DoD's $110M MICROELECTRONICS ASSURANCE contract awarded to Booz Allen Hamilton for R&D in secure electronics

Contract Overview

Contract Amount: $109,620,328 ($109.6M)

Contractor: Booz Allen Hamilton Inc

Awarding Agency: Department of Defense

Start Date: 2020-11-03

End Date: 2026-06-03

Contract Duration: 2,038 days

Daily Burn Rate: $53.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: MICROELECTRONICS ASSURANCE FOR SECURE TRUSTWORTHY ELECTRONICS RESEARCH (MASTER)

Place of Performance

Location: MCLEAN, FAIRFAX County, VIRGINIA, 22102

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $109.6 million to BOOZ ALLEN HAMILTON INC for work described as: MICROELECTRONICS ASSURANCE FOR SECURE TRUSTWORTHY ELECTRONICS RESEARCH (MASTER) Key points: 1. Contract focuses on critical research and development for secure and trustworthy microelectronics. 2. Awarded under full and open competition, suggesting a robust market for these specialized services. 3. Performance period extends over six years, indicating a long-term strategic investment. 4. The contract type (Cost Plus Fixed Fee) allows for flexibility in research but requires careful cost oversight. 5. This award aligns with national security priorities in safeguarding critical technological infrastructure. 6. The North American Industry Classification System (NAICS) code 541715 points to advanced physical sciences research.

Value Assessment

Rating: good

The contract value of approximately $110 million over six years represents a significant investment in microelectronics research. Benchmarking this against similar R&D contracts in advanced technologies is challenging due to the specialized nature of microelectronics assurance. However, the Cost Plus Fixed Fee structure necessitates diligent oversight to ensure costs remain reasonable and aligned with the fixed fee component. The total value appears commensurate with the scope of research and development in a highly technical and evolving field.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple capable vendors were allowed to bid. The presence of three bidders suggests a competitive environment for this specialized research area. This level of competition is generally favorable for price discovery and ensuring the government receives competitive proposals.

Taxpayer Impact: Full and open competition helps ensure that taxpayer dollars are used efficiently by fostering a competitive environment that drives down costs and encourages innovation.

Public Impact

The primary beneficiaries are the Department of Defense and its associated agencies, which will receive enhanced security and trustworthiness in their microelectronic components. The services delivered will focus on research and development to identify vulnerabilities, develop countermeasures, and establish assurance methodologies for microelectronics. The geographic impact is primarily national, supporting U.S. technological sovereignty and defense capabilities. Workforce implications include the potential for highly skilled researchers and engineers in the fields of electrical engineering, computer science, and materials science.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can lead to cost overruns if not managed rigorously.
The long performance period requires sustained oversight to ensure continued relevance and effectiveness of research.
Dependence on a single prime contractor for such a critical area warrants close monitoring of subcontractor performance.

Positive Signals

Awarded through full and open competition, indicating a healthy market and potential for innovation.
Focus on microelectronics assurance directly addresses a critical national security need.
Long-term nature of the contract allows for sustained progress in a complex research domain.

Sector Analysis

The microelectronics sector is a critical component of national security and economic competitiveness, encompassing the design, manufacturing, and integration of semiconductor devices. This contract falls within the broader Research and Development (R&D) sector, specifically focusing on the physical and engineering sciences related to ensuring the integrity and security of these vital components. The market for microelectronics R&D is characterized by high barriers to entry, significant capital investment, and rapid technological advancement. This contract represents a strategic investment by the Department of Defense to bolster domestic capabilities in a field increasingly dominated by foreign actors.

Small Business Impact

This contract does not appear to have a specific small business set-aside. However, the prime contractor, Booz Allen Hamilton, is a large business. It is common for large R&D contracts to involve significant subcontracting opportunities for specialized small businesses in niche areas of microelectronics research, development, and testing. The extent of small business participation will depend on the prime contractor's subcontracting plan and the availability of specialized small businesses in the microelectronics ecosystem.

Oversight & Accountability

Oversight for this Cost Plus Fixed Fee contract will likely be managed by the Department of the Air Force, with specific program managers responsible for monitoring research progress, cost expenditures, and adherence to contract terms. Accountability measures will include regular progress reports, milestone reviews, and financial audits. Transparency will be facilitated through contract award data and potentially through public releases of non-sensitive research findings. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Microelectronics research programs
National security technology initiatives
Defense R&D spending
Secure systems engineering
Trusted foundry programs

Risk Flags

Cost Overruns Risk (CPFF)
Scope Creep Risk (R&D)
Long-term Project Management Complexity
Reliance on Prime Contractor Expertise
National Security Technology Dependence

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $109.6 million to BOOZ ALLEN HAMILTON INC. MICROELECTRONICS ASSURANCE FOR SECURE TRUSTWORTHY ELECTRONICS RESEARCH (MASTER)

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 $109.6 million.

What is the period of performance?

Start: 2020-11-03. End: 2026-06-03.

What is Booz Allen Hamilton's track record with similar large-scale R&D contracts for the Department of Defense?

Booz Allen Hamilton has a long and extensive history of supporting the Department of Defense (DoD) across a wide range of services, including complex research and development initiatives, systems engineering, and strategic consulting. They have managed numerous large-value contracts, often involving advanced technologies and national security applications. Their experience typically includes navigating intricate government acquisition processes, managing large teams of scientists and engineers, and delivering on challenging technical objectives. While specific details of past R&D performance on contracts of this exact nature are proprietary, their established presence and consistent awards from the DoD suggest a demonstrated capability to handle significant R&D efforts. Performance metrics and past performance evaluations from previous contracts would be key indicators of their suitability for this specific microelectronics assurance program.

How does the estimated cost per year for this contract compare to industry benchmarks for similar microelectronics R&D efforts?

Estimating an annual cost requires dividing the total contract value ($110M) by its duration (approx. 6 years), yielding roughly $18.3 million per year. Benchmarking this figure against industry standards for microelectronics R&D is complex due to the highly specialized and rapidly evolving nature of the field, as well as the specific objectives of 'assurance' which can encompass a broad range of activities from design verification to supply chain security. Typical R&D investments in cutting-edge semiconductor technology can range widely, from tens of millions to hundreds of millions annually for major corporate or government initiatives. Factors such as the specific research areas (e.g., novel materials, advanced packaging, security protocols), the scale of research teams, and the required laboratory infrastructure significantly influence costs. Without a precise definition of the 'assurance' activities and the specific technological focus, a direct comparison is difficult. However, the allocated annual budget appears substantial enough to support a dedicated, multi-disciplinary research effort in a critical area.

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

The Cost Plus Fixed Fee (CPFF) contract type, while offering flexibility for R&D where scope can evolve, presents specific risks. For the government, the primary risk is that costs could exceed initial estimates, although the fixed fee provides a ceiling on the contractor's profit. This necessitates robust government oversight to ensure that all costs incurred are reasonable, allocable, and allowable. Contractor risk involves managing expenses to stay within the estimated cost base to maximize their profit margin, as the fee is fixed regardless of actual costs. If costs escalate significantly beyond projections, the contractor may face reduced profitability or even financial strain. For this microelectronics R&D effort, risks include unforeseen technical challenges requiring more expensive solutions, difficulties in sourcing specialized materials or equipment, and potential scope creep if research directions shift substantially. Effective risk mitigation relies on detailed cost tracking, regular progress reviews, and clear communication between the contractor and the contracting officer.

What is the expected impact of this contract on the advancement of secure microelectronics within the U.S. defense industrial base?

This contract is expected to have a significant positive impact on the advancement of secure microelectronics within the U.S. defense industrial base. By funding dedicated R&D into 'assurance' for microelectronics, the Department of Defense aims to mitigate risks associated with counterfeit components, malicious hardware insertions, and supply chain vulnerabilities. This research will likely lead to the development of new methodologies, tools, and standards for verifying the integrity and trustworthiness of microelectronic devices used in critical defense systems. Such advancements are crucial for maintaining technological superiority and ensuring the reliability of sensitive military equipment. The contract supports the broader national strategy to onshore and secure critical technology supply chains, reducing reliance on foreign sources that may pose security risks.

How does this contract's spending compare to historical DoD investments in microelectronics research and development?

The $110 million awarded to Booz Allen Hamilton represents a notable investment in microelectronics assurance R&D. Historically, the Department of Defense has allocated substantial funding towards microelectronics research, driven by national security imperatives and the recognition of microelectronics as a foundational technology. Programs like the Trusted Foundry Program and various DARPA initiatives have historically commanded significant budgets, often in the hundreds of millions of dollars over several years, to advance semiconductor capabilities and security. While this specific contract focuses on 'assurance,' it complements broader efforts in microelectronics innovation. Comparing this single award requires context; it is one component of a larger, multi-faceted DoD strategy. Over the past decade, DoD spending on microelectronics R&D has fluctuated but generally remained robust, reflecting its strategic importance. This $110M award aligns with the ongoing trend of significant federal investment in securing and advancing domestic microelectronics capabilities.

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

Offers Received: 3

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: $139,668,269

Exercised Options: $139,668,269

Current Obligation: $109,620,328

Actual Outlays: $14,069,255

Subaward Activity

Number of Subawards: 64

Total Subaward Amount: $113,039,371

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA807518D0004

IDV Type: IDC

Timeline