DoD Awards $31.8M for NMCI Enterprise Service Tool (NEST) to Deloitte Consulting LLP

Contract Overview

Contract Amount: $31,853,648 ($31.9M)

Contractor: Deloitte Consulting LLP

Awarding Agency: Department of Defense

Start Date: 2024-02-13

End Date: 2026-02-12

Contract Duration: 730 days

Daily Burn Rate: $43.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: NMCI ENTERPRISE SERVICE TOOL (NEST)

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22209

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $31.9 million to DELOITTE CONSULTING LLP for work described as: NMCI ENTERPRISE SERVICE TOOL (NEST) Key points: 1. Contract awarded to a single, large business vendor. 2. Focus on computer systems design services within the IT sector. 3. Potential for cost overruns due to Cost Plus Fixed Fee structure. 4. Limited competition raises concerns about price discovery and value for money.

Value Assessment

Rating: questionable

The contract's Cost Plus Fixed Fee (CPFF) pricing structure, while common for complex IT services, can lead to less price certainty compared to fixed-price contracts. Benchmarking against similar IT service contracts is difficult without more detailed cost breakdowns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was not competed, indicating a sole-source award. This limits opportunities for competitive bidding and may result in higher prices than if multiple vendors had vied for the contract. The rationale for sole-sourcing is not provided.

Taxpayer Impact: The lack of competition could lead to taxpayers paying more than necessary for these IT services.

Public Impact

Ensures continued operation of critical Navy IT infrastructure. Potential for increased costs due to sole-source award. Impacts the availability of IT support for Navy personnel. Limited visibility into the cost-effectiveness of the services provided.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Cost Plus Fixed Fee pricing
Lack of competition
No small business participation

Positive Signals

Supports critical Navy IT infrastructure
Definitive contract provides a clear period of performance

Sector Analysis

This contract falls within the IT sector, specifically computer systems design services. Spending in this area is substantial across the federal government, with significant variation in pricing based on complexity and vendor.

Small Business Impact

The contract data indicates no small business participation. This suggests that the prime contractor, Deloitte Consulting LLP, is performing all work, potentially missing opportunities to leverage small business expertise and meet socio-economic goals.

Oversight & Accountability

The sole-source nature of this award warrants close oversight to ensure the government receives fair value and that the contractor is managing costs effectively. Transparency in reporting and performance metrics will be crucial.

Related Government Programs

Computer Systems Design Services
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Sole-source award limits competition.
Cost Plus Fixed Fee structure may lead to higher costs.
No small business participation noted.
Lack of transparency regarding justification for sole-sourcing.
Potential for cost overruns without stringent oversight.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $31.9 million to DELOITTE CONSULTING LLP. NMCI ENTERPRISE SERVICE TOOL (NEST)

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 $31.9 million.

What is the period of performance?

Start: 2024-02-13. End: 2026-02-12.

What is the specific justification for awarding this contract on a sole-source basis, and what steps were taken to ensure fair and reasonable pricing?

The justification for a sole-source award is critical for understanding why competition was bypassed. Agencies typically require detailed documentation, such as a Justification and Approval (J&A), outlining the necessity and lack of alternatives. Without this, it's difficult to assess if fair and reasonable pricing was achieved through negotiation or if the government may have overpaid.

How does the Cost Plus Fixed Fee (CPFF) structure for this $31.8M contract ensure cost control and prevent potential overruns?

CPFF contracts share costs and profits between the government and contractor. While it allows for flexibility in evolving IT projects, it places a greater burden on the government to monitor costs closely. Robust oversight, detailed cost reporting, and clear performance metrics are essential to prevent cost overruns and ensure the contractor remains incentivized to manage expenses efficiently.

What is the expected impact of this sole-source, non-competed contract on the overall IT service landscape within the Department of the Navy?

A sole-source award can limit market disruption and ensure continuity of essential services, especially if the incumbent possesses unique knowledge. However, it also reduces opportunities for new vendors to enter the market or existing competitors to challenge the incumbent, potentially stifling innovation and price competition in the long run.

Industry Classification

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

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0003924R7001

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: $55,747,948

Exercised Options: $31,942,487

Current Obligation: $31,853,648

Subaward Activity

Number of Subawards: 3

Total Subaward Amount: $903,959

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline