Labor Department's Core Financial System O&M contract awarded to Booz Allen Hamilton for $123.9M over 7 years

Contract Overview

Contract Amount: $123,901,665 ($123.9M)

Contractor: Booz Allen Hamilton Inc

Awarding Agency: Department of Labor

Start Date: 2019-09-30

End Date: 2026-09-29

Contract Duration: 2,556 days

Daily Burn Rate: $48.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: LABOR HOURS

Sector: IT

Official Description: OPERATIONS AND MAINTENANCE SERVICES FOR THE DEPARTMENT OF LABOR NEW CORE FINANCIAL MANAGEMENT SYSTEM.

Place of Performance

Location: MCLEAN, FAIRFAX County, VIRGINIA, 22102

State: Virginia Government Spending

Plain-Language Summary

Department of Labor obligated $123.9 million to BOOZ ALLEN HAMILTON INC for work described as: OPERATIONS AND MAINTENANCE SERVICES FOR THE DEPARTMENT OF LABOR NEW CORE FINANCIAL MANAGEMENT SYSTEM. Key points: 1. Contract value of $123.9M for O&M of a critical financial system. 2. Booz Allen Hamilton is a large, established government contractor. 3. Potential risk associated with long-term reliance on a single vendor for system maintenance. 4. IT sector spending, specifically for software and IT support services.

Value Assessment

Rating: fair

The contract value of $123.9M over approximately 7 years suggests a significant investment. Benchmarking against similar large-scale IT O&M contracts is difficult without more granular data on service scope and performance metrics.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating a competitive bidding process. This method generally promotes price discovery and potentially better value for the government.

Taxpayer Impact: The competitive award aims to ensure taxpayer funds are used efficiently for essential IT services.

Public Impact

Ensures continued operation of the Department of Labor's financial management system. Supports critical financial reporting and operational functions for the agency. Potential for service disruptions if maintenance is inadequate or vendor performance declines.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long-term contract duration may limit flexibility.
Reliance on a single vendor for critical system maintenance.
Potential for cost creep over the contract's life.

Positive Signals

Awarded through full and open competition.
Supports a critical government function.
Established contractor with a track record.

Sector Analysis

This contract falls within the IT services sector, specifically focusing on computer systems design and related services for operations and maintenance. Government spending in this area is substantial, supporting agency-wide IT infrastructure and software.

Small Business Impact

The data indicates this contract was not set aside for small businesses and was awarded to a large prime contractor. There is no information on subcontracting opportunities for small businesses within this award.

Oversight & Accountability

Oversight would typically be managed by the Department of Labor's contracting officers and program managers to ensure performance standards are met and funds are used appropriately. The long duration necessitates consistent monitoring.

Related Government Programs

Computer Systems Design Services
Department of Labor Contracting
Office of the Assistant Secretary for Administration and Management Programs

Risk Flags

Long-term contract duration.
Sole-source potential if follow-on contracts are not competed.
Vendor lock-in risk.
Dependence on a single vendor for critical system functionality.

Frequently Asked Questions

What is this federal contract paying for?

Department of Labor awarded $123.9 million to BOOZ ALLEN HAMILTON INC. OPERATIONS AND MAINTENANCE SERVICES FOR THE DEPARTMENT OF LABOR NEW CORE FINANCIAL MANAGEMENT SYSTEM.

Who is the contractor on this award?

The obligated recipient is BOOZ ALLEN HAMILTON INC.

Which agency awarded this contract?

Awarding agency: Department of Labor (Office of the Assistant Secretary for Administration and Management).

What is the total obligated amount?

The obligated amount is $123.9 million.

What is the period of performance?

Start: 2019-09-30. End: 2026-09-29.

What is the specific scope of 'Operations and Maintenance' for the new core financial management system?

The scope of 'Operations and Maintenance' likely encompasses a range of services including system uptime, bug fixes, security patching, user support, minor enhancements, and ensuring compatibility with evolving IT environments. Detailed Service Level Agreements (SLAs) within the contract would define these specific responsibilities and performance metrics.

What are the key performance indicators (KPIs) used to measure the contractor's performance?

Key performance indicators would likely include system availability (uptime percentage), response times for issue resolution, security incident response times, successful patch deployment rates, and user satisfaction surveys. These KPIs are crucial for ensuring the system's reliability and the effectiveness of the maintenance services provided.

How does the pricing structure (labor hours) compare to industry benchmarks for similar IT O&M services?

Pricing based on labor hours can be challenging to benchmark directly without detailed labor category rates and hours expended. However, the total contract value suggests a significant investment. Agencies often use Independent Government Cost Estimates (IGCEs) and market research to ensure labor hour rates are competitive and reasonable for the services rendered.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 1605DC-19-Q-00158

Offers Received: 1

Pricing Type: LABOR HOURS (Z)

Evaluated Preference: NONE

Contractor Details

Parent Company: Booz Allen Hamilton Holding Corporation

Address: 8283 GREENSBORO DR, MCLEAN, VA, 22102

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $128,537,548

Exercised Options: $127,530,940

Current Obligation: $123,901,665

Actual Outlays: $113,934,668

Subaward Activity

Number of Subawards: 64

Total Subaward Amount: $9,975,448

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: 47QTCK18D0004

IDV Type: GWAC

Timeline