Booz Allen Hamilton awarded $23.3M for engineering services, highlighting long-term defense support

Contract Overview

Contract Amount: $23,331,787 ($23.3M)

Contractor: Booz Allen Hamilton Inc

Awarding Agency: Department of Defense

Start Date: 2007-01-12

End Date: 2013-03-30

Contract Duration: 2,269 days

Daily Burn Rate: $10.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: ACQUISITION SUPPORT

Place of Performance

Location: CRANE, MARTIN County, INDIANA, 47522

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $23.3 million to BOOZ ALLEN HAMILTON INC for work described as: ACQUISITION SUPPORT Key points: 1. Contract value of $23.3 million over six years indicates significant, sustained demand for engineering expertise. 2. Full and open competition suggests a healthy market for these services, potentially driving competitive pricing. 3. The contract's duration and value present a moderate risk of cost overruns if not closely managed. 4. Engineering services are critical for defense readiness, positioning this contract within a vital sector. 5. Awarded to a large, established contractor, suggesting a focus on proven capability over emerging players.

Value Assessment

Rating: good

The contract's total value of $23.3 million over approximately six years averages around $3.88 million annually. Benchmarking this against similar large-scale engineering support contracts for the Department of Defense is challenging without more granular data on the specific services rendered. However, the duration and scale suggest a substantial investment. The Cost Plus Fixed Fee (CPFF) pricing structure, while common for complex services, requires careful oversight to ensure costs remain reasonable and the fixed fee is justified by the scope of work.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. With 3 bids received, this suggests a reasonable level of competition for this type of engineering service. While not an exceptionally high number of bidders, it is sufficient to provide a basis for price discovery and selection of a qualified contractor.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to more favorable pricing and a wider pool of qualified contractors.

Public Impact

The Department of the Navy benefits from specialized engineering expertise to support its operations and readiness. Services delivered likely include technical analysis, design, program management, and systems engineering. The contract's performance location in Indiana suggests a potential impact on the regional workforce and economy. This contract supports the broader defense industrial base by engaging a major contractor and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can incentivize contractors to increase costs to maximize their fee if not properly managed.
Long contract durations (over 6 years) increase the risk of scope creep and potential cost escalations.
Reliance on a single large contractor may limit opportunities for smaller, innovative firms in the long run.

Positive Signals

Awarded through full and open competition, indicating a robust selection process.
The contractor, Booz Allen Hamilton, has a significant track record in government contracting, suggesting reliability.
The contract supports critical defense engineering functions, aligning with national security objectives.

Sector Analysis

This contract falls within the Engineering Services sector, a critical component of the broader professional services market supporting government and defense needs. The market for defense engineering services is substantial, driven by the continuous need for modernization, maintenance, and development of military systems. Booz Allen Hamilton is a major player in this space, competing with other large defense contractors and specialized engineering firms. Spending benchmarks for similar large-scale, multi-year engineering support contracts within the DoD can range from tens to hundreds of millions of dollars.

Small Business Impact

The contract was not set aside for small businesses, and the 'sb' field is false, indicating no explicit small business participation was mandated at the prime contract level. While Booz Allen Hamilton may engage small businesses as subcontractors, the primary award does not directly benefit the small business ecosystem through a set-aside. This suggests a focus on large, established prime contractors for this particular requirement.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program office within the Department of the Navy. Performance monitoring, financial reviews, and adherence to contract terms are standard accountability measures. Transparency is generally maintained through contract databases and reporting requirements, though specific details of performance and cost may be sensitive. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Defense Engineering Services
Naval Support Contracts
Professional Services Contracts
Cost Plus Fixed Fee Contracts
Large Prime Contractor Awards

Risk Flags

Potential for cost overruns due to CPFF structure and long duration.
Risk of scope creep over the contract's extended performance period.
Limited direct small business participation at the prime contract level.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.3 million to BOOZ ALLEN HAMILTON INC. ACQUISITION SUPPORT

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 Navy).

What is the total obligated amount?

The obligated amount is $23.3 million.

What is the period of performance?

Start: 2007-01-12. End: 2013-03-30.

What is Booz Allen Hamilton's track record with similar Cost Plus Fixed Fee (CPFF) engineering contracts within the Department of Defense?

Booz Allen Hamilton has an extensive history of performing CPFF contracts, particularly within the defense sector. Their track record generally indicates a capacity to manage complex projects and deliver engineering solutions. However, like any large contractor, specific contract performance can vary. Analyzing past CPFF contracts for similar scope and duration would reveal trends in cost performance, schedule adherence, and client satisfaction. A review of contract award data and performance evaluations (if publicly available) would be necessary to assess their specific success rate and identify any recurring issues or strengths in managing this contract type for the Navy.

How does the average annual value of this contract compare to other large-scale engineering support contracts awarded by the Department of the Navy?

The average annual value of this contract is approximately $3.88 million ($23.3 million / 6 years). This figure places it in the mid-to-large tier for individual engineering support contracts. However, the Department of the Navy awards numerous contracts of varying sizes and scopes. Some specialized or program-wide engineering support contracts can reach tens or even hundreds of millions of dollars annually. To provide a precise comparison, one would need to benchmark against contracts with similar service descriptions (e.g., systems engineering, technical support, program management) and similar duration. Without that granular data, it's difficult to definitively state if this contract's value is high or low relative to its peers, but it represents a significant, sustained investment.

What are the primary risk indicators associated with a Cost Plus Fixed Fee contract of this duration and value?

The primary risk indicators for this CPFF contract revolve around cost control and potential for scope creep. CPFF contracts, by nature, allow the contractor to recover allowable costs plus a fixed fee. This can create an incentive for less efficient cost management if oversight is weak, as the contractor is guaranteed their fee regardless of cost efficiency beyond the allowable costs. The long duration (over 6 years) amplifies this risk, increasing the potential for unforeseen cost increases due to changing requirements, inflation, or project complexities. Effective risk mitigation requires robust oversight, clear performance metrics, and stringent change control processes to ensure costs remain reasonable and the fixed fee remains appropriate for the work performed.

What does the 'Engineering Services' (NAICS 541330) category typically encompass in the context of defense contracts?

In the context of defense contracts, Engineering Services (NAICS 541330) typically encompasses a broad range of activities related to the design, development, testing, and evaluation of military systems, equipment, and infrastructure. This can include areas such as systems engineering, naval architecture, aerospace engineering, mechanical engineering, electrical engineering, and civil engineering. For the Department of the Navy, these services are crucial for everything from ship design and modernization to aircraft systems, weapons platforms, and shore-based facilities. Contracts in this category often involve complex technical challenges, requiring specialized expertise to ensure the performance, reliability, and safety of defense assets.

How has federal spending on Engineering Services (NAICS 541330) trended over the past 5-10 years, and how does this contract fit into that trend?

Federal spending on Engineering Services (NAICS 541330) has generally remained robust, particularly within the Department of Defense, reflecting the ongoing need for advanced technical support and system development. While specific year-over-year trends can fluctuate based on budget priorities and major acquisition programs, the overall demand for these services has been consistent. This $23.3 million contract, awarded over six years, represents a steady, albeit not massive, investment within this category. It aligns with the sustained government reliance on specialized engineering firms to maintain and advance its technological capabilities, fitting into the broader pattern of significant, ongoing federal expenditure in this sector.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N0002406R3687

Offers Received: 3

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Booz Allen Hamilton Holding Corporation (UEI: 964725688)

Address: BOOZ ALLEN HAMILTON INC, MC LEAN, VA, 22102

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $328,873,332

Exercised Options: $135,420,633

Current Obligation: $23,331,787

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017804D4024

IDV Type: IDC

Timeline