DoD's $42.7M Deloitte Contract for Financial IT Services Faces Scrutiny Over Value and Competition

Contract Overview

Contract Amount: $42,773,181 ($42.8M)

Contractor: Deloitte Consulting LLP

Awarding Agency: Department of Defense

Start Date: 2016-10-21

End Date: 2021-12-20

Contract Duration: 1,886 days

Daily Burn Rate: $22.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::OT::IGF THIS REQUIREMENT PROVIDES ENGINEERING SERVICES TO SUBSUME THE EXISTING DISA FINANCIAL ACCOUNTING MANAGEMENT INFORMATION SYSTEM - WORKING CAPITAL FUND MOD AND LEGACY TELECOMMUNICATION SERVICES ENTERPRISE ACQUISITION SERVICES, FINANCIAL ACCOUNTING MANAGEMENT INFORMATION SYSTEM - ENTERPRISE ACQUISITION SERVICES, DISA CASH MANAGEMENT SYSTEM - TELECOMMUNICATIONS SERVICES AND THE ENTERPRISE SERVICES AND FINANCIAL ACCOUNTING AND BUDGET SYSTEM SYSTEMS TO DELIVER A COMBINED FINANCIAL IT SERVICE SOLUTION THAT SERVES THE COMPUTING SERVICES AND THE TSEAS LINES OF THE DISA BUSINESS. THE SCOPE OF THE EFFORT IS FOR THE CONTRACTOR TO PLAN AND IMPLEMENT A TURN-KEY SOLUTION TO ANALYZE, DESIGN, DEVELOP, PROVIDE CONFIGURATION MANAGEMENT, INTEGRATE, TEST, CERTIFY, ACCREDIT, DEPLOY, DATA MIGRATE, SUSTAIN AND PROVIDE TRAINING FOR THE ORACLE R12 FEDERAL FINANCIALS SOFTWARE CONFIGURED TO MEET THE DISA WORKING CAPITAL FUND REQUIREMENTS.

Place of Performance

Location: FORT GEORGE G MEADE, ANNE ARUNDEL County, MARYLAND, 20755

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $42.8 million to DELOITTE CONSULTING LLP for work described as: IGF::OT::IGF THIS REQUIREMENT PROVIDES ENGINEERING SERVICES TO SUBSUME THE EXISTING DISA FINANCIAL ACCOUNTING MANAGEMENT INFORMATION SYSTEM - WORKING CAPITAL FUND MOD AND LEGACY TELECOMMUNICATION SERVICES ENTERPRISE ACQUISITION SERVICES, FINANCIAL ACCOUNTING MANAGEMENT INFORMATIO… Key points: 1. The contract aims to consolidate multiple financial IT systems for DISA, promising efficiency gains. 2. Deloitte Consulting LLP is the sole awardee, raising questions about the competitive process. 3. The fixed-price contract structure may offer some cost control, but the overall value needs further assessment. 4. This IT services contract falls within the Computer Systems Design Services sector.

Value Assessment

Rating: questionable

The contract value of $42.7 million for engineering services to consolidate financial IT systems appears substantial. Benchmarking against similar large-scale IT integration projects is necessary to determine if this pricing is competitive and reflects fair market value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting a competitive bidding process. However, the data indicates a single delivery order to Deloitte Consulting LLP, which warrants further investigation into the extent of competition achieved and its impact on price discovery.

Taxpayer Impact: The consolidation of multiple systems could lead to long-term cost savings for taxpayers by reducing maintenance and operational expenses, but the initial investment and ongoing costs need careful management.

Public Impact

Consolidation of critical financial systems could improve operational efficiency for the Defense Information Systems Agency (DISA). Potential for enhanced data accuracy and reporting across financial operations. Impacts users and processes reliant on the subsumed legacy systems, requiring effective change management. Ensures continued financial management capabilities for DISA's computing services and telecommunications enterprise acquisition services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited visibility into the true competitive landscape despite 'full and open' designation.
Potential for cost overruns if scope creep occurs during the complex system integration.
Risk of vendor lock-in with a single provider for critical financial IT infrastructure.

Positive Signals

Clear objective to modernize and consolidate disparate financial systems.
Firm fixed-price contract type can provide cost certainty if well-defined.
Experienced contractor (Deloitte) selected for a complex integration task.

Sector Analysis

This contract falls within the IT sector, specifically Computer Systems Design Services. Spending in this area is significant across the federal government, with benchmarks varying widely based on project complexity, scope, and duration. Large-scale system integration projects like this often represent substantial investments.

Small Business Impact

The provided data does not indicate any specific set-asides or participation goals for small businesses in this contract. Further analysis would be needed to determine if small businesses had opportunities to participate as subcontractors.

Oversight & Accountability

The contract was awarded as a delivery order, suggesting it might be part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract. Oversight would focus on task order execution, performance monitoring, and adherence to contract terms to ensure accountability and value for money.

Related Government Programs

Computer Systems Design Services
Department of Defense Contracting
Defense Information Systems Agency Programs

Risk Flags

Lack of transparency on the competitive process despite 'full and open' status.
Potential for cost overruns due to the complexity of integrating multiple legacy systems.
Risk of vendor lock-in and limited future flexibility.
Need for robust oversight to ensure successful system integration and performance.
Unclear if small businesses had opportunities for subcontracting.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $42.8 million to DELOITTE CONSULTING LLP. IGF::OT::IGF THIS REQUIREMENT PROVIDES ENGINEERING SERVICES TO SUBSUME THE EXISTING DISA FINANCIAL ACCOUNTING MANAGEMENT INFORMATION SYSTEM - WORKING CAPITAL FUND MOD AND LEGACY TELECOMMUNICATION SERVICES ENTERPRISE ACQUISITION SERVICES, FINANCIAL ACCOUNTING MANAGEMENT INFORMATION SYSTEM - ENTERPRISE ACQUISITION SERVICES, DISA CASH MANAGEMENT SYSTEM - TELECOMMUNICATIONS SERVICES AND THE ENTERPRISE SERVICES AND FINANCIAL ACCOUNTING AND BUDGET SYSTEM SYSTEMS TO DELIVER A COMBINED FINANCIAL IT SERV

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 $42.8 million.

What is the period of performance?

Start: 2016-10-21. End: 2021-12-20.

What was the specific mechanism of the 'full and open competition' that resulted in a single delivery order to Deloitte, and how was price competition ensured?

The 'full and open competition' designation implies that all responsible sources were permitted to submit offers. However, the award of a single delivery order to Deloitte suggests that either only one offer was received, or Deloitte's offer was deemed the most advantageous. Further details on the solicitation process, evaluation criteria, and the number of proposals received are needed to fully understand the competitive dynamics and how price was determined.

How does the $42.7 million cost compare to industry benchmarks for similar large-scale financial IT system consolidation projects, considering the complexity of integrating multiple legacy systems?

Assessing the value requires comparing this contract's cost against industry benchmarks for similar IT consolidation projects. Factors like the number of systems integrated, data migration complexity, and the specific functionalities required significantly influence costs. Without detailed project scope and comparable market data, it's difficult to definitively state if $42.7 million represents excellent, good, or fair value.

What are the key performance indicators (KPIs) and metrics used to measure the effectiveness and success of this IT service solution post-deployment?

The effectiveness of this financial IT service solution would be measured by KPIs related to system uptime, data accuracy, transaction processing speed, user satisfaction, and the successful decommissioning of legacy systems. Metrics should also track the achievement of intended cost savings and operational efficiencies promised by the consolidation effort.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design 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: HC104716R4021

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Deloitte Touche Tohmatsu Limited

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: $50,162,926

Exercised Options: $43,427,933

Current Obligation: $42,773,181

Subaward Activity

Number of Subawards: 6

Total Subaward Amount: $5,914,229

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS00Q09BGD0018

IDV Type: GWAC

Timeline