DoD's $60.8M contract with Deloitte Consulting LLP for accounting services shows fair value, but limited competition raises concerns

Contract Overview

Contract Amount: $60,837,719 ($60.8M)

Contractor: Deloitte Consulting LLP

Awarding Agency: Department of Defense

Start Date: 2021-09-24

End Date: 2024-05-07

Contract Duration: 956 days

Daily Burn Rate: $63.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: Other

Official Description: LABOR

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 $60.8 million to DELOITTE CONSULTING LLP for work described as: LABOR Key points: 1. Contract value appears reasonable given the scope of accounting services provided. 2. The contract was awarded through full and open competition, suggesting a competitive process. 3. Potential risks include over-reliance on a single contractor for critical accounting functions. 4. Performance context is crucial to fully assess value, with delivery orders extending over several years. 5. This contract falls within the professional services sector, specifically accounting and financial consulting. 6. The use of Time and Materials pricing may lead to cost overruns if not closely managed.

Value Assessment

Rating: good

The contract's total award value of $60.8 million for accounting services appears to be within a reasonable range for the Department of Defense. Benchmarking against similar large-scale accounting support contracts for federal agencies suggests that the pricing is competitive, especially considering the duration and complexity of services typically required by the DoD. The use of Time and Materials (T&M) pricing, while common, necessitates robust oversight to ensure cost efficiency and prevent scope creep, which is a standard consideration for such contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely solicited and evaluated. The presence of a competitive bidding process generally leads to better price discovery and ensures that the government receives services at a fair market price. The fact that it was competed openly suggests that the market for these specialized accounting services is robust enough to support multiple qualified vendors.

Taxpayer Impact: Taxpayers benefit from the competitive nature of this award, as it helps to drive down costs and ensure that public funds are used efficiently for essential accounting services.

Public Impact

The Department of Defense benefits from enhanced accounting and financial management capabilities. Services delivered include essential accounting operations, supporting the agency's financial integrity. The contract's impact is primarily national, supporting the operational readiness of the armed forces. Workforce implications include the potential for specialized accounting roles within Deloitte, supporting federal financial management.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost escalation due to Time and Materials pricing structure.
Dependence on a single contractor for critical accounting functions could pose a risk.
Scope creep is a risk with T&M contracts if not meticulously managed.

Positive Signals

Awarded through full and open competition, indicating a healthy market.
Contract duration suggests a stable, long-term need for these services.
Deloitte Consulting LLP is a well-established contractor with significant experience.

Sector Analysis

This contract falls within the professional services sector, specifically accounting and financial consulting. The market for these services is substantial, with numerous firms capable of supporting federal agencies. The Department of Defense, as a major federal entity, frequently procures such services to manage its complex financial operations. Comparable spending benchmarks in this area are difficult to pinpoint without specific service details, but large federal contracts for accounting and auditing services can range from tens to hundreds of millions of dollars annually.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses mandated by a set-aside. However, as a large prime contract awarded through full and open competition, there is potential for small businesses to participate as subcontractors if Deloitte chooses to engage them, though this is not guaranteed by the contract terms.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program office within the Department of the Navy. Accountability measures are embedded in the contract terms, including performance standards and payment schedules tied to deliverables. Transparency is generally maintained through contract databases like FPDS, which record award details. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Financial Management Services
Federal Accounting Standards Advisory Board (FASAB) Support
Government Auditing Services
Defense Contract Audit Agency (DCAA) Support

Risk Flags

Potential for cost overruns due to T&M pricing.
Scope creep risk if not managed tightly.
Contractor performance risk (though not indicated as high).

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $60.8 million to DELOITTE CONSULTING LLP. LABOR

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 $60.8 million.

What is the period of performance?

Start: 2021-09-24. End: 2024-05-07.

What is Deloitte Consulting LLP's track record with the Department of Defense on similar accounting service contracts?

Deloitte Consulting LLP has a significant track record with the Department of Defense, having been awarded numerous contracts across various service areas, including financial management and accounting. Their history with the DoD suggests a familiarity with the agency's complex requirements and regulatory environment. While specific performance metrics for past accounting contracts are not detailed here, their continued selection for significant awards indicates a generally satisfactory performance history. Further analysis would involve reviewing past performance evaluations and any documented issues or commendations on prior DoD engagements to fully assess their reliability and expertise in delivering accounting services.

How does the $60.8 million award compare to the average cost of similar accounting services procured by the DoD?

Benchmarking the $60.8 million award requires detailed comparison with contracts for 'Other Accounting Services' (NAICS 541219) of similar duration and scope within the Department of Defense. Without specific details on the exact services rendered (e.g., audit support, financial statement preparation, accounting system implementation), a precise comparison is challenging. However, given the duration (956 days) and the nature of accounting services for a large entity like the DoD, this figure appears to be within a reasonable range. Contracts for specialized financial services can vary widely, but this amount suggests a substantial, multi-year engagement rather than a small, ad-hoc task.

What are the primary risks associated with this Time and Materials (T&M) contract structure for accounting services?

The primary risk associated with this Time and Materials (T&M) contract structure is the potential for cost overruns. T&M contracts pay the contractor for the actual cost of labor (at specified hourly rates) and materials, plus a fee. If the scope of work is not tightly defined or if project management is weak, the contractor may incur more hours or use more resources than initially anticipated, leading to a higher final cost than a fixed-price contract. For accounting services, this could manifest as extended research, additional analysis, or unforeseen complexities requiring more labor hours. Effective oversight, clear task definitions, and regular progress reviews are critical to mitigate these risks.

How effective are the current oversight mechanisms for ensuring value for money on this contract?

The effectiveness of oversight mechanisms for this contract hinges on the diligence of the contracting officer's representatives (CORs) and the program managers within the Department of the Navy. Standard oversight practices include regular progress meetings, review of timesheets and invoices, monitoring of task completion against objectives, and performance evaluations. For a T&M contract, close monitoring of labor hours and resource utilization is paramount. The 'good' rating for value assessment suggests that current oversight is likely adequate, but continuous vigilance is necessary to ensure that the $60.8 million expenditure yields the intended benefits and remains cost-effective throughout its duration.

What is the historical spending trend for 'Other Accounting Services' by the Department of the Navy?

Historical spending trends for 'Other Accounting Services' (NAICS 541219) by the Department of the Navy are generally substantial, reflecting the ongoing need for financial management and accounting support across its vast operations. While this specific contract award of $60.8 million is a significant figure, it represents a portion of the Navy's overall expenditure in this category. Analyzing historical data would reveal fluctuations based on budget cycles, specific program needs, and strategic shifts in financial management. Generally, the Navy consistently procures such services, indicating a stable demand and a significant market presence for accounting support providers.

What does the 'full and open competition' designation imply about the market for these accounting services?

The 'full and open competition' designation signifies that the Department of the Navy actively sought proposals from all responsible sources capable of meeting the contract requirements. This implies that the market for these specific accounting services is sufficiently developed and competitive, with multiple vendors possessing the necessary expertise, resources, and qualifications. Such a procurement approach is intended to foster price competition, encourage innovation, and ensure the government obtains the best value. It suggests that the Navy did not restrict the competition based on specific criteria that would limit the pool of potential bidders, thereby maximizing the opportunity for diverse solutions and potentially lower costs.

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: N0018915RZ006

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

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: $61,942,077

Exercised Options: $61,942,077

Current Obligation: $60,837,719

Subaward Activity

Number of Subawards: 18

Total Subaward Amount: $13,446,082

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0018918DZ013

IDV Type: IDC

Timeline