Booz Allen Hamilton awarded $443M for R&D services, with a significant portion for engineering development and integration

Contract Overview

Contract Amount: $443,088,852 ($443.1M)

Contractor: Booz Allen Hamilton Inc

Awarding Agency: General Services Administration

Start Date: 2023-02-20

End Date: 2027-02-23

Contract Duration: 1,464 days

Daily Burn Rate: $302.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: R&D

Official Description: ENGINEERING DEVELOPMENT INTEGRATION AND TECHNOLOGYBASED SOLUTIONS EDITS

Place of Performance

Location: MCLEAN, FAIRFAX County, VIRGINIA, 22102

State: Virginia Government Spending

Plain-Language Summary

General Services Administration obligated $443.1 million to BOOZ ALLEN HAMILTON INC for work described as: ENGINEERING DEVELOPMENT INTEGRATION AND TECHNOLOGYBASED SOLUTIONS EDITS Key points: 1. Contract value indicates substantial investment in advanced engineering and technology solutions. 2. The broad scope of R&D services suggests a focus on innovation and future capabilities. 3. The contract duration of nearly four years allows for sustained development and integration efforts. 4. The use of Cost Plus Award Fee (CPAF) pricing structure incentivizes performance and cost control. 5. This award represents a significant portion of the agency's spending in the R&D sector. 6. The contractor, Booz Allen Hamilton, is a major player in federal IT and engineering services.

Value Assessment

Rating: good

The total award amount of $443 million over approximately four years suggests a significant investment in research and development. Benchmarking this against similar large-scale R&D contracts for engineering development and integration is challenging without more specific service details. However, the Cost Plus Award Fee (CPAF) structure implies that the government aims to achieve good value by incentivizing contractor performance and cost efficiency. The pricing will be further evaluated based on the achievement of award fee criteria and the final costs incurred.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified vendors had the opportunity to bid. The specific number of bidders is not provided, but full and open competition generally fosters a competitive environment, which can lead to better pricing and innovative solutions. The agency's decision to use this procurement method suggests confidence in achieving a fair market price and selecting the best-value offer.

Taxpayer Impact: Taxpayers benefit from full and open competition through the potential for lower prices and higher quality services due to a wider range of vendor participation and innovation.

Public Impact

The primary beneficiaries are federal agencies requiring advanced engineering, development, integration, and technology-based solutions. Services delivered likely include research, system design, prototyping, testing, and implementation of complex technological systems. The geographic impact is likely national, supporting various federal initiatives across different departments and agencies. Workforce implications include the creation and sustainment of highly skilled jobs in engineering, research, and technology sectors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The Cost Plus Award Fee (CPAF) structure can lead to cost overruns if not managed diligently, as the contractor is reimbursed for costs plus a fee that can be adjusted based on performance.
The broad nature of 'engineering development and integration' could lead to scope creep if not clearly defined and managed throughout the contract lifecycle.
Reliance on a single large contractor for such a significant R&D effort might limit the agency's agility in adopting rapidly evolving technologies from smaller, specialized firms.

Positive Signals

The award to a well-established contractor like Booz Allen Hamilton suggests a high likelihood of successful project execution and delivery of expected outcomes.
The use of full and open competition indicates a robust procurement process aimed at securing the best value for the government.
The CPAF structure, when effectively managed, can incentivize superior performance and cost savings, leading to better overall value.
The long-term nature of the contract allows for deep integration and development of specialized capabilities tailored to agency needs.

Sector Analysis

This contract falls within the Research and Development (R&D) sector, specifically focusing on physical, engineering, and life sciences. The North American Industry Classification System (NAICS) code 541715 confirms this focus. This sector is characterized by innovation, long development cycles, and significant government investment. Comparable spending benchmarks would involve analyzing other large federal R&D contracts awarded to prime contractors for similar engineering and technology integration services, often seen across defense, intelligence, and civilian agency modernization efforts.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a large prime contract awarded through full and open competition, it is unlikely to have significant direct subcontracting opportunities specifically mandated for small businesses unless specified within the contract's statement of work. However, the prime contractor may engage small businesses as subcontractors for specialized services, contributing to the broader small business ecosystem.

Oversight & Accountability

Oversight for this contract will likely be managed by the contracting agency (General Services Administration) through designated Contracting Officers and Technical Representatives. Performance will be monitored against the Cost Plus Award Fee criteria. Transparency is facilitated by federal procurement data systems, though detailed performance metrics and award fee determinations are typically internal. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Federal R&D Spending
Engineering Services Contracts
Technology Integration Services
Information Technology Research and Development
Defense Research and Development
General Services Administration Contracts

Risk Flags

Potential for cost overruns under CPAF structure
Scope creep risk in broad R&D services
Contractor performance monitoring complexity
Dependence on a single large contractor

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $443.1 million to BOOZ ALLEN HAMILTON INC. ENGINEERING DEVELOPMENT INTEGRATION AND TECHNOLOGYBASED SOLUTIONS EDITS

Who is the contractor on this award?

The obligated recipient is BOOZ ALLEN HAMILTON INC.

Which agency awarded this contract?

Awarding agency: General Services Administration (Federal Acquisition Service).

What is the total obligated amount?

The obligated amount is $443.1 million.

What is the period of performance?

Start: 2023-02-20. End: 2027-02-23.

What is Booz Allen Hamilton's track record with similar large-scale R&D and engineering integration contracts for the federal government?

Booz Allen Hamilton has a long and extensive history of performing large-scale R&D, engineering, and technology integration services for numerous U.S. federal agencies, including defense, intelligence, and civilian sectors. They are a prime contractor on many significant government contracts, often involving complex systems engineering, cybersecurity, data analytics, and digital transformation initiatives. Their track record includes managing substantial budgets and delivering solutions across diverse technological domains. While specific performance metrics for past contracts are not publicly detailed, their consistent presence as a major federal contractor suggests a generally positive performance history and capability to handle complex, high-value projects. However, like any large contractor, they have faced scrutiny and reviews on specific contracts regarding performance and cost management.

How does the $443 million award compare to typical federal spending on engineering development and integration services?

The $443 million award for engineering development and integration services is substantial and falls within the upper tier of federal contract awards for R&D and related services. Federal spending in this category is significant, often running into billions of dollars annually across various agencies. This specific award represents a considerable investment by the General Services Administration (GSA) in a particular area of technological advancement. To provide a precise comparison, one would need to benchmark against contracts with similar NAICS codes (like 541715) and service descriptions (engineering development, integration, technology-based solutions) awarded over comparable timeframes. However, it is indicative of a major program or a portfolio of related projects requiring extensive research and development effort.

What are the primary risks associated with a Cost Plus Award Fee (CPAF) contract of this magnitude?

The primary risks associated with a large CPAF contract like this include potential cost overruns if the base cost-plus component is not tightly controlled, and the possibility of the award fee not being fully earned if performance targets are not met. For the government, there's a risk that the contractor might prioritize activities that maximize their fee rather than the most critical project outcomes, especially if award criteria are not perfectly aligned with strategic goals. Contractor performance management is crucial; inadequate oversight can lead to inefficiencies or a failure to achieve desired innovation. Conversely, if the award fee structure is well-designed and performance is rigorously monitored, CPAF can be an effective tool for incentivizing high performance and achieving value for money.

What is the expected impact of this contract on the specific R&D sector (NAICS 541715)?

This contract is expected to have a positive impact on the R&D sector, particularly within the physical, engineering, and life sciences (excluding nanotechnology and biotechnology). The significant funding directed towards Booz Allen Hamilton will stimulate research, development, and innovation activities. It supports the growth and employment of highly skilled personnel in fields such as systems engineering, software development, and advanced technology integration. Furthermore, the contract's focus on 'technology-based solutions' suggests that the outcomes could lead to advancements that benefit other government programs or even commercial applications, contributing to the overall technological progress and competitiveness within the sector. It also reinforces the role of large, established firms in executing complex federal R&D initiatives.

How does the duration of the contract (1464 days) influence the potential for successful long-term technology development and integration?

The contract duration of approximately four years (1464 days) is well-suited for complex research and development, and technology integration projects. Such projects often require extended periods for initial research, design, prototyping, testing, refinement, and full-scale integration. A longer duration allows the contractor to build deep expertise, establish robust processes, and foster strong working relationships with the government stakeholders. It provides stability and predictability, enabling sustained focus on achieving long-term technological objectives without the disruption of frequent re-competition. This extended timeframe is crucial for developing and integrating sophisticated systems where iterative development and adaptation to evolving requirements are necessary.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 47QFCA22R0031

Offers Received: 1

Pricing Type: COST PLUS AWARD FEE (R)

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: $1,148,636,464

Exercised Options: $814,812,032

Current Obligation: $443,088,852

Subaward Activity

Number of Subawards: 247

Total Subaward Amount: $185,784,393

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 47QFCA22D0357

IDV Type: IDC

Timeline