Deloitte Consulting LLP awarded $24.3M for DoD Financial Management Support, with a high per-unit cost

Contract Overview

Contract Amount: $24,304,929 ($24.3M)

Contractor: Deloitte Consulting LLP

Awarding Agency: Department of Defense

Start Date: 2020-06-01

End Date: 2025-05-31

Contract Duration: 1,825 days

Daily Burn Rate: $13.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: OFFICE OF THE CHIEF FINANCIAL OFFICER (OCFO) / FINANCIAL MANAGEMENT OPERATIONS SUPPORT DIVISION (CFS) SYSTEMS SUPPORT SERVICES.

Place of Performance

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

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $24.3 million to DELOITTE CONSULTING LLP for work described as: OFFICE OF THE CHIEF FINANCIAL OFFICER (OCFO) / FINANCIAL MANAGEMENT OPERATIONS SUPPORT DIVISION (CFS) SYSTEMS SUPPORT SERVICES. Key points: 1. Contract value represents a significant investment in financial management systems support. 2. The contract was awarded through full and open competition, suggesting a competitive bidding process. 3. The duration of the contract (5 years) indicates a long-term need for these services. 4. The fixed-price contract type shifts performance risk to the contractor. 5. The specific services are crucial for the operational efficiency of the OCFO. 6. The contract's geographic focus is Maryland, aligning with agency presence.

Value Assessment

Rating: fair

The contract value of $24.3 million over five years for computer systems design services is substantial. Benchmarking against similar contracts for financial management system support within the Department of Defense is necessary for a precise value assessment. However, the provided data indicates a high per-unit cost, suggesting potential areas for cost optimization or a premium for specialized expertise.

Cost Per Unit: $13,318 per day (estimated based on total value and duration)

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit bids. The presence of multiple bidders in such a scenario typically fosters price discovery and can lead to more competitive pricing. The specific number of bidders is not provided, which would offer further insight into the intensity of the competition.

Taxpayer Impact: Full and open competition generally benefits taxpayers by encouraging a wider range of offers, potentially driving down costs and improving the quality of services received.

Public Impact

The Office of the Chief Financial Officer (OCFO) and its Financial Management Operations Support Division (CFS) are the primary beneficiaries, receiving essential systems support. Services delivered include computer systems design and support, critical for maintaining financial operations. The geographic impact is concentrated in Maryland, where the agency operates. The contract supports a specialized workforce within Deloitte Consulting LLP, contributing to the IT services sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

High per-unit cost may indicate a need for further price negotiation or justification.
Lack of specific bidder count limits the assessment of competitive intensity.
The long contract duration could lead to vendor lock-in if not managed carefully.

Positive Signals

Awarded through full and open competition, suggesting a robust selection process.
Firm fixed-price contract type provides cost certainty for the government.
The contract addresses critical financial management systems support for a key agency division.

Sector Analysis

This contract falls within the Computer Systems Design Services sector (NAICS 541512), a vital component of the broader IT services industry. The federal government is a significant consumer of these services, particularly for managing complex financial and operational systems. Comparable spending benchmarks would involve analyzing other contracts for similar IT support services across various federal agencies, considering factors like contract scope, duration, and contractor expertise.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific impacts on the small business ecosystem stemming from a set-aside provision. The prime contractor, Deloitte Consulting LLP, is a large business.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program officials within the Department of Defense's Defense Information Systems Agency (DISA) and the OCFO. Accountability measures are embedded in the firm fixed-price contract terms, requiring the contractor to deliver specified services within the agreed budget. Transparency is facilitated through contract databases like FPDS, though detailed performance metrics are often internal. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Department of Defense Financial Management Systems
IT Systems Support Services
Computer Systems Design Services
Financial Management Operations Support

Risk Flags

High Per-Unit Cost
Long-Term Contract Duration
Reliance on Single Contractor for Critical Systems

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.3 million to DELOITTE CONSULTING LLP. OFFICE OF THE CHIEF FINANCIAL OFFICER (OCFO) / FINANCIAL MANAGEMENT OPERATIONS SUPPORT DIVISION (CFS) SYSTEMS SUPPORT SERVICES.

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 $24.3 million.

What is the period of performance?

Start: 2020-06-01. End: 2025-05-31.

What is Deloitte Consulting LLP's track record with the Department of Defense for similar IT support contracts?

Deloitte Consulting LLP has a significant history of contracting with the Department of Defense across various IT and professional services. While specific details for this exact contract's predecessor are not provided, Deloitte is a major federal contractor known for its extensive work in areas such as financial systems modernization, cybersecurity, and enterprise resource planning (ERP) implementation for defense agencies. Their track record generally includes managing large, complex contracts, often involving sensitive data and critical infrastructure. Performance reviews and past performance evaluations from previous DoD contracts would be crucial for a comprehensive assessment of their suitability and reliability for this specific financial management support role.

How does the per-unit cost of $13,318 per day compare to market rates for similar IT systems support services?

The estimated per-unit cost of $13,318 per day is on the higher end for general IT systems support services. Market rates can vary significantly based on the complexity of the systems supported, the level of expertise required (e.g., specialized financial systems knowledge vs. general IT support), geographic location, and the specific services included (e.g., maintenance, development, help desk). For highly specialized financial management systems requiring deep domain knowledge and security clearances, such costs might be justifiable, especially if the contractor brings unique capabilities or efficiencies. However, without a detailed breakdown of the services covered by this daily rate and a comparison to benchmark data for comparable government or commercial contracts with similar scope and complexity, it is difficult to definitively assess its competitiveness. Further analysis would involve comparing this rate against industry benchmarks for similar roles and contract types.

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

Key risks include potential cost overruns if the firm fixed-price structure is not adequately managed, contractor performance issues leading to disruptions in critical financial operations, and cybersecurity vulnerabilities within the supported systems. Mitigation strategies likely involve robust contract oversight by the Defense Information Systems Agency (DISA) and the OCFO, clear performance metrics and deliverables outlined in the contract, regular progress reviews, and adherence to strict cybersecurity protocols. The firm fixed-price nature shifts some financial risk to Deloitte, incentivizing them to manage costs effectively. However, the government bears the risk of inadequate performance if oversight is insufficient or if unforeseen technical challenges arise.

How effective has the OCFO's financial management systems support been historically, and how does this contract contribute to program effectiveness?

Historical effectiveness data for the OCFO's financial management systems support is not directly provided in the contract details. However, the continuation of such support through a multi-year, multi-million dollar contract suggests that these systems are deemed critical and that the services provided are necessary for maintaining the agency's financial integrity and operational efficiency. This contract aims to ensure the continued availability, reliability, and potentially the modernization of these vital systems. Its effectiveness will be measured by the contractor's ability to meet performance standards, maintain system uptime, support users, and adapt to evolving financial regulations and technological requirements, thereby contributing to the overall effectiveness of the OCFO's mission.

What are the historical spending patterns for financial management systems support within the Department of Defense, and how does this contract fit?

The Department of Defense historically spends billions of dollars annually on IT services, including significant investments in financial management systems. These systems are complex, require continuous maintenance, upgrades, and specialized support due to the sheer scale and sensitivity of DoD finances. Contracts for such support are often long-term and awarded to large, experienced IT service providers. This $24.3 million contract with Deloitte fits within this pattern as a specific, albeit substantial, allocation for systems support services to a key financial division. It represents a portion of the DoD's ongoing commitment to maintaining robust and compliant financial operations through dedicated IT support.

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: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Deloitte Financial Advisory Services 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: $24,304,929

Exercised Options: $24,304,929

Current Obligation: $24,304,929

Actual Outlays: $8,046,724

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $137,520

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HHSN316201200018W

IDV Type: GWAC

Timeline