Deloitte is much better known for their audit, tax, risk, and regulatory advisory services than their government contracting capabilities, but assuming they’re just a bunch of accountants would be a fatal oversight by more “traditional” GovCons. Boasting more than 312,000 employees worldwide and nearly $20 billion in 2018 revenue, Deloitte has a significant base of resources on which to draw.
Their Government & Public Services (GPS) practice weighs in closer to 15,000 professionals that has focused on technology transformation for U.S. federal and state governments as well as higher education. This technological transformation includes citizen experiences, data analytics, artificial intelligence (AI), and cloud services.
An interesting quirk regarding Deloitte in the federal sector – as one of the “Big Four” accounting firms with a heavy focus in auditing, their GPS practice cannot partner with their audit practice’s clients. They have strict independence standards to maintain objectivity, impartiality, and responsibility to investors. For instance, as Deloitte & Touche LLP are Northrop Grumman’s auditors, Deloitte’s federal business would be hard pressed to team with Northrop Grumman.
Recent Wins
Deloitte has been fairly successful with some recent contract takeaways and defense of their incumbent work.
- U.S. Department of the Air Force, Assistant Secretary of the Air Force (Financial Management and Comptroller) (SAF/FM), Financial Improvement and Audit Readiness (FIAR) Support – In April 2018, Deloitte was awarded this 7-year, $784 million takeaway from Guidehouse (formerly PricewaterhouseCoopers’ (PwC) U.S. Public Sector). More aligned with “traditional” Deloitte, this FIAR support contract provides advisory & assistance services (A&AS) in management and professional support services and studies, analyses, and evaluations. Deloitte will support Air Force locations around the country and require a range of auditing, accounting, internal controls, and financial expertise.
- U.S. Department of State, Bureau of Consular Affairs (CA), Travel Issuance and Overseas Citizen Assistance (TIOCA) – Deloitte was the incumbent on approximately two-thirds of this work, with SOSi (by way of legacy STG) holding the other third. The two contracts were consolidated and awarded to Deloitte for 7 years and $431 million. The TIOCA portfolio supports a wide range of CA systems under four functional areas within DOS/CA: Passport Support Services, American Citizen Services, Non-Citizen Services, and Consular Lookout and Support Systems (CLASS). Note that this was a U.S. General Services Administration (GSA) Federal Systems Integration and Management Center (FEDSIM) managed competition which is even more challenging for incumbents to win.
- U.S. Department of Health and Human Services (HHS), Centers for Medicare and Medicaid Services (CMS), Federally Facilitated Exchange (FFE) – Deloitte won this contract away from Accenture for 5 years and $398 million to support the operations, maintenance, and development of the healthcare.gov exchange in November 2019 (Accenture has filed a protest with GAO, decision due by March 11, 2020). Following the initial contract’s struggles to launch the portal, Accenture was heralded for stepping in and saving the exchange. Deloitte’s takeaway of one of Accenture’s “go-to” success stories is a win for more than just the dollar value.
- Cybersecurity Support (clients vary) – Deloitte has several recent wins that merge their inherent audit, compliance, and strategy capabilities with emerging cybersecurity needs across a range of customers. These include Cybersecurity Audit Support for HHS’s National Institutes of Health (NIH); Cybersecurity Strategic Planning, Implementation, Audit Assessment, and Remediation under the IRS’s $1 billion IT Enterprise Program Management Support Services (IT-EPMSS) contract; and Cybersecurity / Information Assurance (IA) support services BPAs with U.S. Department of Labor (DOL) and the Social Security Administration (SSA).
Customers
Deloitte has a fairly well-balanced set of customers at the top end of their portfolio.
Figure 1 – Deloitte’s top 10 federal customers by prime contract obligations (FY15-FY19). Source: USAspending.gov
Their significant level of support for the IRS (which shouldn’t come as a surprise) has been bolstered by their seat on the $1 billion IT-EPMSS IDIQ contract. Much of their IRS support is centered around data analytics, compliance, integration, software development, and management support services.
The company has also maintained a strong focus on the federal healthcare industry with the Defense Health Agency (DHA), HHS Operating Divisions NIH and the Food and Drug Administration (FDA), and the U.S. Department of Veterans Affairs (VA). Work for these agencies focuses heavily on IT and engineering support services, business process improvement, governance and compliance support, and financial management.
Deloitte has maintained a decently strong footprint in agencies that have experienced reduced funding under this administration with DOS and U.S. Agency for International Development (USAID). Their support for these agencies includes their recent TIOCA win, business improvements, analytics support, workforce transformation, and improvement of foreign governance, accountability, transparency, and power / energy infrastructure.
FedSavvy Strategies’ takeaway
Deloitte should not be seen as just a “Big Four” accounting firm in the government contracting space. They would be a credible competitor across a range of contracts, from cybersecurity to data analytics, IT and engineering support to international development. But yes, Deloitte is still strong in the accounting, audit, and financial management disciplines – they haven’t lost sight of who they are. When assessing which competitors may be teaming with Deloitte, remember that their independence standards prevent Deloitte GPS from partnering with their audit practice’s clients.
As always, do your homework (or we can…) to ensure that what you think are your competitors is truly accurate.
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