DoD's $43.4M IT support contract to Booz Allen Hamilton shows fair value, but limited competition raises concerns

Contract Overview

Contract Amount: $43,396,797 ($43.4M)

Contractor: Booz Allen Hamilton Inc

Awarding Agency: Department of Defense

Start Date: 2022-05-20

End Date: 2024-05-24

Contract Duration: 735 days

Daily Burn Rate: $59.0K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: TECHNICAL SERVICES SUPPORT CIO SUPPORT OPNAV N1

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22204

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $43.4 million to BOOZ ALLEN HAMILTON INC for work described as: TECHNICAL SERVICES SUPPORT CIO SUPPORT OPNAV N1 Key points: 1. Contract awarded via full and open competition, indicating a broad search for qualified vendors. 2. The contract's value appears reasonable when benchmarked against similar IT support services. 3. Potential for cost overruns exists due to the Cost Plus Fixed Fee pricing structure. 4. The contractor, Booz Allen Hamilton, has a significant track record with the federal government. 5. This contract supports critical IT functions for the Navy's personnel command. 6. The relatively short duration of the contract suggests a need for ongoing, agile support. 7. No small business set-aside was utilized, potentially limiting opportunities for smaller firms.

Value Assessment

Rating: good

The contract's total value of approximately $43.4 million over two years appears to be within a reasonable range for comprehensive IT support services. Benchmarking against similar contracts for computer systems design and technical support reveals comparable pricing structures and award values. While the Cost Plus Fixed Fee (CPFF) structure allows for flexibility, it also introduces a risk of costs exceeding initial estimates if not managed diligently. The fixed fee component provides some cost certainty for the government, but the overall value proposition hinges on effective cost control and performance by the contractor.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that the Department of the Navy actively sought proposals from a wide range of qualified vendors. While the specific number of bidders is not provided, the 'full and open' designation implies a competitive process designed to achieve the best value. This approach typically fosters price discovery and encourages vendors to offer competitive terms. However, without knowing the number of proposals received, it's difficult to definitively assess the intensity of the competition.

Taxpayer Impact: A full and open competition generally benefits taxpayers by promoting a competitive environment that can lead to more favorable pricing and better service quality. It ensures that the government explores a broad market, potentially uncovering innovative solutions and cost-saving opportunities that might be missed in a more restricted procurement.

Public Impact

Provides essential IT services to the Navy's personnel command (OPNAV N1), supporting critical human resources functions. Enhances the operational efficiency and technological capabilities of naval personnel management. Benefits Navy personnel by ensuring the smooth functioning of IT systems that manage their information and services. The contract's impact is primarily within the Department of Defense, specifically supporting naval operations. Workforce implications include the potential for Booz Allen Hamilton to utilize its skilled IT professionals to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can lead to cost overruns if not closely monitored.
Lack of specific details on the number of bidders limits the assessment of true competitive pressure.
The contract's duration (735 days) may require subsequent procurements, leading to potential transition costs.
Reliance on a single large contractor could limit opportunities for smaller, specialized IT firms in future procurements.

Positive Signals

Awarded through full and open competition, maximizing potential vendor pool.
Contractor (Booz Allen Hamilton) is a well-established entity with extensive federal contracting experience.
Contract supports critical IT infrastructure for Navy personnel management, indicating strategic importance.
The fixed fee component in the CPFF structure provides a degree of cost predictability.

Sector Analysis

This contract falls within the IT services sector, specifically focusing on computer systems design and related technical support. The federal IT services market is substantial, with agencies consistently investing in maintaining and upgrading their technological infrastructure. This contract represents a portion of the Department of Defense's broader IT spending, aimed at ensuring the operational readiness and efficiency of its personnel support systems. Comparable spending benchmarks in this area often involve multi-year contracts for system design, integration, and ongoing maintenance, with values varying significantly based on scope and complexity.

Small Business Impact

This contract was not awarded as a small business set-aside, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. This suggests that the primary focus was on securing the most capable vendor through full and open competition, rather than prioritizing small business participation. Consequently, the direct impact on the small business ecosystem may be limited, although Booz Allen Hamilton might engage small businesses as subcontractors if deemed necessary for specialized support.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting officers and program managers. The Cost Plus Fixed Fee (CPFF) structure necessitates rigorous oversight to monitor costs, ensure compliance with contract terms, and verify performance against requirements. Transparency is generally maintained through contract reporting mechanisms and performance reviews. While specific Inspector General (IG) jurisdiction isn't detailed here, the DoD IG often reviews major IT contracts for waste, fraud, and abuse.

Related Government Programs

DoD IT Modernization Programs
Navy Personnel Systems Modernization
Federal Civilian IT Services Contracts
Computer Systems Design Services
IT Support Services

Risk Flags

Cost Overrun Risk (CPFF)
Performance Monitoring Challenges
Cybersecurity Vulnerability Potential
Limited Small Business Participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $43.4 million to BOOZ ALLEN HAMILTON INC. TECHNICAL SERVICES SUPPORT CIO SUPPORT OPNAV N1

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 $43.4 million.

What is the period of performance?

Start: 2022-05-20. End: 2024-05-24.

What is Booz Allen Hamilton's track record with the Department of Defense and similar IT support contracts?

Booz Allen Hamilton is a major federal contractor with a long history of supporting the Department of Defense across various domains, including IT services, cybersecurity, and strategic consulting. They have held numerous large-scale contracts with the Navy and other military branches, often involving complex system design, integration, and support. Their track record includes managing significant IT infrastructure and providing technical expertise for critical defense operations. While specific performance metrics for this particular contract are not detailed, their extensive experience suggests a capacity to handle the technical demands. However, like any large contractor, they have faced scrutiny on past contracts regarding cost management and performance, underscoring the importance of ongoing oversight for this current award.

How does the pricing structure (Cost Plus Fixed Fee) compare to other IT support contracts of similar scope?

The Cost Plus Fixed Fee (CPFF) structure is common for IT support and development contracts where the scope may evolve or is not fully defined at the outset. It allows the government to reimburse the contractor for allowable costs incurred, plus a predetermined fixed fee representing profit. Compared to fixed-price contracts, CPFF offers more flexibility but can be more expensive if costs are not well-controlled. For IT services of this magnitude, CPFF is a standard approach, but its value-for-money depends heavily on the government's ability to manage costs and the contractor's efficiency. Other contracts might use Firm-Fixed-Price (FFP) if the scope is very well-defined, or Cost Plus Incentive Fee (CPIF) to incentivize performance targets.

What are the primary risks associated with this contract, and how are they being mitigated?

The primary risks associated with this contract include potential cost overruns due to the CPFF structure, performance deficiencies in delivering critical IT support, and potential security vulnerabilities in the systems managed. Mitigation strategies likely involve robust government oversight, including regular cost reviews, performance monitoring against defined metrics (though not specified here), and adherence to strict cybersecurity protocols. The fixed fee component provides some incentive for the contractor to manage costs efficiently. Furthermore, the contractor's established reputation and experience may mitigate performance risks, but continuous vigilance and proactive management by the Navy are essential.

How effective has the Department of the Navy been in managing similar IT support contracts in the past?

The Department of the Navy manages a vast portfolio of IT contracts, with varying degrees of success. Historically, large IT procurements within the DoD have faced challenges related to cost overruns, schedule delays, and integration issues. However, the Navy has also successfully executed numerous complex IT projects. Effectiveness often depends on the specific program management office, the clarity of requirements, the chosen contract type, and the level of government oversight. For contracts like this one, which involves ongoing support, effective management hinges on strong contract administration, performance metrics, and proactive risk management to ensure value and operational continuity.

What is the historical spending trend for IT support services within the Department of the Navy?

The Department of the Navy consistently allocates significant portions of its budget to IT services, reflecting the critical role technology plays in modern naval operations. Historical spending trends show a continuous demand for IT support, encompassing everything from network infrastructure maintenance and cybersecurity to software development and data management. Spending in this category has generally increased over the years, driven by the need to modernize aging systems, adopt new technologies (like cloud computing and AI), and address evolving cyber threats. Contracts for IT support services, like the one awarded to Booz Allen Hamilton, are a substantial component of this overall IT expenditure.

What are the implications of awarding this contract through 'full and open competition' versus a sole-source or limited competition?

Awarding this contract through 'full and open competition' implies that the Department of the Navy solicited proposals from all responsible sources capable of meeting the requirements. This approach is generally preferred as it maximizes the potential for obtaining the best value through robust price and technical competition. It fosters a level playing field and encourages innovation. In contrast, a sole-source award would mean only one vendor was considered, often due to unique capabilities or urgent needs, potentially leading to higher costs and less innovation. Limited competition involves soliciting from a small number of sources. Therefore, the 'full and open' designation suggests a deliberate effort to leverage market forces for taxpayer benefit.

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: $43,396,797

Exercised Options: $43,396,797

Current Obligation: $43,396,797

Subaward Activity

Number of Subawards: 4

Total Subaward Amount: $1,219,515

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