Booz Allen Hamilton awarded $88.6M contract for PEO Digital support services by the Department of the Navy

Contract Overview

Contract Amount: $88,602,470 ($88.6M)

Contractor: Booz Allen Hamilton Inc

Awarding Agency: Department of Defense

Start Date: 2023-09-29

End Date: 2026-09-28

Contract Duration: 1,095 days

Daily Burn Rate: $80.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: NAVWAR IS ACQUIRING PSS FOR THE PEO DIGITAL TO SUPPORT THE FOLLOWING DISCIPLINES: PROGRAM MANAGEMENT, ACQUISITION MANAGEMENT, FINANCIAL MANAGEMENT, CONTRACT MANAGEMENT, AND STRATEGIC MANAGEMENT.

Place of Performance

Location: WASHINGTON NAVY YARD, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20374

State: District of Columbia Government Spending

Plain-Language Summary

Department of Defense obligated $88.6 million to BOOZ ALLEN HAMILTON INC for work described as: NAVWAR IS ACQUIRING PSS FOR THE PEO DIGITAL TO SUPPORT THE FOLLOWING DISCIPLINES: PROGRAM MANAGEMENT, ACQUISITION MANAGEMENT, FINANCIAL MANAGEMENT, CONTRACT MANAGEMENT, AND STRATEGIC MANAGEMENT. Key points: 1. Contract provides essential program, acquisition, financial, contract, and strategic management support. 2. Full and open competition indicates a broad market search for qualified contractors. 3. The contract duration of 1095 days suggests a need for sustained, long-term support. 4. Cost Plus Fixed Fee (CPFF) pricing structure may incentivize contractor efficiency while managing costs. 5. The award to a single contractor, Booz Allen Hamilton, highlights their established presence in this domain. 6. Support is concentrated in Washington D.C., indicating a focus on the national capital region's defense infrastructure.

Value Assessment

Rating: good

The contract value of $88.6 million over three years for specialized program management and acquisition support appears reasonable given the scope. Benchmarking against similar large-scale support contracts for Program Executive Offices (PEOs) within the Department of Defense suggests this pricing is within expected ranges. The CPFF structure, while requiring careful oversight, allows for flexibility in addressing evolving program needs.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that the Navy actively sought proposals from a wide range of qualified vendors. The presence of multiple bidders (indicated by 'no': 3) is a positive sign for price discovery and ensures that the government received competitive offers. This approach typically leads to better value for the government.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that drives down prices and encourages innovation, ensuring that public funds are used efficiently.

Public Impact

The primary beneficiaries are the Program Executive Office (PEO) Digital and its associated programs, which will receive enhanced management and strategic guidance. Services delivered include critical program management, acquisition, financial, contract, and strategic management functions. The geographic impact is concentrated in Washington D.C., supporting key defense initiatives within the capital region. This contract will likely sustain or create high-skilled jobs in program management, acquisition, and financial analysis within the contractor's workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in CPFF contracts if not rigorously managed.
Reliance on a single contractor for critical support functions could pose a risk if performance falters.

Positive Signals

Awarded through full and open competition, indicating a robust selection process.
Contract duration suggests a stable, long-term need and commitment from the agency.
Booz Allen Hamilton is a well-established contractor with significant experience in government support services.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting defense program management and acquisition. The market for these services is substantial within the federal government, particularly for agencies like the Department of the Navy that manage complex, high-value programs. Comparable spending often involves large, multi-year contracts for strategic consulting and program support.

Small Business Impact

The data indicates this contract was not set aside for small businesses ('sb': false) and does not explicitly mention subcontracting requirements for small businesses. This suggests that the primary award went to a large business, and opportunities for small businesses would likely be through subcontracting if initiated by Booz Allen Hamilton.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy's contracting officers and program managers. Accountability measures are typically embedded within the contract's performance work statement and reporting requirements. Transparency is facilitated through contract award databases and public reporting, though specific performance metrics may be internal.

Related Government Programs

Department of Defense Program Management Support
Naval Sea Systems Command (NAVSEA) Support Contracts
Program Executive Office (PEO) Digital Services
Acquisition Management Support Services

Risk Flags

Cost Overrun Risk (CPFF)
Contractor Performance Dependency
Potential for Scope Creep

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $88.6 million to BOOZ ALLEN HAMILTON INC. NAVWAR IS ACQUIRING PSS FOR THE PEO DIGITAL TO SUPPORT THE FOLLOWING DISCIPLINES: PROGRAM MANAGEMENT, ACQUISITION MANAGEMENT, FINANCIAL MANAGEMENT, CONTRACT MANAGEMENT, AND STRATEGIC MANAGEMENT.

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 $88.6 million.

What is the period of performance?

Start: 2023-09-29. End: 2026-09-28.

What is Booz Allen Hamilton's track record with similar Department of Defense contracts?

Booz Allen Hamilton has an extensive track record with the Department of Defense, frequently securing large contracts for a wide array of services including management consulting, IT support, cybersecurity, and program management. They are a prime contractor on numerous IDIQs (Indefinite Delivery/Indefinite Quantity) and have held significant prime contracts across various military branches and defense agencies. Their history includes supporting major defense programs and initiatives, demonstrating a deep understanding of military operational needs and acquisition processes. This extensive experience positions them as a reliable, albeit costly, partner for complex government requirements.

How does the $88.6 million value compare to other PEO Digital support contracts?

The $88.6 million contract value for three years of support services for PEO Digital appears to be within the typical range for large-scale program management and strategic support contracts awarded to major defense contractors. PEOs often manage portfolios worth billions, requiring substantial contractor support for effective execution. While specific comparable contracts for PEO Digital might vary, similar contracts for other PEOs within the DoD have often ranged from tens to hundreds of millions of dollars over similar or longer durations. The value reflects the complexity and criticality of the services provided, encompassing strategic planning, financial oversight, and acquisition lifecycle management.

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 is the potential for cost overruns, as the contractor is reimbursed for allowable costs plus a fixed fee. While the fixed fee incentivizes efficiency, there's less direct financial incentive for the contractor to minimize costs compared to fixed-price contracts. This necessitates robust government oversight to ensure costs are reasonable, allocable, and allowable. The government bears the risk of cost increases, while the contractor is guaranteed a profit margin. For complex services like program management, where scope can evolve, CPFF offers flexibility but requires diligent monitoring by the agency to control expenditures.

How effective is 'full and open competition' in ensuring value for taxpayer money in this context?

Full and open competition is generally considered the most effective method for ensuring value for taxpayer money in federal contracting. By allowing all responsible sources to submit bids, it maximizes the pool of potential offerors, fostering a competitive environment that drives down prices and encourages innovation. In this case, the Navy's decision to use full and open competition for PEO Digital support suggests a commitment to obtaining the best possible services at the most competitive price. The presence of three bidders indicates a healthy level of competition, which typically leads to better price discovery and reduces the likelihood of paying inflated prices.

What is the historical spending trend for similar engineering and management support services within the Department of the Navy?

Historical spending trends for engineering and management support services within the Department of the Navy show a consistent and significant investment. Agencies like the Navy, responsible for complex platforms and systems, rely heavily on contractor support for program management, acquisition, engineering, and strategic planning. Spending in this category has generally been in the billions of dollars annually across the DoD, with specific allocations to PEOs representing a substantial portion. Factors such as evolving threats, technological advancements, and shipbuilding/modernization programs drive sustained demand and spending for these critical support functions. The trend indicates a long-term reliance on external expertise to augment organic capabilities.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering 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: N0003923R3003

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: $232,260,778

Exercised Options: $123,631,668

Current Obligation: $88,602,470

Actual Outlays: $271,126

Subaward Activity

Number of Subawards: 10

Total Subaward Amount: $16,528,589

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017819D7264

IDV Type: IDC

Timeline