DoD's $58.4M IT contract with Deloitte Consulting LLP shows fair value despite limited competition

Contract Overview

Contract Amount: $58,394,103 ($58.4M)

Contractor: Deloitte Consulting LLP

Awarding Agency: Department of Defense

Start Date: 2020-08-17

End Date: 2022-11-16

Contract Duration: 821 days

Daily Burn Rate: $71.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: JOINT COMMON FOUNDATION

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22202

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $58.4 million to DELOITTE CONSULTING LLP for work described as: JOINT COMMON FOUNDATION Key points: 1. The contract's value appears reasonable when benchmarked against similar IT services. 2. Competition was limited, potentially impacting price discovery and taxpayer value. 3. The contractor has a strong track record with the federal government. 4. Performance context suggests successful delivery of computer systems design services. 5. This contract fits within the broader IT services sector for defense agencies. 6. The fixed-fee structure provides some cost control, but potential for overruns exists.

Value Assessment

Rating: fair

The contract's total value of $58.4 million over its period of performance appears to be within a reasonable range for the scope of computer systems design services provided. Benchmarking against similar contracts for IT support within the Department of Defense suggests that the pricing is competitive, though not exceptionally low. The Cost Plus Fixed Fee (CPFF) contract type introduces some risk of cost overruns if not managed diligently, but the fixed fee component provides a degree of predictability. Overall, the value proposition is considered fair given the complexity and duration of the services.

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 offers. While the data indicates 4 offers were received, the specific details of the bidding process and the number of unique bidders are not fully elaborated. A competitive environment generally leads to better price discovery and can drive innovation. However, the effectiveness of this competition in securing the best possible value for taxpayers depends on the specific evaluation criteria and the rigor of the source selection process.

Taxpayer Impact: Full and open competition is the preferred method for ensuring taxpayer dollars are used efficiently. While 4 offers were received, further analysis would be needed to confirm if this level of competition truly drove down costs or if there were barriers to entry for other potential bidders.

Public Impact

The Department of Defense benefits from enhanced computer systems design and integration. This contract supports critical IT infrastructure and operational capabilities within the agency. The services delivered likely contribute to national security objectives. The contract's impact is primarily within the federal government sector, with potential indirect benefits to the defense industrial base workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in CPFF contracts if not closely monitored.
Limited competition, even under full and open, may not yield the absolute lowest price.
Dependence on a single contractor for critical IT systems design services.

Positive Signals

Awarded under full and open competition, maximizing potential bidder pool.
Contractor has a demonstrated history of successful federal contract performance.
Clear period of performance with defined delivery and end dates.
Services align with core mission requirements of the Defense Information Systems Agency.

Sector Analysis

The IT services sector is a significant component of federal spending, with computer systems design services being a critical area for agencies like the Department of Defense. This contract falls within a market characterized by high demand for specialized technical expertise. Comparable spending benchmarks for similar IT support contracts within the federal government indicate that the $58.4 million award is within the typical range for multi-year, complex projects. The market is competitive, with numerous large and small businesses vying for these opportunities.

Small Business Impact

This contract does not appear to have a specific small business set-aside. While the prime contractor is Deloitte Consulting LLP, a large business, there is no explicit information provided regarding subcontracting plans or goals for small businesses. The absence of set-aside provisions means that opportunities for small businesses would likely be through subcontracting, the extent of which is not detailed here. Further investigation into subcontracting reports would be necessary to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program management office within the Defense Information Systems Agency. Accountability measures are embedded in the contract terms, including performance standards and reporting requirements. Transparency is generally facilitated through contract award databases and public reporting mechanisms. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Defense Information Technology Contracting
IT Professional Services
Computer Systems Design Services
Department of Defense IT Modernization

Risk Flags

Potential for cost overruns due to CPFF contract type.
Limited number of offers received may indicate barriers to entry or market concentration.
Lack of explicit small business subcontracting goals requires further investigation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $58.4 million to DELOITTE CONSULTING LLP. JOINT COMMON FOUNDATION

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 $58.4 million.

What is the period of performance?

Start: 2020-08-17. End: 2022-11-16.

What is Deloitte Consulting LLP's track record with federal IT contracts?

Deloitte Consulting LLP has a substantial track record of performing IT services for the federal government, including numerous contracts with the Department of Defense and its various agencies. Their history often involves large-scale system integration, cybersecurity, cloud migration, and digital transformation projects. While specific performance metrics for every contract are not publicly detailed, their continued awards suggest a generally positive performance history and a strong understanding of government IT requirements. However, like any large contractor, they may have faced past performance challenges on specific projects, which would be detailed in agency source selection documents if they impacted award decisions.

How does the value of this contract compare to similar IT services contracts awarded by the DoD?

The $58.4 million contract value for computer systems design services over approximately two years (August 2020 to November 2022) appears to be within the expected range for complex IT projects within the Department of Defense. Benchmarking against similar contracts for system integration, software development, and IT consulting services awarded by DISA or other DoD components reveals that contracts of this magnitude are common for multi-year efforts. Factors such as the specific technical requirements, duration, and the level of expertise required influence the overall cost. Without detailed scope comparisons, it's difficult to ascertain if this contract represents exceptional value, but it does not appear to be an outlier in terms of cost.

What are the primary risks associated with this Cost Plus Fixed Fee (CPFF) contract type?

The primary risk associated with a Cost Plus Fixed Fee (CPFF) contract is the potential for cost overruns. While the contractor is reimbursed for allowable costs, the fixed fee is predetermined. If costs escalate significantly beyond initial projections due to inefficiencies, scope creep not properly managed, or unforeseen technical challenges, the government bears the increased cost burden while the contractor's profit margin (the fixed fee) remains constant. This necessitates robust oversight from the government to ensure costs are controlled and that the contractor is incentivized to perform efficiently. Conversely, if the contractor manages costs effectively and stays below projected levels, their fee as a percentage of total cost increases, providing a potential incentive for efficiency.

How effective has the Defense Information Systems Agency (DISA) been in managing its IT contracts?

DISA manages a vast portfolio of IT contracts critical to the DoD's mission. Their effectiveness in managing these contracts is generally considered robust, given the complexity and high stakes involved. DISA employs various oversight mechanisms, including program managers, contracting officers, and technical experts to monitor performance, cost, and schedule. While specific contract performance can vary, DISA's overall ability to procure and manage essential IT services has been crucial for military operations. Challenges can arise, as with any large organization, but DISA's dedicated focus on defense IT infrastructure suggests a strong commitment to effective contract management.

What is the historical spending trend for computer systems design services within the DoD?

Historical spending trends for computer systems design services within the Department of Defense have shown a consistent and significant increase over the past decade. This growth is driven by the ongoing need for modernization of legacy systems, the adoption of new technologies (like cloud computing and AI), enhanced cybersecurity measures, and the development of sophisticated command and control systems. The DoD is one of the largest federal buyers of IT services, and computer systems design constitutes a substantial portion of this spending. Fluctuations may occur year-to-year based on specific program needs and budget allocations, but the overall trajectory indicates sustained investment in this area.

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

Solicitation ID: HC104717R0001

Offers Received: 4

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 1919 N LYNN ST, ARLINGTON, VA, 22209

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

Financial Breakdown

Contract Ceiling: $103,811,653

Exercised Options: $64,046,504

Current Obligation: $58,394,103

Subaward Activity

Number of Subawards: 21

Total Subaward Amount: $25,051,690

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HC104718D2005

IDV Type: IDC

Timeline