Booz Allen Hamilton awarded $674M contract for defense support services, spanning over 5 years

Contract Overview

Contract Amount: $67,402,901 ($67.4M)

Contractor: Booz Allen Hamilton Inc

Awarding Agency: Department of Defense

Start Date: 1999-10-27

End Date: 2004-11-30

Contract Duration: 1,861 days

Daily Burn Rate: $36.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Place of Performance

Location: MCLEAN, FAIRFAX County, VIRGINIA, 22102

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $67.4 million to BOOZ ALLEN HAMILTON INC for work described as: Key points: 1. Contract value of $674 million over 5 years suggests significant, long-term support requirements. 2. Awarded under full and open competition, indicating a potentially competitive bidding process. 3. Cost Plus Fixed Fee (CPFF) contract type carries inherent risk of cost overruns. 4. Contract duration of 1861 days (approx. 5 years) allows for sustained program execution. 5. Booz Allen Hamilton's extensive experience in defense contracting likely influenced the award. 6. The contract's focus on 'VA' (likely Virginia) suggests a concentration of services in that region.

Value Assessment

Rating: fair

The contract value of $674 million over approximately five years averages to roughly $135 million annually. Without specific service details or benchmarks, it's challenging to definitively assess value for money. However, CPFF contracts can sometimes lead to higher costs compared to fixed-price arrangements if not managed tightly. Benchmarking against similar large-scale defense support contracts would be necessary for a more precise evaluation of pricing and value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' suggesting that all responsible sources were permitted to submit bids. The number of bidders is not specified, but this type of competition generally aims to foster price discovery and ensure the government receives competitive offers. The fact that it was competed broadly implies that multiple firms likely vied for this significant award.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it increases the likelihood of obtaining services at competitive prices, potentially saving taxpayer dollars through robust bidding.

Public Impact

The primary beneficiaries are likely the Department of Defense agencies requiring specialized support services. Services delivered are expected to encompass a broad range of technical, management, and professional support critical to defense operations. The geographic impact is concentrated in Virginia, where the contractor's Speciality is listed as 'VA'. Workforce implications include the potential for significant employment opportunities for Booz Allen Hamilton and its subcontractors within the defense sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) structure can incentivize contractor to increase costs to maximize fee.
Long contract duration (over 5 years) may reduce flexibility to adapt to changing requirements or technology.
Lack of specific performance metrics or service details makes it difficult to assess potential performance risks.
Concentration of services in a single geographic region (Virginia) could pose risks if unforeseen issues arise there.

Positive Signals

Awarded through full and open competition, suggesting a competitive process that should yield fair pricing.
Booz Allen Hamilton is a large, established contractor with significant experience in defense, indicating a lower risk of contractor failure.
The contract's duration allows for continuity of essential services to the Department of Defense.
The 'VA' specialty code might indicate a focus on specific, well-defined support areas, potentially leading to efficient service delivery.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically supporting defense-related activities. The market for defense contracting is substantial, with significant government spending allocated annually to firms like Booz Allen Hamilton for a wide array of support functions. This contract represents a notable portion of spending within this niche, reflecting the ongoing need for specialized expertise in national security.

Small Business Impact

The provided data indicates that small business participation (sb) was false, and there is no mention of a small business set-aside. This suggests the contract was not specifically targeted towards small businesses. Therefore, the primary impact on the small business ecosystem would likely be through subcontracting opportunities, if Booz Allen Hamilton chooses to engage small businesses for portions of the work. Without explicit subcontracting plans, the direct benefit to small businesses is uncertain.

Oversight & Accountability

Oversight for this contract would typically be managed by the awarding agency (Department of Defense) and potentially the Defense Contract Management Agency (DCMA), given its role in contract administration. Accountability measures are usually embedded within the contract terms, including performance standards and reporting requirements. Transparency is often facilitated through contract databases and public reporting, though specific operational details may remain sensitive. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense-wide Professional and Technical Support Services
Department of Defense Management and Consulting Services
Information Technology Support Services (Defense)
Logistics and Readiness Support (Defense)

Risk Flags

Cost Overrun Risk (CPFF)
Scope Creep Potential
Long-Term Dependency on Contractor
Lack of Specific Performance Metrics

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $67.4 million to BOOZ ALLEN HAMILTON INC. See the official description on USAspending.

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 Contract Management Agency).

What is the total obligated amount?

The obligated amount is $67.4 million.

What is the period of performance?

Start: 1999-10-27. End: 2004-11-30.

What specific services does Booz Allen Hamilton provide under this $674 million contract?

The provided data does not specify the exact services rendered under this contract, only that it falls under the 'VA' specialty and is for the Department of Defense. Typically, contracts of this magnitude awarded to firms like Booz Allen Hamilton involve a broad spectrum of support, potentially including strategic planning, systems engineering, IT support, cybersecurity, program management, intelligence analysis, and operational support. The Cost Plus Fixed Fee (CPFF) structure suggests services where the scope might be difficult to define precisely upfront or where innovation is expected, allowing for flexibility in cost reimbursement plus a predetermined profit.

How does the $674 million contract value compare to similar defense support contracts awarded to Booz Allen Hamilton or its competitors?

Without access to a comprehensive database of all defense contracts and their specific service categories, a direct comparison is difficult. However, $674 million over five years represents a significant award, averaging over $130 million annually. Booz Allen Hamilton is a major defense contractor, and it regularly secures large contracts. Competitors like SAIC, Leidos, and CACI also receive substantial awards in similar service areas. The value is substantial but not necessarily an outlier for a prime contractor of Booz Allen's size supporting a major federal agency like the DoD over a multi-year period.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract of this size and duration?

The primary risk with a CPFF contract is the potential for cost overruns. Since the contractor is reimbursed for allowable costs plus a fixed fee, there is less incentive to control costs compared to fixed-price contracts. If the contractor's costs escalate beyond initial estimates, the government pays more. For a contract of this size ($674M) and duration (over 5 years), the risk is amplified due to the extended period over which costs can accumulate. Effective government oversight, stringent cost accounting standards, and clear definition of allowable costs are crucial to mitigate this risk.

What is the historical spending pattern for similar defense support services provided by the Department of Defense?

The Department of Defense consistently represents the largest portion of federal spending on goods and services, with a significant amount allocated to professional, scientific, and technical services. Historical data shows billions of dollars spent annually on support contracts that encompass areas like IT, logistics, management consulting, and R&D. Spending in this category often fluctuates based on geopolitical events, modernization initiatives, and budget allocations. Contracts like this one are typical within the DoD's strategy to leverage external expertise for complex operational and strategic requirements.

What is Booz Allen Hamilton's track record with the Department of Defense, particularly on large CPFF contracts?

Booz Allen Hamilton has a long-standing and extensive track record as a prime contractor for the Department of Defense, having received billions of dollars in contracts over decades. They are a major player in providing a wide range of services, including IT, intelligence, and management consulting. While specific details on their performance on all CPFF contracts are not publicly itemized, their continued success in winning large, complex awards from the DoD suggests a generally positive performance history and strong relationship with the agency. However, like any large contractor, they may have faced scrutiny or challenges on specific contracts.

How does the 'VA' specialty code influence the understanding of this contract's purpose and potential risks?

The 'VA' specialty code, often associated with 'Virginia' in contract databases, suggests that the primary place of performance or the focus of the services is within the state of Virginia. This could imply support for major DoD installations or headquarters located there, such as the Pentagon or various Army, Navy, and Air Force commands. While not a direct indicator of risk, a geographic concentration can sometimes concentrate risks related to local factors (e.g., workforce availability, regional economic conditions) or simplify oversight if physical presence is required. It also suggests the contract is tied to specific operational needs within that region.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Contractor Details

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

Address: 8283 GREENSBORO DR, MC LEAN, VA, 22102

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline