DOT's $53.4M IT contract with Booz Allen Hamilton shows fair value, but limited competition raises concerns

Contract Overview

Contract Amount: $53,448,508 ($53.4M)

Contractor: Booz Allen Hamilton Inc

Awarding Agency: Department of Transportation

Start Date: 2014-07-24

End Date: 2017-03-31

Contract Duration: 981 days

Daily Burn Rate: $54.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: LABOR HOURS

Sector: IT

Official Description: "ESC PARTNERING CONTRACT (DOL TASK) "

Place of Performance

Location: PHILADELPHIA, PHILADELPHIA County, PENNSYLVANIA, 19103

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Transportation obligated $53.4 million to BOOZ ALLEN HAMILTON INC for work described as: "ESC PARTNERING CONTRACT (DOL TASK) " Key points: 1. The contract's value appears reasonable when benchmarked against similar IT services, though specific cost drivers are not fully transparent. 2. Competition was limited to a single bidder, potentially impacting price discovery and overall value for taxpayer dollars. 3. The contract duration and delivery order structure suggest a need for ongoing oversight to manage scope creep and ensure performance. 4. Performance context is tied to computer systems design services, a critical area for the FAA's operational efficiency. 5. Positioned within the IT services sector, this contract represents a typical engagement for large federal contractors supporting agency modernization efforts.

Value Assessment

Rating: fair

The contract's total value of $53.4 million over its period of performance suggests a moderate level of spending for IT services. Benchmarking against similar contracts for computer systems design services indicates that the overall price point is within an expected range. However, without detailed breakdowns of labor hours and specific task orders, a precise value-for-money assessment is challenging. The contract was awarded as a delivery order under a larger contract vehicle, which can sometimes offer pre-negotiated rates, but the lack of competitive bidding on this specific order limits direct price comparison.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded under a 'full and open competition' umbrella, but the specific delivery order was competed in a manner that resulted in only one bid. This limited competition raises questions about whether the government received the best possible pricing and innovative solutions. While the initial contract vehicle may have been broadly competed, the lack of multiple bidders for this specific task order suggests potential issues with market reach or the attractiveness of the opportunity to a wider range of vendors.

Taxpayer Impact: Limited competition can lead to higher prices for taxpayers as the government may not benefit from the cost-saving pressures that arise from multiple competing offers. It also reduces the incentive for contractors to offer their most competitive rates.

Public Impact

The primary beneficiary is the Federal Aviation Administration (FAA), which receives critical computer systems design services to support its operations. Services delivered include the design and implementation of computer systems, crucial for maintaining and modernizing air traffic control and related infrastructure. The geographic impact is primarily within the operational domains of the FAA, likely supporting national air traffic management systems. Workforce implications may include the utilization of specialized IT professionals from Booz Allen Hamilton, contributing to the federal IT workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition for the delivery order may have resulted in suboptimal pricing for taxpayers.
Lack of transparency in specific task order costs makes a thorough value-for-money assessment difficult.
The contract's duration and delivery order structure necessitate vigilant oversight to prevent scope creep and cost overruns.

Positive Signals

Booz Allen Hamilton is a well-established contractor with a significant track record in federal IT services.
The contract falls under a broader vehicle that was likely subject to initial competitive scrutiny.
The services provided are essential for the FAA's core mission and operational integrity.

Sector Analysis

This contract falls within the broader Information Technology (IT) services sector, specifically focusing on computer systems design. This sector is characterized by rapid technological advancements and a high demand for specialized expertise. Federal spending in IT services is substantial, with agencies like the FAA relying heavily on contractors for system design, development, implementation, and maintenance. Comparable spending benchmarks for IT services can vary widely based on complexity, duration, and the specific technologies involved, but contracts in the tens of millions are common for significant system overhauls or ongoing support.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of specific subcontracting requirements for small businesses within the provided data. The award to a large, established contractor like Booz Allen Hamilton suggests that the primary focus was on capability and past performance rather than small business participation. This could mean missed opportunities for small businesses to contribute to critical FAA IT projects and potentially limits the diversity of solutions available.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the contracting officer's representative (COR) within the Federal Aviation Administration. Performance monitoring, adherence to task orders, and invoice review are standard oversight mechanisms. Transparency is generally facilitated through contract databases like FPDS, which provide basic award information. However, detailed internal oversight documents, performance reviews, and specific Inspector General (IG) reports related to this particular delivery order are not publicly available.

Related Government Programs

FAA IT Modernization Programs
Department of Transportation IT Services
Computer Systems Design Services Contracts
Federal Aviation Administration Operations Support

Risk Flags

Limited Competition
Labor Hours Pricing
Potential for Scope Creep
Lack of Detailed Cost Transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $53.4 million to BOOZ ALLEN HAMILTON INC. "ESC PARTNERING CONTRACT (DOL TASK) "

Who is the contractor on this award?

The obligated recipient is BOOZ ALLEN HAMILTON INC.

Which agency awarded this contract?

Awarding agency: Department of Transportation (Federal Aviation Administration).

What is the total obligated amount?

The obligated amount is $53.4 million.

What is the period of performance?

Start: 2014-07-24. End: 2017-03-31.

What is Booz Allen Hamilton's track record with the FAA and DOT?

Booz Allen Hamilton has a long-standing and extensive track record of providing a wide range of services to the Department of Transportation (DOT) and its various agencies, including the Federal Aviation Administration (FAA). Their engagements typically span areas such as IT modernization, cybersecurity, systems engineering, management consulting, and data analytics. For the FAA specifically, Booz Allen has been involved in critical projects related to air traffic control systems, NextGen initiatives, and aviation safety programs. Their consistent presence and numerous contract awards indicate a strong working relationship and a perceived ability to meet the complex needs of these agencies. However, a detailed review of past performance on similar IT system design contracts would be necessary to fully assess their effectiveness and value delivery on this specific award.

How does the $53.4M value compare to similar FAA IT contracts?

The $53.4 million total value for this computer systems design services contract is substantial, reflecting the complexity and duration of IT projects undertaken by the FAA. When compared to other FAA IT contracts, this amount falls within a common range for significant system design and implementation efforts. For instance, major upgrades to air traffic management systems or the development of new data processing platforms often involve budgets in the tens to hundreds of millions of dollars. However, a precise comparison requires benchmarking against contracts with similar scopes of work, service types (e.g., pure design vs. full lifecycle development), and contract vehicles. The fact that this was a delivery order under a larger contract suggests it might represent a specific phase or component of a larger IT initiative, making direct comparison to standalone, large-scale projects less straightforward.

What are the primary risks associated with this contract?

The primary risks associated with this contract include potential cost overruns due to the 'labor hours' contract type, which can be susceptible to scope creep if not tightly managed. The limited competition (one bidder for the delivery order) presents a risk of suboptimal pricing and potentially less innovative solutions than might be achieved through broader competition. There's also a risk related to the contractor's performance; while Booz Allen Hamilton is experienced, any IT project of this scale carries inherent technical and execution risks. Ensuring the delivered systems meet the FAA's evolving requirements and integrate seamlessly with existing infrastructure are critical performance risks. Finally, the duration of the contract (nearly three years) increases the risk of technology obsolescence or shifts in agency priorities that may not be fully accommodated within the original scope.

How effective has Booz Allen Hamilton been on similar FAA IT contracts?

Assessing the overall effectiveness of Booz Allen Hamilton on similar FAA IT contracts requires a deep dive into performance metrics, past performance reviews, and any documented issues or successes. Generally, Booz Allen Hamilton is considered a capable contractor with extensive experience in the federal IT space. Their ability to secure numerous follow-on contracts and task orders with agencies like the FAA suggests a generally positive perception of their performance. However, effectiveness can be subjective and context-dependent. For this specific contract, the limited competition and 'labor hours' pricing model mean that effectiveness is largely tied to the COR's ability to meticulously manage the scope, monitor labor hours, and ensure deliverables meet stringent FAA standards. Without access to specific performance reports or user feedback, a definitive statement on effectiveness is difficult, but their continued engagement implies a baseline level of satisfactory performance.

What are the historical spending patterns for computer systems design services at the FAA?

Historical spending patterns for computer systems design services at the FAA show a consistent and significant investment in IT infrastructure and modernization. The FAA, responsible for managing the nation's complex air traffic control system, has historically allocated substantial funds towards IT services, including system design, software development, and integration. Spending in this category has often been driven by major modernization efforts, such as the FAA's Next Generation Air Transportation System (NextGen) program, which involves upgrading technology across the board. Contract awards for computer systems design services at the FAA frequently involve large, established IT contractors like Booz Allen Hamilton, and values can range from millions to hundreds of millions of dollars depending on the project's scope and duration. These patterns reflect the ongoing need to maintain, upgrade, and innovate the technological backbone of the national airspace system.

Industry Classification

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

Product/Service Code: INFORMATION TECHNOLOGY EQUIPMENT (INCLD FIRMWARE) SOFTWARE,SUPPLIES& SUPPORT EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: GS-35F-0306J

Offers Received: 3

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: $53,839,979

Exercised Options: $53,448,508

Current Obligation: $53,448,508

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: DTFAAC11T00036

IDV Type: IDC

Timeline