DoD's $39.8M Deloitte contract for acquisition and program management services shows fair value with a competitive landscape

Contract Overview

Contract Amount: $39,818,653 ($39.8M)

Contractor: Deloitte Consulting LLP

Awarding Agency: Department of Defense

Start Date: 2021-06-28

End Date: 2024-08-27

Contract Duration: 1,156 days

Daily Burn Rate: $34.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: ACQUISITION AND PROGRAM MANAGEMENT, CONFIGURATION AND DATA MANAGEMENT, ENGINEERING, TEST AND EVALUATION, LOGISTICS, CYBERSECURITY/INFORMATION ASSURANCE, CONTRACT SUPPORT, THIRD PARTY SALES (3PS) SUPPORT, RISK AND OPPORTUNITY MANAGEMENT SUPPORT SVCS.

Place of Performance

Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92147

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $39.8 million to DELOITTE CONSULTING LLP for work described as: ACQUISITION AND PROGRAM MANAGEMENT, CONFIGURATION AND DATA MANAGEMENT, ENGINEERING, TEST AND EVALUATION, LOGISTICS, CYBERSECURITY/INFORMATION ASSURANCE, CONTRACT SUPPORT, THIRD PARTY SALES (3PS) SUPPORT, RISK AND OPPORTUNITY MANAGEMENT SUPPORT SVCS. Key points: 1. The contract provides a broad range of acquisition and program management support, including engineering, cybersecurity, and logistics. 2. Deloitte's extensive experience in government contracting suggests a strong understanding of complex program requirements. 3. The contract's duration of over three years indicates a significant, ongoing need for these services. 4. While specific performance metrics are not detailed, the nature of the services implies a focus on operational efficiency and program success. 5. The contract falls within the Engineering Services sector, a critical area for defense modernization and readiness. 6. The use of a Cost Plus Fixed Fee (CPFF) pricing structure requires careful monitoring to ensure cost control.

Value Assessment

Rating: fair

The contract's total value of approximately $39.8 million over its period of performance appears reasonable given the extensive scope of services. Benchmarking against similar large-scale acquisition and program management contracts within the Department of Defense suggests that the overall cost is within expected ranges. However, the Cost Plus Fixed Fee (CPFF) structure necessitates diligent oversight to prevent cost overruns and ensure that the fixed fee remains appropriate for the level of effort and risk involved. Without detailed performance data or specific cost breakdowns, a definitive value-for-money assessment is challenging, but the competitive award provides some assurance.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified vendors had the opportunity to bid. The presence of three bidders suggests a healthy level of competition for this significant program management support requirement. A competitive process generally leads to better price discovery and encourages contractors to offer their best value propositions. The fact that Deloitte was selected implies they presented the most advantageous offer based on the evaluation criteria.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it drives down costs through market forces and ensures that government funds are used efficiently by selecting the most cost-effective and capable provider.

Public Impact

The Department of the Navy benefits from enhanced acquisition and program management capabilities, leading to more effective procurement and execution of defense programs. Services delivered include critical support functions such as engineering, cybersecurity, logistics, and test and evaluation, bolstering overall defense readiness. The contract's impact is primarily national, supporting defense initiatives across the Department of Defense, with a focus on naval operations. Workforce implications include the potential for skilled professionals in program management, engineering, and cybersecurity to be engaged through Deloitte's efforts.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The CPFF contract type can incentivize higher spending if not closely managed, as the contractor is reimbursed for costs plus a fixed fee.
Lack of specific performance metrics in the provided data makes it difficult to assess the contractor's efficiency and effectiveness beyond the competitive award.
The broad scope of services could lead to potential scope creep if not meticulously managed by both the contractor and the government.
Reliance on a single large contractor for such a wide array of critical support functions may present a concentration of risk.

Positive Signals

Awarded through full and open competition, ensuring a competitive process and potentially better value.
Deloitte is a well-established contractor with a proven track record in supporting complex government programs.
The contract covers essential functions vital to defense acquisition and program execution.
The duration of the contract suggests a stable, long-term need that Deloitte is positioned to meet.

Sector Analysis

The Engineering Services sector (NAICS 541330) is a significant component of the federal contracting landscape, particularly within the Department of Defense. This sector encompasses a wide range of activities, from basic research and development to highly specialized technical support. Spending in this area is driven by the need for advanced technological solutions, program management expertise, and lifecycle support for complex defense systems. Comparable contracts in this space often involve substantial dollar values and long performance periods, reflecting the intricate nature of defense acquisition. This contract fits within the broader trend of the DoD outsourcing specialized technical and management functions to experienced private sector firms.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the prime contractor, Deloitte Consulting LLP, is a large business. While there is no explicit information on subcontracting plans for small businesses, large federal contracts often include provisions for small business participation. The absence of a set-aside suggests that the primary focus was on obtaining the best overall solution from the open market, rather than specifically targeting small business capabilities. The impact on the small business ecosystem would depend on whether Deloitte actively seeks small business subcontractors for specialized services.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting officers and program managers. They are responsible for monitoring performance, approving invoices, and ensuring compliance with contract terms. The Cost Plus Fixed Fee (CPFF) structure necessitates rigorous financial oversight to track incurred costs and ensure the fixed fee remains justified. Transparency is generally maintained through contract reporting mechanisms and potentially through contract audit agencies. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arise during the contract's performance.

Related Government Programs

Defense Acquisition Management Support
Program Management Services
Engineering and Technical Services
Cybersecurity Support Services
Logistics and Supply Chain Management

Risk Flags

Cost Plus Fixed Fee (CPFF) contract type requires diligent oversight to manage costs.
Broad scope of services may increase risk of scope creep.
Lack of detailed performance metrics hinders granular value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $39.8 million to DELOITTE CONSULTING LLP. ACQUISITION AND PROGRAM MANAGEMENT, CONFIGURATION AND DATA MANAGEMENT, ENGINEERING, TEST AND EVALUATION, LOGISTICS, CYBERSECURITY/INFORMATION ASSURANCE, CONTRACT SUPPORT, THIRD PARTY SALES (3PS) SUPPORT, RISK AND OPPORTUNITY MANAGEMENT SUPPORT SVCS.

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 $39.8 million.

What is the period of performance?

Start: 2021-06-28. End: 2024-08-27.

What is Deloitte's track record with similar large-scale Department of Defense contracts?

Deloitte Consulting LLP is a major federal contractor with extensive experience supporting the Department of Defense and other government agencies across a wide array of services, including acquisition, program management, engineering, and cybersecurity. They have a history of managing large, complex contracts, often involving significant dollar values and long performance periods. Their track record generally indicates a capacity to deliver on demanding requirements, though like any large contractor, specific contract performance can vary. Government contract databases and performance reports (e.g., CPARS) would provide more granular detail on their past performance on specific programs, highlighting areas of strength and any past performance concerns.

How does the pricing structure (CPFF) compare to other contract types for similar services?

The Cost Plus Fixed Fee (CPFF) contract type is often used when the scope of work is not precisely defined, or when there is a high degree of uncertainty in the costs involved, such as in research and development or complex system integration. It reimburses the contractor for allowable costs plus a predetermined fixed fee representing profit. Compared to Firm-Fixed-Price (FFP) contracts, CPFF offers less cost certainty for the government and can incentivize higher spending if not managed diligently. However, it provides flexibility and allows the government to leverage contractor expertise in evolving environments. For services like acquisition and program management, where requirements can change, CPFF can be appropriate, but it demands robust government oversight to control costs and ensure the fixed fee remains fair.

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

Primary risks include potential cost overruns due to the CPFF structure, scope creep if requirements are not tightly managed, and performance issues if the contractor fails to deliver on critical support functions. Mitigation strategies typically involve strong government oversight by contracting officers and program managers, detailed performance work statements, regular progress reviews, and potentially incentive clauses or performance metrics. For CPFF contracts, careful monitoring of incurred costs against the estimated cost is crucial. The competitive award itself mitigates some risk by selecting a vendor deemed capable and offering competitive terms. The broad scope also presents a risk of over-reliance on a single entity, which could be mitigated through strategic sourcing and clear delineation of responsibilities.

What is the historical spending pattern for acquisition and program management support within the Department of the Navy?

The Department of the Navy, like other branches of the DoD, consistently spends billions of dollars annually on acquisition and program management support services. This spending is driven by the continuous need to modernize platforms, develop new technologies, and manage complex weapon systems throughout their lifecycle. Historical data indicates a significant and often increasing reliance on contractors for these specialized functions, reflecting the complexity and scale of defense programs. Spending patterns can fluctuate based on defense budgets, strategic priorities, and specific acquisition programs underway. This particular contract, valued at approximately $39.8 million, represents a portion of the Navy's broader investment in ensuring effective program execution and acquisition processes.

How does the geographic location of the contractor (California) impact service delivery or oversight?

The contractor's location in California (SN: CALIFORNIA) is noted, but the specific impact on service delivery or oversight for a contract supporting the Department of the Navy is likely minimal, especially given the nature of modern contracting. Many support services, particularly in program management and engineering, can be performed remotely or at various government sites. Oversight is primarily a function of the government's contracting and program management teams, who can be located anywhere and may conduct oversight through site visits, virtual meetings, and review of submitted documentation. While some on-site presence might be required depending on the specific tasks, the broad nature of the services suggests flexibility in location. The key is ensuring effective communication and coordination regardless of physical proximity.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N0003920R3003

Offers Received: 3

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, Corporate Entity Not Tax Exempt, Minority Owned Business, Not Designated a Small Business, Self-Certified Small Disadvantaged Business, Service Disabled Veteran Owned Business, Small Business, Special Designations, Subchapter S Corporation, Indian (Subcontinent) American Owned Business, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $77,201,706

Exercised Options: $45,690,173

Current Obligation: $39,818,653

Actual Outlays: $768,373

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017819D8497

IDV Type: IDC

Timeline