Deloitte Consulting LLP awarded $25.5M contract for OP&R Support Services by the Department of the Navy

Contract Overview

Contract Amount: $25,507,158 ($25.5M)

Contractor: Deloitte Consulting LLP

Awarding Agency: Department of Defense

Start Date: 2022-09-01

End Date: 2025-08-31

Contract Duration: 1,095 days

Daily Burn Rate: $23.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: OP&R SUPPORT SERVICES

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22209

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $25.5 million to DELOITTE CONSULTING LLP for work described as: OP&R SUPPORT SERVICES Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract duration of 1095 days (3 years) indicates a medium-term need for these services. 3. The contract type is Cost Plus Fixed Fee (CPFF), which can incentivize cost control but also carries risk if not managed closely. 4. The primary service category is Administrative Management and General Management Consulting Services. 5. The awardee, Deloitte Consulting LLP, is a large, established government contractor. 6. The contract is a Delivery Order, implying it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle or a similar framework.

Value Assessment

Rating: fair

Benchmarking the value of this $25.5 million contract for administrative management and general management consulting services is challenging without specific performance metrics or comparable contract data. The Cost Plus Fixed Fee (CPFF) contract type means the government pays the contractor's allowable costs plus a fixed fee, which can lead to higher overall costs if not carefully managed. While Deloitte is a reputable firm, the CPFF structure warrants scrutiny to ensure costs remain reasonable and the fixed fee represents fair value for the services rendered. Further analysis would require understanding the scope of work and comparing the fee structure to industry standards for similar consulting engagements.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. The presence of 4 bids suggests a moderate level of competition for this requirement. While full and open competition is generally preferred for ensuring fair pricing and access to a wide range of capabilities, the specific number of bidders (4) means that the full potential of market competition may not have been realized if many other qualified firms chose not to bid or were excluded by specific requirements not detailed here.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically drives down prices through market forces. A moderate number of bidders, like the 4 received, suggests that while some competition existed, there might be opportunities for even greater price discovery with broader outreach or a more accessible contract vehicle.

Public Impact

The Department of the Navy benefits from specialized administrative and management consulting services to support its operations. The services delivered are expected to enhance the efficiency and effectiveness of the Navy's organizational management. The geographic impact is primarily within Virginia, where the contractor is located and likely where services will be performed. The contract supports the workforce of Deloitte Consulting LLP, a large professional services firm.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can lead to cost overruns if not rigorously managed.
Limited transparency on specific performance metrics makes it difficult to assess the true value for money.
The number of bidders (4) is moderate, raising questions about whether maximum competition was achieved.
Reliance on a single large contractor for critical support services could pose a risk if capabilities are not maintained or if the contractor faces issues.

Positive Signals

Awarded through full and open competition, indicating a commitment to market-based procurement.
The contractor, Deloitte Consulting LLP, is a well-established firm with a track record in government contracting.
The contract duration of 3 years suggests a stable, ongoing need for these services, allowing for continuity.
The contract is a Delivery Order, likely leveraging an existing IDIQ or framework, which can streamline procurement processes.

Sector Analysis

The administrative management and general management consulting services sector is a significant part of the professional services industry supporting government operations. This contract falls within the broader management consulting market, which is characterized by a mix of large, established firms like Deloitte and smaller specialized consultancies. Government spending in this area often focuses on improving efficiency, strategic planning, and organizational effectiveness. Comparable spending benchmarks would typically look at the average cost of similar consulting engagements across federal agencies, considering factors like contract duration, scope of work, and contractor size.

Small Business Impact

This contract does not appear to have a small business set-aside (ss is false). Given the awardee is Deloitte Consulting LLP, a large business, there are no direct subcontracting implications for small businesses stemming from this specific awardee's status. However, the overall contract vehicle under which this delivery order was issued might have small business subcontracting goals, which would need to be tracked separately. The absence of a small business set-aside for this particular award means that opportunities for small businesses to directly compete for this work were limited.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program office within the Department of the Navy. As a Cost Plus Fixed Fee (CPFF) contract, rigorous oversight of allowable costs and the fixed fee is crucial to ensure value for money. Transparency is generally facilitated through contract databases like FPDS, but detailed performance reports and cost breakdowns are often internal. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Management and Consulting Services
Professional Services
Department of Defense Support Services
Navy Administrative Support
General Management Consulting

Risk Flags

Cost Plus Fixed Fee (CPFF) contract type requires diligent cost oversight.
Moderate number of bidders (4) in a full and open competition may limit price discovery.
Lack of specific performance metrics in the provided data hinders value assessment.
Potential for cost overruns inherent in CPFF structures.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $25.5 million to DELOITTE CONSULTING LLP. OP&R SUPPORT SERVICES

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 $25.5 million.

What is the period of performance?

Start: 2022-09-01. End: 2025-08-31.

What is Deloitte Consulting LLP's track record with the Department of Defense and specifically the Department of the Navy?

Deloitte Consulting LLP has a substantial track record with the Department of Defense (DoD) and its various branches, including the Department of the Navy. They are a frequent recipient of contracts across a wide range of services, including IT, management consulting, financial management, and logistics support. Their history with the Navy likely includes numerous task orders and delivery orders under larger IDIQ contracts, as well as direct awards. Analyzing their past performance ratings, any past performance issues or awards, and the total value of contracts previously awarded by the Navy would provide a clearer picture of their established relationship and capabilities within the service. This specific contract, valued at $25.5 million over three years, aligns with the scale of work Deloitte typically undertakes for large federal agencies.

How does the $25.5 million value compare to similar administrative and management consulting contracts within the federal government?

The $25.5 million value for a three-year contract for administrative and general management consulting services is within a common range for engagements with large federal agencies like the Department of the Navy. However, 'similar' is a broad term. If the scope involves high-level strategic planning, complex organizational restructuring, or extensive data analytics, this value might represent a good investment. If the scope is more routine administrative support, it could be on the higher end. Benchmarking requires comparing not just the dollar amount but also the contract duration, the specific services rendered (e.g., policy development, process improvement, change management), the level of expertise required, and the number of personnel involved. Without these details, a precise value comparison is difficult, but it is not an outlier for a major federal agency's consulting needs.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for consulting services?

The primary risk with a Cost Plus Fixed Fee (CPFF) contract is that the government may end up paying more than necessary if the contractor's costs are higher than anticipated, even though the fee is fixed. While the fixed fee incentivizes the contractor to control costs to maximize their profit margin, there's less direct incentive to reduce costs compared to a fixed-price contract. The government bears the risk of cost overruns on allowable expenses. For consulting services, accurately estimating all necessary costs upfront can be challenging due to the often-unpredictable nature of project scope and effort. Rigorous oversight by the government to scrutinize allowable costs and ensure efficiency is paramount to mitigate this risk and ensure fair value.

How effective are full and open competitions with only 4 bidders in ensuring optimal price discovery for taxpayers?

A full and open competition with only 4 bidders suggests a moderate level of market interest, which is generally positive for taxpayers compared to sole-source or limited competitions. However, optimal price discovery often benefits from a larger pool of bidders, as increased competition typically drives prices down. The fact that only 4 firms submitted proposals could indicate several things: the requirement was highly specialized, the contract vehicle had limitations, the solicitation period was short, or perhaps the market for these specific services is concentrated among a few large players. While 4 bidders provide some competitive tension, it's possible that additional bidders could have offered lower prices or more innovative solutions, meaning taxpayers might not have achieved the absolute best possible value.

What are the potential implications of this contract on the small business ecosystem within the federal contracting space?

Since this contract was awarded to Deloitte Consulting LLP, a large business, and does not appear to have a small business set-aside, its direct impact on the small business ecosystem is minimal in terms of direct award. Small businesses will not be directly performing this work unless they are subcontracted by Deloitte. The primary implication is the opportunity cost: this $25.5 million contract was competed broadly, and small businesses were likely unable to compete directly due to the scale or nature of the requirement, or the specific contract vehicle used. However, if the underlying IDIQ or contract vehicle has small business subcontracting goals, Deloitte would be obligated to seek out small businesses for a portion of the work, which could create opportunities.

What oversight mechanisms are typically in place for a contract of this nature and value?

Oversight for a $25.5 million Cost Plus Fixed Fee (CPFF) contract like this involves several layers. The Contracting Officer (CO) and their team are responsible for overall contract administration, ensuring compliance with terms and conditions, and approving payments. For a CPFF contract, cost monitoring and auditing are critical; the Defense Contract Audit Agency (DCAA) or equivalent may audit the contractor's claimed costs to ensure they are allowable, allocable, and reasonable. The Program Manager (PM) and their staff oversee the technical performance and delivery of services, ensuring the work meets the government's needs. Regular progress reports, performance reviews, and potentially site visits are common oversight tools. Transparency is usually maintained through contract reporting systems (like FPDS), but detailed cost breakdowns and performance metrics are often considered sensitive.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Administrative Management and General Management Consulting 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: N0018921RZ011

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: $30,090,026

Exercised Options: $25,507,158

Current Obligation: $25,507,158

Subaward Activity

Number of Subawards: 6

Total Subaward Amount: $2,739,239

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0018921DZ039

IDV Type: IDC

Timeline