DoD's $25.7M IT support contract awarded to Booz Allen Hamilton shows fair value, but limited competition raises concerns

Contract Overview

Contract Amount: $25,694,894 ($25.7M)

Contractor: Booz Allen Hamilton Inc

Awarding Agency: Department of Defense

Start Date: 2021-12-01

End Date: 2025-05-31

Contract Duration: 1,277 days

Daily Burn Rate: $20.1K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: NETC IT TDS-RRL SUPPORT

Place of Performance

Location: PENSACOLA, ESCAMBIA County, FLORIDA, 32509

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $25.7 million to BOOZ ALLEN HAMILTON INC for work described as: NETC IT TDS-RRL SUPPORT Key points: 1. Contract value appears reasonable given the scope of IT systems design and support services. 2. Competition was limited, with only one bid received, potentially impacting price discovery. 3. Risk indicators are moderate, with performance history and contract type needing close monitoring. 4. This contract supports critical IT infrastructure for the Department of the Navy. 5. The IT services sector is highly competitive, making limited competition unusual for this type of work.

Value Assessment

Rating: good

The contract's total value of $25.7 million over its period of performance appears to be within a reasonable range for comprehensive IT systems design and support services. Benchmarking against similar contracts for large-scale IT support within the Department of Defense suggests that the pricing structure, while not explicitly detailed here, is likely competitive. However, without more granular data on labor rates and specific deliverables, a definitive value-for-money assessment is challenging. The Cost Plus Fixed Fee (CPFF) structure necessitates careful oversight to ensure costs remain controlled.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded under a full and open competition, but only one bid was received. This limited competition scenario can sometimes lead to less favorable pricing for the government, as there is reduced pressure from competing proposals. While the initial competition was open, the outcome suggests potential barriers to entry or a lack of market interest from other qualified vendors for this specific requirement. Further analysis into the solicitation process and market research conducted by the agency would be beneficial to understand why only one bid was submitted.

Taxpayer Impact: A single bid limits the government's ability to negotiate the best possible price, potentially resulting in higher costs for taxpayers compared to a scenario with multiple competitive offers.

Public Impact

The Department of the Navy benefits from enhanced IT systems design and support, ensuring operational readiness. End-users within the Navy will experience improved IT services, potentially leading to increased efficiency. The contract's geographic impact is focused on Florida, where the contractor's services will be delivered. While not a direct job creation contract, it sustains high-skilled IT professional roles within Booz Allen Hamilton.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may lead to suboptimal pricing.
Cost Plus Fixed Fee contracts require robust oversight to prevent cost overruns.
Dependence on a single contractor for critical IT support could pose a risk if performance issues arise.

Positive Signals

Awarded to a well-established contractor with a strong track record in government IT services.
Contract duration provides stability for critical IT infrastructure support.
Services are essential for maintaining the operational capabilities of the Department of the Navy.

Sector Analysis

The IT services sector is a vast and dynamic market, with government spending on IT solutions representing a significant portion. This contract falls under computer systems design services, a sub-sector that includes planning and designing computer systems that integrate hardware, software, and communication technologies. The market is characterized by a mix of large prime contractors and specialized small businesses. Government agencies often rely on these services for modernization, cybersecurity, and operational efficiency. Benchmarks for similar IT support contracts can vary widely based on complexity, duration, and specific service requirements.

Small Business Impact

This contract does not appear to have a small business set-aside. Given the nature of the services and the prime contractor, there is no explicit indication of subcontracting opportunities for small businesses within this specific award. Further review of the contract's subcontracting plan, if applicable, would be necessary to determine any potential impact on the small business ecosystem.

Oversight & Accountability

Oversight for this Cost Plus Fixed Fee contract would typically involve the Department of the Navy's contracting officer and administrative contracting officer. They are responsible for monitoring contractor performance, ensuring compliance with contract terms, and reviewing costs incurred. Transparency is generally maintained through contract reporting requirements. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Department of Defense IT Modernization Programs
Navy Enterprise IT Services
Computer Systems Design Services Contracts
IT Support Services for Federal Agencies

Risk Flags

Limited Competition
Cost Plus Fixed Fee Contract Type
Potential for Cost Overruns

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $25.7 million to BOOZ ALLEN HAMILTON INC. NETC IT TDS-RRL 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 $25.7 million.

What is the period of performance?

Start: 2021-12-01. End: 2025-05-31.

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

Booz Allen Hamilton has a long-standing and extensive track record of providing IT support and systems integration services to the Department of Defense (DoD) and its various branches, including the Department of the Navy. They are a major government contractor known for their expertise in areas such as cybersecurity, data analytics, cloud computing, and enterprise IT modernization. Their history with the DoD includes numerous large-scale contracts supporting complex defense systems and operations. While specific performance metrics for this particular contract are not detailed here, Booz Allen Hamilton's general performance with the DoD is typically characterized by their ability to handle complex technical challenges and manage large programs, though like any large contractor, they may have faced specific performance reviews or challenges on individual contracts over time.

How does the pricing structure of this Cost Plus Fixed Fee (CPFF) contract compare to other IT support contracts?

Cost Plus Fixed Fee (CPFF) contracts are common for IT services where the scope of work may evolve or is difficult to define precisely at the outset. In a CPFF contract, the government reimburses the contractor for allowable costs plus a fixed fee representing profit. Compared to fixed-price contracts, CPFF can offer more flexibility but carries a higher risk of cost overruns if not managed diligently. Benchmarking CPFF contracts requires detailed analysis of the "cost" component, including labor rates, overhead, and direct expenses, against similar services. Without that granular data, it's difficult to definitively state if the pricing is superior or inferior to other IT support contracts. However, the "fixed fee" portion is intended to provide the contractor with a predictable profit margin, which, when combined with competitive bidding, should theoretically lead to reasonable overall costs.

What are the primary risks associated with a sole-source or limited-competition IT support contract?

The primary risks associated with a sole-source or limited-competition IT support contract include reduced price competition, potentially leading to higher costs for the government. There's also a risk of complacency from the contractor, as the lack of competitive pressure might reduce incentives for innovation or exceptional performance. Furthermore, a limited vendor pool could mean the government is reliant on a single entity's capabilities, potentially creating vulnerabilities if that contractor faces financial difficulties, performance issues, or strategic shifts. This dependence can also limit the government's ability to adapt to new technologies or service providers if the incumbent contractor's offerings become outdated or less efficient.

How effective is this contract likely to be in ensuring the Department of the Navy's IT operational readiness?

The effectiveness of this contract in ensuring the Department of the Navy's IT operational readiness hinges on several factors. Firstly, the contractor, Booz Allen Hamilton, has a strong reputation for IT services, suggesting a high likelihood of competent execution. Secondly, the contract's duration (over 4 years) provides continuity for critical IT systems. However, the CPFF structure necessitates rigorous oversight to ensure that costs are managed effectively and that the services delivered directly contribute to readiness goals. The limited competition is a potential concern, as it might mean the Navy isn't leveraging the full spectrum of available IT solutions or achieving the most cost-effective support. Ultimately, effectiveness will be measured by the contractor's ability to maintain, upgrade, and secure the Navy's IT infrastructure as required.

What are the historical spending patterns for similar IT support services within the Department of the Navy?

Historical spending patterns for IT support services within the Department of the Navy (DoN) generally show a significant and consistent investment in maintaining and modernizing its vast IT infrastructure. The DoN, like other branches of the DoD, relies heavily on robust IT systems for command, control, intelligence, logistics, and personnel management. Spending in this category typically includes a mix of hardware, software, cybersecurity, network management, and professional IT services. Contracts for systems design and support, similar to this one, are common and often awarded through competitive processes, though sole-source or limited-competition awards do occur for specialized needs or during specific circumstances. The overall trend has been towards increased spending on advanced IT capabilities, including cloud migration, data analytics, and AI, reflecting the evolving technological landscape and defense requirements.

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 › IT AND TELECOM - IT MANAGEMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0018921RZ032

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: $25,694,894

Exercised Options: $25,694,894

Current Obligation: $25,694,894

Subaward Activity

Number of Subawards: 8

Total Subaward Amount: $6,204,354

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0018921DZ046

IDV Type: IDC

Timeline