DoD's $20.5M Engineering Services Contract to Deloitte Consulting LLP Shows Long-Term Engagement

Contract Overview

Contract Amount: $20,488,046 ($20.5M)

Contractor: Deloitte Consulting LLP

Awarding Agency: Department of Defense

Start Date: 2014-03-31

End Date: 2105-03-31

Contract Duration: 33,237 days

Daily Burn Rate: $616/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ENGINEERING DHCS- D&R

Place of Performance

Location: FALLS CHURCH, FAIRFAX County, VIRGINIA, 22042

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $20.5 million to DELOITTE CONSULTING LLP for work described as: ENGINEERING DHCS- D&R Key points: 1. Contract duration of over 33,000 days suggests a sustained need for engineering services. 2. The 'NOT COMPETED' status raises questions about the initial procurement process and potential missed opportunities for broader market engagement. 3. A single award indicates a lack of competitive pressure, which could impact pricing and innovation. 4. The contract's significant value and long duration warrant scrutiny of performance and value for money. 5. Engineering services are critical for defense infrastructure, highlighting the importance of efficient and effective procurement in this sector. 6. The contract's classification as 'DEFINITIVE CONTRACT' implies a clear scope of work and established terms.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific deliverables and market rates for comparable engineering services within the Department of Defense. The extended duration and significant total value suggest a substantial investment. However, the lack of competition makes it difficult to assess if the pricing reflects optimal value for money compared to what might have been achieved through a competitive bidding process. Further analysis of the specific services rendered and their impact on defense health systems would be needed for a more definitive assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under a sole-source basis, meaning it was not openly competed. This approach is typically used when only one source is capable of meeting the requirement, or in specific circumstances where full and open competition is not feasible or advantageous. The absence of multiple bidders means there was no direct price competition, which can sometimes lead to higher costs for the government compared to a competitively awarded contract. The rationale for the sole-source award would need to be examined to understand why other qualified firms were not considered.

Taxpayer Impact: Sole-source awards can limit taxpayer savings by foregoing the potential for lower prices driven by competitive bidding. It also reduces transparency in the procurement process.

Public Impact

The primary beneficiary is the Department of Defense, specifically the Defense Health Agency, which receives essential engineering support. Services delivered likely include design, development, and maintenance of critical defense health infrastructure and systems. The geographic impact is primarily within the United States, supporting military health facilities and operations. Workforce implications may involve specialized engineering roles within Deloitte Consulting LLP, contributing to the firm's revenue and employment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to suboptimal pricing.
Long contract duration could mask inefficiencies if not actively managed.
Sole-source awards reduce transparency and potential for innovation from a wider market.

Positive Signals

Sustained engineering support ensures continuity for critical defense health systems.
Deloitte Consulting LLP is a large, established firm with significant resources.
The contract's fixed-price nature provides some cost certainty for the government.

Sector Analysis

The engineering services sector is a vital component of the broader professional services market, supporting numerous government agencies. Within the defense sector, engineering services are crucial for the design, development, and maintenance of complex military systems and infrastructure. This contract, valued at over $20 million, falls within the typical range for significant engineering support contracts awarded by agencies like the Department of Defense. Comparable spending benchmarks would involve analyzing other large-scale engineering service contracts awarded to major consulting firms for defense-related projects.

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 the primary contractor, Deloitte Consulting LLP, is not obligated to subcontract with small businesses for this specific award. Consequently, there may be limited direct impact on the small business ecosystem through this particular contract, although the prime contractor's overall business practices might involve small business engagement elsewhere.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices, specifically within the Defense Health Agency. Accountability measures would be tied to the terms and conditions of the definitive contract, including performance metrics and deliverables. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any issues of fraud, waste, or abuse arise during the contract's performance.

Related Government Programs

Defense Health Agency IT Support Contracts
Department of Defense Engineering and Technical Services
Professional Services for Military Health Systems
Large-Scale Consulting Engagements in Defense

Risk Flags

Sole-source award lacks competitive pricing pressure.
Long contract duration requires diligent oversight.
Potential for vendor lock-in.
Lack of transparency in procurement process.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.5 million to DELOITTE CONSULTING LLP. ENGINEERING DHCS- D&R

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 $20.5 million.

What is the period of performance?

Start: 2014-03-31. End: 2105-03-31.

What specific engineering services are being provided under this contract, and how do they align with the Defense Health Agency's mission?

While the data provided categorizes this as 'Engineering Services' (NAICS 541330), the specific deliverables are not detailed. However, given the awarding agency is the Defense Health Agency (DHA), it is highly probable that these services relate to the design, development, implementation, or maintenance of healthcare IT systems, medical facilities, or related infrastructure critical to military health operations. This could encompass everything from architectural designs for new medical centers to the engineering behind complex medical equipment integration or the IT backbone supporting telehealth services. The alignment with the DHA's mission would be direct, focusing on ensuring the operational readiness and effectiveness of healthcare delivery to service members, veterans, and their families.

What is the justification for awarding this significant contract on a sole-source basis to Deloitte Consulting LLP?

The justification for a sole-source award typically stems from unique capabilities, specialized expertise, or specific circumstances where full and open competition is not feasible. For a contract of this magnitude and duration, the Defense Health Agency likely determined that Deloitte Consulting LLP possessed proprietary knowledge, unique technical skills, or an established relationship with critical systems that made them the only viable option. This could be due to prior work on specific defense health platforms, specialized security clearances, or a deep understanding of the complex regulatory and operational environment within the DHA. Without the official justification documentation (e.g., a Justification and Approval document), the precise reasons remain speculative but would center on necessity and lack of alternatives.

How does the total contract value of approximately $20.5 million compare to other engineering service contracts awarded by the Department of Defense or similar agencies?

A total contract value of $20.5 million for engineering services is substantial, indicating a significant scope of work or a long-term engagement. Within the Department of Defense, which procures billions of dollars in services annually, this amount is moderate to large, depending on the specific service category and duration. For engineering services specifically, contracts can range from a few million for specialized tasks to hundreds of millions for large-scale infrastructure projects or complex system development. Comparing this to similar agencies, it aligns with major professional services contracts awarded by entities like the General Services Administration (GSA) or other military branches for specialized engineering support. The extended duration (over 9 years) also means the annual expenditure is relatively modest, around $2.2 million per year, which is common for ongoing support contracts.

What are the potential risks associated with a sole-source contract of this length, and what mitigation strategies might be in place?

The primary risks associated with a long-term, sole-source contract include potential cost overruns if pricing is not adequately managed, a lack of innovation due to the absence of competitive pressure, and vendor lock-in. There's also the risk that the contractor's capabilities might not keep pace with evolving technological needs. Mitigation strategies could include robust performance monitoring by the government, clear contract clauses for scope adjustments and price reviews, regular market research to identify potential alternative solutions, and strong government oversight to ensure the contractor remains efficient and effective. The government may also build in options for re-competition or require knowledge transfer to mitigate vendor dependency.

Given the contract's 'NOT COMPETED' status, what does this imply about the historical procurement practices for these specific engineering services within the Defense Health Agency?

The 'NOT COMPETED' designation suggests that for this particular requirement, the Defense Health Agency (DHA) opted not to conduct a competitive solicitation. This could indicate a few things about historical practices: either this type of specialized engineering support has consistently been procured through sole-source channels due to unique requirements, or there may have been a specific justification at the time of award that precluded competition. It might also reflect a strategic decision to maintain continuity with a known provider for critical systems. However, it also raises a flag for potential over-reliance on non-competitive awards, which could warrant a review of procurement strategies to ensure maximum value and opportunity for a broader range of contractors in the future.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: HT001114R0013

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Deloitte Touche Tohmatsu Limited

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: $20,818,569

Exercised Options: $20,488,046

Current Obligation: $20,488,046

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $705,994

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline