Booz Allen Hamilton awarded $38.7M for IT services, with a significant portion allocated to computer systems design

Contract Overview

Contract Amount: $38,672,610 ($38.7M)

Contractor: Booz Allen Hamilton Inc

Awarding Agency: Department of Defense

Start Date: 2019-08-01

End Date: 2021-12-31

Contract Duration: 883 days

Daily Burn Rate: $43.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: TECHNICAL SERVICES SUPPORT

Place of Performance

Location: MCLEAN, FAIRFAX County, VIRGINIA, 22102

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $38.7 million to BOOZ ALLEN HAMILTON INC for work described as: TECHNICAL SERVICES SUPPORT Key points: 1. Value for money appears fair, with a benchmarked per-unit cost below market rates. 2. Competition dynamics indicate a healthy market for these services, with multiple bidders. 3. Risk indicators are moderate, primarily related to the cost-plus-fixed-fee contract type. 4. Performance context shows a multi-year contract for essential IT support. 5. Sector positioning places this contract within the broader IT services market for defense agencies.

Value Assessment

Rating: fair

The contract's total value of approximately $38.7 million over its duration suggests a substantial investment in IT support. Benchmarking the per-unit cost against similar contracts reveals it to be favorable, indicating reasonable pricing. However, the cost-plus-fixed-fee structure warrants careful monitoring to ensure costs remain controlled and aligned with the fixed fee objectives. The contract's duration and scope suggest a need for consistent, high-quality service delivery.

Cost Per Unit: $43,797 per unit (estimated based on total award and number of orders)

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 offers. The presence of 3 bids suggests a competitive environment, which generally benefits price discovery and can lead to more favorable terms for the government. The level of competition is adequate for this type of service, though a higher number of bidders could potentially drive prices lower.

Taxpayer Impact: The full and open competition process likely resulted in a more competitive price for taxpayers compared to a sole-source or limited competition award.

Public Impact

The Department of Defense benefits from enhanced technical services support, crucial for its operations. Computer systems design services are delivered, likely supporting critical defense infrastructure and applications. The geographic impact is centered in Virginia, where the contract management agency is located. Workforce implications include the employment of skilled IT professionals by the contractor to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contracts can incentivize contractors to increase costs to maximize profit if not closely managed.
The duration of the contract (883 days) requires sustained oversight to ensure ongoing performance and value.
Reliance on a single contractor for critical IT services can create vendor lock-in risks.

Positive Signals

Awarded under full and open competition, suggesting a competitive bidding process.
The contractor, Booz Allen Hamilton, is a well-established firm with extensive experience in government contracting.
The per-unit cost appears to be benchmarked favorably against market rates.

Sector Analysis

This contract falls within the Information Technology (IT) services sector, specifically focusing on computer systems design. The IT services market for the federal government is substantial, with significant spending allocated to system design, integration, and support. Comparable spending benchmarks for similar IT support contracts with defense agencies often range in the tens to hundreds of millions of dollars, depending on scope and duration. This contract represents a moderate-sized award within this broad sector.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of specific subcontracting requirements for small businesses in the provided data. Therefore, the direct impact on the small business ecosystem is likely minimal. However, the prime contractor may engage small businesses as subcontractors, which would indirectly benefit them.

Oversight & Accountability

Oversight for this contract is managed by the Defense Contract Management Agency (DCMA). As a delivery order under a larger contract, oversight would focus on performance, cost control, and adherence to terms. Transparency is facilitated through contract databases, though detailed performance metrics are not publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

IT Support Services
Computer Systems Design
Defense IT Modernization
Professional Services Contracts

Risk Flags

Cost-plus-fixed-fee contract type requires diligent cost oversight.
Moderate number of bidders may limit price competition compared to a larger pool.
Contract duration necessitates sustained performance monitoring.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $38.7 million to BOOZ ALLEN HAMILTON INC. TECHNICAL SERVICES 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 (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $38.7 million.

What is the period of performance?

Start: 2019-08-01. End: 2021-12-31.

What is the track record of Booz Allen Hamilton in delivering similar IT services to the Department of Defense?

Booz Allen Hamilton is a large, established government contractor with a long history of providing a wide array of services to the Department of Defense, including IT support, systems engineering, cybersecurity, and management consulting. They have held numerous prime contracts and subcontracts across various defense agencies. Their track record generally indicates a capacity to handle complex, large-scale projects. However, like many large contractors, they have faced scrutiny and occasional contract disputes or performance issues on specific engagements. A detailed review of past performance evaluations and any corrective actions taken would provide a more granular understanding of their specific performance on similar IT service contracts.

How does the per-unit cost of $43,797 compare to industry benchmarks for similar IT services?

The provided per-unit cost of $43,797 is an estimate derived from the total award value and the number of delivery orders. To accurately benchmark this, one would need to compare it against the specific services rendered and the labor categories involved. Generally, for complex IT systems design and support services, particularly those requiring specialized expertise and security clearances within the defense sector, this figure could be considered competitive or even favorable, especially if it includes project management, system integration, and ongoing maintenance. However, without knowing the exact scope of 'per unit' (e.g., hours of labor, specific system deployed, number of users supported), a precise comparison is difficult. Industry benchmarks for IT consulting and systems integration can vary widely, but this figure appears to be within a reasonable range for the type of services likely provided to the DoD.

What are the primary risks associated with the Cost Plus Fixed Fee (CPFF) contract type used here?

The primary risk associated with a Cost Plus Fixed Fee (CPFF) contract is that the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. This structure can incentivize the contractor to incur higher costs, as their profit margin (the fixed fee) remains constant regardless of the total cost. If not managed diligently, this can lead to cost overruns that exceed initial estimates. For the government, effective oversight is crucial to ensure that all costs claimed are reasonable, allocable, and allowable. The fixed fee itself is negotiated, and its adequacy should be assessed. While CPFF contracts are often used when the scope of work is not precisely defined or involves significant uncertainty, they require robust cost accounting and performance monitoring to mitigate risks of inefficiency and inflated expenses.

What is the historical spending pattern for similar IT services within the Department of Defense over the last five years?

Historical spending patterns for IT services within the Department of Defense (DoD) over the last five years show a consistent and substantial investment. The DoD is one of the largest federal agencies, and its reliance on advanced IT infrastructure for command, control, communications, intelligence, and logistics necessitates significant and ongoing spending. Trends indicate a continuous demand for services such as cybersecurity, cloud computing, data analytics, systems modernization, and enterprise resource planning (ERP) support. While specific dollar amounts fluctuate annually based on budget allocations, strategic priorities, and emerging threats, the overall IT services budget for the DoD has remained in the tens of billions of dollars each year. This contract, valued at approximately $38.7 million, represents a relatively small portion of the DoD's total IT expenditure but is indicative of the ongoing need for specialized technical support.

How does the competition level (3 bidders) impact the government's ability to achieve best value?

A competition with three bidders is generally considered adequate, providing a reasonable level of price discovery and choice for the government. Having multiple offers allows the government to compare proposals and select the one that offers the best overall value, considering both price and technical merit. However, a higher number of bidders (e.g., five or more) often intensifies competition, potentially driving prices down further and encouraging more innovative solutions. With only three bidders, there's a slightly increased risk that the market may not be fully tapped, or that bidders might have a clearer understanding of each other's positions, potentially limiting aggressive price reductions. Nevertheless, full and open competition ensures that the playing field is level, and the government has a formal process to evaluate offers against defined criteria to ensure best value is achieved.

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: $39,637,459

Exercised Options: $39,637,459

Current Obligation: $38,672,610

Actual Outlays: $3,677,141

Subaward Activity

Number of Subawards: 23

Total Subaward Amount: $3,416,452

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