DoD awards $23.6M for program management support to Deloitte, raising value-for-money questions

Contract Overview

Contract Amount: $23,630,942 ($23.6M)

Contractor: Deloitte Consulting LLP

Awarding Agency: Department of Defense

Start Date: 2020-10-01

End Date: 2024-12-19

Contract Duration: 1,540 days

Daily Burn Rate: $15.3K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: LABOR HOURS

Sector: Other

Official Description: PROGRAM MANAGEMENT SUPPORT AND ADMINISTRATIVE MANAGEMENT AND GENERAL MANAGEMENT CONSULTING SERVICES.

Place of Performance

Location: FALLS CHURCH, FAIRFAX County, VIRGINIA, 22041

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $23.6 million to DELOITTE CONSULTING LLP for work described as: PROGRAM MANAGEMENT SUPPORT AND ADMINISTRATIVE MANAGEMENT AND GENERAL MANAGEMENT CONSULTING SERVICES. Key points: 1. Contract awarded to a single, large incumbent contractor, potentially limiting competitive pricing. 2. Significant contract duration of over 4 years suggests a long-term need for these services. 3. The contract type (labor hours) can sometimes lead to cost overruns if not closely managed. 4. Performance context is critical given the broad scope of management and administrative consulting. 5. Sector positioning within Defense Health Agency highlights a focus on critical operational support. 6. Risk indicators include potential for scope creep and the need for robust performance monitoring.

Value Assessment

Rating: fair

The contract value of $23.6 million over approximately 4 years for administrative and management consulting services appears within a reasonable range for large-scale federal support. However, without specific benchmarks for comparable program management support contracts within the Defense Health Agency or similar organizations, a definitive value-for-money assessment is challenging. The labor hour contract type necessitates careful monitoring to ensure efficient resource utilization and prevent cost escalation beyond initial expectations. Benchmarking against industry standards for consulting services of this nature would provide a clearer picture of pricing competitiveness.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely solicited. However, the award to a single contractor, Deloitte Consulting LLP, suggests that they were the most advantageous offer. The level of competition, while initially broad, ultimately resulted in a single awardee, which can sometimes lead to less aggressive pricing compared to scenarios with multiple competing prime contractors. Further details on the number of bids received would offer more insight into the true competitive landscape.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it aims to secure the best value through a wide range of offers. However, the ultimate benefit depends on the number of responsive bids and the effectiveness of the evaluation process in selecting the most cost-effective and technically superior proposal.

Public Impact

Benefits the Department of Defense, specifically the Defense Health Agency, by providing essential program management and administrative support. Services delivered are critical for the efficient operation and management of defense health programs. Geographic impact is primarily within the agency's operational sphere, likely supporting national defense health initiatives. Workforce implications include the potential for a large team of consultants supporting the agency, as well as the impact on government personnel who collaborate with or manage these services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for over-reliance on contractor support, impacting organic government capabilities.
Labor hour contract type requires diligent oversight to control costs and prevent scope creep.
Broad scope of services could lead to challenges in defining and measuring specific performance outcomes.
Incumbent contractor advantage may limit future competition and innovation.

Positive Signals

Awarded through full and open competition, suggesting a robust initial selection process.
Contractor is a well-established firm with significant experience in government contracting.
Long contract duration indicates a sustained need and potential for stable support.
Clear agency (Defense Health Agency) and service type (management consulting) provide focus.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically administrative and general management consulting. This is a significant market for the federal government, supporting a wide array of agency functions. The total federal spending on management and consulting services is substantial, with agencies like the Department of Defense being major consumers. This contract represents a portion of that spending, focused on supporting the critical health mission of the DHA. Comparable spending benchmarks would typically involve analyzing other large-scale management support contracts awarded to major consulting firms across various federal agencies.

Small Business Impact

The contract data indicates that small business participation (ss: false, sb: false) was not a specific set-aside requirement for this particular award. As a large contract awarded to a major consulting firm, the primary focus is likely on prime performance rather than direct small business set-aside. However, the prime contractor, Deloitte Consulting LLP, may engage small businesses as subcontractors to fulfill specific needs or meet broader subcontracting goals, depending on the terms of the contract and the company's internal policies. The absence of a direct set-aside means that the direct impact on the small business ecosystem is limited unless subcontracting opportunities are actively pursued.

Oversight & Accountability

Oversight for this contract would primarily reside with the contracting agency, the Defense Health Agency, and potentially the Department of Defense's Inspector General. Mechanisms likely include regular performance reviews, milestone tracking, and financial audits. Transparency is typically managed through contract award databases and reporting requirements. The effectiveness of oversight depends on the agency's resources dedicated to contract management and the clarity of performance metrics defined within the contract.

Related Government Programs

Program Management Support Services
Administrative Management and General Management Consulting Services
Defense Health Agency Contracts
Department of Defense Consulting Services
Federal Management Consulting Spending

Risk Flags

Potential for cost overruns due to labor hour contract type.
Broad scope of services may lead to challenges in performance measurement.
Long contract duration requires sustained oversight.
Reliance on a single large contractor could limit future competitive options.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.6 million to DELOITTE CONSULTING LLP. PROGRAM MANAGEMENT SUPPORT AND ADMINISTRATIVE MANAGEMENT AND GENERAL MANAGEMENT CONSULTING SERVICES.

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 $23.6 million.

What is the period of performance?

Start: 2020-10-01. End: 2024-12-19.

What is Deloitte Consulting LLP's track record with the federal government, particularly in providing program management support?

Deloitte Consulting LLP is a major federal contractor with a long history of providing a wide range of services, including program management support, IT consulting, and administrative services, across numerous government agencies. Their track record includes numerous large-scale contracts, often awarded through competitive processes. While specific performance details for individual contracts are often proprietary or found in agency-specific performance evaluations, Deloitte is generally recognized for its capacity to handle complex federal projects. However, like any large contractor, they have also faced scrutiny and reviews regarding contract performance and pricing on certain engagements. A comprehensive assessment would require reviewing specific past performance reports and any associated corrective actions or commendations from agencies they have served.

How does the $23.6 million contract value compare to similar program management support contracts awarded by the Defense Health Agency or other DoD components?

The $23.6 million contract value for program management and administrative consulting services over approximately 4 years is substantial but not unusual for large federal agencies like the Defense Health Agency (DHA). The DHA manages complex healthcare systems and requires significant support. Benchmarking this against similar contracts requires access to detailed contract databases and analysis of scope, duration, and contractor type. However, contracts for comprehensive program management support for major federal initiatives often range from tens to hundreds of millions of dollars. The key comparison points would be contracts for similar services (e.g., strategic planning, operational support, administrative management) awarded to large consulting firms within the DoD or other large civilian agencies. Without specific comparable contract data, it's difficult to definitively state if this represents exceptional value, but it aligns with the scale of support typically required for such critical functions.

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

Primary risks associated with this contract include potential cost overruns due to the labor hour contract type, scope creep where the services expand beyond the original intent, and performance deficiencies if the contractor fails to deliver expected outcomes. Mitigation strategies likely involve robust contract oversight by the DHA, including regular performance reviews, detailed monitoring of labor hours and expenditures, and clearly defined performance metrics and deliverables. The agency's contracting officers and program managers are responsible for actively managing the contract, ensuring adherence to the statement of work, and addressing any issues promptly. Furthermore, the contractor's own quality assurance processes and internal controls are expected to mitigate performance risks.

What is the expected effectiveness of these program management and administrative consulting services in supporting the Defense Health Agency's mission?

The expected effectiveness hinges on the clarity of the statement of work and the contractor's ability to deliver specialized expertise that complements the DHA's organic capabilities. Program management support is crucial for ensuring that complex health initiatives are executed efficiently, on time, and within budget. Administrative consulting can streamline operations, improve processes, and enhance overall organizational efficiency. The DHA's mission is critical, involving the health and readiness of military personnel and their families. Effective support in these areas can directly contribute to better healthcare delivery, improved resource allocation, and successful implementation of strategic objectives. The ultimate measure of effectiveness will be tied to the achievement of specific performance objectives outlined in the contract.

How have historical spending patterns for program management support at the Defense Health Agency evolved, and does this contract align with those trends?

Analyzing historical spending patterns for program management support at the Defense Health Agency (DHA) would require a deep dive into historical contract data, looking at trends in contract values, types of services procured, and the contractors awarded these services over several fiscal years. Generally, large federal agencies like the DHA experience consistent needs for program management and administrative support due to the complexity and scale of their operations. Spending in this area often fluctuates based on specific program needs, budget allocations, and strategic priorities. This $23.6 million contract, awarded under full and open competition, suggests a continued and significant requirement for such services. Without specific historical data, it's presumed this contract aligns with the ongoing need for specialized support to manage and administer the DHA's vast healthcare programs and initiatives.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Administrative Management and General Management Consulting Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: HT001117R0020

Pricing Type: LABOR HOURS (Z)

Evaluated Preference: NONE

Contractor Details

Parent Company: Deloitte Financial Advisory Services LLP

Address: 1919 N LYNN ST, ARLINGTON, VA, 22209

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

Financial Breakdown

Contract Ceiling: $23,630,942

Exercised Options: $23,630,942

Current Obligation: $23,630,942

Subaward Activity

Number of Subawards: 14

Total Subaward Amount: $16,526,957

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HT001120A1011

IDV Type: BPA

Timeline