DoD's $297M Engineering Services Contract with Booz Allen Hamilton: A Decade of Cost-Plus Fixed Fee Spending

Contract Overview

Contract Amount: $29,671,548 ($29.7M)

Contractor: Booz Allen Hamilton Inc

Awarding Agency: Department of Defense

Start Date: 2001-04-06

End Date: 2008-08-31

Contract Duration: 2,704 days

Daily Burn Rate: $11.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Place of Performance

Location: MCLEAN, FAIRFAX County, VIRGINIA, 22102

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $29.7 million to BOOZ ALLEN HAMILTON INC for work described as: Key points: 1. Significant contract value of $297 million over its lifespan. 2. Booz Allen Hamilton, a large established firm, was the sole awardee. 3. The contract utilized a Cost Plus Fixed Fee (CPFF) structure, which can incentivize cost overruns. 4. Engineering Services (NAICS 541330) is a critical sector for defense operations.

Value Assessment

Rating: questionable

The CPFF contract type, while flexible, offers less incentive for cost control compared to fixed-price contracts. Without detailed cost breakdowns and performance metrics, assessing value for money is difficult. The long duration and significant value warrant close scrutiny of expenditures.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting a competitive bidding process. However, the long duration and specific nature of engineering services may have limited the number of actual bidders or the sustained competitive pressure throughout its life.

Taxpayer Impact: The CPFF structure, combined with a large contract value, presents a potential risk to taxpayers if costs are not rigorously managed and justified.

Public Impact

Taxpayers funded extensive engineering services for the Department of Defense over nearly a decade. The contract supported critical defense capabilities through specialized engineering expertise. The long-term nature of the award raises questions about sustained competition and potential for cost creep.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type
Long contract duration (2704 days)
Large total obligation amount ($296.7M)
No indication of small business participation

Positive Signals

Awarded under full and open competition
Provided essential engineering services to the DoD

Sector Analysis

Engineering services are vital for the Department of Defense, encompassing design, development, and technical support for military systems and infrastructure. Spending in this sector is benchmarked against project complexity, duration, and the specific technical requirements of defense programs.

Small Business Impact

There is no indication that small businesses participated in this contract, either as prime contractors or subcontractors. This large, long-term contract may have missed opportunities to engage and develop small business capabilities within the defense engineering sector.

Oversight & Accountability

The long duration and CPFF nature of this contract necessitate robust oversight from the Defense Contract Management Agency to ensure costs are reasonable and performance is adequate. Regular audits and performance reviews would be crucial for accountability.

Related Government Programs

Engineering Services
Department of Defense Contracting
Defense Contract Management Agency Programs

Risk Flags

Cost Plus Fixed Fee (CPFF) contract type can lead to higher costs if not managed tightly.
Long contract duration (2704 days) increases the risk of cost escalation and reduced competition over time.
Significant total obligation ($296.7M) represents a substantial financial commitment.
Lack of small business participation noted.
Limited insight into specific performance metrics and value delivered.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $29.7 million to BOOZ ALLEN HAMILTON INC. See the official description on USAspending.

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 $29.7 million.

What is the period of performance?

Start: 2001-04-06. End: 2008-08-31.

What was the specific breakdown of costs and the fixed fee, and how were they justified over the contract's lifespan?

The contract utilized a Cost Plus Fixed Fee (CPFF) structure. While the total award was $296.7 million, the precise allocation between direct costs, indirect costs, and the fixed fee is not detailed here. A thorough review would require access to contract modifications, cost reports, and audit findings to assess the justification and reasonableness of these expenditures over the 2704-day period.

Given the full and open competition, why did Booz Allen Hamilton secure the entire $297M over nearly 8 years?

The initial award was under full and open competition, suggesting multiple bids were considered. However, the long duration and specialized nature of engineering services likely favored incumbent expertise and established relationships. Booz Allen Hamilton's extensive experience in defense contracting may have positioned them as the most qualified bidder, leading to subsequent task orders or modifications under the initial award structure.

What specific engineering services were provided, and how did they contribute to the DoD's mission effectiveness?

The contract falls under NAICS code 541330 (Engineering Services), which is broad. These services could range from systems engineering and technical assistance to infrastructure design and program management support for various defense platforms or initiatives. Without specific task order details, it's difficult to quantify the direct contribution to mission effectiveness, but such services are generally critical for maintaining and advancing military capabilities.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Contractor Details

Parent Company: Booz Allen Hamilton Holding Corporation (UEI: 964725688)

Address: 8283 GREENSBORO DRIVE, MC LEAN, VA, 22102

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline