KPMG LLP has filed a bid protest in the U.S. Court of Federal Claims accusing the U.S. Air Force of unlawfully bypassing competitive bidding in awarding more than $1 billion in audit remediation contracts to Deloitte. The protest seeks to stop what KPMG describes as a “billion-dollar boondoggle” that unfairly excludes KPMG from competing for these critical contracts.
In its complaint, filed Wednesday, KPMG alleges the Air Force has repeatedly failed to conduct a competitive procurement process for its Financial Improvement and Audit Remediation (FIAR) program, awarding most, if not all, of the work to Deloitte since 2018.
“The Air Force’s noncompetitive actions violate fundamental federal procurement law, including the Competition in Contracting Act, which mandates full and open competition,” the complaint states. “Agencies cannot forgo competition due to poor advance planning.”
KPMG asserts that despite the Air Force awarding over $1 billion in FIAR contracts to Deloitte, the Air Force still lacks auditable financial statements and has no realistic plan to achieve them.
Originally awarded competitively in 2018, Deloitte’s contract included transition-out provisions to facilitate competition by other vendors. However, as Deloitte’s performance declined and deadlines slipped, the Air Force allegedly extended Deloitte’s contract through a series of noncompetitive sole-source actions, now totaling over $1 billion.
KPMG highlights that the Air Force recently awarded an additional $100 million in sole-source contracts to Deloitte, despite more than three years of public engagement with other vendors, including KPMG, through government requests for information.
“KPMG has consistently expressed its interest and ability to compete for the FIAR requirements,” the firm said, citing its prior success supporting the Department of Defense and securing clean audit opinions for the U.S. Marine Corps.
KPMG argues the Air Force’s sole-source contracting is unjustified, noting Deloitte’s performance has not been a “resounding success.” The complaint states, “Despite six years and over a billion dollars, the Air Force’s FIAR objectives remain unmet, with numerous delays and doubts about achieving auditable financial statements.”
KPMG is asking the court to declare the Air Force’s procurement practices arbitrary, capricious, and unlawful. The firm seeks injunctive relief to prevent further sole-source contracts with Deloitte, ensuring full and open competition that will benefit the government.
“Unless this billion-dollar boondoggle is stopped, KPMG will suffer irreparable harm by being denied a fair chance to compete and contribute its expertise to the FIAR program,” the firm said.
KPMG is represented by Crowell & Moring LLP. The case is KPMG LLP v. The United States, case number 1:25-cv-00826, pending before the U.S. Court of Federal Claims.
