Booz Allen Hamilton awarded $20.8M for computer systems design, facing strong competition

Contract Overview

Contract Amount: $20,850,365 ($20.9M)

Contractor: Booz Allen Hamilton Inc

Awarding Agency: Department of Defense

Start Date: 2018-12-01

End Date: 2020-12-14

Contract Duration: 744 days

Daily Burn Rate: $28.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: LABOR

Place of Performance

Location: MCLEAN, FAIRFAX County, VIRGINIA, 22102

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $20.9 million to BOOZ ALLEN HAMILTON INC for work described as: LABOR Key points: 1. Contract value of $20.8M for computer systems design services. 2. Awarded to Booz Allen Hamilton Inc. by the Department of Defense. 3. Contract type is Cost Plus Fixed Fee. 4. Duration of 744 days (approximately 2 years). 5. Full and open competition was utilized. 6. Delivery Order under a larger contract vehicle. 7. Services provided under NAICS code 541512. 8. Small business set-aside was not applicable.

Value Assessment

Rating: good

The contract value of $20.8 million for computer systems design services appears reasonable given the duration of approximately two years. Benchmarking against similar contracts for IT services by the Department of Defense is necessary for a precise value-for-money assessment. However, the Cost Plus Fixed Fee (CPFF) contract type suggests that costs are reimbursed, with a fixed fee for profit, which can be less cost-effective than fixed-price contracts if not managed carefully. The number of bids received (3) indicates a moderate level of competition, which typically helps in achieving fair pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit a bid. Three bids were received for this delivery order. While three bidders represent some level of competition, it is on the lower end for a contract of this potential value and scope. A higher number of bidders could potentially lead to more aggressive pricing and a wider range of innovative solutions.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages a broader range of offers and can drive down prices through market forces. However, with only three bidders, the potential for significant cost savings may be limited compared to scenarios with more robust competition.

Public Impact

The Department of Defense benefits from enhanced computer systems design capabilities. Services likely support critical defense operations and infrastructure. The geographic impact is primarily within Virginia, where the contract is managed. Workforce implications include employment for skilled IT professionals at Booz Allen Hamilton.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

CPFF contract type can lead to cost overruns if not closely monitored.
Limited competition (3 bidders) may not have secured the best possible price.
Potential for scope creep in cost-reimbursable contracts.

Positive Signals

Awarded through full and open competition, ensuring broad market access.
Booz Allen Hamilton is a well-established contractor with significant experience.
Delivery order structure suggests it's part of a pre-competed vehicle, potentially streamlining acquisition.

Sector Analysis

The computer systems design services sector is a critical component of the IT industry, supporting government and commercial entities in developing and maintaining complex technological infrastructures. The Department of Defense is a major consumer of these services, investing heavily in modernizing its systems. Spending in this sector is characterized by high demand for specialized expertise and often involves large, long-term contracts. Comparable spending benchmarks would involve analyzing other large IT service contracts awarded by DoD for similar system design and integration work.

Small Business Impact

This contract was not set aside for small businesses, and the data indicates no subcontracting goals were specified. Booz Allen Hamilton is a large business. The absence of small business participation in this specific award means that opportunities for small businesses to contribute to this particular project were not actively pursued through set-asides. This does not preclude small businesses from participating in other DoD contracts or through subcontracting on different awards.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The Cost Plus Fixed Fee structure necessitates rigorous financial oversight to monitor costs and ensure the fixed fee remains appropriate. Transparency is generally maintained through contract reporting systems, though specific details of performance metrics and cost breakdowns may be sensitive.

Related Government Programs

Department of Defense IT Modernization Programs
Defense Contract Management Agency Support Services
Computer Systems Design and Integration Contracts
Cost Plus Fixed Fee Service Contracts

Risk Flags

Cost Plus Fixed Fee contract type requires diligent oversight.
Limited number of bidders (3) may impact optimal price discovery.
Contract duration and scope require careful management to prevent overruns.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.9 million to BOOZ ALLEN HAMILTON INC. LABOR

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 $20.9 million.

What is the period of performance?

Start: 2018-12-01. End: 2020-12-14.

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

Booz Allen Hamilton Inc. has a long and extensive history of contracting with the Department of Defense (DoD) across a wide array of IT and professional services. They are a prime contractor on numerous large IDIQ (Indefinite Delivery/Indefinite Quantity) vehicles and have been awarded billions of dollars in contracts over the years. Their experience spans areas such as systems engineering, cybersecurity, data analytics, cloud migration, and IT modernization. For computer systems design services specifically (NAICS 541512), they have consistently secured significant awards. A review of their DoD contract history would likely show a pattern of successful performance, though like any large contractor, specific contract performance reviews can vary. Their established presence suggests a deep understanding of DoD requirements and processes.

How does the $20.8 million value compare to similar computer systems design contracts awarded by the DoD?

The $20.8 million value for this 744-day (approximately 2-year) contract for computer systems design services is within a common range for large IT service delivery orders issued by the Department of Defense. DoD frequently awards contracts in the tens to hundreds of millions of dollars for complex IT projects, including system design, integration, and modernization. Factors influencing this value include the scope of work, the level of technical expertise required, the number of personnel involved, and the duration. While this specific award is substantial, it is not exceptionally large compared to some of the mega-contracts awarded for enterprise-wide IT solutions or major defense system development. A more precise comparison would require analyzing contracts with identical or highly similar NAICS codes, service descriptions, and contract types (CPFF) awarded within a similar timeframe.

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

The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract, such as this $20.8 million award, revolve around cost control and potential for contractor inefficiency. In a CPFF arrangement, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing their profit. The main risk for the government is that the contractor may have less incentive to control costs rigorously, as cost overruns directly increase the total amount paid (though the fee remains fixed). This can lead to the project exceeding its estimated cost ceiling. Additionally, defining and managing the 'scope of work' can be challenging, potentially leading to scope creep where additional work is performed without adequate adjustments to the contract. Effective government oversight and robust cost accounting standards are crucial to mitigate these risks.

What does the utilization of 'Full and Open Competition' with only 3 bidders imply for price discovery?

The utilization of 'Full and Open Competition' signifies that the government sought offers from all eligible sources, which is the preferred method for maximizing competition. However, receiving only three bids for this $20.8 million contract suggests that the market for this specific service, under these particular requirements and contract vehicle, may be somewhat limited, or that the solicitation process may have deterred additional bidders. While three bidders provide a basis for price comparison and negotiation, it represents a moderate level of competition. Ideally, a larger number of bidders would create more downward pressure on pricing through competitive dynamics. The government's negotiation position is strengthened by having multiple offers, but the potential for achieving the absolute lowest price might be constrained compared to a scenario with, for example, five or more competitive bids.

How has federal spending on computer systems design services (NAICS 541512) trended over the past five years?

Federal spending on computer systems design services, categorized under NAICS code 541512, has generally shown a consistent upward trend over the past five years, driven by the ongoing need for digital transformation, modernization of legacy systems, and cybersecurity enhancements across various government agencies. The Department of Defense, as a major technology consumer, is a significant contributor to this spending. While specific year-over-year fluctuations occur due to budget cycles and the awarding of large contracts, the overall trajectory indicates sustained investment in IT infrastructure and services. Factors such as increased reliance on cloud computing, big data analytics, and artificial intelligence have further fueled demand. This particular $20.8 million award to Booz Allen Hamilton fits within this broader pattern of substantial federal investment in IT services.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N0018918RZ031

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: $21,758,200

Exercised Options: $21,758,200

Current Obligation: $20,850,365

Actual Outlays: $2,406,932

Subaward Activity

Number of Subawards: 19

Total Subaward Amount: $2,781,351

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0018918DZ067

IDV Type: IDC

Timeline