DSCA Security Assistance Audit Contract Awarded to SIKICH CPA LLC for $20.06M Over 5 Years

Contract Overview

Contract Amount: $20,058,153 ($20.1M)

Contractor: Sikich CPA LLC

Awarding Agency: Department of Defense

Start Date: 2022-01-01

End Date: 2026-12-31

Contract Duration: 1,825 days

Daily Burn Rate: $11.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: LABOR HOURS

Sector: Other

Official Description: EO14042. DEFENSE SECURITY COOPERATION AGENCY SECURITY ASSISTANCE ACCOUNTS FINANCIAL STATEMENTS AUDIT FOR FISCAL YEARS 2022-2026

Place of Performance

Location: ALEXANDRIA, ALEXANDRIA CITY County, VIRGINIA, 22314

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $20.1 million to SIKICH CPA LLC for work described as: EO14042. DEFENSE SECURITY COOPERATION AGENCY SECURITY ASSISTANCE ACCOUNTS FINANCIAL STATEMENTS AUDIT FOR FISCAL YEARS 2022-2026 Key points: 1. The contract aims to audit financial statements for security assistance accounts. 2. SIKICH CPA LLC was selected through full and open competition. 3. The audit covers fiscal years 2022-2026, indicating a long-term financial review. 4. The contract value is approximately $20.06 million, with a significant portion allocated to labor hours. 5. This audit is crucial for ensuring accountability and transparency in defense security cooperation spending.

Value Assessment

Rating: good

The contract's value of $20.06M over five years for audit services appears reasonable given the scope and duration. Benchmarking against similar large-scale government financial statement audits suggests this pricing is competitive.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, allowing multiple qualified firms to bid. This competitive process likely resulted in a fair market price discovery for the audit services.

Taxpayer Impact: The taxpayer benefits from a thorough audit ensuring the proper use of funds in security assistance programs.

Public Impact

Ensures accountability for billions in security assistance funds. Provides transparency into the financial operations of the Defense Security Cooperation Agency. Supports effective management and oversight of international security cooperation efforts. Identifies potential financial risks and areas for improvement in accounting practices. Contributes to maintaining public trust in defense spending.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep in long-term audits.
Reliance on contractor's independence and thoroughness.
Complexity of international financial regulations.

Positive Signals

Clear objective for financial statement audits.
Established audit firm with relevant experience.
Long-term contract allows for consistent oversight.
Full and open competition ensures best value.

Sector Analysis

This contract falls within the professional services sector, specifically accounting and auditing. Government spending on audit services is a critical component of ensuring financial integrity and compliance across all agencies, with benchmarks often set by the scale and complexity of the entity being audited.

Small Business Impact

The contract was awarded through full and open competition, which does not specifically favor small businesses. However, the nature of large-scale financial audits often requires specialized expertise and resources typically found in larger firms.

Oversight & Accountability

The Department of Defense, through the Defense Finance and Accounting Service, is responsible for overseeing this contract. Regular reporting and performance reviews will be critical to ensure the audit meets its objectives and taxpayer interests are protected.

Related Government Programs

Offices of Certified Public Accountants
Department of Defense Contracting
Defense Finance and Accounting Service Programs

Risk Flags

Potential for audit findings to reveal significant financial mismanagement.
Contract duration may lead to complacency or loss of institutional knowledge.
Complexity of international financial transactions could complicate audit scope.
Dependence on agency cooperation for access to records and personnel.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.1 million to SIKICH CPA LLC. EO14042. DEFENSE SECURITY COOPERATION AGENCY SECURITY ASSISTANCE ACCOUNTS FINANCIAL STATEMENTS AUDIT FOR FISCAL YEARS 2022-2026

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 $20.1 million.

What is the period of performance?

Start: 2022-01-01. End: 2026-12-31.

What specific areas of security assistance spending will the audit prioritize, and how will findings be used to improve future financial management?

The audit will focus on the accuracy and fairness of the financial statements for security assistance accounts. Findings are expected to highlight any material misstatements, internal control weaknesses, or non-compliance with regulations. This information will be used by DSCA leadership and DFAS to implement corrective actions, strengthen internal controls, and improve the overall financial reporting processes for security assistance programs, ultimately enhancing accountability and efficiency.

What are the potential risks associated with a five-year audit contract, and what mitigation strategies are in place?

Potential risks include the contractor's independence being compromised over time, changes in accounting standards or agency operations not being adequately addressed, and potential cost overruns if the scope expands. Mitigation strategies include rigorous annual performance reviews, clear contractual clauses regarding independence and adherence to standards, and regular communication between the agency and the audit firm to address evolving requirements proactively.

How will the effectiveness of the audit be measured, beyond the issuance of audit reports?

Effectiveness will be measured by the timeliness and quality of the audit reports, the identification of significant financial irregularities or control deficiencies, and the extent to which the agency implements the audit recommendations. Success will also be gauged by the reduction in audit findings in subsequent years and the overall improvement in the reliability and transparency of the security assistance financial statements, contributing to better informed decision-making.

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: HQ042321R0029

Offers Received: 4

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: $20,058,153

Exercised Options: $20,058,153

Current Obligation: $20,058,153

Subaward Activity

Number of Subawards: 5

Total Subaward Amount: $2,164,028

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS00F144CA

IDV Type: FSS

Timeline