DoD's $31.4M Deloitte contract for program management support shows fair value, but limited competition raises concerns

Contract Overview

Contract Amount: $31,411,715 ($31.4M)

Contractor: Deloitte Consulting LLP

Awarding Agency: Department of Defense

Start Date: 2022-10-01

End Date: 2023-09-30

Contract Duration: 364 days

Daily Burn Rate: $86.3K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: PROGRAM MANAGEMENT SUPPORT SERVICES

Place of Performance

Location: FALLS CHURCH, FAIRFAX County, VIRGINIA, 22041

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $31.4 million to DELOITTE CONSULTING LLP for work described as: PROGRAM MANAGEMENT SUPPORT SERVICES Key points: 1. Value for money appears fair given the scope of program management support. 2. Competition was full and open, but the number of bidders was not specified. 3. Risk indicators are moderate, with no major red flags identified in the provided data. 4. Performance context is within administrative management and general management consulting services. 5. Sector positioning is within the Defense Health Agency's IT and administrative support functions. 6. The contract type is Firm Fixed Price, which helps control costs. 7. The contract was awarded as a BPA Call, indicating it's part of a larger framework agreement.

Value Assessment

Rating: fair

The contract's value of approximately $31.4 million over one year for program management support services appears reasonable when benchmarked against similar large-scale consulting engagements within the federal government. While specific performance metrics are not detailed, the firm-fixed-price structure suggests a degree of cost control. However, without more granular data on the specific deliverables and the contractor's historical performance on similar tasks, a definitive assessment of 'excellent' value is difficult. The price per day is approximately $86,296, which is substantial but not necessarily out of line for complex program management.

Cost Per Unit: Approximately $86,296 per day.

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which is a positive indicator for price discovery and market responsiveness. However, the number of bids received is not specified, making it difficult to fully assess the intensity of the competition. A high number of bidders typically drives down prices and encourages innovation. Without this detail, it's challenging to determine if the competition was robust enough to secure the best possible value for the government.

Taxpayer Impact: Full and open competition is generally beneficial for taxpayers as it aims to solicit the widest range of offers, potentially leading to more competitive pricing and better service quality.

Public Impact

The primary beneficiary is the Department of Defense, specifically the Defense Health Agency, which receives critical program management support. Services delivered include administrative management and general management consulting, essential for the efficient operation of defense health programs. The geographic impact is primarily within the Defense Health Agency's operational areas, likely supporting national defense health initiatives. Workforce implications include the potential for Deloitte to utilize a significant number of consultants, contributing to employment in the professional services sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific performance metrics makes it hard to gauge true effectiveness.
The substantial daily rate warrants close monitoring of deliverables.
Dependence on a single large contract for critical support functions can pose a risk if performance falters.

Positive Signals

Firm-fixed-price contract type helps manage cost overruns.
Awarded under full and open competition, suggesting a broad market search.
Deloitte is a large, established firm with significant experience in government contracting.

Sector Analysis

This contract falls within the professional services sector, specifically management consulting, which is a significant component of federal IT and administrative support spending. The market for these services is large and competitive, with numerous firms capable of providing program management support. The Defense Health Agency's need for such services is driven by the complexity of managing large-scale health programs within the military. Comparable spending benchmarks for similar program management support contracts within the DoD often range in the tens to hundreds of millions of dollars annually.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). As a large contract awarded to a major firm, it is unlikely to have significant direct subcontracting opportunities for small businesses unless explicitly mandated or pursued by the prime contractor. The focus is on large-scale program management, which typically requires extensive resources and expertise best provided by larger entities.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program managers within the Defense Health Agency. As a firm-fixed-price contract, the primary oversight focuses on ensuring that the contractor meets the defined scope of work and performance standards. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any issues of fraud, waste, or abuse arise.

Related Government Programs

DoD Program Management Support Services
Defense Health Agency IT Services
Management and Consulting Services
Large-scale Federal Consulting Contracts
BPA Call Awards

Risk Flags

Potential for cost creep if scope is not well-defined.
Performance risk due to complexity of program management.
Limited insight into the number of competitors.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $31.4 million to DELOITTE CONSULTING LLP. PROGRAM MANAGEMENT SUPPORT 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 $31.4 million.

What is the period of performance?

Start: 2022-10-01. End: 2023-09-30.

What is Deloitte's track record with the Department of Defense for similar program management contracts?

Deloitte Consulting LLP has a substantial and long-standing track record of contracting with the Department of Defense across various agencies and program areas. They frequently secure large, complex contracts for management consulting, IT services, and program support. Their history with the DoD includes numerous engagements involving strategic planning, systems implementation, financial management, and operational efficiency improvements. While specific performance details on past contracts are often proprietary or require deeper investigation into contract performance reports (CPARS), Deloitte's consistent presence and award of significant contracts suggest a generally accepted level of capability and reliability within the defense sector. However, like any large contractor, past performance reviews may vary, and a detailed analysis would involve examining specific past performance evaluations for contracts of similar size and scope.

How does the $86,296 daily rate compare to market benchmarks for similar consulting services?

The daily rate of approximately $86,296 for this contract, when annualized and divided by the number of days (364), suggests a significant cost. Benchmarking this rate requires careful consideration of the specific services provided, the seniority of the personnel involved, and the complexity of the program management. For high-level strategic consulting and program management support within the federal government, particularly for specialized defense health initiatives, rates can indeed be substantial. However, compared to standard industry rates for management consultants, this figure appears to be at the higher end. Without knowing the exact mix of labor categories (e.g., senior advisors, project managers, analysts) and their respective rates, a precise comparison is difficult. It is crucial to assess if this rate reflects the specialized expertise and the critical nature of the support provided to the Defense Health Agency.

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

The primary risks associated with this contract include potential cost overruns if the scope of work expands beyond initial estimates (though mitigated by the firm-fixed-price structure), performance deficiencies where the contractor fails to deliver expected outcomes, and a lack of sufficient competition potentially leading to suboptimal pricing. Mitigation strategies include the firm-fixed-price contract type, which shifts cost risk to the contractor. Oversight by the Defense Health Agency's contracting officers and program managers is crucial for monitoring performance against the Statement of Work (SOW). While the contract was awarded under full and open competition, the lack of specified bidder numbers means the intensity of competition, a key risk mitigator for price, is unclear. The contractor's established reputation is also a mitigating factor against performance risk.

What is the historical spending pattern for program management support services at the Defense Health Agency?

Historical spending patterns for program management support services at the Defense Health Agency (DHA) are likely substantial and have grown over time, reflecting the increasing complexity of military healthcare systems and the need for sophisticated management. The DHA manages a vast network of healthcare facilities and programs, requiring continuous support for planning, execution, and oversight. Annual spending on such services can easily reach tens or hundreds of millions of dollars, often distributed across multiple contracts and task orders awarded through various vehicles like Blanket Purchase Agreements (BPAs) and Indefinite Delivery/Indefinite Quantity (IDIQ) contracts. This specific $31.4 million contract represents a portion of that overall spending, likely focused on a particular program or set of initiatives within the DHA's portfolio. Trends may show an increasing reliance on external expertise for specialized program management.

How does the 'BPA Call' award mechanism impact the transparency and efficiency of this contract?

The 'BPA Call' award mechanism signifies that this contract is a task order issued under a pre-existing Blanket Purchase Agreement (BPA). BPAs are established with vendors to streamline the procurement of commonly purchased goods or services. A 'BPA Call' is essentially an order placed against that BPA. This mechanism generally enhances efficiency by reducing the administrative burden and lead time associated with establishing new contracts. Transparency is maintained through the initial competitive process used to establish the BPA itself, and subsequent calls are typically awarded based on pre-negotiated terms and pricing. However, the transparency of individual calls can vary depending on the terms of the BPA and whether multiple vendors under the BPA could have competed for the specific call. For taxpayers, this can mean faster delivery of services and potentially better pricing due to pre-negotiated rates, but it relies on the initial BPA competition being robust.

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

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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: $31,411,715

Exercised Options: $31,411,715

Current Obligation: $31,411,715

Actual Outlays: $6,869,348

Subaward Activity

Number of Subawards: 15

Total Subaward Amount: $16,367,489

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HT001120A1011

IDV Type: BPA

Timeline