DoD's $75.5M engineering services contract awarded to Booz Allen Hamilton Inc. shows fair value with 2 bidders

Contract Overview

Contract Amount: $75,546,055 ($75.5M)

Contractor: Booz Allen Hamilton Inc

Awarding Agency: Department of Defense

Start Date: 2004-04-09

End Date: 2008-10-22

Contract Duration: 1,657 days

Daily Burn Rate: $45.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

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 $75.5 million to BOOZ ALLEN HAMILTON INC for work described as: Key points: 1. The contract's value appears reasonable given the scope of engineering services provided. 2. Competition was robust, indicating potential for competitive pricing. 3. The contract duration and type suggest a need for long-term, complex support. 4. Performance context is limited without specific task order details. 5. This contract falls within the professional services sector for the Department of Defense. 6. The awardee has a significant presence in government contracting.

Value Assessment

Rating: fair

The contract's total award amount of $75.5 million over its period of performance suggests a moderate level of investment for engineering services. Benchmarking against similar large-scale engineering support contracts within the Department of Defense is challenging without more granular data on the specific services rendered. However, the presence of two bidders in a full and open competition indicates that the pricing structure was likely competitive, though a detailed cost-benefit analysis would require deeper insight into the deliverables and outcomes.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, which is the most competitive scenario. Two bids were received, suggesting a healthy level of interest and a reasonable degree of competition for this requirement. While two bidders are better than one, a higher number of bids could potentially drive prices down further and offer a wider range of innovative solutions. The competition level here indicates that the market was engaged, but there may be room for increased competition on future, similar procurements.

Taxpayer Impact: The full and open competition with two bidders suggests that taxpayer dollars were likely used efficiently, as the government had multiple options to choose from. This level of competition helps ensure that the selected contractor provides services at a fair market price, avoiding excessive costs.

Public Impact

The Department of Defense benefits from specialized engineering expertise to support its complex operations. Services delivered likely include design, analysis, and technical support for defense systems. The geographic impact is primarily within the Department of Defense's operational areas, potentially global. Workforce implications include the employment of highly skilled engineers and technical professionals.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited transparency on specific task order performance metrics.
Potential for cost overruns if not closely managed due to Cost Plus Fixed Fee structure.
Dependence on a single contractor for critical engineering functions.

Positive Signals

Awarded through full and open competition, indicating market engagement.
Contractor has extensive experience in government services.
Clear contract award and period of performance.

Sector Analysis

This contract falls within the Engineering Services sector, a critical component of the broader professional services industry supporting government and defense clients. The market for defense engineering services is substantial, driven by the continuous need for modernization, maintenance, and development of complex military systems. Booz Allen Hamilton is a major player in this space, competing with other large government contractors. Spending benchmarks for similar large-scale engineering support contracts within the DoD can range from tens to hundreds of millions of dollars, depending on the scope and duration.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb: false'. The prime contractor, Booz Allen Hamilton, is a large business. There is no explicit information provided regarding subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem from this specific prime contract award is likely minimal, though the prime contractor may engage small businesses as subcontractors.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program management office within the Department of the Navy. Accountability measures are embedded in the contract terms, including performance standards and reporting requirements. Transparency is generally maintained through contract databases like FPDS, though detailed performance data for individual task orders may be less accessible to the public. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense Engineering Services
Professional Services Contracts
Department of Defense IT and Engineering Support
Naval Systems Engineering

Risk Flags

Contract type (CPFF) may lead to cost overruns if not managed closely.
Limited number of bidders could reduce competitive pressure.
Performance details for specific task orders are not readily available.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $75.5 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 (Department of the Navy).

What is the total obligated amount?

The obligated amount is $75.5 million.

What is the period of performance?

Start: 2004-04-09. End: 2008-10-22.

What is the track record of Booz Allen Hamilton Inc. in delivering engineering services for the Department of Defense?

Booz Allen Hamilton Inc. has a long-standing and extensive track record of providing a wide array of services to the Department of Defense, including complex engineering, systems integration, cybersecurity, and management consulting. They are a prime contractor on numerous large-scale contracts across various military branches. Their history with the DoD is characterized by significant involvement in major defense programs, often requiring deep technical expertise and the ability to manage large, complex projects. While specific performance metrics for individual contracts are not always publicly detailed, their continued success in winning and executing large DoD contracts suggests a generally positive performance history and a strong understanding of military requirements and operational environments. However, like any large contractor, they have also faced scrutiny and reviews on specific contracts over the years.

How does the value of this $75.5 million contract compare to similar engineering services contracts awarded by the Department of Defense?

The $75.5 million award value for engineering services is a substantial but not extraordinary figure within the context of large Department of Defense procurements. The DoD frequently awards contracts in the tens to hundreds of millions of dollars for specialized engineering, research, development, and technical support. For instance, contracts for systems engineering, platform design, or advanced technology integration can easily reach these figures or exceed them, especially when spanning multiple years. The comparison is highly dependent on the specific nature of the engineering services, the complexity of the systems involved, and the duration of the contract. Given this contract's duration of approximately 4.5 years (from award to estimated completion), the annual value is around $16.8 million, which is within the typical range for significant engineering support engagements.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract type for engineering services?

The Cost Plus Fixed Fee (CPFF) contract type, used here, presents specific risks for the government. The primary risk is that the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. This structure can incentivize contractors to incur higher costs, as their fee remains constant regardless of the total cost. While the fixed fee limits the contractor's profit, it does not cap the total expenditure. For the government, effective oversight and robust cost accounting standards are crucial to ensure that all costs are reasonable, allocable, and allowable. Without stringent monitoring, there is a risk of cost overruns and less incentive for the contractor to find the most cost-effective solutions compared to fixed-price contracts.

What does the 'Engineering Services' (NAICS 541330) category typically encompass within federal contracting?

The 'Engineering Services' category, identified by NAICS code 541330, encompasses a broad range of professional services related to engineering. This includes services such as designing, developing, and implementing systems; providing consulting on engineering projects; conducting feasibility studies; performing specialized engineering analysis (e.g., structural, mechanical, electrical); and offering technical support for engineering endeavors. For federal agencies, particularly the Department of Defense, these services are critical for the design, acquisition, maintenance, and modernization of complex infrastructure, weapon systems, and technological platforms. Contracts in this category often require highly specialized expertise and clearances.

How does the competition level (2 bidders) for this contract potentially impact price discovery and value for taxpayers?

A competition level of two bidders for this contract represents a moderate level of competition. While it is superior to a sole-source award, it is less ideal than a scenario with numerous bidders. With only two bidders, the government has some leverage to negotiate pricing, but the potential for truly aggressive price competition is somewhat limited compared to a market with, say, five or more interested parties. Price discovery is still occurring, as the bidders must present competitive offers to win. However, there's a possibility that the prices submitted might be higher than they would be in a more crowded field. For taxpayers, this means that while the contract is likely awarded at a fair price due to the competition, there might be a missed opportunity for even greater cost savings that a more robust bidding process could have yielded.

What is the significance of the contract award type being a 'Definitive Contract'?

A 'Definitive Contract' is a standard, legally binding agreement that obligates both the government and the contractor to perform specific actions. Unlike indefinite-delivery/indefinite-quantity (IDIQ) contracts or basic ordering agreements, a definitive contract typically specifies all the terms and conditions, including price, quantity, and delivery schedule, upfront. In the context of this engineering services contract, it implies that the scope of work, deliverables, and associated costs were sufficiently defined at the time of award to establish a firm commitment. This provides clarity and predictability for both parties throughout the contract's performance period.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

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

Address: BOOZ ALLEN HAMILTON INC, 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: NO

Timeline