Deloitte & Touche LLP awarded $21.5M for audit remediation and sustainment support by the Department of Defense

Contract Overview

Contract Amount: $21,510,405 ($21.5M)

Contractor: Deloitte & Touche LLP

Awarding Agency: Department of Defense

Start Date: 2024-05-06

End Date: 2026-05-05

Contract Duration: 729 days

Daily Burn Rate: $29.5K/day

Competition Type: COMPETED UNDER SAP

Number of Offers Received: 3

Pricing Type: LABOR HOURS

Sector: Other

Official Description: AUDIT REMEDIATION AND SUSTAINMENT SUPPORT

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 $21.5 million to DELOITTE & TOUCHE LLP for work described as: AUDIT REMEDIATION AND SUSTAINMENT SUPPORT Key points: 1. The contract focuses on essential audit remediation and sustainment, indicating a need for ongoing financial oversight and compliance. 2. Competition dynamics are favorable, with the contract being competed under Simplified Acquisition Procedures (SAP), suggesting a competitive bidding process. 3. The award to a major accounting firm like Deloitte & Touche suggests a focus on specialized expertise in financial auditing and remediation. 4. Performance context is tied to the Department of Defense's operational needs, highlighting the critical nature of financial integrity in defense spending. 5. The contract falls within the professional services sector, specifically accounting and auditing services. 6. The duration of the contract (729 days) suggests a medium-term engagement for sustained support.

Value Assessment

Rating: good

The contract value of $21.5 million for audit remediation and sustainment support appears reasonable given the scope and the contractor's expertise. Benchmarking against similar large-scale audit support contracts for federal agencies, this award falls within expected ranges. The use of BPA Call indicates a pre-negotiated framework, which can lead to more efficient pricing. Further analysis would require detailed cost breakdowns and comparison to specific service rates within the accounting industry.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was competed under Simplified Acquisition Procedures (SAP), which typically involves a competitive process among qualified vendors. While the exact number of bidders is not specified, SAP is designed to encourage competition for contracts below certain thresholds. This method generally leads to fair market pricing and allows for a reasonable selection of qualified contractors.

Taxpayer Impact: Competition under SAP generally benefits taxpayers by ensuring that the government receives competitive pricing and that funds are used efficiently. It reduces the risk of overpayment compared to sole-source awards.

Public Impact

The Department of Defense benefits from improved financial accountability and compliance through audit remediation. Services delivered include specialized support for addressing audit findings and maintaining financial systems. The geographic impact is primarily within the District of Columbia, where Washington Headquarters Services is located. Workforce implications include the engagement of highly skilled accounting and auditing professionals.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if audit findings are more extensive than initially anticipated.
Reliance on a single large contractor may limit flexibility in adapting to rapidly changing audit requirements.
Ensuring continuous knowledge transfer and documentation to mitigate risks associated with contractor personnel turnover.

Positive Signals

Award to a reputable firm like Deloitte & Touche suggests a high likelihood of quality service delivery.
The use of a BPA Call indicates a streamlined procurement process and potentially pre-negotiated favorable terms.
The contract's focus on audit remediation directly addresses compliance and financial integrity, which are critical for government operations.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically the accounting and auditing services sub-sector. The market for these services within the federal government is substantial, driven by mandates for financial transparency and accountability. Comparable spending benchmarks would include other large federal contracts for audit support, financial management consulting, and compliance services, often awarded to 'Big Four' accounting firms.

Small Business Impact

The contract data indicates that small business participation was not a primary set-aside consideration for this specific award (sb: false). However, large prime contractors like Deloitte & Touche often have subcontracting plans that may include opportunities for small businesses to provide specialized support services. The impact on the small business ecosystem would depend on the extent to which such subcontracting opportunities are utilized and effectively managed.

Oversight & Accountability

Oversight for this contract would likely be managed by contracting officers and program managers within the Washington Headquarters Services. Accountability measures are inherent in the contract terms, requiring adherence to deliverables and performance standards. Transparency is facilitated through federal procurement databases where contract awards are reported. Inspector General jurisdiction may apply if any issues of fraud, waste, or abuse arise.

Related Government Programs

Federal Audit Services
Financial Management Systems Support
Defense Contract Audit Agency (DCAA) Services
Government Accountability Office (GAO) Audits
Washington Headquarters Services Contracts

Risk Flags

Potential for cost overruns if scope expands.
Dependence on contractor expertise.
Ensuring data security and confidentiality.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.5 million to DELOITTE & TOUCHE LLP. AUDIT REMEDIATION AND SUSTAINMENT SUPPORT

Who is the contractor on this award?

The obligated recipient is DELOITTE & TOUCHE LLP.

Which agency awarded this contract?

Awarding agency: Department of Defense (Washington Headquarters Services).

What is the total obligated amount?

The obligated amount is $21.5 million.

What is the period of performance?

Start: 2024-05-06. End: 2026-05-05.

What is the track record of Deloitte & Touche LLP with the Department of Defense for similar audit remediation services?

Deloitte & Touche LLP has a significant history of providing professional services, including audit, advisory, and financial consulting, to various federal agencies, including the Department of Defense (DoD). Their experience often involves complex financial management, compliance, and audit support. For the DoD specifically, they have been involved in large-scale financial improvement and audit readiness initiatives. While specific details of past audit remediation contracts with the DoD would require deeper database searches, their general profile suggests a strong capability and established relationship with defense clients for such critical services. Their past performance is typically evaluated during the procurement process, and awards like this indicate a favorable assessment by the agency.

How does the awarded amount of $21.5 million compare to typical federal spending on audit remediation and sustainment support?

The $21.5 million award for audit remediation and sustainment support by the Department of Defense is a substantial figure, reflecting the complexity and scale of financial operations within the DoD. When compared to similar federal contracts for audit support and financial management services, this amount is within the expected range for a multi-year engagement with a major accounting firm. For instance, other large federal agencies often award contracts in the tens of millions for comprehensive financial improvement programs. The 'value for money' is assessed by comparing the proposed costs against the scope of work, the contractor's expertise, and the criticality of the services. Given the DoD's vast budget and regulatory requirements, this investment is likely deemed necessary for maintaining financial integrity and compliance.

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

Primary risks associated with this contract include the potential for scope creep if audit findings are more extensive than initially anticipated, leading to cost overruns or schedule delays. Another risk is the reliance on a single large contractor, which could limit flexibility. Furthermore, ensuring the continuity of knowledge and mitigating risks associated with contractor personnel turnover are crucial. Mitigation strategies typically involve robust contract management, clear definition of scope and deliverables, performance monitoring, and potentially incorporating clauses for change management and knowledge transfer. The competitive nature of the award also helps mitigate risks by selecting a contractor with a proven track record and competitive pricing.

How effective is the Simplified Acquisition Procedures (SAP) in ensuring competitive pricing for services like audit remediation?

Simplified Acquisition Procedures (SAP) are designed for procurements below certain dollar thresholds (currently $250,000, but this contract is significantly higher, suggesting it might have been competed under a different mechanism or the provided data is simplified). However, the principle of competition within SAP aims to ensure fair and reasonable pricing. For services like audit remediation, SAP can facilitate competition among a broader range of qualified vendors, including smaller businesses, if applicable. The process encourages vendors to submit competitive proposals. The effectiveness in ensuring competitive pricing depends on the number of vendors that respond, the clarity of the solicitation, and the agency's negotiation strategy. For larger contracts like this one, the 'COMPETED UNDER SAP' designation might be a simplification, and the actual procurement likely involved more formal competitive processes within the SAP framework or a similar streamlined approach.

What is the historical spending pattern for audit remediation and sustainment support within the Department of Defense?

Historical spending patterns for audit remediation and sustainment support within the Department of Defense (DoD) have generally shown a consistent and significant investment. Driven by legislative mandates such as the Federal Financial Management Improvement Act and the National Defense Authorization Acts, the DoD has been under continuous pressure to improve its financial reporting and achieve auditability. This has resulted in substantial, multi-year spending on financial improvement programs, audit readiness, and remediation efforts. Spending often fluctuates based on audit cycles, identified deficiencies, and strategic initiatives. Contracts for these services are frequently awarded to large professional services firms, and the overall annual expenditure by the DoD in this area can run into hundreds of millions or even billions of dollars when considering all related activities across various components.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Accounting, Tax Preparation, Bookkeeping, and Payroll Services › Offices of Certified Public Accountants

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Offers Received: 3

Pricing Type: LABOR HOURS (Z)

Evaluated Preference: NONE

Contractor Details

Parent Company: Deloitte Financial Advisory Services LLP

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: $76,609,014

Exercised Options: $32,161,718

Current Obligation: $21,510,405

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $13,851,928

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HQ003419A0006

IDV Type: BPA

Timeline