DoD's $13.2M Audit Liaison Contract with Deloitte Raises Questions on Value and Competition

Contract Overview

Contract Amount: $13,228,250 ($13.2M)

Contractor: Deloitte & Touche LLP

Awarding Agency: Department of Defense

Start Date: 2024-01-01

End Date: 2026-12-31

Contract Duration: 1,095 days

Daily Burn Rate: $12.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: PMW 220 AUDIT LIAISON ITGC-R

Place of Performance

Location: WASHINGTON NAVY YARD, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20374

State: District of Columbia Government Spending

Plain-Language Summary

Department of Defense obligated $13.2 million to DELOITTE & TOUCHE LLP for work described as: PMW 220 AUDIT LIAISON ITGC-R Key points: 1. The contract's value of $13.2M for audit liaison services warrants scrutiny given the nature of the work. 2. Full and open competition was cited, but the specific pricing and cost-plus-fixed-fee structure need further examination. 3. Potential risks include the fixed-fee component potentially not aligning perfectly with actual audit liaison needs. 4. The ITGC-R designation suggests a focus on IT governance, risk, and compliance, a specialized area.

Value Assessment

Rating: questionable

The $13.2M contract value for audit liaison services, utilizing a Cost Plus Fixed Fee structure, appears high for the described services. Benchmarking against similar contracts for accounting and auditing support is recommended to assess value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which is positive for price discovery. However, the Cost Plus Fixed Fee (CPFF) pricing model requires careful monitoring to ensure costs remain reasonable and aligned with the fixed fee.

Taxpayer Impact: The significant contract value suggests a substantial taxpayer investment. Ensuring efficient service delivery and cost control is crucial to maximize the return on this investment.

Public Impact

Taxpayers are funding a significant contract for specialized audit liaison services within the Department of Defense. The use of a large, established firm like Deloitte & Touche LLP indicates a reliance on experienced contractors for critical functions. The contract's duration of nearly three years suggests a long-term need for these audit support services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee structure may incentivize cost overruns.
High contract value for accounting services.
Lack of specific performance metrics in provided data.
Potential for scope creep in audit liaison activities.

Positive Signals

Awarded under full and open competition.
Contract awarded to a reputable firm.
Clear contract duration and end dates.

Sector Analysis

This contract falls within the 'Other Accounting Services' sector, specifically related to IT Governance, Risk, and Compliance (ITGC-R). Spending in this area is critical for maintaining financial integrity and compliance within large government agencies.

Small Business Impact

The data indicates this contract was awarded to Deloitte & Touche LLP, a large business. There is no indication of small business participation in this specific award, which is common for large, specialized contracts.

Oversight & Accountability

The contract's oversight will be crucial, particularly given the CPFF structure. Regular reviews by the Department of the Navy will be necessary to ensure costs are controlled and services meet objectives.

Related Government Programs

Other Accounting Services
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

High contract value for accounting services.
Cost Plus Fixed Fee structure can lead to cost overruns.
Potential for contractor to prioritize billable hours over efficiency.
Lack of detailed performance metrics in the provided data.
Dependence on a single large contractor for critical audit functions.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $13.2 million to DELOITTE & TOUCHE LLP. PMW 220 AUDIT LIAISON ITGC-R

Who is the contractor on this award?

The obligated recipient is DELOITTE & TOUCHE 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 $13.2 million.

What is the period of performance?

Start: 2024-01-01. End: 2026-12-31.

What specific ITGC-R functions are covered under this contract, and how do they align with the Department of the Navy's audit needs?

The contract likely encompasses support for internal controls, IT system audits, risk assessments, and compliance verification related to the Department of the Navy's IT infrastructure. The specific functions would detail the scope of work, ensuring alignment with the agency's unique audit requirements and regulatory obligations.

How does the fixed fee component of the CPFF contract ensure cost-effectiveness for these specialized audit liaison services?

In a CPFF contract, the fixed fee represents the contractor's profit. While the cost-reimbursable portion covers allowable expenses, the fixed fee aims to provide a predictable profit margin. However, effective oversight is critical to ensure the contractor manages costs efficiently, as the government bears the direct costs of the work performed.

What mechanisms are in place to measure the effectiveness and value delivered by Deloitte & Touche LLP for this $13.2M contract?

Effectiveness is typically measured through performance metrics outlined in the contract's statement of work, such as timely completion of audit support tasks, quality of reports, and adherence to audit standards. Value is assessed by comparing the cost of services against the benefits derived, such as improved audit findings, enhanced compliance, and reduced financial risk.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Accounting, Tax Preparation, Bookkeeping, and Payroll Services › Other Accounting Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N0003923R5001

Offers Received: 4

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: $24,716,222

Exercised Options: $19,660,646

Current Obligation: $13,228,250

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0018922DZ017

IDV Type: IDC

Timeline