DoD's Transportation Command WCF audit contract awarded to Sikich CPA LLC for $26.9M over 5 years

Contract Overview

Contract Amount: $26,935,575 ($26.9M)

Contractor: Sikich CPA LLC

Awarding Agency: Department of Defense

Start Date: 2021-01-01

End Date: 2025-12-31

Contract Duration: 1,825 days

Daily Burn Rate: $14.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: LABOR HOURS

Sector: Other

Official Description: AUDIT OF THE UNITED STATES TRANSPORTATION COMMAND (TRANSCOM) WORKING CAPITAL FUND (WCF) FY21-FY25

Place of Performance

Location: ALEXANDRIA, ALEXANDRIA CITY County, VIRGINIA, 22314

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $26.9 million to SIKICH CPA LLC for work described as: AUDIT OF THE UNITED STATES TRANSPORTATION COMMAND (TRANSCOM) WORKING CAPITAL FUND (WCF) FY21-FY25 Key points: 1. Value for money assessed through comparison with similar audit services. 2. Competition dynamics indicate a full and open process. 3. Risk indicators include the duration of the contract and the nature of audit services. 4. Performance context is the ongoing audit of TRANSCOM's Working Capital Fund. 5. Sector positioning within professional services for government agencies.

Value Assessment

Rating: good

The contract value of $26.9 million over five years for audit services appears reasonable when benchmarked against similar large-scale government audit contracts. Sikich CPA LLC's pricing will be evaluated against industry standards for certified public accounting firms performing complex financial audits. The specific scope of work, including the audit of the Transportation Command's Working Capital Fund for FY21-FY25, justifies the investment in ensuring financial integrity and compliance.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple qualified bidders had the opportunity to submit proposals. The presence of two bidders indicates a moderate level of competition for this significant audit service requirement. A competitive process generally leads to better price discovery and ensures the government receives proposals from a range of capable firms.

Taxpayer Impact: A full and open competition helps ensure that taxpayer dollars are used efficiently by driving down costs through competitive bidding.

Public Impact

The Department of Defense benefits from an independent audit of its Transportation Command's Working Capital Fund. Services delivered include comprehensive financial statement audits and assessments of internal controls. Geographic impact is primarily within the Department of Defense's operational footprint, with a focus on financial management. Workforce implications are minimal, primarily involving the contractor's audit team and relevant DoD personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep in audit requirements over the five-year period.
Reliance on contractor expertise for complex financial systems.
Timeliness of audit findings and recommendations implementation.

Positive Signals

Award to a qualified CPA firm through a competitive process.
Clear contract duration and defined audit objectives.
Focus on a critical financial function within a major DoD command.

Sector Analysis

The market for government audit services is robust, with numerous accounting firms capable of performing complex financial audits. This contract falls within the professional services sector, specifically accounting and auditing for federal agencies. Comparable spending benchmarks for large federal audit contracts can vary significantly based on agency size, complexity of financial systems, and audit scope. The Transportation Command's Working Capital Fund represents a substantial financial operation within the Department of Defense.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. The nature of the audit services required likely favors larger, established firms with extensive experience in federal financial audits. This means the direct economic impact on the small business ecosystem for this specific contract is likely limited.

Oversight & Accountability

Oversight will be provided by the Defense Finance and Accounting Service (DFAS), which awarded the contract. Accountability measures are embedded in the contract terms, requiring adherence to Generally Accepted Auditing Standards (GAAS) and specific audit objectives. Transparency is facilitated through the public availability of audit reports, subject to security and classification considerations. The Inspector General's office may also have oversight jurisdiction over audit processes and findings.

Related Government Programs

Department of Defense Financial Audits
Transportation Command Operations
Working Capital Fund Management
Federal Audit Services Contracts

Risk Flags

Contract duration exceeds typical audit cycles.
Potential for findings impacting operational readiness.
Reliance on contractor for critical financial oversight.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.9 million to SIKICH CPA LLC. AUDIT OF THE UNITED STATES TRANSPORTATION COMMAND (TRANSCOM) WORKING CAPITAL FUND (WCF) FY21-FY25

Who is the contractor on this award?

The obligated recipient is SIKICH CPA LLC.

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 $26.9 million.

What is the period of performance?

Start: 2021-01-01. End: 2025-12-31.

What is the track record of Sikich CPA LLC in performing federal government audits, particularly for large defense agencies?

Sikich CPA LLC has a documented history of providing audit and accounting services to various government entities. While specific details on their experience with large defense agencies like TRANSCOM would require a deeper dive into their past performance records and contract awards, their selection for this significant contract suggests they meet the necessary qualifications and experience. Federal agencies typically conduct thorough pre-award reviews of contractor past performance, including audits of similar scope and complexity, to ensure capability. Further analysis would involve examining their federal contract databases and any publicly available performance reviews or awards.

How does the awarded amount of $26.9 million compare to similar large-scale federal audit contracts?

Benchmarking the $26.9 million award requires comparing it to contracts for comprehensive financial statement audits of large federal entities or working capital funds. Contracts for entities with complex financial structures, extensive operations, and significant asset bases, such as TRANSCOM's WCF, typically command higher values. Factors influencing cost include the number of audit hours, complexity of financial systems, regulatory requirements, and the specific audit standards to be applied. Without direct comparisons to identical entities, this figure appears within a reasonable range for a multi-year audit of a major component of the Department of Defense, assuming the scope is adequately defined.

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

Key risks include potential audit findings that could necessitate significant corrective actions, contractor performance issues impacting audit timeliness or quality, and the inherent risk of financial misstatements within the audited fund. Mitigation strategies involve robust contract oversight by DFAS, clear performance metrics and deliverables, adherence to strict auditing standards, and the competitive nature of the award which incentivizes quality performance. The contract's duration also allows for building institutional knowledge, potentially reducing risks over time, but also necessitates vigilance against complacency. Regular communication and review meetings are crucial for proactive risk management.

How effective is the audit of the Transportation Command's Working Capital Fund expected to be in improving financial management and accountability?

The effectiveness of the audit hinges on the thoroughness of Sikich CPA LLC's work and the responsiveness of TRANSCOM to audit findings and recommendations. Independent audits are crucial for identifying control weaknesses, non-compliance, and areas for operational efficiency. By providing an objective assessment, the audit aims to enhance transparency, strengthen internal controls, and ensure the accurate reporting of financial information. The ultimate effectiveness in improving financial management and accountability will be measured by the extent to which TRANSCOM implements the recommended corrective actions and demonstrates sustained improvements in its financial operations and reporting.

What are the historical spending patterns for audit services related to the Transportation Command's Working Capital Fund?

Analyzing historical spending patterns for audit services related to TRANSCOM's WCF would provide context for the current $26.9 million award. This would involve examining previous audit contracts, their values, durations, and the contractors involved. Significant year-over-year increases or decreases in spending could indicate changes in audit scope, complexity, or market rates. Understanding past expenditures helps in assessing whether the current contract represents a fair market price and whether there have been consistent investments in financial oversight for this specific fund. Without access to historical data, it's difficult to establish a precise trend.

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

Solicitation ID: HQ042320Q0011

Offers Received: 2

Pricing Type: LABOR HOURS (Z)

Evaluated Preference: NONE

Contractor Details

Address: 333 JOHN CARLYLE ST STE 500, ALEXANDRIA, VA, 22314

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

Financial Breakdown

Contract Ceiling: $27,052,480

Exercised Options: $27,052,480

Current Obligation: $26,935,575

Actual Outlays: $3,421,850

Subaward Activity

Number of Subawards: 4

Total Subaward Amount: $3,756,787

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: GS00F144CA

IDV Type: FSS

Timeline