DoD's $22.7M audit integrator contract awarded to KPMG LLP for financial management support

Contract Overview

Contract Amount: $22,747,290 ($22.7M)

Contractor: Kpmg LLP

Awarding Agency: Department of Defense

Start Date: 2024-06-03

End Date: 2025-07-02

Contract Duration: 394 days

Daily Burn Rate: $57.7K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: FIAR STRATEGIC AUDIT INTEGRATOR AND ADVISOR TASK ORDER

Place of Performance

Location: FAIRFAX, FAIRFAX County, VIRGINIA, 22030

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $22.7 million to KPMG LLP for work described as: FIAR STRATEGIC AUDIT INTEGRATOR AND ADVISOR TASK ORDER Key points: 1. Contract awarded via BPA Call, indicating a pre-competed framework. 2. KPMG LLP, a major accounting firm, brings extensive experience in financial audits. 3. The contract duration of 394 days suggests a focused, short-term engagement. 4. Fixed-price contract type aims to control costs and provide budget certainty. 5. No small business set-aside indicates a focus on large, experienced contractors. 6. The task order is part of a larger Defense Logistics Agency initiative.

Value Assessment

Rating: good

The contract value of $22.7 million for a 394-day period appears reasonable for specialized financial audit integration and advisory services. Benchmarking against similar large-scale audit support contracts for federal agencies suggests this pricing is within expected ranges, especially considering the expertise required. The firm-fixed-price structure further supports value by capping potential cost overruns for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, likely through a Blanket Purchase Agreement (BPA) Call, which implies a pre-existing competitive process for the underlying BPA. The specific details of the number of bidders for this particular task order are not provided, but the 'full and open' designation suggests a broad solicitation. This level of competition is generally favorable for price discovery and ensuring the government receives competitive offers.

Taxpayer Impact: A full and open competition ensures that taxpayers benefit from the most competitive pricing and that the government can access a wide pool of qualified contractors, leading to better value for public funds.

Public Impact

The Department of Defense, specifically the Defense Logistics Agency, benefits from improved financial audit integration and advisory services. Services delivered are critical for enhancing the accuracy and efficiency of financial reporting and management within the DoD. The geographic impact is primarily within Virginia, where the task order is managed. Workforce implications include the engagement of highly skilled accounting and financial professionals from KPMG LLP.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for contractor lock-in if this becomes a recurring need without re-competition.
Reliance on a single large firm for critical financial functions could pose a risk if performance issues arise.

Positive Signals

Award to a reputable firm like KPMG LLP suggests a high likelihood of competent performance.
Firm-fixed-price contract provides cost certainty for the government.
BPA Call award mechanism implies prior vetting and competition for the base agreement.

Sector Analysis

This contract falls within the professional services sector, specifically accounting and auditing services. The federal government is a significant consumer of these services to ensure accountability and compliance with financial regulations. The market for these services is dominated by large, established accounting firms, with significant competition often occurring at the BPA or IDIQ contract level, followed by task order awards. The total federal spending on accounting and auditing services is in the billions annually.

Small Business Impact

The contract was not set aside for small businesses, as indicated by 'sb': false. This suggests that the scope and complexity of the services required were deemed best met by larger, established firms with the capacity and expertise to handle such a significant task. There is no explicit mention of subcontracting requirements for small businesses in the provided data, but large prime contractors are often encouraged or required to have small business subcontracting plans.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Logistics Agency's contracting officers and program managers. The firm-fixed-price nature of the contract provides a degree of cost control. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Defense Logistics Agency Financial Improvement and Audit Remediation (FIAR) initiatives
Department of Defense Financial Management Transformation efforts
Federal Audit Services Contracts
Government-wide Accounting and Auditing Support

Risk Flags

Contract performance risk
Potential for scope creep
Reliance on single large contractor

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.7 million to KPMG LLP. FIAR STRATEGIC AUDIT INTEGRATOR AND ADVISOR TASK ORDER

Who is the contractor on this award?

The obligated recipient is KPMG LLP.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $22.7 million.

What is the period of performance?

Start: 2024-06-03. End: 2025-07-02.

What is KPMG LLP's track record with similar federal audit support contracts?

KPMG LLP has a substantial track record of performing audit, financial advisory, and management consulting services for various federal agencies, including the Department of Defense. They are one of the 'Big Four' accounting firms and regularly compete for and win large federal contracts. Their experience often includes supporting complex financial improvement and audit readiness initiatives, such as the Defense Logistics Agency's FIAR program. Past performance is a critical factor in federal contracting, and KPMG's consistent presence in this space indicates a generally positive assessment of their capabilities by government agencies. Specific details on past performance metrics for this exact type of task order would require deeper analysis of contract databases and agency performance evaluations.

How does the value of this contract compare to other federal audit integration contracts?

The $22.7 million value for this 394-day task order is significant and aligns with the scale of specialized financial advisory and audit support services required by large federal entities like the DoD. Comparable contracts often range from tens to hundreds of millions of dollars over multiple years, depending on the scope, duration, and complexity of the agency's financial management challenges. Contracts supporting the Defense-wide Financial Improvement and Audit Readiness (FIAR) efforts, in particular, are substantial investments. This specific task order appears to be a focused effort within a broader financial management strategy, and its value seems proportionate to the specialized expertise and support needed for audit integration and advisory functions.

What are the primary risks associated with this contract?

Key risks include potential performance deficiencies by the contractor, although mitigated by KPMG's reputation and the firm-fixed-price structure. Another risk is the potential for scope creep if the advisory services extend beyond the initial defined objectives, which could lead to cost implications if not managed carefully through contract modifications. Over-reliance on a single contractor for critical financial functions could also pose a risk if the contractor faces internal issues or if the government seeks to diversify its support base in the future. Furthermore, the effectiveness of the advisory services in achieving tangible improvements in financial audit integration is a performance risk that requires ongoing monitoring.

How effective is the firm-fixed-price contract type in managing costs for this service?

The firm-fixed-price (FFP) contract type is generally considered effective for managing costs when the scope of work is well-defined and the risks of performance are relatively low or can be reasonably estimated. For specialized advisory and integration services like those provided under this contract, FFP provides budget certainty for the government, as the contractor assumes the risk of cost overruns. This incentivizes the contractor to perform efficiently. However, if the requirements are highly complex or subject to significant change, an FFP contract might be less suitable than other types, potentially leading to disputes or the need for costly contract modifications. In this case, the task order's duration and specific objectives likely allow for effective cost management under FFP.

What is the historical spending trend for similar audit support services within the Defense Logistics Agency?

Historical spending on audit support services within the Defense Logistics Agency (DLA) has been substantial, driven by the DoD's ongoing efforts to achieve auditable financial statements. DLA, as a major logistics and supply chain provider, faces complex financial management challenges. Spending in this area has likely seen fluctuations based on specific audit readiness milestones, regulatory changes, and the prioritization of financial improvement initiatives. While precise historical figures for 'audit integrator and advisor task orders' are not provided, DLA's overall budget for financial management, audit support, and related professional services would encompass significant amounts, often awarded through large IDIQs or BPAs, with task orders like this one representing specific allocations of those funds.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Accounting, Tax Preparation, Bookkeeping, and Payroll Services › Offices of Certified Public Accountants

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: SP470424Q0019

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 8350 BROAD ST STE 900, MC LEAN, VA, 22102

Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $22,747,290

Exercised Options: $22,747,290

Current Obligation: $22,747,290

Subaward Activity

Number of Subawards: 7

Total Subaward Amount: $1,534,124

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SP470423A0506

IDV Type: BPA

Timeline