Booz Allen Hamilton awarded $41M contract for Navy readiness and cost reporting systems engineering

Contract Overview

Contract Amount: $40,959,353 ($41.0M)

Contractor: Booz Allen Hamilton Inc

Awarding Agency: Department of Defense

Start Date: 2022-04-25

End Date: 2027-04-24

Contract Duration: 1,825 days

Daily Burn Rate: $22.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: READINESS AND COST REPORTING PROGRAM SYSTEMS ENGINEERING, ANALYSIS, INTEGRATION, AND OPTIMIZATION FOR NAVY EXPEDITIONARY COMBAT COMMAND AND NAVY BUREAU OF MEDICINE AND SURGERY

Place of Performance

Location: VIRGINIA BEACH, VIRGINIA BEACH CITY County, VIRGINIA, 23455

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $41.0 million to BOOZ ALLEN HAMILTON INC for work described as: READINESS AND COST REPORTING PROGRAM SYSTEMS ENGINEERING, ANALYSIS, INTEGRATION, AND OPTIMIZATION FOR NAVY EXPEDITIONARY COMBAT COMMAND AND NAVY BUREAU OF MEDICINE AND SURGERY Key points: 1. Contract focuses on critical systems for Navy Expeditionary Combat Command and Bureau of Medicine and Surgery. 2. Booz Allen Hamilton, a large defense contractor, holds this award. 3. The contract is structured as a cost-plus-fixed-fee, indicating potential for cost overruns. 4. Performance period spans five years, suggesting a long-term need for these services. 5. The award falls under Research and Development in Physical, Engineering, and Life Sciences. 6. This contract represents a significant investment in naval operational efficiency and financial management systems.

Value Assessment

Rating: good

The contract value of approximately $41 million over five years appears reasonable for complex systems engineering and integration services for two distinct naval commands. Benchmarking against similar large-scale R&D and IT support contracts for defense agencies suggests this pricing is within expected ranges. However, the cost-plus-fixed-fee structure warrants close monitoring to ensure costs remain controlled and represent good value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified vendors had the opportunity to bid. The presence of a single delivery order suggests that the initial competition may have been for a broader IDIQ or similar vehicle, with this being one specific task order. The level of competition for the underlying vehicle is not detailed here, but the 'full and open' designation is a positive sign for price discovery.

Taxpayer Impact: Full and open competition generally leads to more competitive pricing, which benefits taxpayers by ensuring the government receives the best possible value for its investment.

Public Impact

Naval Expeditionary Combat Command personnel will benefit from improved readiness reporting systems. Navy Bureau of Medicine and Surgery will see enhanced cost reporting and system optimization. The services delivered will support critical operational and administrative functions within the Navy. Geographic impact is broad, supporting naval operations globally. Workforce implications include the need for specialized systems engineers and analysts.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contracts can lead to higher final costs if not managed diligently.
The long performance period requires sustained oversight to ensure continued alignment with evolving Navy needs.
Dependence on a single large contractor for critical systems integration carries inherent risks.

Positive Signals

Awarded through full and open competition, suggesting a competitive bidding process.
Focus on R&D and systems optimization indicates investment in modernization and efficiency.
The contract supports essential functions for two significant naval commands.

Sector Analysis

This contract falls within the Defense Information Technology and Professional Services sector, a substantial segment of federal spending. The market is dominated by large, established defense contractors like Booz Allen Hamilton, who possess the expertise and security clearances required for such sensitive work. Spending in this area is driven by the continuous need for technological advancement, cybersecurity, and operational efficiency within military branches. Comparable contracts often involve complex system integration, software development, and lifecycle support for mission-critical applications.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. The prime contractor, Booz Allen Hamilton, is a large business. There is no explicit information provided regarding subcontracting plans for small businesses. Without specific subcontracting goals or reporting, the direct impact on the small business ecosystem for this particular award is likely minimal, though large prime contractors often engage small businesses for specialized support.

Oversight & Accountability

Oversight for this contract will likely be managed by the contracting officer and program managers within the Department of Defense, specifically the Air Force as the contracting agency. Accountability measures are embedded in the cost-plus-fixed-fee structure, requiring detailed reporting and justification of costs. Transparency is facilitated through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Navy Enterprise Resource Planning (ERP)
Defense Health Information Technology
Naval Sea Systems Command (NAVSEA) IT Support
Combatant Command Systems Engineering
DoD Financial Management Systems

Risk Flags

Cost-plus-fixed-fee structure requires diligent cost oversight.
Long performance period necessitates ongoing performance monitoring.
Potential for vendor lock-in if not managed carefully.
Reliance on contractor for critical systems integration.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $41.0 million to BOOZ ALLEN HAMILTON INC. READINESS AND COST REPORTING PROGRAM SYSTEMS ENGINEERING, ANALYSIS, INTEGRATION, AND OPTIMIZATION FOR NAVY EXPEDITIONARY COMBAT COMMAND AND NAVY BUREAU OF MEDICINE AND SURGERY

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 $41.0 million.

What is the period of performance?

Start: 2022-04-25. End: 2027-04-24.

What is Booz Allen Hamilton's track record with similar large-scale Navy systems engineering contracts?

Booz Allen Hamilton has a long and extensive history of supporting the Department of Defense, including the Navy, with complex systems engineering, IT modernization, and program management services. They are a prime contractor on numerous large contracts across various naval commands and defense agencies. Their track record includes work on enterprise resource planning (ERP) systems, command and control (C2) systems, and data analytics platforms. While specific performance metrics for past contracts are not publicly detailed in this context, their sustained presence and significant contract awards suggest a generally positive performance history and capability to handle large, complex R&D and integration efforts. However, like any large contractor, they have faced scrutiny on specific contracts regarding cost management and performance.

How does the $41 million contract value compare to similar R&D and systems integration contracts for naval commands?

The $41 million contract value over five years, averaging roughly $8.2 million annually, is considered moderate for complex systems engineering and R&D services within the Department of Defense, particularly for naval commands. Large-scale IT modernization, cybersecurity, and systems integration programs for entities like the Navy can range from tens of millions to billions of dollars. This contract's value appears aligned with specialized support for specific program areas (readiness and cost reporting) rather than a comprehensive enterprise-wide overhaul. Benchmarking against similar contracts for systems engineering, analysis, and integration for commands of comparable size and scope suggests this figure is within a reasonable range, reflecting the specialized nature of the work and the contractor's expertise.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract structure for this type of service?

The primary risk with a Cost Plus Fixed Fee (CPFF) contract structure is the potential for cost overruns. While the contractor is reimbursed for allowable costs, the 'fixed fee' component provides a set profit margin. If costs escalate significantly beyond initial projections due to unforeseen technical challenges, scope creep, or inefficient performance, the government bears the brunt of the increased cost while the contractor's fee remains fixed. This can lead to the final contract price being substantially higher than initially anticipated. For the government, this necessitates robust oversight to ensure costs are reasonable, allocable, and allowable, and that the contractor is making diligent efforts to control expenses. The risk for the contractor is that if costs are managed very efficiently, their fee might represent a smaller percentage of the total contract value than anticipated.

How effective are current readiness and cost reporting systems likely to be improved by this contract?

The effectiveness of improvements hinges on the specific technical solutions implemented under this contract. The contract's objective is to provide 'systems engineering, analysis, integration, and optimization,' suggesting a focus on enhancing the efficiency, accuracy, and potentially the scope of existing systems. Improved systems engineering can lead to better system design, reduced redundancies, and enhanced interoperability. Analysis and optimization aim to streamline processes, identify bottlenecks, and potentially reduce manual effort. Successful integration should ensure seamless data flow between different reporting mechanisms. Ultimately, the contract's success will be measured by tangible improvements in the timeliness and accuracy of readiness and cost data available to Navy leadership, enabling better decision-making and resource allocation.

What is the historical spending trend for similar systems engineering and IT support services for the Navy?

Historical spending trends for systems engineering and IT support services for the Navy have shown a consistent and significant increase over the past decade. Driven by modernization efforts, cybersecurity imperatives, and the need for data-driven decision-making, the Navy, like other branches of the DoD, relies heavily on external contractors for specialized expertise. Spending in areas like R&D, systems integration, software development, and IT infrastructure support has grown substantially. This trend is fueled by the increasing complexity of naval operations, the adoption of advanced technologies (AI, cloud computing, big data), and the ongoing need to maintain and upgrade legacy systems. Contracts for readiness and cost reporting systems fall within this broader category of essential IT and engineering support.

What are the implications of this contract being awarded to a single large business prime contractor?

Awarding this contract to a single large business prime contractor like Booz Allen Hamilton streamlines contract management for the government, consolidating oversight and communication with one entity. It leverages the contractor's established infrastructure, extensive resources, and proven ability to manage complex projects. However, it also concentrates risk with one provider and potentially limits opportunities for smaller, specialized firms unless they are subcontracted. For taxpayers, the primary implication is ensuring that the large prime contractor effectively manages the project, controls costs under the CPFF structure, and delivers the promised value, as there are fewer alternative providers readily available for this specific scope without a new competitive process.

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: 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: $51,989,394

Exercised Options: $51,989,394

Current Obligation: $40,959,353

Subaward Activity

Number of Subawards: 11

Total Subaward Amount: $13,451,852

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