DoD awards $26M to McKinsey for consulting, raising questions on competition and value
Contract Overview
Contract Amount: $26,030,305 ($26.0M)
Contractor: Mckinsey & Company, Inc. Washington D.C.
Awarding Agency: Department of Defense
Start Date: 2022-03-17
End Date: 2025-01-19
Contract Duration: 1,039 days
Daily Burn Rate: $25.1K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: GOCO AAP CAMPAIGN PLAN
Place of Performance
Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20036
Plain-Language Summary
Department of Defense obligated $26.0 million to MCKINSEY & COMPANY, INC. WASHINGTON D.C. for work described as: GOCO AAP CAMPAIGN PLAN Key points: 1. Significant contract awarded to a single, well-known consulting firm. 2. Lack of competition may lead to inflated pricing. 3. Administrative management consulting is a broad category with potential for cost savings. 4. Long contract duration (1039 days) warrants close monitoring.
Value Assessment
Rating: questionable
The $26 million award to McKinsey & Company for administrative management consulting is substantial. Without competitive bidding, it's difficult to assess if this price reflects fair market value compared to similar services.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This limits price discovery and potentially increases costs for taxpayers as there was no market pressure to offer the best price.
Taxpayer Impact: The lack of competition on this $26 million contract means taxpayers may be overpaying for consulting services.
Public Impact
Taxpayers may be paying a premium due to the absence of competitive bidding. The effectiveness of consulting services for administrative management needs scrutiny. Transparency in contract modifications and performance reporting is crucial.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- High contract value
- Lack of clear performance metrics (implied)
- Long contract duration
Positive Signals
- Awarded to a reputable firm (McKinsey)
- Clear contract type (Firm Fixed Price)
Sector Analysis
Administrative Management and General Management Consulting Services (NAICS 541611) is a common area for government spending. Benchmarks vary widely based on scope, but large, sole-source awards warrant scrutiny.
Small Business Impact
This contract was awarded to McKinsey & Company, Inc., a large business. There is no indication that small businesses were involved in this specific award, missing an opportunity for their participation.
Oversight & Accountability
The sole-source nature of this award necessitates robust oversight from the Department of the Army to ensure the services provided are necessary, effective, and priced appropriately. Regular performance reviews are essential.
Related Government Programs
- Administrative Management and General Management Consulting Services
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Sole-source award lacks competition.
- Potential for overpayment due to lack of price discovery.
- High contract value requires significant oversight.
- Long contract duration increases risk over time.
- No indication of small business participation.
Tags
administrative-management-and-general-ma, department-of-defense, dc, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $26.0 million to MCKINSEY & COMPANY, INC. WASHINGTON D.C.. GOCO AAP CAMPAIGN PLAN
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 $26.0 million.
What is the period of performance?
Start: 2022-03-17. End: 2025-01-19.
What specific administrative management and general management consulting services are being procured, and how do they align with the Department of the Army's strategic objectives?
The contract details are broad, covering 'Administrative Management and General Management Consulting Services.' A deeper dive into the specific task orders and deliverables under this $26 million award is needed to understand how these services directly support the Army's mission and whether they represent a critical need justifying a sole-source procurement.
What is the justification for awarding this significant contract on a sole-source basis, and what steps were taken to ensure fair and reasonable pricing?
The justification for a sole-source award, especially for a contract valued at $26 million, needs to be clearly documented and publicly accessible. Without competition, the Department of Defense must demonstrate rigorous price analysis, potentially through historical data, independent cost estimates, or benchmarking against similar, albeit competitively awarded, contracts to ensure taxpayer funds are used efficiently.
How will the effectiveness and impact of McKinsey's consulting services be measured and evaluated throughout the contract's duration?
Given the substantial investment and the long contract period, establishing clear, measurable performance metrics and key performance indicators (KPIs) is critical. The Department of the Army should implement a robust performance management plan to track progress, ensure deliverables meet expectations, and ultimately assess the return on investment for these consulting services.
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: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: W15QKN21R0126
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Mckinsey & Company, Inc.
Address: 1200 19TH ST NW STE 1000, WASHINGTON, DC, 20036
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $26,030,305
Exercised Options: $26,030,305
Current Obligation: $26,030,305
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2022-03-17
Current End Date: 2025-01-19
Potential End Date: 2025-01-19 12:01:00
Last Modified: 2024-01-18
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