Department of the Navy awards $22.6M IT support contract to Booz Allen Hamilton, a sole-source procurement

Contract Overview

Contract Amount: $22,578,696 ($22.6M)

Contractor: Booz Allen Hamilton Inc

Awarding Agency: Department of Defense

Start Date: 2016-09-25

End Date: 2018-11-30

Contract Duration: 796 days

Daily Burn Rate: $28.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: BASE PERIOD - NETC IM/IT SUPPORT SVCS. IGF::OT::IGF

Place of Performance

Location: MCLEAN, FAIRFAX County, VIRGINIA, 22102

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $22.6 million to BOOZ ALLEN HAMILTON INC for work described as: BASE PERIOD - NETC IM/IT SUPPORT SVCS. IGF::OT::IGF Key points: 1. Contract awarded on a sole-source basis, limiting competitive pricing benefits. 2. IT support services are critical for naval operations and readiness. 3. The contract duration of 796 days suggests a need for sustained support. 4. Performance period falls within a period of significant defense spending. 5. The contractor, Booz Allen Hamilton, is a large, established firm in the federal IT space. 6. The contract type (Cost Plus Fixed Fee) can incentivize cost overruns if not closely managed.

Value Assessment

Rating: fair

The contract value of $22.6 million for approximately 2.6 years of IT support services appears within a reasonable range for large-scale federal IT contracts. However, without a competitive bidding process, it is difficult to benchmark the true value for money. The Cost Plus Fixed Fee (CPFF) contract type, while allowing for flexibility, carries inherent risks of cost escalation if not rigorously monitored by the agency. Comparisons to similar IT support contracts are limited due to the sole-source nature of this award.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor possesses the necessary capabilities or when urgency dictates a rapid award. The lack of competition means that the government did not benefit from the price discovery and innovation that typically arises from a competitive bidding environment. This can potentially lead to higher costs for taxpayers.

Taxpayer Impact: Sole-source awards limit the government's ability to secure the best possible pricing through competition, potentially resulting in higher expenditures for taxpayers compared to a fully competed contract.

Public Impact

Naval personnel benefit from reliable IT systems and support, enhancing operational efficiency. Essential IT infrastructure and systems maintenance are delivered to the Department of the Navy. Services are primarily delivered within Virginia, supporting the Navy's East Coast operations. The contract supports a team of IT professionals, contributing to the federal IT workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Cost Plus Fixed Fee contract type can lead to cost overruns if not managed effectively.
Lack of transparency in the justification for sole-source award.

Positive Signals

Contract awarded to a well-established and experienced IT services provider.
Services are critical for maintaining naval IT infrastructure and operational readiness.
Contract duration suggests a stable, long-term need for these services.

Sector Analysis

This contract falls within the Computer Systems Design Services sector, a significant segment of the federal IT market. The Department of Defense is a major consumer of these services, utilizing them for everything from network management to software development and cybersecurity. The market for IT support services is highly competitive, with numerous large and small businesses vying for federal contracts. However, sole-source awards bypass this competitive landscape for specific needs.

Small Business Impact

This contract was not set aside for small businesses, nor does it indicate any specific subcontracting requirements for small businesses. The award to Booz Allen Hamilton, a large prime contractor, suggests that the primary focus was on the prime's capabilities rather than fostering small business participation through this specific procurement vehicle. Further analysis would be needed to determine if subcontracting opportunities exist within the awarded contract.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. The Cost Plus Fixed Fee structure necessitates close monitoring of costs and performance to ensure value for money. While specific Inspector General (IG) involvement is not detailed, the DoD IG has broad jurisdiction over defense contracts. Transparency regarding the justification for the sole-source award and ongoing performance metrics would enhance accountability.

Related Government Programs

Department of Defense IT Services
Naval Information Technology Support
Computer Systems Design Services
Sole Source IT Procurements

Risk Flags

Sole-source award
Cost-plus contract type
Lack of competitive bidding

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.6 million to BOOZ ALLEN HAMILTON INC. BASE PERIOD - NETC IM/IT SUPPORT SVCS. IGF::OT::IGF

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 $22.6 million.

What is the period of performance?

Start: 2016-09-25. End: 2018-11-30.

What was the specific justification provided by the Department of the Navy for awarding this IT support contract on a sole-source basis to Booz Allen Hamilton?

The provided data does not include the specific justification for the sole-source award. Typically, sole-source procurements are justified under circumstances such as the existence of only one responsible source, urgent and compelling needs, or when a specific technological capability is uniquely held by a single contractor. Without the official justification document (e.g., a Justification and Approval for Other Than Full and Open Competition - J&A), it is impossible to ascertain the precise rationale. This lack of transparency is a common concern with sole-source awards, as it limits the public's understanding of why competitive processes were bypassed and potentially higher costs were incurred.

How does the Cost Plus Fixed Fee (CPFF) contract type compare to other contract types in terms of risk and potential for cost savings for the government in IT support services?

The Cost Plus Fixed Fee (CPFF) contract type is characterized by the government reimbursing the contractor for all allowable costs incurred, plus a predetermined fixed fee representing profit. This structure is often used when the scope of work is not precisely defined or when there is uncertainty about the costs involved, such as in research and development or complex IT services. While it allows for flexibility and can be beneficial when requirements evolve, it carries a higher risk of cost overruns for the government compared to fixed-price contracts. The contractor has less incentive to control costs since their profit (the fixed fee) is not directly tied to cost savings. In contrast, Firm-Fixed-Price (FFP) contracts offer the greatest potential for cost savings as the contractor bears all cost risks and is motivated to perform efficiently to maximize profit. However, FFP contracts require a well-defined scope of work. Other cost-reimbursement types, like Cost Plus Incentive Fee (CPIF), can introduce cost-control incentives by adjusting the fee based on performance against targets.

What is Booz Allen Hamilton's track record with the Department of the Navy for IT support services, and have there been any significant performance issues or contract disputes?

Booz Allen Hamilton is a large and established government contractor with a significant presence across various federal agencies, including the Department of Defense and the Department of the Navy. They have a broad portfolio of IT and management consulting services. While specific performance issues or contract disputes related to this particular contract (NETC IM/IT SUPPORT SVCS) are not detailed in the provided data, large contractors often have a history of numerous contracts, some of which may involve performance reviews, contract modifications, or occasional disputes. A comprehensive review of contract performance databases (like the Federal Procurement Data System - FPDS) and any available contract award histories or past performance evaluations would be necessary to assess their specific track record with the Navy for similar IT support services and identify any notable issues.

Considering the $22.6 million award value and the 796-day duration, what is the approximate average annual spending on IT support services for this specific contract?

To calculate the approximate average annual spending, we divide the total contract value by the duration in years. The contract value is $22,578,695.60, and the duration is 796 days. First, convert the duration to years: 796 days / 365.25 days/year ≈ 2.18 years. Then, divide the total value by the duration in years: $22,578,695.60 / 2.18 years ≈ $10,357,199.82 per year. Therefore, the approximate average annual spending on IT support services for this contract is roughly $10.36 million. This figure provides a benchmark for understanding the scale of annual investment in these services under this specific award.

What are the potential implications of awarding a sole-source IT support contract to a large incumbent contractor like Booz Allen Hamilton on future competition for similar services?

Awarding a sole-source contract to a large incumbent contractor like Booz Allen Hamilton can have several implications for future competition. Firstly, it may reinforce the contractor's position and knowledge of the agency's specific systems and needs, potentially making it harder for new or smaller competitors to enter the market in the future. Incumbency can create a barrier to entry, as competitors may lack the intimate understanding of the environment that the incumbent possesses. Secondly, if the sole-source award was justified by unique capabilities, it might signal to the market that the agency values those specific capabilities, potentially leading other firms to invest in similar areas. However, without a competitive process, the agency misses opportunities to foster a broader base of qualified vendors and potentially drive down prices through market forces. It can also create a perception that the agency favors established relationships over open competition.

Industry Classification

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

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0018916RZ093

Offers Received: 1

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: $22,578,696

Exercised Options: $22,578,696

Current Obligation: $22,578,696

Subaward Activity

Number of Subawards: 9

Total Subaward Amount: $976,071

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline