Navy awards $14M+ contract for HR transformation management support to Deloitte

Contract Overview

Contract Amount: $14,053,237 ($14.1M)

Contractor: Deloitte Consulting LLP

Awarding Agency: Department of Defense

Start Date: 2024-05-07

End Date: 2025-06-07

Contract Duration: 396 days

Daily Burn Rate: $35.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: MYNAVY HR TRANSFORMATION MANAGEMENT SUPPORT SERVICES (TMSS)

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22204

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $14.1 million to DELOITTE CONSULTING LLP for work described as: MYNAVY HR TRANSFORMATION MANAGEMENT SUPPORT SERVICES (TMSS) Key points: 1. Contract aims to modernize Navy HR systems and processes. 2. Deloitte Consulting LLP, a large established firm, is the awardee. 3. The contract is structured as Cost Plus Fixed Fee, which can present cost control challenges. 4. Performance period is over a year, indicating a significant undertaking. 5. The award falls under Engineering Services NAICS code. 6. This contract is part of a broader digital transformation initiative within the Navy.

Value Assessment

Rating: fair

The contract value of over $14 million for a little over a year of support appears to be within a reasonable range for complex HR transformation projects. However, the Cost Plus Fixed Fee (CPFF) pricing structure warrants close monitoring. CPFF contracts can lead to higher costs if not managed diligently, as the contractor is reimbursed for allowable costs plus a fixed fee. Benchmarking against similar HR transformation support contracts across government agencies would provide a clearer picture of value for money, but initial indications suggest it is not excessively priced, though potential for cost overruns exists.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded using full and open competition, indicating that multiple qualified bidders had the opportunity to submit proposals. The presence of four bidders (no is 4) suggests a competitive environment, which typically benefits price discovery and encourages better service offerings. The specific details of the competition, such as the number of proposals received and the evaluation criteria, would further illuminate the effectiveness of the competition.

Taxpayer Impact: Full and open competition generally leads to better pricing for taxpayers by fostering a competitive environment among potential contractors.

Public Impact

The primary beneficiaries are the Department of the Navy and its personnel, who will experience modernized HR services. Services delivered include management support for HR transformation initiatives. The geographic impact is primarily within the Department of the Navy's operations, likely with a focus on personnel located in Virginia. Workforce implications include potential changes to HR processes and systems, impacting civilian and military personnel administration.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can incentivize contractor to incur costs to increase the fixed fee, potentially leading to higher overall costs if not managed carefully.
The duration of the contract (396 days) is substantial, requiring sustained oversight to ensure performance and cost control.
The specific scope of 'HR transformation management support' is broad and requires clear performance metrics to ensure effective delivery.
Reliance on a single large contractor for a critical function like HR transformation could pose a risk if performance falters.

Positive Signals

Awarded through full and open competition, suggesting a robust selection process.
The contractor, Deloitte Consulting LLP, is a well-established firm with significant experience in large-scale transformation projects.
The contract supports a critical initiative to modernize Navy HR, which is essential for operational efficiency and personnel management.
The contract has a defined end date, providing a clear timeframe for achieving transformation goals.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically engineering services (NAICS 541330). This sector is characterized by high demand for specialized expertise in areas like management consulting, IT, and process improvement. The total government spending in this sector is substantial, with significant portions allocated to large prime contractors like Deloitte. This contract represents a portion of the Navy's investment in modernizing its human resources infrastructure, aligning with broader government trends towards digital transformation and improved service delivery.

Small Business Impact

This contract was not set aside for small businesses (ss is false, sb is false). The awardee, Deloitte Consulting LLP, is a large business. There is no explicit mention of small business subcontracting requirements in the provided data. Therefore, the direct impact on the small business ecosystem is likely minimal, unless Deloitte voluntarily includes small businesses in its subcontracting efforts.

Oversight & Accountability

Oversight for this contract will primarily reside with the Department of the Navy contracting officers and program managers. The Cost Plus Fixed Fee structure necessitates rigorous financial oversight to ensure that costs are allowable, reasonable, and allocable. Performance monitoring will be crucial to ensure that the HR transformation objectives are met within the defined scope and timeline. Transparency will depend on the Navy's reporting practices regarding contract performance and expenditures. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Navy HR Transformation Initiatives
Defense Human Resources Management Systems
Federal HR Modernization Programs
Management and Consulting Services Contracts

Risk Flags

Cost Overrun Risk (CPFF)
Performance Risk (Scope Definition)
Cybersecurity Risk (Sensitive Data)
Change Management Risk (Large Workforce)

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.1 million to DELOITTE CONSULTING LLP. MYNAVY HR TRANSFORMATION MANAGEMENT SUPPORT SERVICES (TMSS)

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 $14.1 million.

What is the period of performance?

Start: 2024-05-07. End: 2025-06-07.

What is Deloitte's track record with similar large-scale HR transformation contracts within the federal government?

Deloitte Consulting LLP has a substantial track record of managing and executing large-scale transformation projects for various federal agencies. They have been involved in modernizing IT systems, improving business processes, and implementing new HR platforms across departments like Defense, Homeland Security, and Health and Human Services. Their experience often includes change management, system integration, and strategic planning. While specific details of past HR transformation contracts are not provided here, their general profile suggests they possess the requisite experience for this Navy contract. A deeper dive into their past performance on similar CPFF contracts would be beneficial to assess their ability to manage costs effectively and deliver on complex objectives within budget.

How does the Cost Plus Fixed Fee (CPFF) structure compare to other contract types for this type of service, and what are the implications for value?

The Cost Plus Fixed Fee (CPFF) contract type is often used for research and development or complex services where the scope is not fully defined at the outset, or where innovation is a key component. It reimburses the contractor for allowable costs plus a predetermined fixed fee, which is not subject to adjustment based on actual costs. Compared to Firm-Fixed-Price (FFP) contracts, CPFF offers more flexibility for the government if scope changes are anticipated, but it carries a higher risk of cost overruns if not managed diligently. For HR transformation, where requirements can evolve, CPFF can be appropriate. However, it places a significant burden on the government to meticulously track and audit costs to ensure value. FFP contracts generally offer better price certainty for the government but may be less suitable for highly uncertain scopes.

What are the key performance indicators (KPIs) that will be used to measure the success of this HR transformation management support?

The provided data does not specify the Key Performance Indicators (KPIs) for this contract. However, for an HR transformation management support contract, typical KPIs would likely focus on the successful implementation of new HR systems and processes, improvements in HR service delivery times, enhanced data accuracy and accessibility, increased user satisfaction among Navy personnel, and the achievement of specific modernization milestones within defined timelines and budgets. Effective KPIs should be measurable, achievable, relevant, and time-bound (SMART). The Department of the Navy's program managers will be responsible for defining and monitoring these KPIs to ensure the contractor delivers the intended transformation outcomes and provides value for money.

What is the historical spending trend for HR transformation management support services within the Department of the Navy?

Historical spending trends for HR transformation management support services within the Department of the Navy are not detailed in the provided data. However, it is reasonable to assume that spending in this area has been increasing as the Navy, like other branches of the military and federal agencies, prioritizes digital modernization and efficiency improvements. Investments in HR systems and processes are critical for managing a large workforce. Analyzing past contracts for similar services, including their value, duration, and scope, would provide a clearer picture of the Navy's historical investment patterns and help benchmark the current $14 million award against previous expenditures.

Are there any specific risks associated with the geographic location (Virginia) or the nature of HR transformation in a large military organization?

The primary geographic focus being Virginia is significant, as it hosts a large concentration of Navy personnel and administrative functions. This concentration can facilitate implementation and user adoption but also means that any disruption or failure in the HR transformation could impact a substantial portion of the Navy's workforce. Risks specific to a large military organization include the complexity of integrating new systems with existing legacy infrastructure, the need for robust cybersecurity measures to protect sensitive personnel data, managing change across a diverse and hierarchical workforce, and ensuring compliance with numerous military regulations and policies. The sheer scale and unique operational demands of the Navy present inherent challenges that require careful management and risk mitigation strategies.

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: N0018923R3032

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: $14,053,237

Exercised Options: $14,053,237

Current Obligation: $14,053,237

Subaward Activity

Number of Subawards: 3

Total Subaward Amount: $6,000,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017819D7502

IDV Type: IDC

Timeline