DoD's $27.5M Accenture contract for IT services shows strong competition but raises questions on value

Contract Overview

Contract Amount: $27,512,150 ($27.5M)

Contractor: Accenture Federal Services LLC

Awarding Agency: Department of Defense

Start Date: 2018-05-31

End Date: 2021-07-31

Contract Duration: 1,157 days

Daily Burn Rate: $23.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 117

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: 8505552947!TECHNOLOGY SERVICES

Place of Performance

Location: FORT BELVOIR, FAIRFAX County, VIRGINIA, 22060

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $27.5 million to ACCENTURE FEDERAL SERVICES LLC for work described as: 8505552947!TECHNOLOGY SERVICES Key points: 1. Contract awarded via full and open competition, indicating a healthy market. 2. Multiple bids received, suggesting competitive pricing pressures. 3. Firm Fixed Price contract type helps mitigate cost overrun risks. 4. Performance period spans over three years, allowing for sustained service delivery. 5. IT services sector is highly dynamic, requiring continuous adaptation. 6. Contractor has a significant presence in federal IT services. 7. Value for money requires deeper analysis against benchmarks. 8. No small business set-aside, potentially limiting opportunities for smaller firms.

Value Assessment

Rating: fair

The contract's total value of $27.5 million over three years averages to approximately $9.17 million annually. Benchmarking this against similar IT services contracts within the Department of Defense is crucial. Without specific per-unit cost data or detailed service descriptions, a precise value-for-money assessment is challenging. However, the firm fixed-price nature suggests a degree of cost certainty for the government. Further analysis would involve comparing the scope of services and deliverables to industry standards and other government contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with 117 bids received. This high number of bidders suggests a robust and competitive marketplace for the IT services required. The extensive competition is generally favorable for price discovery and likely resulted in a more competitive initial offer. The agency benefited from a wide pool of potential contractors, increasing the likelihood of selecting a capable and cost-effective provider.

Taxpayer Impact: The broad competition for this contract is beneficial for taxpayers as it likely drove down prices and ensured the government received competitive proposals. A large number of bidders reduces the risk of paying above-market rates and increases the chances of securing high-quality services at a reasonable cost.

Public Impact

The Department of Defense benefits from enhanced technology services, supporting its operational readiness. Military personnel and civilian staff gain access to improved IT infrastructure and support. Services are delivered primarily within Virginia, impacting the local tech workforce. The contract supports the modernization of IT systems crucial for national security. Accenture Federal Services LLC, the contractor, leverages its expertise to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific performance metrics makes it difficult to gauge service effectiveness.
Potential for scope creep in long-term IT service contracts.
Reliance on a single large contractor could create vendor lock-in.
IT services market is subject to rapid technological obsolescence.

Positive Signals

Awarded through full and open competition, ensuring broad market access.
Firm Fixed Price contract type provides cost predictability.
Contract duration allows for stable service provision.
Contractor is a well-established entity in the federal IT space.

Sector Analysis

The IT services sector within the federal government is a significant and dynamic market. This contract falls under the 'Other Computer Related Services' NAICS code (541519), which encompasses a wide range of IT support and consulting. Spending in this category is substantial across various agencies, driven by the need for digital transformation, cybersecurity, and modern infrastructure. Comparable spending benchmarks would typically look at the average cost per hour or per service for similar IT support functions within the federal landscape.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. This means that opportunities for small businesses to participate in this specific contract are limited. While the primary contractor is a large entity, the absence of set-asides or explicit subcontracting goals may not significantly boost the small business IT ecosystem through this particular award. Further investigation into the contractor's general subcontracting practices would be needed for a complete picture.

Oversight & Accountability

The contract is subject to standard federal procurement oversight. As a Delivery Order under a larger contract vehicle, its execution is monitored by the Defense Logistics Agency. Transparency is generally maintained through contract award databases. Inspector General oversight would apply if any fraud, waste, or abuse were suspected. The firm fixed-price nature of the contract provides a degree of accountability regarding cost.

Related Government Programs

IT Professional Services
IT Operations and Support
Cloud Computing Services
Cybersecurity Services
Defense IT Modernization

Risk Flags

Potential for vendor lock-in
Risk of technological obsolescence
Lack of specific performance metrics
Limited small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $27.5 million to ACCENTURE FEDERAL SERVICES LLC. 8505552947!TECHNOLOGY SERVICES

Who is the contractor on this award?

The obligated recipient is ACCENTURE FEDERAL SERVICES LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $27.5 million.

What is the period of performance?

Start: 2018-05-31. End: 2021-07-31.

What is Accenture Federal Services LLC's track record with the Department of Defense and similar IT service contracts?

Accenture Federal Services LLC is a major contractor with the Department of Defense and other federal agencies, frequently awarded contracts for IT services, consulting, and digital transformation. Their track record generally includes large-scale projects and a significant presence in the federal IT market. Historical data indicates they have successfully managed numerous complex IT initiatives. However, like any large contractor, they may have faced scrutiny on specific projects regarding performance or cost management. A detailed review of past performance evaluations and any contract disputes or awards would provide a more granular understanding of their specific performance history with the DoD.

How does the $27.5 million contract value compare to similar IT services contracts awarded by the Defense Logistics Agency or DoD?

The $27.5 million total contract value over approximately three years places this contract in the mid-to-large tier for IT services within the DoD. Annual spending averages around $9.17 million. To benchmark effectively, one would compare this to other firm-fixed-price contracts for 'Other Computer Related Services' (NAICS 541519) awarded by DLA or similar DoD components. Factors like contract duration, specific service scope (e.g., help desk, network management, software development), and the number of bidders influence pricing. Without access to a detailed breakdown of services and specific performance metrics, a direct comparison is difficult, but the number of bids suggests it was competitively priced within its service category.

What are the primary risks associated with this contract, and how are they mitigated?

Key risks include potential scope creep, technological obsolescence in the fast-evolving IT sector, and over-reliance on a single vendor. Mitigation strategies are embedded in the contract structure and management. The firm-fixed-price (FFP) nature helps control costs by fixing the price regardless of the contractor's actual costs, shifting cost risk to Accenture. The contract duration of over three years, while allowing for sustained service, also necessitates careful monitoring to prevent vendor lock-in and ensure services remain current. Regular performance reviews and clear contract management by the DLA are crucial for ongoing risk mitigation.

How effective is the 'full and open competition' approach for IT services contracts of this nature?

Full and open competition is generally considered the most effective method for awarding IT services contracts when a clear statement of work can be defined. It maximizes the pool of potential offerors, fostering robust price competition and increasing the likelihood of selecting the best value solution. For a contract valued at $27.5 million with 117 bids, this approach clearly worked to generate significant interest and likely competitive pricing. The effectiveness is further enhanced when the agency has strong technical expertise to evaluate proposals thoroughly and manage the ensuing contract.

What is the historical spending trend for 'Other Computer Related Services' by the Defense Logistics Agency?

Historical spending data for 'Other Computer Related Services' (NAICS 541519) by the Defense Logistics Agency (DLA) would reveal trends in IT service procurement. Analyzing past years' spending in this category would indicate whether DLA's reliance on such services is increasing, decreasing, or remaining stable. It would also highlight the typical contract values and types (e.g., FFP, cost-plus) DLA favors. Understanding these patterns provides context for the current $27.5 million award, helping to determine if it aligns with historical procurement strategies or represents a shift in DLA's IT service acquisition approach.

Are there any specific performance metrics or KPIs tied to this contract that indicate its success?

The provided data does not include specific performance metrics or Key Performance Indicators (KPIs) tied to this contract. While the contract is firm-fixed-price, which implies a focus on deliverables, the absence of explicit, quantifiable metrics makes it challenging to objectively assess the contractor's performance and the overall success of the service delivery. Effective contract management would typically involve defining and tracking KPIs related to service availability, response times, issue resolution rates, and user satisfaction. Without these, assessing the true value and effectiveness of the services provided is difficult.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 117

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Novetta Solutions, LLC

Address: 800 NORTH GLEBE RD #300, ARLINGTON, VA, 22203

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $34,282,583

Exercised Options: $27,512,150

Current Obligation: $27,512,150

Actual Outlays: $2,449,108

Subaward Activity

Number of Subawards: 93

Total Subaward Amount: $11,665,766

Contract Characteristics

Consolidated Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SP470917D0023

IDV Type: IDC

Timeline