Defense Health Agency awards $32.6M contract for organizational design and model development to Booz Allen Hamilton

Contract Overview

Contract Amount: $32,621,584 ($32.6M)

Contractor: Booz Allen Hamilton Inc

Awarding Agency: Department of Defense

Start Date: 2018-07-02

End Date: 2021-09-29

Contract Duration: 1,185 days

Daily Burn Rate: $27.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: CT 17-1549 ORGANIZATIONAL DESIGN AND MODEL DEVELOPMENT FOR THE COMPONENT ACQUISITION EXECUTIVE (J-4), DEFENSE HEALTH AGENCY

Place of Performance

Location: MCLEAN, FAIRFAX County, VIRGINIA, 22102

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $32.6 million to BOOZ ALLEN HAMILTON INC for work described as: CT 17-1549 ORGANIZATIONAL DESIGN AND MODEL DEVELOPMENT FOR THE COMPONENT ACQUISITION EXECUTIVE (J-4), DEFENSE HEALTH AGENCY Key points: 1. Contract focuses on research and development in physical, engineering, and life sciences, excluding biotechnology. 2. Awarded under full and open competition, indicating a broad market solicitation. 3. The contract duration of 1185 days suggests a significant, long-term project. 4. The contract type is Cost Plus Fixed Fee, which allows for cost reimbursement plus a fixed fee. 5. The agency is the Defense Health Agency, a key entity within the Department of Defense. 6. The North American Industry Classification System (NAICS) code 541712 points to R&D services. 7. The contract was awarded as a Delivery Order, implying it's part of a larger contract vehicle.

Value Assessment

Rating: fair

The contract value of $32.6 million over approximately three years for organizational design and model development is within a reasonable range for specialized R&D services. Benchmarking against similar contracts for complex organizational analysis and strategic modeling within the defense sector would provide a clearer picture of value for money. The Cost Plus Fixed Fee (CPFF) contract type can sometimes lead to cost overruns if not managed tightly, but it also allows for flexibility in research and development where scope can evolve. Without specific performance metrics or detailed cost breakdowns, a definitive value assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit offers. This approach typically fosters a competitive environment, encouraging multiple bidders to propose their best solutions and pricing. The number of bidders is not specified, but the open competition suggests a robust process aimed at achieving the best value for the government. This method is generally preferred for ensuring fair pricing and access to a wide range of capabilities.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it increases the likelihood of receiving competitive pricing and innovative solutions, potentially leading to cost savings and improved service delivery.

Public Impact

The Defense Health Agency benefits from enhanced organizational design and model development, potentially improving its operational efficiency and strategic planning. Services delivered include research and development focused on optimizing organizational structures and models within the defense health sector. The geographic impact is primarily within the Department of Defense's operational sphere, affecting its internal structures and processes. Workforce implications may include the need for specialized analytical and modeling expertise, potentially impacting civilian and military personnel involved in organizational management.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can incentivize contractors to incur costs without direct financial risk, potentially leading to higher overall expenditures if not closely monitored.
The nature of R&D can involve inherent uncertainties, making it difficult to precisely define scope and budget upfront, which could lead to cost adjustments.
Organizational design and model development are complex, subjective areas where measuring tangible outcomes and return on investment can be challenging.

Positive Signals

Awarded through full and open competition, suggesting a competitive process that should drive value.
The contractor, Booz Allen Hamilton, is a well-established firm with significant experience in government contracting and consulting.
The contract duration indicates a commitment to addressing complex organizational challenges over a sustained period.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on organizational sciences and strategic modeling. The market for such services within the federal government, particularly for large agencies like the Defense Health Agency, is substantial. Companies like Booz Allen Hamilton are key players in this space, offering expertise in management consulting, systems engineering, and advanced analytics. Comparable spending benchmarks would involve looking at other large-scale organizational transformation or strategic planning contracts awarded to consulting firms by federal agencies.

Small Business Impact

This contract was not set aside for small businesses and was awarded to Booz Allen Hamilton, a large business. There is no explicit indication of subcontracting plans for small businesses within the provided data. The focus on specialized R&D and organizational modeling may limit opportunities for broad small business participation unless specific niche expertise is required for subcontracting. Further analysis would be needed to determine if small businesses were involved in the subcontracting chain.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the Defense Contract Management Agency (DCMA), which is listed as the servicing agency. The Cost Plus Fixed Fee structure necessitates rigorous financial oversight to ensure costs are reasonable and allocable, and that the fixed fee is earned. Transparency would be enhanced through regular reporting requirements from the contractor and potential reviews by the agency's Inspector General, particularly concerning the effectiveness and efficiency of the organizational design and model development.

Related Government Programs

Defense Health Agency IT Modernization Efforts
Department of Defense Strategic Planning Contracts
Federal Management Consulting Services
Organizational Efficiency Studies
Research and Development in Defense Sector

Risk Flags

Cost Overrun Risk (CPFF)
Scope Creep Potential (R&D)
Measuring ROI for Organizational Models
Contractor Performance Monitoring (CPFF)

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.6 million to BOOZ ALLEN HAMILTON INC. CT 17-1549 ORGANIZATIONAL DESIGN AND MODEL DEVELOPMENT FOR THE COMPONENT ACQUISITION EXECUTIVE (J-4), DEFENSE HEALTH AGENCY

Who is the contractor on this award?

The obligated recipient is BOOZ ALLEN HAMILTON INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $32.6 million.

What is the period of performance?

Start: 2018-07-02. End: 2021-09-29.

What is Booz Allen Hamilton's track record with the Defense Health Agency and similar federal entities?

Booz Allen Hamilton has a long-standing and extensive track record of contracting with various U.S. federal agencies, including the Department of Defense and its sub-agencies like the Defense Health Agency (DHA). Their portfolio includes a wide range of services such as IT consulting, cybersecurity, management consulting, and strategic planning. For the DHA specifically, they have likely been involved in numerous projects related to healthcare IT, operational efficiency, and strategic initiatives. Their history suggests a capacity to handle large, complex contracts. However, a detailed review of past performance evaluations, past performance questionnaires (PPQs), and any past disputes or contract terminations would be necessary for a comprehensive assessment of their specific performance on similar DHA or DoD organizational development contracts.

How does the $32.6 million contract value compare to similar organizational design and R&D contracts within the federal government?

The $32.6 million contract value for organizational design and model development over approximately three years is substantial but not extraordinary for specialized R&D and consulting services within the Department of Defense. Large federal agencies often award contracts in the tens of millions for complex analytical, strategic, and R&D initiatives. To benchmark effectively, one would need to compare this contract to others with similar NAICS codes (e.g., 541712, 541611 - Administrative Management and General Management Consulting Services) awarded by agencies like the DoD, HHS, or other large civilian departments. Factors such as contract duration, specific deliverables, and the level of R&D involved would influence comparability. Without access to a comprehensive database of comparable contract values and scopes, it's difficult to definitively state if this represents excellent or fair value, but it aligns with the scale of major federal consulting and R&D projects.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for R&D services?

The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for R&D services revolve around cost control and scope definition. For the government, the risk is that the contractor may not be sufficiently incentivized to control costs, as all allowable costs are reimbursed, and the profit (fixed fee) is predetermined. This can lead to cost overruns if the project scope expands or unforeseen challenges arise, which is common in R&D. The contractor bears the risk of the fixed fee not adequately compensating them if costs exceed initial estimates significantly, but they are protected from losing money on incurred costs. For R&D, where the path to success is often uncertain, CPFF offers flexibility but requires robust government oversight to ensure costs remain reasonable and the project stays aligned with objectives. Effective management and clear communication are crucial to mitigate these risks.

How might the 'organizational design and model development' deliverables impact the Defense Health Agency's operations?

The 'organizational design and model development' deliverables are intended to enhance the Defense Health Agency's (DHA) effectiveness and efficiency. This could involve creating new organizational structures, refining existing ones, or developing predictive models for resource allocation, operational workflows, or strategic planning. Potential impacts include improved decision-making processes, better integration of healthcare services across military branches, optimized use of resources (personnel, budget, equipment), and enhanced responsiveness to evolving healthcare needs and threats. The models developed could serve as tools for simulation, forecasting, and strategic guidance, ultimately aiming to strengthen the DHA's mission of providing medical support to the warfighter and their families.

What is the significance of the NAICS code 541712 (Research and Development in the Physical, Engineering, and Life Sciences) for this contract?

The NAICS code 541712 signifies that the core of this contract involves scientific inquiry and experimentation aimed at discovering or interpreting facts, principles, or theories for application to the physical, engineering, and life sciences. While the contract title mentions 'organizational design and model development,' the R&D classification suggests that the work likely involves advanced analytical methods, potentially incorporating scientific principles or engineering approaches to understand and improve complex organizational systems within the defense health context. This classification implies a focus on innovation, research, and the development of novel solutions rather than routine operational support or standard consulting services. It also guides the type of expertise sought and the regulatory framework applicable to the contract.

What does the 'Delivery Order' (AW) designation imply about this contract?

The 'Delivery Order' (AW) designation indicates that this contract is likely a task order issued under a pre-existing indefinite-delivery, indefinite-quantity (IDIQ) contract or a similar type of contract vehicle. IDIQ contracts allow agencies to procure supplies or services over a set period, with specific orders (delivery or task orders) being issued as needed. This approach provides flexibility for the agency to acquire services incrementally and manage evolving requirements. For this specific contract, it means that the $32.6 million award represents a specific order placed against a broader contract, potentially with a longer overall ceiling or duration. This method is common for services that are needed periodically or whose exact timing and scope may not be fully defined at the outset.

Industry Classification

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

Product/Service Code: RESEARCH AND DEVELOPMENT › OTHER RESEARCH/DEVELOPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: FA807515R0001

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

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: $34,199,997

Exercised Options: $34,199,997

Current Obligation: $32,621,584

Actual Outlays: $70,024

Subaward Activity

Number of Subawards: 10

Total Subaward Amount: $2,087,467

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA807516D0003

IDV Type: IDC

Timeline