DoD awards $78M for LASER/EO Systems Support, with Booz Allen Hamilton Inc. as prime contractor

Contract Overview

Contract Amount: $78,150,396 ($78.2M)

Contractor: Booz Allen Hamilton Inc

Awarding Agency: Department of Defense

Start Date: 2019-02-04

End Date: 2024-05-03

Contract Duration: 1,915 days

Daily Burn Rate: $40.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: LASER/EO SYSTEMS SUPPORT

Place of Performance

Location: DAHLGREN, KING GEORGE County, VIRGINIA, 22448

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $78.2 million to BOOZ ALLEN HAMILTON INC for work described as: LASER/EO SYSTEMS SUPPORT Key points: 1. Contract value of $78.15M over 5 years indicates significant investment in specialized engineering services. 2. Full and open competition suggests a robust market for these services, potentially driving competitive pricing. 3. The contract's duration and cost-plus-fixed-fee structure warrant scrutiny for cost control and performance incentives. 4. Engineering services (NAICS 541330) are critical for defense modernization and technological advancement. 5. The contract is positioned within the broader defense sector, supporting advanced sensor and laser technologies. 6. A significant number of bids (3) were received, suggesting healthy competition for this type of work.

Value Assessment

Rating: good

The contract value of $78.15M over approximately 5 years averages to about $15.6M annually. Benchmarking against similar large-scale engineering support contracts within the Department of Defense is necessary for a precise value-for-money assessment. However, the presence of multiple bidders in a full and open competition suggests that the pricing is likely within a competitive range. The cost-plus-fixed-fee (CPFF) pricing structure means that costs are reimbursed, plus a fixed fee, which can incentivize efficiency but also requires careful oversight to manage scope creep and ensure value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. Three bids were received, which suggests a moderate level of competition for this specialized engineering service. While three bidders is not exceptionally high, it does provide a basis for price comparison and negotiation. The open competition framework is designed to ensure that the government receives the best possible value by allowing a wide range of qualified contractors to participate.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to lower prices and higher quality services. The presence of multiple bidders helps ensure that the government is not overpaying for the services rendered.

Public Impact

The Department of Defense benefits from specialized engineering expertise to maintain and advance laser and electro-optical systems. This contract supports the development and sustainment of critical defense technologies, enhancing national security. The primary beneficiaries are military branches relying on advanced sensor and targeting systems. Workforce implications include employment for highly skilled engineers and technical specialists in the defense industry. Geographic impact is likely concentrated around defense installations and contractor facilities, primarily in Virginia.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contracts require diligent oversight to prevent cost overruns and ensure adherence to the fixed fee.
The long duration of the contract (1915 days) necessitates ongoing performance monitoring to ensure sustained quality and value.
Reliance on a single prime contractor for extensive support could create dependencies and potential risks if performance falters.

Positive Signals

Awarded under full and open competition, indicating a broad market engagement and potential for competitive pricing.
Multiple bidders (3) suggest that the contractor was selected from a pool of qualified and competitive offers.
The contract supports critical defense capabilities, aligning with national security objectives.

Sector Analysis

The defense sector, particularly within specialized engineering services, is characterized by high technological complexity and significant government investment. This contract for LASER/EO Systems Support falls within the broader category of defense electronics and advanced materials, a market driven by innovation and stringent performance requirements. Comparable spending benchmarks would involve analyzing other large-scale engineering support contracts for complex defense systems, often valued in the tens to hundreds of millions of dollars. The market size for such specialized services is substantial, reflecting the ongoing need for modernization and maintenance of sophisticated military hardware.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb: false'. Furthermore, the prime contractor, Booz Allen Hamilton Inc., is a large business. While there is no direct set-aside, the contract may still offer subcontracting opportunities for small businesses within the defense supply chain. The extent of these opportunities would depend on the prime contractor's subcontracting plan and the specific technical requirements of the support services.

Oversight & Accountability

Oversight for this contract is primarily the responsibility of the Department of the Navy, a component of the Department of Defense. Mechanisms likely include contract performance reviews, milestone tracking, and financial audits, especially given the Cost Plus Fixed Fee (CPFF) structure. Transparency is typically managed through contract reporting systems and official award notices. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract.

Related Government Programs

Defense Advanced Research Projects Agency (DARPA) research programs
Naval Sea Systems Command (NAVSEA) contracts
Air Force Research Laboratory (AFRL) contracts
Missile Defense Agency (MDA) programs
Tactical Technology and Systems Support Contracts

Risk Flags

Cost-plus-fixed-fee contract requires diligent oversight
Long contract duration necessitates sustained performance monitoring
Potential for contractor dependency
Need for clear scope definition to prevent overruns

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $78.2 million to BOOZ ALLEN HAMILTON INC. LASER/EO SYSTEMS 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 $78.2 million.

What is the period of performance?

Start: 2019-02-04. End: 2024-05-03.

What is the track record of Booz Allen Hamilton Inc. in delivering similar engineering support services to the Department of Defense?

Booz Allen Hamilton Inc. has a long-standing and extensive track record of providing a wide array of professional and technical services to the Department of Defense and other federal agencies. Their expertise spans areas such as systems engineering, cybersecurity, intelligence analysis, and program management. For laser and electro-optical (EO) systems support specifically, the company has been involved in numerous contracts related to the development, integration, testing, and sustainment of advanced defense technologies. Their historical performance data, available through federal procurement databases and agency performance reports, generally indicates a strong capability in managing complex projects and delivering technical solutions. However, as with any large contractor, specific contract performance can vary, and a detailed review of past performance on similar contracts would be prudent for a comprehensive assessment.

How does the $78.15M contract value compare to other LASER/EO systems support contracts awarded by the DoD?

The $78.15M contract value for LASER/EO Systems Support awarded to Booz Allen Hamilton Inc. is substantial, placing it among significant investments in specialized defense engineering. To benchmark this value, one would typically compare it against other contracts for similar services, focusing on scope, duration, and complexity. For instance, contracts for the research, development, testing, and sustainment of advanced sensor systems, electronic warfare, or directed energy technologies often fall within this multi-million dollar range. The Department of Defense frequently awards large contracts in these areas due to the high cost of R&D and the critical nature of these capabilities. While $78.15M is a considerable sum, it is not uncommon for major defense programs requiring specialized engineering expertise over several years.

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

The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract of this magnitude ($78.15M) and duration (approx. 5 years) revolve around cost control and contractor performance. For the government, the main risk is that the contractor may not be sufficiently incentivized to control costs, as all allowable costs are reimbursed. While the fixed fee provides a ceiling for profit, there's a potential for scope creep or less efficient execution if not managed rigorously. For the contractor, the risk lies in accurately estimating the costs to perform the work and deliver the fixed fee. If costs exceed estimates significantly, their profit margin shrinks. Effective risk mitigation requires robust government oversight, clear definition of work requirements, regular performance reviews, and strict adherence to the contract's terms and conditions to ensure value for money.

What is the expected impact of this contract on the development and deployment of advanced laser and electro-optical technologies within the DoD?

This contract is expected to have a significant positive impact on the development and deployment of advanced laser and electro-optical (EO) technologies within the DoD. By providing dedicated engineering support, it ensures that critical systems are maintained, upgraded, and potentially enhanced. This support is vital for keeping pace with technological advancements and ensuring that military platforms are equipped with state-of-the-art sensing, targeting, and communication capabilities. The contract likely facilitates the integration of new technologies, the resolution of complex technical challenges, and the sustainment of operational readiness for systems that rely on laser and EO components. Ultimately, it contributes to the DoD's strategic goals of maintaining technological superiority and enhancing warfighter effectiveness.

How has federal spending on LASER/EO Systems Support evolved over the past five years, and does this contract represent a trend?

Analyzing federal spending on LASER/EO Systems Support over the past five years requires access to detailed historical procurement data across all agencies. However, general trends in defense spending indicate a consistent and often increasing investment in advanced technologies, including laser and electro-optical systems. This is driven by evolving geopolitical landscapes, the need for enhanced situational awareness, precision targeting, and countermeasures. A $78.15M contract for such specialized support suggests that the DoD continues to prioritize these capabilities. Without specific historical data for this exact category, it's difficult to definitively state if this contract represents a trend, but it aligns with the broader pattern of sustained or growing investment in high-tech defense solutions.

What are the implications of awarding this contract to Booz Allen Hamilton Inc. in terms of market concentration for defense engineering services?

Awarding a significant contract like this to Booz Allen Hamilton Inc. has implications for market concentration within the defense engineering services sector. Booz Allen Hamilton is one of the largest and most established contractors in this space, possessing extensive resources, expertise, and existing relationships with government agencies. Their ability to secure large, complex contracts contributes to a market where a few major players dominate a substantial portion of the available work. While this concentration can offer stability and proven capability, it also raises questions about potential barriers to entry for smaller, innovative firms and the long-term effects on competition. However, the fact that this contract was competed under 'full and open' and received multiple bids suggests that the market, while potentially concentrated, still allows for competitive engagement.

Industry Classification

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

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N0017818R3006

Offers Received: 3

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Booz Allen Hamilton Holding Corporation

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

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $87,978,790

Exercised Options: $87,948,790

Current Obligation: $78,150,396

Actual Outlays: $12,507,640

Subaward Activity

Number of Subawards: 101

Total Subaward Amount: $11,860,198

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017804D4024

IDV Type: IDC

Timeline