DoD's $19.5M contract with Guidehouse LLP aims to improve financial auditability and readiness

Contract Overview

Contract Amount: $19,480,362 ($19.5M)

Contractor: Guidehouse LLP

Awarding Agency: Department of Defense

Start Date: 2010-03-25

End Date: 2015-09-24

Contract Duration: 2,009 days

Daily Burn Rate: $9.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: TIME AND MATERIALS

Sector: Other

Official Description: AWARD IS IN SUPPORT OF OUSD(C) NEED FOR AN INDEPENDENT PUBLIC ACCOUNTING (IPA) FIRM TO ADDRESS ISSUES IMPEDING THE AUDITABILITY OF THE DEPARTMENT AND EACH OF ITS COMPONENTS. THIS EFFORT WILL SERVE TO ENHANCE THE FINANCIAL IMPROVEMENT AND AUDIT READINESS (FIAR) PLAN'S EFFECTIVENESS AS A MANAGEMENT TOOL FOR GUIDING, MONITORING, AND REPORTING ON THE DEPARTMENT'S EFFORTS TO IDENTIFY AND RESOLVE FINANCIAL MANAGEMENT WEAKNESSES AND ACHIEVE FINANCIAL STATEMENT AUDITABILITY. THIS IS A CONTRACT WITH A BASE YEAR AND 4 OPTION YEARS.

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 $19.5 million to GUIDEHOUSE LLP for work described as: AWARD IS IN SUPPORT OF OUSD(C) NEED FOR AN INDEPENDENT PUBLIC ACCOUNTING (IPA) FIRM TO ADDRESS ISSUES IMPEDING THE AUDITABILITY OF THE DEPARTMENT AND EACH OF ITS COMPONENTS. THIS EFFORT WILL SERVE TO ENHANCE THE FINANCIAL IMPROVEMENT AND AUDIT READINESS (FIAR) PLAN'S EFFECTIVENE… Key points: 1. Contract focuses on enhancing the Department of Defense's Financial Improvement and Audit Readiness (FIAR) plan. 2. Independent Public Accounting (IPA) firm selected to address auditability issues. 3. Contract duration spans a base year with four option years. 4. Utilizes a Time and Materials pricing structure. 5. Awarded by the Defense Finance and Accounting Service (DFAS). 6. Geographic focus on Washington D.C.

Value Assessment

Rating: good

The contract's value of approximately $19.5 million over its potential five-year period appears reasonable for specialized accounting and audit readiness services. Benchmarking against similar large-scale government audit support contracts would provide a more precise value assessment. The Time and Materials (T&M) pricing structure, while common for such services, necessitates careful monitoring to ensure cost efficiency and prevent scope creep. The selection of Guidehouse LLP, a known entity in government consulting, suggests a degree of confidence in their capabilities.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple qualified firms had the opportunity to bid. This competitive process is expected to drive better pricing and service quality. The number of bidders is not specified, but the full and open nature suggests a robust competition that should benefit the government.

Taxpayer Impact: Full and open competition generally leads to more favorable pricing for taxpayers by fostering a competitive environment among potential contractors.

Public Impact

The Department of Defense benefits through improved financial management and auditability. Services delivered include independent public accounting and audit readiness support. Geographic impact is primarily within the Washington D.C. area, where DFAS and OUSD(C) are located. Workforce implications include the engagement of specialized accounting and auditing professionals.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and Materials (T&M) pricing can lead to cost overruns if not managed diligently.
The long contract duration (base + 4 options) requires sustained oversight to ensure continued value.
Dependence on external IPA firms for core auditability functions may indicate internal capacity gaps.

Positive Signals

Awarded through full and open competition, suggesting a competitive selection process.
Focus on a critical area (auditability) that supports overall financial integrity.
Selection of a firm with demonstrated experience in government financial services.

Sector Analysis

This contract falls within the professional services sector, specifically accounting and auditing. The market for government audit and financial advisory services is substantial, with numerous firms competing for federal contracts. The Department of Defense, in particular, represents a significant portion of this spending due to its complex financial operations and regulatory requirements. This contract aligns with broader government initiatives to improve financial transparency and accountability across agencies.

Small Business Impact

The contract data indicates that small business participation was not a primary focus, as the award was made to Guidehouse LLP, a large firm, and there is no indication of small business set-asides or subcontracting requirements being explicitly mentioned. This suggests that the primary objective was to secure specialized expertise, and the scale of the work may not have been structured to facilitate significant small business involvement.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Finance and Accounting Service (DFAS) and the Office of the Under Secretary of Defense for Comptroller (OUSD(C)). Accountability measures would be embedded in the contract's performance work statement, requiring the contractor to meet specific deliverables and performance standards. Transparency is facilitated through the contract award process and public reporting mechanisms, though detailed performance metrics may not be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense Financial Improvement and Audit Readiness (FIAR) Program
Federal Audit Services Contracts
Government Financial Management Systems Support
Independent Public Accounting (IPA) Services

Risk Flags

Potential for cost overruns with T&M contract type.
Complexity of achieving DoD-wide auditability.
Reliance on external expertise for core financial functions.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.5 million to GUIDEHOUSE LLP. AWARD IS IN SUPPORT OF OUSD(C) NEED FOR AN INDEPENDENT PUBLIC ACCOUNTING (IPA) FIRM TO ADDRESS ISSUES IMPEDING THE AUDITABILITY OF THE DEPARTMENT AND EACH OF ITS COMPONENTS. THIS EFFORT WILL SERVE TO ENHANCE THE FINANCIAL IMPROVEMENT AND AUDIT READINESS (FIAR) PLAN'S EFFECTIVENESS AS A MANAGEMENT TOOL FOR GUIDING, MONITORING, AND REPORTING ON THE DEPARTMENT'S EFFORTS TO IDENTIFY AND RESOLVE FINANCIAL MANAGEMENT WEAKNESSES AND ACHIEVE FINANCIAL STATEMENT AUDITABILITY. THIS IS A CONTRACT WITH A

Who is the contractor on this award?

The obligated recipient is GUIDEHOUSE LLP.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Finance and Accounting Service).

What is the total obligated amount?

The obligated amount is $19.5 million.

What is the period of performance?

Start: 2010-03-25. End: 2015-09-24.

What is the track record of Guidehouse LLP in supporting federal audit readiness initiatives?

Guidehouse LLP has a significant track record in providing consulting services to federal agencies, including extensive work in financial management, audit, and cybersecurity. They have been involved in numerous large-scale government contracts aimed at improving financial systems and achieving auditability, particularly within defense and civilian agencies. Their experience often includes supporting complex financial statement audits, implementing financial system improvements, and developing strategies for audit readiness. This background suggests they possess the necessary expertise and understanding of the federal environment to support the DoD's objectives effectively. Their past performance on similar contracts would be a key factor in their selection for this specific award.

How does the $19.5 million contract value compare to similar government audit support contracts?

The $19.5 million contract value, spread over a potential five-year period (base year plus four option years), positions this as a substantial engagement for specialized audit readiness services. Comparable contracts within the federal government for large-scale financial improvement and audit support can range from tens to hundreds of millions of dollars, depending on the agency's size, complexity, and the scope of work. For instance, contracts supporting the audit of the entire Department of Defense or major components like the Army or Navy often exceed this amount significantly. However, for a specific focus on enhancing auditability through an Independent Public Accounting (IPA) firm's support, $19.5 million appears to be within a reasonable range, reflecting the specialized nature of the services and the duration of the engagement. A precise benchmark would require comparing it to contracts with similar objectives and contractor types.

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

The primary risks associated with this contract include potential cost overruns due to the Time and Materials (T&M) pricing structure, contractor performance issues, and the inherent challenges in achieving full auditability within the Department of Defense. T&M contracts, while flexible, require robust oversight to ensure efficient use of labor hours and prevent scope creep. Mitigation strategies likely involve detailed performance metrics, regular progress reviews, and strong contract management by DFAS and OUSD(C). Contractor performance risks are addressed through the initial selection process based on qualifications and past performance, and ongoing monitoring. The complexity of DoD's financial systems presents a significant challenge, mitigated by the selection of an experienced IPA firm and the contract's focus on enhancing the existing FIAR plan, rather than a complete overhaul.

How effective is the Financial Improvement and Audit Readiness (FIAR) plan as a management tool, and how does this contract enhance it?

The FIAR plan is designed as a strategic roadmap for the Department of Defense to achieve auditable financial statements. Its effectiveness as a management tool lies in its ability to guide, monitor, and report on progress towards financial management improvements and auditability. This contract directly enhances the FIAR plan's effectiveness by providing an Independent Public Accounting (IPA) firm to offer objective assessments and specialized expertise. The IPA firm will identify issues impeding auditability, recommend solutions, and potentially assist in implementing corrective actions. This external validation and support are crucial for ensuring the FIAR plan remains a dynamic and actionable tool, rather than a static document, ultimately driving the DoD closer to its auditability goals.

What is the historical spending pattern for similar audit and financial advisory services within the Department of Defense?

Historical spending patterns for audit and financial advisory services within the Department of Defense are substantial and have been increasing as the department strives to meet auditability requirements. Over the past decade, DoD has awarded numerous contracts, often in the tens and hundreds of millions of dollars annually, to various firms for services related to financial improvement, audit support, system modernization, and compliance. These contracts range from large, comprehensive engagements covering entire service branches to more specialized support for specific financial functions or initiatives like the FIAR program. The trend indicates a consistent and significant investment in external expertise to address the complexities of DoD's financial management and the mandate for auditable financial statements.

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) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 3

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: Pricewaterhousecoopers LLP (UEI: 001863794)

Address: 1800 TYSONS BLVD 6TH FL, MCLEAN, VA, 22102

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

Financial Breakdown

Contract Ceiling: $19,480,362

Exercised Options: $19,480,362

Current Obligation: $19,480,362

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS23F0165N

IDV Type: FSS

Timeline