DoD's $73M R&D Contract with Booz Allen Hamilton Faces Scrutiny for Value and Competition

Contract Overview

Contract Amount: $73,144,275 ($73.1M)

Contractor: Booz Allen Hamilton Inc

Awarding Agency: Department of Defense

Start Date: 2018-09-27

End Date: 2023-09-27

Contract Duration: 1,826 days

Daily Burn Rate: $40.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: CT 18-1697 LABOR/ODCS (FEE BEARING)

Place of Performance

Location: MCLEAN, FAIRFAX County, VIRGINIA, 22102

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $73.1 million to BOOZ ALLEN HAMILTON INC for work described as: CT 18-1697 LABOR/ODCS (FEE BEARING) Key points: 1. The contract awarded to Booz Allen Hamilton for R&D services represents a significant investment in the physical, engineering, and life sciences. 2. Competition was full and open, suggesting a potentially competitive pricing environment, but the specific impact on price discovery needs further analysis. 3. The contract's duration and cost-plus-fixed-fee structure warrant a review of potential cost overruns and value for money. 4. The R&D sector is critical for innovation, but oversight is essential to ensure taxpayer funds are used effectively.

Value Assessment

Rating: fair

The Cost Plus Fixed Fee (CPFF) contract type can lead to higher costs if not managed tightly. Benchmarking against similar R&D contracts for 'Research and Development in the Physical, Engineering, and Life Sciences' is crucial to assess if the $73.14 million award represents fair value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which generally promotes competitive pricing. However, the effectiveness of this competition in achieving optimal price discovery for complex R&D services requires further examination.

Taxpayer Impact: While competition aims for efficiency, the CPFF structure necessitates robust oversight to ensure taxpayer funds are not unnecessarily inflated.

Public Impact

Taxpayers are funding advanced research and development, potentially leading to technological advancements. The duration of the contract (5 years) means sustained investment and potential for long-term impact. The specific R&D focus could influence national security or scientific progress.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee structure can incentivize cost escalation.
Long contract duration may not adapt to evolving R&D needs.
Lack of specific performance metrics makes value assessment difficult.

Positive Signals

Awarded under full and open competition.
Supports critical R&D in physical, engineering, and life sciences.
Contract awarded to a well-established firm.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. Spending in this area is vital for innovation but requires careful management to ensure return on investment. Benchmarks for similar R&D contracts vary widely based on scope and complexity.

Small Business Impact

The data indicates this contract was not awarded to a small business, as Booz Allen Hamilton is a large corporation. There is no indication of subcontracting opportunities for small businesses within this award.

Oversight & Accountability

The contract's CPFF structure necessitates strong oversight from the Department of the Air Force to monitor costs, ensure adherence to scope, and verify the effective use of taxpayer funds. Regular performance reviews and audits are critical for accountability.

Related Government Programs

Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)
Department of Defense Contracting
Department of the Air Force Programs

Risk Flags

Potential for cost overruns due to CPFF structure.
Lack of specific performance metrics hinders value assessment.
Long duration may reduce adaptability to changing R&D landscape.
Limited insight into the specific research objectives and expected outcomes.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $73.1 million to BOOZ ALLEN HAMILTON INC. CT 18-1697 LABOR/ODCS (FEE BEARING)

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 (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $73.1 million.

What is the period of performance?

Start: 2018-09-27. End: 2023-09-27.

How does the fixed fee component of this CPFF contract compare to industry standards for similar R&D projects, and what is the potential impact on overall cost?

The fixed fee in a CPFF contract is negotiated at the outset and represents the contractor's profit. For R&D projects, this fee can range significantly based on risk, complexity, and duration. Without specific benchmarks for this type of research, it's difficult to definitively assess if Booz Allen Hamilton's fee is competitive. However, a higher fixed fee could indicate a greater perceived risk or a less competitive negotiation, potentially increasing the overall cost to the government if costs exceed estimates.

What specific R&D outcomes or deliverables are expected under this contract, and how will their achievement be measured to ensure effectiveness and value for money?

The provided data lacks specific details on the expected R&D outcomes and deliverables. Effective measurement requires clearly defined milestones, performance metrics, and objective criteria for success. Without this information, assessing the contract's effectiveness and ensuring value for taxpayer money is challenging. A thorough review should identify the specific research objectives and the mechanisms in place to track progress and evaluate the final results against the investment.

Given the 5-year duration, what mechanisms are in place to ensure the contract remains relevant and adaptable to potential shifts in research priorities or technological advancements?

Long-term R&D contracts require flexibility. Mechanisms such as contract modification clauses, regular review periods, and clear communication channels between the agency and the contractor are essential. These allow for adjustments to research scope or direction based on new findings or evolving priorities. The effectiveness of these mechanisms in adapting to the dynamic nature of R&D will be crucial for the contract's continued relevance and success over its five-year term.

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: $74,487,085

Exercised Options: $74,487,085

Current Obligation: $73,144,275

Actual Outlays: $3,400,647

Subaward Activity

Number of Subawards: 37

Total Subaward Amount: $24,224,381

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