GSA awards $34.2M IT services contract to Booz Allen Hamilton, raising value-for-money questions

Contract Overview

Contract Amount: $34,196,579 ($34.2M)

Contractor: Booz Allen Hamilton Inc

Awarding Agency: General Services Administration

Start Date: 2012-04-16

End Date: 2015-04-15

Contract Duration: 1,094 days

Daily Burn Rate: $31.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: IGF::CL::IGF

Place of Performance

Location: ABERDEEN PROVING GROUND, HARFORD County, MARYLAND, 21005

State: Maryland Government Spending

Plain-Language Summary

General Services Administration obligated $34.2 million to BOOZ ALLEN HAMILTON INC for work described as: IGF::CL::IGF Key points: 1. Contract awarded on a time-and-materials basis, which can lead to cost overruns if not managed closely. 2. Sole bidder for this specific delivery order, despite a broad contract vehicle, may indicate limited competition. 3. The contract duration of nearly three years suggests a significant, ongoing need for these services. 4. Services fall under IT systems design, a critical but often complex area for government efficiency. 5. The award to a large, established contractor like Booz Allen Hamilton is typical for this type of service. 6. Benchmarking against similar contracts is crucial to assess if the pricing reflects fair market value.

Value Assessment

Rating: fair

The contract's value of $34.2 million over approximately three years for IT systems design services requires careful scrutiny. While Booz Allen Hamilton is a reputable contractor, the time-and-materials pricing structure presents a risk for cost control. Without detailed performance metrics and comparison to industry benchmarks for similar IT design services, it is difficult to definitively assess value for money. The General Services Administration (GSA) should ensure robust oversight to prevent scope creep and ensure efficient resource utilization.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded as a delivery order under a larger indefinite-delivery/indefinite-quantity (IDIQ) contract. While the IDIQ vehicle itself may have been competed broadly, this specific delivery order had only one bidder. This limited competition for the delivery order raises concerns about whether the government received the best possible pricing and innovative solutions. A single bidder scenario can reduce pressure on the contractor to offer competitive rates.

Taxpayer Impact: Limited competition on individual delivery orders can result in higher costs for taxpayers compared to scenarios with multiple competing bids, potentially leading to less efficient use of public funds.

Public Impact

Federal agencies requiring computer systems design and integration services benefit from this contract. The contract supports the modernization and efficiency of federal IT infrastructure. Work is likely concentrated in Maryland, given the stated location code. The contract supports highly skilled IT professionals, contributing to the federal workforce in specialized roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Risk of cost overruns due to time-and-materials pricing structure.
Limited competition for this specific delivery order may impact price competitiveness.
Potential for vendor lock-in if not managed with clear exit strategies.
Complexity of IT systems design can lead to unforeseen challenges and delays.

Positive Signals

Award to a contractor with a proven track record in federal IT services.
Contract supports critical federal IT infrastructure needs.
GSA's role as an intermediary can provide some level of procurement expertise.

Sector Analysis

The IT services sector within the federal government is vast, encompassing a wide range of needs from software development to cybersecurity and systems integration. This contract for computer systems design services falls within a segment focused on the architecture and implementation of IT solutions. Spending in this area is consistently high as agencies strive to update legacy systems and adopt new technologies. Comparable spending benchmarks would typically be found within GSA's IT Schedule or other large IT IDIQ vehicles, assessing rates for similar skill sets and project scopes.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. 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 IT ecosystem is likely minimal, though large prime contractors often utilize small businesses for specialized support.

Oversight & Accountability

Oversight for this contract would primarily fall under the General Services Administration (GSA), specifically the Federal Acquisition Service. Mechanisms likely include contract performance reviews, regular reporting requirements from the contractor, and potentially task-level oversight by agency program managers. Transparency is generally facilitated through contract databases like FPDS, but detailed performance data and cost justifications may not always be publicly accessible. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

GSA IT Schedule
CIO-SP3
Alliant Government Services
IT Professional Services

Risk Flags

Limited competition on delivery order
Time and materials pricing structure
Potential for cost overruns
Lack of explicit small business subcontracting goals

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $34.2 million to BOOZ ALLEN HAMILTON INC. IGF::CL::IGF

Who is the contractor on this award?

The obligated recipient is BOOZ ALLEN HAMILTON INC.

Which agency awarded this contract?

Awarding agency: General Services Administration (Federal Acquisition Service).

What is the total obligated amount?

The obligated amount is $34.2 million.

What is the period of performance?

Start: 2012-04-16. End: 2015-04-15.

What is the typical hourly rate for computer systems design services under similar GSA contracts?

Determining a precise 'typical' hourly rate for computer systems design services is complex due to variations in skill sets, experience levels, geographic locations, and specific contract vehicles. However, under GSA IT Schedule 70 (now IT Professional Services), rates for senior systems engineers or architects can range from $100 to $200+ per hour, depending on the specific labor category and the contractor's pricing. For time-and-materials contracts, the government negotiates hourly rates for different labor categories, including direct labor, indirect costs, and profit. Without the specific labor categories and negotiated rates for this Booz Allen Hamilton contract, a direct comparison is difficult. However, the $34.2 million total value over approximately three years suggests an average annual spend of over $11 million, which, depending on the number of full-time equivalents (FTEs) and their blended hourly rates, could fall within expected ranges for complex IT design work, provided efficient project management.

How does the time-and-materials (T&M) pricing structure compare to fixed-price contracts for IT services in terms of risk and value?

Time-and-materials (T&M) contracts are best suited for situations where the scope of work is not clearly defined or is expected to change, offering flexibility. However, they carry a higher risk of cost overruns for the government if not closely monitored, as the contractor is reimbursed for actual labor hours and materials used, plus a fixed fee or percentage for profit. Fixed-price contracts, conversely, offer greater cost certainty for the government, as the price is set upfront. The risk shifts to the contractor to complete the work within that price. For IT services, especially those involving design and development where requirements can evolve, T&M can be appropriate but requires stringent oversight, including labor hour limitations and regular reviews, to ensure value and prevent uncontrolled spending. Fixed-price contracts are generally preferred when requirements are well-defined to maximize cost control.

What are the potential implications of having only one bidder for this specific delivery order?

Having only one bidder for a specific delivery order, even under a competitively awarded IDIQ contract, significantly reduces the government's leverage in price negotiations and potentially limits access to innovative solutions. It suggests that either the specific requirements of the delivery order were too narrow, the timeframe for bidding was insufficient, or other potential bidders were not aware of or interested in the opportunity. This lack of competition can lead to higher prices than might be achieved in a multi-bidder scenario and may indicate that the government is not receiving the full benefit of market competition. It also raises questions about the effectiveness of the broader contract vehicle in stimulating robust competition at the task order level.

What is Booz Allen Hamilton's track record with GSA and similar IT services contracts?

Booz Allen Hamilton is a large, well-established government contractor with a significant presence across various federal agencies, including extensive work with the General Services Administration (GSA). They have a long history of providing IT consulting, systems engineering, and digital transformation services. Their track record includes numerous large-scale IT contracts, often involving complex systems integration and modernization efforts. While generally considered a capable provider, like any large contractor, they have been subject to scrutiny regarding contract performance and pricing on specific awards. Their extensive experience suggests familiarity with federal procurement processes and requirements, but the specific value and performance outcomes of individual contracts, like this one, still require diligent government oversight.

How does this contract's value compare to overall federal IT spending?

The total value of this contract, approximately $34.2 million, represents a relatively small fraction of the overall federal IT spending. The U.S. federal government spends hundreds of billions of dollars annually on IT products and services. For instance, in recent fiscal years, federal IT spending has often exceeded $100 billion per year. Therefore, while $34.2 million is a substantial sum for a single contract, it is a modest component within the vast landscape of federal IT investments. This contract likely supports a specific set of IT systems design needs for one or more agencies served by GSA, rather than representing a major agency-wide or government-wide IT initiative.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 02FM21110515

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

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

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: $69,414,238

Exercised Options: $41,611,183

Current Obligation: $34,196,579

Subaward Activity

Number of Subawards: 18

Total Subaward Amount: $10,805,139

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS00Q09BGD0019

IDV Type: GWAC

Timeline