DoD Awards $30M Engineering Tech Support Contract to McKinsey, Raising Value Concerns
Contract Overview
Contract Amount: $30,066,600 ($30.1M)
Contractor: Mckinsey & Company, Inc. Washington D.C.
Awarding Agency: Department of Defense
Start Date: 2023-09-27
End Date: 2025-11-30
Contract Duration: 795 days
Daily Burn Rate: $37.8K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: OCEA ENGINEERING TECHNOLOGY SUPPORT
Place of Performance
Location: FAIRFAX, FAIRFAX County, VIRGINIA, 22030
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $30.1 million to MCKINSEY & COMPANY, INC. WASHINGTON D.C. for work described as: OCEA ENGINEERING TECHNOLOGY SUPPORT Key points: 1. High contract value ($30M) for engineering technology support warrants scrutiny. 2. Competition method (Full and Open) is positive, but specific pricing details are key. 3. Risk of overpayment exists given the firm fixed-price structure and lack of detailed cost breakdown. 4. The IT/Engineering Services sector often sees significant spending, requiring careful benchmarking.
Value Assessment
Rating: questionable
The $30M contract value for engineering technology support is substantial. Without detailed cost breakdowns or specific deliverables, it's difficult to benchmark against similar contracts. The firm fixed-price nature suggests a defined scope, but the overall value proposition requires further analysis.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which is a positive sign for price discovery. However, the impact on price discovery is limited without transparency into the bidding process and the specific services rendered for the $30M.
Taxpayer Impact: The full and open competition aims to ensure fair pricing, but the ultimate taxpayer impact depends on the efficiency and necessity of the services provided by McKinsey.
Public Impact
Significant taxpayer funds allocated to a single, high-profile consulting firm. Potential for services to be duplicated or overlap with existing government capabilities. Questions about the long-term necessity and cost-effectiveness of external engineering technology support.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- High contract value
- Lack of detailed cost transparency
- Potential for scope creep despite fixed price
Positive Signals
- Full and open competition
- Clear contract end date
Sector Analysis
This contract falls within the Engineering Services sector, which is closely related to IT and professional services. Spending in this area can be substantial, particularly for defense agencies requiring specialized technical expertise. Benchmarking against similar large-scale engineering support contracts is crucial for assessing value.
Small Business Impact
The contract was awarded to McKinsey & Company, Inc., a large, well-established firm. There is no indication that small businesses were involved as subcontractors or partners in this specific award, which is common for large, complex contracts of this nature.
Oversight & Accountability
Oversight will be critical to ensure that the Department of the Air Force receives the intended engineering technology support and that the $30M is spent efficiently and effectively. Accountability rests with the contracting officers and program managers to monitor performance and adherence to contract terms.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- High contract value
- Limited transparency on specific services and deliverables
- Potential for contractor lock-in
- Reliance on a single large firm for critical support
Tags
engineering-services, department-of-defense, va, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $30.1 million to MCKINSEY & COMPANY, INC. WASHINGTON D.C.. OCEA ENGINEERING TECHNOLOGY SUPPORT
Who is the contractor on this award?
The obligated recipient is MCKINSEY & COMPANY, INC. WASHINGTON D.C..
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Air Force).
What is the total obligated amount?
The obligated amount is $30.1 million.
What is the period of performance?
Start: 2023-09-27. End: 2025-11-30.
What specific engineering technology support services are being procured, and how do they align with the Air Force's strategic objectives?
The contract details are limited, but 'Engineering Services' suggests technical expertise in areas like system design, analysis, integration, and potentially R&D support. Alignment with strategic objectives would require understanding the specific projects or programs this contract supports, such as advanced aircraft development, cybersecurity enhancements, or operational infrastructure modernization.
How does the $30M contract value compare to industry benchmarks for similar engineering technology support services provided by large consulting firms?
Benchmarking this $30M contract requires detailed comparison data, which is not publicly available. However, for large-scale, multi-year engineering support contracts awarded through full and open competition to major firms, this value is within a plausible range. The key is to assess the scope, duration, and specific deliverables against market rates to determine if it represents good value.
What mechanisms are in place to ensure effective performance and prevent cost overruns or scope creep, despite the firm fixed-price contract type?
Despite being a firm fixed-price contract, effective performance relies on robust government oversight, clear performance metrics, and regular progress reviews. Mechanisms include defined milestones, deliverable acceptance criteria, and communication protocols to address any potential issues or scope adjustments proactively, ensuring the contractor meets expectations within the agreed budget.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: FA714621SC001
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 1200 19TH ST NW STE 1000, WASHINGTON, DC, 20036
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $30,066,600
Exercised Options: $30,066,600
Current Obligation: $30,066,600
Actual Outlays: $6,050,000
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Timeline
Start Date: 2023-09-27
Current End Date: 2025-11-30
Potential End Date: 2025-11-30 00:00:00
Last Modified: 2025-10-31
More Contracts from Mckinsey & Company, Inc. Washington D.C.
- Covid-19 Pandemic Response and Scenario Planning — $48.8M (Department of Veterans Affairs)
- Ocmo Services Reform Support — $39.7M (Department of Defense)
- This Acquisition IS for the Procurement of Integrated Consulting Services in Support of the Effort, Implementing Changes to U.S. Army Sustainment, in Support of the Assistant Secretary of the Army (acquisition, Logistics and Technology) (asa(alt)) Organization — $28.2M (Department of Defense)
- Category Management — $27.3M (Department of Defense)
- Goco AAP Campaign Plan — $26.0M (Department of Defense)
View all Mckinsey & Company, Inc. Washington D.C. federal contracts →
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)