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By Nick Wakeman

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Nick Wakeman

Booz Allen pushes back on Marine Corps' audit requirement

In 2018, Booz Allen Hamilton was one of four winners of the Navy’s Financial Improvement and Audit Readiness contract that has a ceiling of $980 million.

The contract included finance-heavy requirements such as financial statement preparation, reconciliation of accounting transactions, financial metrics analysis and audit support. But one requirement that wasn’t included was for the winners to hold a certification as an independent public accountant or IPA.

But when the Marine Corps issued a solicitation for a task order under the FIAR contract, being an IPA was a requirement. The Marine Corps also stipulated that a subcontractor could not be used to meet the IPA requirement. The task order is estimated to be worth between $34 million and $40 million.

Booz Allen was eliminated from the competition and filed a protest before an award could be made with the Government Accountability Office. The company won its argument that if it knew an IPA was a requirement to win a spot on the FIAR contract, its pricing and teaming plan would have been different.

They also argued that the Marine Corps couldn’t adequately explain why an IPA was required. In fact, the Marine Corps found that Booz Allen was capable of performing the work; it just didn’t have an IPA.

GAO sustained Booz Allen’s protest because the IPA requirement unnecessarily restricted competition and adding the IPA requirement to the task order pushed that work outside the scope of the FIAR contract.

Three other primes on FIAR -- Deloitte, KPMG and Accenture -- did not raises objections to the IPA requirement.

The Marine Corps told GAO that the program manager felt that an IPA would deliver higher quality work, but the service branch didn’t offer any evidence in support of this position other than the “feeling” of the program manager.

The Marine Corps also argued that the solicitation for FIAR indicated that an IPA may be needed. But GAO could not find anything in the solicitation saying that. There were three references to IPAs but they primarily indicated that the FIAR primes would need to interact with the Marine Corps’ IPA.

GAO has recommended that the Marine Corps re-examine whether the prime needs to be an IPA or be affiliated with an IPA. After this re-examination, the Marine Corps should either adjust its procurement strategy or drop the requirement.

If the Marine Corps sticks to its IPA requirement, it will likely need to use a different contract vehicle or will have to allow the primes to bring an IPA in as a subcontractor.

GAO also wants the Marine Corps to reimburse Booz Allen for its costs of pursuing the protest.

Posted by Nick Wakeman on Jun 22, 2020 at 9:42 AM

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