The last time we looked at Deloitte over two years ago, we compared their top customers, highlighted new AI/ML, analytics and cyber offerings, and covered its new acquisitions. In this blog, we will provide an update on their federal customer portfolio, look at recent and noteworthy contract wins, and make note of some interesting developments within the company’s government business. Deloitte Consulting’s federal contracting business continues to evolve with a blend of “classic Deloitte” work an an increasingly aggressive technology enabled services business.
Changing Customer Footprint
It is significant to note that all of Deloitte’s top 10 customers have increased growth when comparing actual spending between fiscal years 2017 to 2021 and fiscal years 2019 to 2023. When comparing Deloitte’s federal customer footprint from our previous blog, we can see that the Internal Revenue Service (IRS), U.S. Air Force, Food and Drug Administration (FDA), U.S. Department of Veterans Affairs (VA), and Centers for Medicare and Medicaid Services (CMS) gained a greater presence among the company’s top 10 customers.
Noteworthy Deloitte federal contract wins
- U.S. Department of Veterans Affairs (VA), Financial Management Business Transformation (FMBT) Support – In November 2023, Deloitte was awarded a six-year, $219 million contract to help modernize financial and acquisition management systems at the VA. Through FMBT, Deloitte is helping the VA migrate to the Integrated Financial and Acquisition Management System (iFAMS), a cloud-hosted, enterprise-wide platform supporting accurate and timely payment processing for organizations serving veterans. Although this was awarded on the GSA MAS schedule, note that Deloitte is among the group of T4NG2 awardees.
- U.S. Department of the Air Force, U.S. Space Force (USSF), 50th Contracting Squadron, Cyber Defense Engineering and Training (CDET) – In September 2021, Deloitte was awarded a six-year, $99 million contract to support cyber defense of space mission systems. Deloitte provides engineering, technical and training support for cyber defense protecting, detecting, responding, sustaining and training, and evaluating and providing recommendations to fulfill cyber defense guidance and methodologies.
- U.S. Department of Health and Human Services (HHS), Centers for Medicare and Medicaid Services (CMS), Innovation Center Support – In June 2024, Deloitte was awarded a five-year, $63 million contract to provide a data aggregation capability to support model operations and transform goals for the CMS Innovation Center. The CMS Innovation Center develops and tests health care payment and service delivery models to improve patient care, lower costs, and align payment systems to promote patient-centered practices.
- U.S. Department of Health and Human Services (HHS), Food and Drug Administration (FDA), Center for Biologics Evaluation and Research (CBER) Task Order – In July 2021, Deloitte was awarded a three-year, $89 million task order under the CBER Systems and Operations and Modernization (CSOM) BPA to enhance the systems, operations and modernization efforts of CBER. This includes improving and maintaining the various IT systems and databases used by CBER. The FDA is not a new customer, but one that has grown steadily over the years.
In addition to wins among Deloitte’s growing customers, the company has scored large-scale wins across the defense and federal civilian space for R&D support, enterprise IT support and system development. These include:
- U.S. Department of the Army, Research and Development (R&D) Support – In November 2023, Deloitte was awarded a ten-year, $450 million contract to provide the U.S. Army services ranging from research and development to prototyping and technology integration. The contract also covers testing, evaluation, experimentation and analytics.
- U.S. Department of Defense (DoD), Defense Manpower Data Center (DMDC), Global Enterprise Management Services (GEMS) IT Support Contract – In February 2024, Deloitte was awarded a $1 billion Alliant 2 task order to provide global human resources IT support. Services include hardware, software and systems integration to support global systems such as the Real-time Automated Identification Systems, Defense Biometrics Identification System and Joint Asset Movement Management System.
However, this win has been protested by the incumbent Peraton, who originally challenged the evaluation of non-price factors and the best-value tradeoff decision. It seemed likely Peraton would be successful in their protest (per Washington Technology) so this continues with an ongoing protest that has yet to be resolved. Deloitte will postpone its win party until this is resolved...or have no win party at all.
- U.S. Postal Service (USPS), Health Benefits System Development– In July 2023, Deloitte was awarded a seven-year, $175 million contract to develop a health benefits system for the U.S. Postal Service. The system will deliver health insurance benefits to approximately 1.7 million USPS employees, annuitants, and eligible family members and will cover enrollment processing, eligibility determinations, data analytics, and other features. This award was protested by Maximus, who later withdrew its argument.
Acquisitions and Organizational Changes
So far this year, Deloitte has acquired three companies to improve its digital engineering, AI and public health capabilities. This includes the company’s January 2024 acquisition of Giant Machines, a digital product company focused on strategizing, designing, and engineering innovative digital products, which will help bolster Deloitte Digital and Deloitte Engineering Capabilities to offer clients a suite of services to deliver engineering solutions.
This was followed by Deloitte’s acquisition of OpTeamizer in February 2024, an AI, generative AI and accelerated computing company specializing in the development and implementation of AI solutions running on NVIDIA accelerated computing. OpTeamizer expands Deloitte’s high-performance computing engineering and generative AI capabilities. This acquisition also aligns with Deloitte’s expanded partnership with NVIDIA (announced in August 2023) to better utilize the latter’s AI technology to build generative AI solutions for enterprise software platforms.
Most recently, Deloitte acquired Gryphon Scientific in April 2024, a company with expertise in data science, scientific communications, modeling and risk assessment. Gryphon is integrated into Deloitte’s federal health practice and adds experience in using AI to enhance security and safety to help advance Deloitte’s life science and public health preparedness and response capabilities.
Looking internally, Deloitte launched a business unit in April 2023 specializing in advising government and commercial clients on space-related investment opportunities, dubbed Deloitte Space. Deloitte Space, led by Alan Brady, employs scientists, technologists and advisors to assist organizations interested in pursuing space as a business, a mission, or a growth initiative. To date, this unit has supported commercial clients and the UK government and has not yet manifested wins in the U.S. federal government.
The FedSavvy Strategies Takeaway
- Deloitte’s federal customer base has grown significantly over the last two years, with notable increases in actual spending among top customers like the IRS, U.S. Air Force, FDA, VA and CMS.
- Specifically, Deloitte’s recent win within the VA may help inform future bids and achieve success on the new T4NG2 contract vehicle.
- Deloitte has demonstrated credibility in winning large-scale contracts across R&D and enterprise IT services. This includes a potential significant takeaway win (IT GEMS) which would become a marquee program for Deloitte if they can survive the protest challenge. This would be a significant shift for Deloitte making it worthwhile to watch.
- The company has aggressively invested in inorganic growth thus far this year, expanding capabilities in digital engineering, generative AI, and public health preparedness.
- The acquisition of Gryphon Scientific is especially interesting, as Deloitte’s federal health accounts including NIH, FDA, VA, CDC and CMS make up a significant percentage (39% of actual spending) of the company’s top 10 customers.
- Deloitte’s launch of Deloitte Space centralizes expertise in exploring space as a business or growth initiative, although it has not yet achieved notable wins in the U.S. federal government sector.
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