) or relevant DISA oversight bodies. Accountability measures are embedded within the Cost Plus Incentive Fee (CPIF) structure, which links contractor compensation to performance and cost targets. Transparency is generally facilitated through contract award databases and reporting requirements, though the specifics of performance and cost data may be considered sensitive.

Related Government Programs

Defense Information Systems Agency (DISA) IT Services
Department of Defense IT Modernization Programs
Federal Civilian IT Services Contracts
Cost Plus Incentive Fee Contracts
Computer Systems Design and Related Services

Risk Flags

Cost Plus Incentive Fee (CPIF) contract type requires careful monitoring for cost overruns.
Long contract duration necessitates ongoing performance evaluation.
Potential for limited transparency on specific competition details for the delivery order itself.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $25.6 million to DELOITTE CONSULTING LLP. LABOR

Who is the contractor on this award?

The obligated recipient is DELOITTE CONSULTING LLP.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Information Systems Agency).

What is the total obligated amount?

The obligated amount is $25.6 million.

What is the period of performance?

Start: 2012-04-10. End: 2016-04-10.

What is the track record of Deloitte Consulting LLP with the Department of Defense for similar IT services?

Deloitte Consulting LLP has a substantial track record with the Department of Defense, having been awarded numerous contracts for a wide array of IT and professional services. Their experience spans complex system integration, cybersecurity, cloud migration, and data analytics. For computer systems design services specifically, Deloitte has consistently been a major player, often winning large-scale, long-term contracts. Their history with DoD suggests a capacity to handle large, complex projects and a familiarity with the agency's unique requirements and procurement processes. However, like any large contractor, past performance reviews and specific contract outcomes would need to be examined for a complete picture of their reliability and effectiveness on individual engagements.

How does the $25.6 million value compare to other similar IT contracts awarded by DISA or DoD?

The $25.6 million contract value for computer systems design services over four years is a moderate-sized award within the Department of Defense's extensive IT spending portfolio. DISA, in particular, manages numerous large IT contracts that can range from tens of millions to billions of dollars. For instance, major enterprise IT modernization efforts, network infrastructure upgrades, or large software development projects often exceed this value significantly. However, for a specific delivery order focused on particular system design services, $25.6 million represents a substantial commitment. It aligns with the typical scale of contracts for specialized IT support and system development that are crucial for maintaining and enhancing defense capabilities.

What are the primary risks associated with a Cost Plus Incentive Fee (CPIF) contract of this nature?

The primary risks associated with a Cost Plus Incentive Fee (CPIF) contract revolve around cost control and the alignment of incentives. For the government, there's a risk that the contractor may not be sufficiently motivated to control costs if the incentive fee structure is not well-defined or if oversight is lax, potentially leading to costs exceeding initial estimates. Conversely, the contractor bears risk if they cannot meet the performance targets tied to the incentive fee. Effective management requires clear, measurable performance metrics and robust government oversight to ensure the contractor is striving for both cost efficiency and high-quality performance. Without diligent monitoring, the CPIF structure can sometimes lead to scope creep or less aggressive cost management than fixed-price contracts.

How effective are full and open competitions in ensuring value for money in federal IT procurements?

Full and open competitions are generally considered the most effective method for ensuring value for money in federal IT procurements. By allowing all responsible sources to compete, the government maximizes the potential for receiving the best combination of price, technical approach, and past performance. This broad competition drives down prices as contractors vie for the award. Furthermore, it encourages innovation as companies strive to differentiate their offerings. While the process can be more time-consuming and resource-intensive than other methods, the resulting competitive pressure and wider selection pool typically yield better outcomes for taxpayers. The key to realizing this value lies in well-defined requirements and a thorough evaluation process.

What is the typical duration for federal IT service contracts of this scope, and does this contract's duration align?

Federal IT service contracts, especially those involving complex system design, development, and integration, often have durations ranging from one to five years, with options for extension. A four-year base period, as seen in this contract (1461 days is approximately 4 years), is quite typical for projects requiring significant effort, knowledge transfer, and sustained support. This duration allows for project completion, stabilization, and potential follow-on phases. Shorter durations might be suitable for specific, well-defined tasks, while longer periods (beyond 5 years, often requiring specific justifications or being structured as indefinite-delivery/indefinite-quantity vehicles) can pose risks related to technological obsolescence and changing requirements. The four-year duration here appears well-aligned with the nature of computer systems design services.

What does the 'Delivery Order' designation imply about this contract's structure?

The designation 'Delivery Order' indicates that this contract is not a standalone, direct award but rather a task order issued under a pre-existing Indefinite Delivery/Indefinite Quantity (IDIQ) contract or a similar type of multiple-award contract vehicle. These vehicles are typically established through an initial, often highly competitive, procurement process. Once the vehicle is in place, agencies can issue delivery or task orders against it to procure specific goods or services as needed. This approach allows for flexibility and faster procurement cycles for individual requirements. It implies that the initial competition for the parent contract vehicle was likely robust, and this delivery order represents a specific call against that established framework.

Industry Classification

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

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Parent Company: Deloitte LLP

Address: 1725 DUKE ST, ALEXANDRIA, VA, 22314

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

Financial Breakdown

Contract Ceiling: $25,596,001

Exercised Options: $25,596,001

Current Obligation: $25,596,001

Subaward Activity

Number of Subawards: 4

Total Subaward Amount: $1,835,849

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: 263010052

IDV Type: IDC

Timeline