Deloitte Consulting LLP awarded $48.4M for engineering and support services by the Department of the Navy

Contract Overview

Contract Amount: $48,424,113 ($48.4M)

Contractor: Deloitte Consulting LLP

Awarding Agency: Department of Defense

Start Date: 2020-07-24

End Date: 2024-02-14

Contract Duration: 1,300 days

Daily Burn Rate: $37.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: ENGINEERING&SUPPORT SERVICES BASE YEAR

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22209

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $48.4 million to DELOITTE CONSULTING LLP for work described as: ENGINEERING&SUPPORT SERVICES BASE YEAR Key points: 1. Contract awarded on a cost-plus-fixed-fee basis, which can lead to cost overruns if not managed carefully. 2. The contract was not competed, raising questions about potential price discovery and value for money. 3. The duration of the contract (1300 days) suggests a significant, long-term need for these services. 4. The North American Industry Classification System (NAICS) code 541511 indicates custom computer programming services. 5. The base year value of over $48 million warrants scrutiny for efficiency and necessity. 6. The contract was awarded to a single vendor, Deloitte Consulting LLP, without a competitive process.

Value Assessment

Rating: questionable

Benchmarking the value for this specific contract is challenging due to its sole-source nature and the lack of publicly available comparable data for custom computer programming services of this scale and scope. The cost-plus-fixed-fee structure introduces inherent risk for the government, as costs can escalate. Without competitive bids, it's difficult to ascertain if the pricing reflects fair market value or if there were opportunities for cost savings through a more open bidding process. The contract's base year value of $48.4 million is substantial and requires robust justification for its necessity and cost-effectiveness.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor possesses the necessary capabilities or when circumstances necessitate immediate action. The lack of competition means that the government did not benefit from the price discovery that typically occurs in a competitive bidding environment, potentially leading to higher costs than might have been achieved otherwise.

Taxpayer Impact: Taxpayers may have paid a premium for these services due to the absence of competitive pressure. The government missed an opportunity to leverage market forces to secure the best possible price and value.

Public Impact

The Department of the Navy benefits from specialized engineering and support services crucial for its operations. The contract supports the development and maintenance of custom computer programming solutions. The primary geographic impact is likely within the Department of the Navy's operational areas, potentially worldwide. The contract supports a workforce skilled in advanced IT and engineering services, contributing to the federal IT sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs for taxpayers.
Cost-plus-fixed-fee contract type carries inherent risk of cost escalation if not closely monitored.
Lack of transparency in the procurement process due to sole-source award.
Significant contract value requires rigorous oversight to ensure value for money.

Positive Signals

Award to a well-established contractor, Deloitte Consulting LLP, suggests potential for reliable service delivery.
The contract addresses a specific, likely critical, need within the Department of the Navy.
The fixed-fee component of the contract provides some level of cost certainty for the government.

Sector Analysis

This contract falls within the broader Information Technology (IT) and professional services sector, specifically focusing on custom computer programming and engineering support. The IT services market is highly competitive, with numerous large and small firms offering specialized capabilities. However, for highly specific or mission-critical systems, sole-source awards can occur. Benchmarking this contract's value is difficult without more specific details on the services rendered, but IT services contracts for the Department of Defense often represent significant portions of the defense budget.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false) and that small business participation was not a stated requirement (sb: false). Therefore, this contract does not directly benefit small businesses through a set-aside. There is no information provided on subcontracting plans, so the impact on the small business ecosystem is unclear. Without specific subcontracting goals, it's unlikely that small businesses will be significantly involved unless Deloitte Consulting LLP voluntarily engages them.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. As a sole-source award, there is a heightened need for robust oversight to ensure that the contractor is delivering services as specified and that costs are reasonable and justified. Transparency is limited due to the non-competitive nature. The Inspector General for the Department of Defense would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Department of Defense IT Services Contracts
Navy IT Modernization Programs
Custom Software Development Contracts
Engineering and Technical Support Services

Risk Flags

Sole-source award lacks competitive justification.
Cost-plus-fixed-fee contract type poses risk of cost escalation.
Long contract duration may lead to technological obsolescence or changing requirements.
Lack of transparency in procurement process.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $48.4 million to DELOITTE CONSULTING LLP. ENGINEERING&SUPPORT SERVICES BASE YEAR

Who is the contractor on this award?

The obligated recipient is DELOITTE CONSULTING LLP.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $48.4 million.

What is the period of performance?

Start: 2020-07-24. End: 2024-02-14.

What specific engineering and support services are being provided under this contract?

The provided data indicates the contract is for 'ENGINEERING&SUPPORT SERVICES BASE YEAR' and falls under NAICS code 541511, 'Custom Computer Programming Services'. This suggests the services likely involve the design, development, implementation, and maintenance of specialized software and IT systems tailored to the unique requirements of the Department of the Navy. It could encompass areas such as system integration, software lifecycle management, cybersecurity solutions, data analytics platforms, or specialized engineering support for naval systems. Without further details on the specific Statement of Work (SOW), the precise nature of the services remains generalized.

Why was this contract awarded on a sole-source basis instead of being competed?

The data explicitly states the contract type as 'NOT COMPETED', indicating a sole-source award. Common justifications for sole-source procurements include situations where only one responsible source can provide the required supplies or services, the government has a critical need that cannot be met through competition, or the contract is a follow-on to a previously competed contract where only the original contractor can provide necessary follow-on work. Without specific documentation from the Department of the Navy, the exact rationale for this sole-source award remains unknown, but it implies a belief that competitive bidding was either not feasible or not in the government's best interest at the time of award.

How does the Cost Plus Fixed Fee (CPFF) contract type compare to other contract types in terms of risk and value?

The Cost Plus Fixed Fee (CPFF) contract type is a hybrid that aims to share risk between the government and the contractor. The government agrees to pay the contractor's actual costs incurred, plus a fixed fee representing the contractor's profit. This structure is often used when the scope of work is not well-defined or involves research and development, making it difficult to estimate costs accurately beforehand. While the fixed fee provides some cost certainty for the contractor's profit, the government bears the risk of cost overruns if actual costs exceed initial estimates. Compared to Firm-Fixed-Price (FFP) contracts, CPFF offers less cost certainty for the government but can be more appropriate for complex, evolving projects. It generally offers better value than Cost-Plus-Incentive-Fee (CPIF) or Cost-Plus-Award-Fee (CPAF) when performance incentives are less critical than managing evolving requirements.

What is the historical spending pattern for similar engineering and support services by the Department of the Navy?

Historical spending data for similar services by the Department of the Navy is extensive, reflecting the significant reliance on external contractors for IT, engineering, and specialized support. While the specific NAICS code 541511 points to custom computer programming, the broader category of engineering and support services encompasses a vast array of contracts. The Navy, like other branches of the DoD, consistently awards billions of dollars annually for such services. Analyzing historical patterns would reveal trends in contract values, dominant contractors, and the prevalence of different contract types. However, without specific historical data points for this particular type of service or contractor, a precise comparison is not feasible based solely on the provided data.

What are the potential risks associated with a 1300-day contract duration for custom computer programming services?

A contract duration of 1300 days (approximately 3.5 years) for custom computer programming services presents several potential risks. Technology evolves rapidly, and software developed at the beginning of such a long contract may become outdated or require significant modifications by its end. Requirements can also change substantially over this period due to shifting mission needs or policy changes within the Department of the Navy. Managing scope creep becomes critical, as does ensuring the contractor maintains the necessary technical expertise and adapts to new technologies. Furthermore, long-term reliance on a single vendor, especially under a sole-source award, can stifle innovation and create vendor lock-in, making future transitions more complex and costly.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Custom Computer Programming Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0003920R0093

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

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: $49,248,923

Exercised Options: $49,248,921

Current Obligation: $48,424,113

Actual Outlays: $2,120,527

Subaward Activity

Number of Subawards: 8

Total Subaward Amount: $6,073,380

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline