Treasury's $28.6M IT services contract awarded to Booz Allen Hamilton for custom programming

Contract Overview

Contract Amount: $28,593,410 ($28.6M)

Contractor: Booz Allen Hamilton Inc

Awarding Agency: Department of the Treasury

Start Date: 2024-05-15

End Date: 2026-05-14

Contract Duration: 729 days

Daily Burn Rate: $39.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: LABOR HOURS

Sector: IT

Official Description: ENFORCEMENT 1

Place of Performance

Location: MCLEAN, FAIRFAX County, VIRGINIA, 22102

State: Virginia Government Spending

Plain-Language Summary

Department of the Treasury obligated $28.6 million to BOOZ ALLEN HAMILTON INC for work described as: ENFORCEMENT 1 Key points: 1. Contract awarded via a BPA Call, indicating a pre-competed framework. 2. The contract duration of 729 days suggests a medium-term need for services. 3. Focus on custom computer programming services points to specialized IT requirements. 4. The award to a single contractor, Booz Allen Hamilton, warrants scrutiny for potential competition limitations. 5. The contract's value of $28.6 million places it in the mid-to-large tier for IT services. 6. The use of 'LABOR HOURS' pricing indicates a focus on effort rather than fixed deliverables.

Value Assessment

Rating: fair

Benchmarking the value of this $28.6 million contract for custom computer programming services is challenging without specific deliverable details. However, the award to Booz Allen Hamilton, a large and established IT contractor, suggests a potentially competitive bid within the established BPA framework. The 'LABOR HOURS' pricing model can sometimes lead to cost overruns if not managed tightly, but it also offers flexibility for evolving project needs. Further analysis would require comparing the hourly rates to market benchmarks for similar skill sets and contract types.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a 'FULL AND OPEN COMPETITION' through a Blanket Purchase Agreement (BPA) Call. While the initial BPA likely underwent full and open competition, the specific call to Booz Allen Hamilton implies that multiple vendors on the BPA may have had the opportunity to bid. The number of bidders for this specific call is not provided, but the 'full and open' designation suggests a robust competitive process was intended.

Taxpayer Impact: A full and open competition, even within a BPA framework, generally leads to better price discovery and potentially lower costs for taxpayers compared to sole-source or limited competition awards.

Public Impact

The primary beneficiaries are likely the Department of the Treasury and the Internal Revenue Service, receiving specialized IT support. The services delivered will focus on custom computer programming, potentially enhancing internal systems or developing new applications. The geographic impact is centered around the Treasury's operational locations, primarily in Virginia. The contract supports the IT workforce, likely involving skilled programmers and IT professionals employed by Booz Allen Hamilton.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost creep due to 'LABOR HOURS' pricing if not rigorously monitored.
Reliance on a single large contractor may limit opportunities for smaller, specialized firms.
The specific nature of 'custom computer programming' could lead to scope creep if requirements are not clearly defined upfront.

Positive Signals

Awarded through a full and open competition BPA, suggesting a competitive process.
Booz Allen Hamilton is a well-established contractor with a track record in government IT services.
The contract supports critical IT functions within the Department of the Treasury.

Sector Analysis

This contract falls within the Information Technology sector, specifically Custom Computer Programming Services (NAICS 541511). This is a large and dynamic market within the federal government, with agencies constantly seeking specialized IT support to modernize systems and improve efficiency. Federal spending on IT services is in the tens of billions annually, with significant portions allocated to custom development, software maintenance, and IT consulting. This contract represents a portion of that broader spending, likely supporting specific IRS or Treasury modernization initiatives.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Booz Allen Hamilton is a large business. While this specific award may not directly benefit small businesses through a set-aside, large prime contractors are often required to subcontract a portion of their work to small businesses. The extent of subcontracting opportunities for small businesses on this contract would depend on Booz Allen Hamilton's subcontracting plan and the specific needs of the project.

Oversight & Accountability

Oversight for this contract would primarily reside with the contracting officers and program managers within the Department of the Treasury and the Internal Revenue Service. The contract's performance will be monitored against the agreed-upon scope, deliverables, and labor hours. Transparency is facilitated through contract databases like FPDS. While no specific Inspector General jurisdiction is mentioned, the Treasury Inspector General for Tax Administration (TIGTA) may have oversight if the contract directly supports tax administration functions.

Related Government Programs

IT Professional Services
Custom Software Development
IT Consulting Services
Blanket Purchase Agreements (BPAs)
Department of the Treasury IT Contracts
Internal Revenue Service IT Contracts

Risk Flags

Potential for cost overruns due to 'LABOR HOURS' pricing.
Limited visibility into the number of bidders for this specific BPA Call.
Reliance on a single large contractor may reduce broader market competition.
Need for strong oversight to manage scope creep and ensure efficient labor utilization.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $28.6 million to BOOZ ALLEN HAMILTON INC. ENFORCEMENT 1

Who is the contractor on this award?

The obligated recipient is BOOZ ALLEN HAMILTON INC.

Which agency awarded this contract?

Awarding agency: Department of the Treasury (Internal Revenue Service).

What is the total obligated amount?

The obligated amount is $28.6 million.

What is the period of performance?

Start: 2024-05-15. End: 2026-05-14.

What is Booz Allen Hamilton's track record with the Department of the Treasury and IRS for similar IT services?

Booz Allen Hamilton is a major federal IT contractor with a significant history of awards across numerous agencies, including the Department of the Treasury and the IRS. Their track record typically involves large-scale IT modernization, cybersecurity, data analytics, and management consulting services. For the Treasury and IRS specifically, they have likely been involved in projects related to tax systems modernization, financial management systems, and data processing. A detailed review of their past performance on similar contracts would reveal their success rates, any past performance issues, and their ability to deliver complex IT solutions within budget and schedule. Their extensive experience suggests a strong capability, but also necessitates careful oversight to ensure continued value and performance.

How does the $28.6 million value compare to similar custom computer programming contracts awarded by the Treasury or IRS?

The $28.6 million value for this contract is substantial and falls within the mid-to-large range for custom computer programming services. To benchmark effectively, one would need to compare it against other contracts for similar services (NAICS 541511) awarded by the Treasury or IRS over the past few years. Factors such as contract duration, labor mix (senior vs. junior developers), specific technologies involved, and the complexity of the custom programming required would influence the price. If comparable contracts for similar scope and duration are significantly lower, it might indicate that this contract's pricing is on the higher side. Conversely, if it aligns with or is lower than benchmarks, it suggests competitive pricing within the market.

What are the primary risks associated with a 'LABOR HOURS' contract type for custom programming?

The primary risk with a 'LABOR HOURS' contract type for custom programming is the potential for cost overruns if the scope of work is not tightly managed or if the project experiences significant unforeseen complexities. Unlike fixed-price contracts, the government pays for the actual hours worked by the contractor's personnel. This can lead to 'scope creep,' where the project expands beyond its original intent, driving up costs. Additionally, it can be more challenging for the government to accurately forecast the total expenditure. Effective risk mitigation involves robust oversight, detailed work breakdown structures, regular progress reviews, and clear communication channels to ensure that labor hours are being utilized efficiently and effectively towards defined objectives.

How does the use of a BPA Call impact the competition and pricing for this contract?

Using a Blanket Purchase Agreement (BPA) Call means that the underlying BPA was already established through a competitive process, likely offering pre-negotiated terms and pricing. When a specific requirement arises, agencies can issue a 'call' against the BPA to one or more pre-qualified vendors. If this BPA Call was issued to multiple vendors on the BPA, it allows for a mini-competition among them, which can drive down prices and ensure competitive sourcing. However, if the call was directed to a single vendor (even if others are on the BPA), the competition is limited to that vendor's offering against the pre-negotiated BPA rates. The 'FULL AND OPEN COMPETITION' designation suggests that the initial BPA was broadly competed, and potentially this call also involved multiple bidders, fostering price discovery.

What are the implications of awarding this contract to a single large vendor like Booz Allen Hamilton?

Awarding a contract of this magnitude to a single large vendor like Booz Allen Hamilton has several implications. On the positive side, it can streamline project management and leverage the contractor's extensive resources, expertise, and established processes. Large contractors often have robust quality assurance and project management frameworks. However, it also means that the competition for this specific task order may have been less intense than if multiple vendors were bidding on a standalone contract. It also concentrates a significant amount of federal spending with one entity, potentially limiting opportunities for smaller, more specialized businesses unless they are part of Booz Allen Hamilton's subcontracting team. The government must ensure rigorous oversight to maintain performance and value.

What is the historical spending trend for custom computer programming services at the Treasury/IRS?

Analyzing historical spending trends for custom computer programming services at the Treasury and IRS is crucial for context. This involves examining annual spending data for NAICS code 541511 over several fiscal years. Trends might reveal whether spending in this category is increasing, decreasing, or remaining stable. Significant increases could indicate new modernization initiatives or growing IT needs, while decreases might suggest a shift towards off-the-shelf solutions or outsourcing different types of IT work. Understanding these patterns helps in assessing whether the current $28.6 million award is an anomaly or part of a consistent investment strategy in custom IT development.

Industry Classification

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

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

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: $45,493,410

Exercised Options: $28,593,410

Current Obligation: $28,593,410

Actual Outlays: $20,556,421

Subaward Activity

Number of Subawards: 7

Total Subaward Amount: $4,102,419

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 2032H523A00018

IDV Type: BPA

Timeline