Army's $28M McKinsey Consulting Contract for Sustainment Modernization Under Full and Open Competition

Contract Overview

Contract Amount: $28,161,057 ($28.2M)

Contractor: Mckinsey & Company, Inc. Washington D.C.

Awarding Agency: Department of Defense

Start Date: 2017-03-08

End Date: 2019-12-01

Contract Duration: 998 days

Daily Burn Rate: $28.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::OT::IGF THIS ACQUISITION IS FOR THE PROCUREMENT OF INTEGRATED CONSULTING SERVICES IN SUPPORT OF THE EFFORT, IMPLEMENTING CHANGES TO U.S. ARMY SUSTAINMENT, IN SUPPORT OF THE ASSISTANT SECRETARY OF THE ARMY (ACQUISITION, LOGISTICS AND TECHNOLOGY) (ASA(ALT)) ORGANIZATION.

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20036

State: District of Columbia Government Spending

Plain-Language Summary

Department of Defense obligated $28.2 million to MCKINSEY & COMPANY, INC. WASHINGTON D.C. for work described as: IGF::OT::IGF THIS ACQUISITION IS FOR THE PROCUREMENT OF INTEGRATED CONSULTING SERVICES IN SUPPORT OF THE EFFORT, IMPLEMENTING CHANGES TO U.S. ARMY SUSTAINMENT, IN SUPPORT OF THE ASSISTANT SECRETARY OF THE ARMY (ACQUISITION, LOGISTICS AND TECHNOLOGY) (ASA(ALT)) ORGANIZATION. Key points: 1. The contract awarded to McKinsey & Company for $28.16 million focuses on modernizing U.S. Army sustainment operations. 2. This acquisition utilized full and open competition, suggesting a robust market for these specialized consulting services. 3. The fixed-price contract type aims to control costs, but the complexity of sustainment modernization presents inherent risks. 4. The sector is professional services, specifically administrative and management consulting, supporting a critical defense function.

Value Assessment

Rating: good

The contract's value of $28.16 million appears reasonable for comprehensive consulting services aimed at large-scale organizational change within the Army's sustainment operations.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The use of full and open competition indicates that multiple qualified firms could bid, fostering a competitive environment that should drive fair pricing and service quality.

Taxpayer Impact: The competitive nature of the award suggests taxpayers are likely receiving value for money, as the Army sought the best solution from a broad pool of providers.

Public Impact

Enhances the efficiency and effectiveness of Army logistics and supply chain management. Impacts the readiness and operational capabilities of U.S. Army forces. Modernizes critical infrastructure and processes within a major federal agency. Potential for improved resource allocation and cost savings in sustainment operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Scope creep in complex modernization projects.
Integration challenges with existing Army systems.
Measuring the long-term impact of consulting recommendations.

Positive Signals

Clear objective to improve Army sustainment.
Use of a reputable consulting firm.
Fixed-price contract for cost certainty.

Sector Analysis

This contract falls within the professional services sector, specifically management and administrative consulting. Spending in this area for defense modernization can be substantial, with benchmarks varying widely based on project scope and complexity.

Small Business Impact

The data indicates this contract was awarded to a large business (McKinsey & Company) and does not show any specific set-asides or participation goals for small businesses.

Oversight & Accountability

The award was made by the Department of the Army, likely subject to internal oversight processes and potentially congressional review given the contract's value and strategic importance.

Related Government Programs

Administrative Management and General Management Consulting Services
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Potential for high cost overruns if scope is not tightly managed.
Risk of recommendations not aligning with military operational realities.
Dependency on contractor expertise for critical modernization.
Challenges in measuring long-term ROI of consulting services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.2 million to MCKINSEY & COMPANY, INC. WASHINGTON D.C.. IGF::OT::IGF THIS ACQUISITION IS FOR THE PROCUREMENT OF INTEGRATED CONSULTING SERVICES IN SUPPORT OF THE EFFORT, IMPLEMENTING CHANGES TO U.S. ARMY SUSTAINMENT, IN SUPPORT OF THE ASSISTANT SECRETARY OF THE ARMY (ACQUISITION, LOGISTICS AND TECHNOLOGY) (ASA(ALT)) ORGANIZATION.

Who is the contractor on this award?

The obligated recipient is MCKINSEY & COMPANY, INC. WASHINGTON D.C..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $28.2 million.

What is the period of performance?

Start: 2017-03-08. End: 2019-12-01.

What specific metrics were used to evaluate the success of McKinsey's consulting services in improving Army sustainment operations?

The success metrics would likely involve quantifiable improvements in key performance indicators such as supply chain efficiency, inventory reduction, cost savings, equipment readiness rates, and response times for logistical support. The contract's final deliverables and performance reviews would detail these metrics and the extent to which they were achieved.

What are the primary risks associated with implementing McKinsey's recommendations for Army sustainment, and how are they being mitigated?

Key risks include resistance to change from personnel, technical integration issues with legacy systems, and the potential for recommendations to be overly theoretical or impractical in a military context. Mitigation strategies likely involve phased implementation, extensive training programs, strong change management leadership from the Army, and continuous feedback loops with McKinsey.

How effectively did the full and open competition process ensure the best value for taxpayer dollars in this $28 million contract?

Full and open competition generally promotes best value by allowing a wide range of qualified vendors to compete, driving down prices and encouraging innovation. For this contract, the effectiveness hinges on the rigor of the evaluation criteria used by the Army to select McKinsey, ensuring that the chosen firm offered not just a competitive price but also the most suitable expertise and approach for the complex sustainment modernization effort.

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

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Mckinsey & Company, Inc. (UEI: 001673920)

Address: 1200 19TH ST NW STE 1100, WASHINGTON, DC, 20036

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $37,529,424

Exercised Options: $37,529,424

Current Obligation: $28,161,057

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS10F0118S

IDV Type: FSS

Timeline