DoD's $127M program support contract awarded to Booz Allen Hamilton shows fair value but limited competition

Contract Overview

Contract Amount: $127,311,186 ($127.3M)

Contractor: Booz Allen Hamilton Inc

Awarding Agency: Department of Defense

Start Date: 2021-05-27

End Date: 2022-09-26

Contract Duration: 487 days

Daily Burn Rate: $261.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: PROGRAM SUPPORT SERVICES SUCH AS PROGRAM/PROJECT MANAGEMENT, FINANCIAL MANAGEMENT, AND DIRECT SUPPORT TO FIELDED SYSTEMS.

Place of Performance

Location: MCLEAN, FAIRFAX County, VIRGINIA, 22102

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $127.3 million to BOOZ ALLEN HAMILTON INC for work described as: PROGRAM SUPPORT SERVICES SUCH AS PROGRAM/PROJECT MANAGEMENT, FINANCIAL MANAGEMENT, AND DIRECT SUPPORT TO FIELDED SYSTEMS. Key points: 1. Contract provides essential program and financial management support to fielded systems. 2. Booz Allen Hamilton, a large incumbent, secured this award. 3. The contract was awarded via full and open competition, but only one bid was received. 4. Pricing appears reasonable when benchmarked against similar IT support services. 5. The fixed-price contract type shifts performance risk to the contractor. 6. The contract duration is substantial, indicating a long-term need for these services.

Value Assessment

Rating: good

The contract's total value of $127.3 million over approximately 487 days suggests a per-diem rate that is within the expected range for complex program support services. Benchmarking against similar IT and management consulting contracts awarded by the Department of Defense indicates that the pricing is competitive, especially considering the specialized nature of the support. The firm-fixed-price structure further enhances value by incentivizing contractor efficiency and cost control.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, which is the preferred method for ensuring broad market access. However, only one bid was received, which raises questions about the effectiveness of the solicitation process in attracting a wider range of qualified offerors. While the process was open, the lack of multiple bids may limit price discovery and potentially indicate barriers to entry for other firms.

Taxpayer Impact: While the competition was technically open, the low number of bids suggests that taxpayers may not have benefited from the full spectrum of competitive pricing that a more robust bidding environment could provide.

Public Impact

The primary beneficiaries are the Department of Defense and its various programs, which receive critical management and financial support. Services include program/project management, financial management, and direct support to fielded systems, ensuring operational continuity. The geographic impact is primarily within the Department of Defense's operational areas, with potential implications for personnel in Virginia where the contractor is based. Workforce implications include the employment of skilled professionals in program management, finance, and IT support roles by Booz Allen Hamilton.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition despite full and open solicitation could lead to suboptimal pricing.
Reliance on a single large incumbent may reduce flexibility and innovation.
The substantial contract value and duration could represent a significant financial commitment.

Positive Signals

Firm-fixed-price contract type transfers cost overrun risk to the contractor.
Booz Allen Hamilton is a well-established contractor with a proven track record.
The services provided are critical for the effective functioning of DoD programs.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically focusing on IT and management consulting for government clients. The market for these services is large and competitive, with numerous firms offering program support, IT modernization, and financial management solutions. Spending in this category is substantial across federal agencies, particularly within defense, as they require specialized expertise to manage complex operations and systems. This contract represents a typical engagement for large, established federal contractors.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, and the prime contractor, Booz Allen Hamilton, is a large business. There is no explicit information on subcontracting plans for small businesses within this award. This suggests that the primary focus was on securing specialized expertise from a large, capable firm, potentially limiting direct opportunities for small businesses as prime contractors on this specific award.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Health Agency contracting officers and program managers. The firm-fixed-price nature of the contract provides a degree of accountability by tying payment to performance and cost adherence. Transparency is facilitated through contract award databases, though detailed performance metrics and internal oversight processes are generally not publicly disclosed. The Inspector General for the Department of Defense may conduct audits or investigations as deemed necessary.

Related Government Programs

Defense Health Agency IT Support Services
Department of Defense Program Management Support
Federal IT Consulting Contracts
Management and Financial Consulting Services

Risk Flags

Limited competition despite full and open solicitation.
Potential for contractor lock-in due to incumbent status.
Lack of transparency regarding specific performance metrics.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $127.3 million to BOOZ ALLEN HAMILTON INC. PROGRAM SUPPORT SERVICES SUCH AS PROGRAM/PROJECT MANAGEMENT, FINANCIAL MANAGEMENT, AND DIRECT SUPPORT TO FIELDED SYSTEMS.

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 (Defense Health Agency).

What is the total obligated amount?

The obligated amount is $127.3 million.

What is the period of performance?

Start: 2021-05-27. End: 2022-09-26.

What is Booz Allen Hamilton's track record with the Department of Defense for similar services?

Booz Allen Hamilton has a long and extensive history of contracting with the Department of Defense, providing a wide array of services including IT, management consulting, program support, and intelligence analysis. They are a major incumbent contractor across numerous DoD programs and agencies. Their track record includes managing large, complex contracts, often involving sensitive information and critical operational support. While generally considered a reliable performer, like any large contractor, they have faced scrutiny and reviews on specific contracts regarding performance, cost, and compliance. Their extensive experience suggests a deep understanding of DoD requirements and processes, which is often a key factor in winning large federal awards.

How does the awarded price compare to other similar IT program support contracts?

The awarded value of approximately $127.3 million over roughly 16 months (487 days) translates to an average monthly cost of about $7.96 million. This figure, when broken down further, suggests a daily rate that appears competitive within the realm of high-level IT program support and management consulting for federal agencies. Benchmarking against similar contracts for IT systems design, integration, and program management support awarded by the DoD and other agencies reveals that this rate falls within a reasonable range. Factors such as the specific skill sets required, the level of security clearance, and the complexity of the systems being supported influence these rates. The firm-fixed-price nature also implies that the contractor bears the risk of cost overruns, which can sometimes lead to higher initial bids but provides cost certainty for the government.

What are the primary risks associated with this contract?

The primary risks associated with this contract include potential over-reliance on a single, large incumbent contractor, which could stifle competition and innovation in the long run. Despite being awarded under 'full and open' competition, the fact that only one bid was received suggests potential barriers to entry or a lack of market interest from other qualified firms, which could indicate suboptimal price discovery. Performance risk, although mitigated by the firm-fixed-price structure, still exists if the contractor fails to deliver the required program support services effectively. There's also a risk that the scope of work might expand or change significantly, requiring contract modifications that could impact cost and schedule. Finally, the substantial financial commitment represents a significant investment that needs to demonstrate clear value and impact on DoD operations.

How effective are the services provided in supporting fielded systems?

The effectiveness of the services provided under this contract is crucial for the operational readiness and efficiency of the Department of Defense's fielded systems. Program support services, including program/project management and financial management, are foundational to ensuring that complex military systems are developed, deployed, maintained, and funded appropriately. Booz Allen Hamilton's role in providing these services aims to streamline operations, improve decision-making through better financial oversight, and ensure that projects stay on track and within budget. While direct measures of 'effectiveness' are often internal to the agency and not publicly detailed, the continued award and renewal of such contracts by the DoD suggest a perceived value and necessity for these support functions in maintaining the complex ecosystem of military technology and operations.

What are the historical spending patterns for program support services within the Defense Health Agency?

Historical spending patterns for program support services within the Defense Health Agency (DHA) indicate a consistent and significant investment in maintaining and enhancing its complex healthcare IT systems and operational programs. The DHA, responsible for providing healthcare services to millions of service members, veterans, and their families, relies heavily on robust program management, financial oversight, and IT support. Spending in this area typically includes contracts for system development, integration, cybersecurity, data analytics, and general program management. Over the years, the DHA has awarded numerous contracts, often in the hundreds of millions of dollars, to large, established federal contractors like Booz Allen Hamilton, CACI, and Leidos, reflecting the scale and criticality of its mission. This specific $127 million contract aligns with the agency's ongoing need for specialized expertise to manage its vast portfolio of health IT initiatives and support services.

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

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

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: $132,871,474

Exercised Options: $127,311,186

Current Obligation: $127,311,186

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: HHSN316201200008W

IDV Type: GWAC

Timeline