Deloitte Consulting LLP awarded $20.9M contract for IT infrastructure services by the Defense Health Agency

Contract Overview

Contract Amount: $20,929,312 ($20.9M)

Contractor: Deloitte Consulting LLP

Awarding Agency: Department of Defense

Start Date: 2013-09-29

End Date: 2016-09-28

Contract Duration: 1,095 days

Daily Burn Rate: $19.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: LABOR CATEGORY

Place of Performance

Location: FALLS CHURCH, FAIRFAX County, VIRGINIA, 22042

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $20.9 million to DELOITTE CONSULTING LLP for work described as: LABOR CATEGORY Key points: 1. Contract value of $20.9 million over three years indicates significant investment in IT infrastructure. 2. Sole-source award suggests limited market availability or specific contractor expertise required. 3. High dollar value and long duration present potential risks if performance falters. 4. Services align with critical defense health IT needs, emphasizing performance context. 5. Positioned within the IT services sector, specifically data processing and hosting. 6. Contract type is a firm-fixed-price definitive contract, providing cost certainty.

Value Assessment

Rating: fair

The contract value of $20.9 million over three years for IT infrastructure services appears substantial. Benchmarking against similar contracts for data processing and web hosting is challenging without more specific service details. However, the firm-fixed-price structure suggests an attempt to control costs. The lack of competition, however, raises questions about whether the government achieved the best possible price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Deloitte Consulting LLP, was solicited. This approach is typically used when there is a lack of reasonable alternatives, unique capabilities required, or in urgent situations. The absence of competition means that price discovery through market forces was bypassed, potentially leading to higher costs for the government.

Taxpayer Impact: Sole-source awards limit opportunities for other businesses and can result in taxpayers paying a premium due to the absence of competitive bidding.

Public Impact

The primary beneficiaries are the Department of Defense and the Defense Health Agency, receiving essential IT infrastructure support. Services delivered include computing infrastructure, data processing, and web hosting, crucial for military health systems. Geographic impact is likely nationwide, supporting military personnel and their families accessing healthcare services. Workforce implications may involve specialized IT personnel employed by Deloitte to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and potentially increases costs for taxpayers.
Long-term contract duration of three years carries performance and vendor stability risks.
Lack of detailed service scope makes precise value-for-money assessment difficult.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Award to a well-established contractor like Deloitte suggests a degree of reliability.
Services are critical for the functioning of the Defense Health Agency's IT systems.

Sector Analysis

This contract falls within the broader IT services sector, specifically focusing on computing infrastructure, data processing, and web hosting. This is a critical area for government operations, especially within defense and healthcare. The market for these services is large and competitive, but specialized government requirements or existing infrastructure integration can sometimes lead to sole-source awards. Comparable spending benchmarks for similar large-scale IT infrastructure contracts within the federal government can range from tens to hundreds of millions of dollars annually.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the 'ss' (small business subcontracting) is also false. This suggests that small businesses are unlikely to be directly involved as subcontractors on this specific award, potentially limiting their opportunities to participate in this particular federal spending. The focus is on a large prime contractor for a significant IT service requirement.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Health Agency's contracting and program management offices. As a definitive contract, it is subject to standard federal procurement regulations and oversight. Transparency is generally maintained through contract databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Defense Health Information Technology
DoD Cloud Computing Services
Federal Data Center Consolidation Initiative
IT Infrastructure Modernization Programs

Risk Flags

Sole Source Award
Potential for Overpricing
Vendor Lock-in Risk
Performance Monitoring Challenges

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.9 million to DELOITTE CONSULTING LLP. LABOR CATEGORY

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 Health Agency).

What is the total obligated amount?

The obligated amount is $20.9 million.

What is the period of performance?

Start: 2013-09-29. End: 2016-09-28.

What is Deloitte Consulting LLP's track record with the Defense Health Agency and similar federal agencies for IT infrastructure services?

Deloitte Consulting LLP has a significant history of contracting with various U.S. federal agencies, including the Department of Defense and its sub-agencies like the Defense Health Agency (DHA). Their portfolio often includes large-scale IT services, consulting, and system integration projects. For IT infrastructure, data processing, and hosting, Deloitte has been a frequent awardee. While specific performance metrics for this $20.9 million contract are not detailed here, their general track record suggests experience in managing complex IT environments. However, as with any large contractor, past performance reviews and any documented issues with previous contracts would be crucial for a complete assessment. The DHA, in particular, relies heavily on contractors for its vast IT infrastructure, making Deloitte's role significant.

How does the $20.9 million contract value compare to similar IT infrastructure contracts awarded by the Defense Health Agency or other DoD components?

The $20.9 million contract value for three years of IT infrastructure services (computing, data processing, hosting) is a substantial but not extraordinary amount for the Department of Defense. Large agencies like the DHA often award contracts in the tens or hundreds of millions for comprehensive IT support. For instance, contracts for enterprise-wide cloud services, data center management, or network infrastructure can easily exceed this figure. When compared to similar definitive contracts for data processing and hosting, this award appears to be in the mid-to-high range for a single vendor over a three-year period. However, without knowing the exact scope, service level agreements (SLAs), and specific technologies involved, a precise value-for-money comparison is difficult. The sole-source nature also complicates direct benchmarking against competitively awarded contracts.

What are the primary risks associated with this sole-source, firm-fixed-price contract for IT infrastructure services?

The primary risks associated with this contract stem from its sole-source nature and the firm-fixed-price (FFP) structure. Sole-sourcing eliminates competitive pressure, potentially leading to inflated prices and reduced innovation, as the government has limited options to negotiate better terms. The FFP structure, while providing cost certainty, can shift risks to the contractor. If the contractor underestimates costs or faces unforeseen technical challenges, they might cut corners on quality or service delivery to maintain profitability, impacting the reliability of critical IT infrastructure. Furthermore, the long duration (three years) increases the risk of vendor lock-in and the potential for the technology or services to become outdated if not managed proactively. Dependence on a single vendor also poses a risk if the contractor experiences financial instability or undergoes significant organizational changes.

How effective is the Defense Health Agency likely to be in overseeing a sole-source contract of this magnitude?

The effectiveness of the Defense Health Agency (DHA) in overseeing this sole-source contract depends heavily on its internal program management capabilities, contract administration resources, and the clarity of the contract's performance work statement (PWS). DHA, being a major component of the DoD, generally possesses established oversight mechanisms, including contract officers, technical monitors, and quality assurance personnel. However, sole-source contracts require particularly diligent oversight to ensure the contractor is delivering as promised and that the pricing remains fair, even without competition. Key oversight activities would include regular performance reviews, monitoring of service level agreements (SLAs), audits of contractor performance, and proactive communication. The agency's ability to enforce contract terms and address any deficiencies promptly will be critical to ensuring the value and effectiveness of the services provided.

What are the historical spending patterns for IT infrastructure services by the Defense Health Agency?

The Defense Health Agency (DHA) has consistently allocated significant funding towards IT infrastructure services to support its vast network of healthcare facilities and personnel. Historical spending patterns reveal a trend of increasing reliance on robust IT systems for electronic health records (EHR), data management, cybersecurity, and communication. The DHA frequently awards large contracts, often in the tens to hundreds of millions of dollars, for services encompassing data center operations, cloud hosting, network management, and related support. These contracts are often multi-year and can be awarded through various procurement methods, including competitive bids and, at times, sole-source actions for specialized needs or existing system integrations. The overall trend indicates a sustained and growing investment in IT infrastructure to maintain and modernize military healthcare systems.

Industry Classification

NAICS: Information › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: HT001113R0052

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Deloitte 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: $20,929,312

Exercised Options: $20,929,312

Current Obligation: $20,929,312

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline