DoD's $6.37M Navy Contract for Financial Systems Migration Awarded to Herdt Consulting Inc

Contract Overview

Contract Amount: $6,372,613 ($6.4M)

Contractor: Herdt Consulting Inc

Awarding Agency: Department of Defense

Start Date: 2024-04-26

End Date: 2026-04-30

Contract Duration: 734 days

Daily Burn Rate: $8.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: CNRF N8 FINANCIAL SYSTEMS MIGRATION AND IMPROPER PAYMENTS REDUCTION THROUGH PROCESS IMPROVEMENT AND AUTOMATION

Place of Performance

Location: NORFOLK, NORFOLK CITY County, VIRGINIA, 23551

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $6.4 million to HERDT CONSULTING INC for work described as: CNRF N8 FINANCIAL SYSTEMS MIGRATION AND IMPROPER PAYMENTS REDUCTION THROUGH PROCESS IMPROVEMENT AND AUTOMATION Key points: 1. Contract focuses on financial system migration and reducing improper payments through automation. 2. Herdt Consulting Inc. is the sole awardee for this specific delivery order. 3. The contract is a Cost Plus Fixed Fee type, indicating potential for cost overruns. 4. The sector is Engineering Services, with a PSC code of 541330.

Value Assessment

Rating: fair

The contract is a Cost Plus Fixed Fee (CPFF) type, which can lead to higher costs than fixed-price contracts if not managed carefully. The award amount of $6.37M for a 734-day duration suggests a moderate per-diem rate.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting a competitive bidding process. However, this is a delivery order against a larger contract, so the initial competition details are not fully captured here. The CPFF structure may limit price discovery.

Taxpayer Impact: Taxpayer funds are being used for a critical financial system upgrade, aiming for efficiency and error reduction. The CPFF structure warrants close monitoring to ensure cost-effectiveness.

Public Impact

Improved financial system accuracy and reduced improper payments. Modernization of critical Department of the Navy financial infrastructure. Potential for enhanced operational efficiency through process improvement and automation. Supports the broader DoD goal of financial accountability and transparency.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type can lead to cost overruns.
Potential for scope creep in system migration projects.
Reliance on a single vendor for a critical financial system upgrade.

Positive Signals

Awarded under full and open competition.
Focus on process improvement and automation for efficiency.
Addresses critical need for financial system modernization.

Sector Analysis

This contract falls within the Engineering Services sector, specifically related to IT and financial systems. Spending in this area is significant across government, driven by the need for modernization and cybersecurity. Benchmarks for similar IT system migration projects vary widely based on complexity and scope.

Small Business Impact

The data indicates this contract was not awarded to a small business (ss: false). There is no specific mention of small business subcontracting goals within this delivery order's details.

Oversight & Accountability

The Department of Defense has robust oversight mechanisms for contracts, including regular reporting requirements and performance reviews. The CPFF structure necessitates diligent oversight to manage costs and ensure deliverables meet expectations.

Related Government Programs

Engineering Services
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Cost Plus Fixed Fee contract type.
Potential for integration issues with legacy systems.
Reliance on vendor expertise for critical financial processes.
Scope creep risk in complex IT migration projects.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $6.4 million to HERDT CONSULTING INC. CNRF N8 FINANCIAL SYSTEMS MIGRATION AND IMPROPER PAYMENTS REDUCTION THROUGH PROCESS IMPROVEMENT AND AUTOMATION

Who is the contractor on this award?

The obligated recipient is HERDT CONSULTING INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $6.4 million.

What is the period of performance?

Start: 2024-04-26. End: 2026-04-30.

What is the projected return on investment for the financial system migration and automation efforts?

The return on investment (ROI) for this financial system migration is expected to stem from reduced improper payments, increased operational efficiency, and improved data accuracy. While specific ROI figures are not provided, the reduction of improper payments alone can yield substantial savings. Automation is key to realizing long-term cost benefits and minimizing manual errors, contributing to a positive financial outcome over the system's lifecycle.

What are the primary risks associated with the 'process improvement and automation' aspect of this contract?

Key risks include potential resistance to change from end-users, integration challenges with existing legacy systems, and the possibility of unforeseen technical complexities during automation implementation. Inadequate requirements definition or scope creep could also derail the intended process improvements. Ensuring thorough testing and user training will be critical to mitigating these risks and achieving successful adoption.

How effectively will this contract contribute to the Department of Defense's overall financial accountability goals?

This contract is designed to directly contribute to financial accountability by modernizing systems and reducing improper payments, which are significant drains on resources and trust. Successful implementation of improved processes and automation should lead to more accurate financial reporting and better audit trails. This initiative aligns with broader DoD efforts to enhance transparency and fiscal responsibility, making it a potentially high-impact project.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering 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: N0018924R3047

Offers Received: 4

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 261 NORMANDY LN, CHELSEA, AL, 35043

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $13,339,707

Exercised Options: $6,372,613

Current Obligation: $6,372,613

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017819D7762

IDV Type: IDC

Timeline