Booz Allen Hamilton Inc. awarded $58.7M contract for professional employer organization services by the Department of the Navy

Contract Overview

Contract Amount: $58,722,462 ($58.7M)

Contractor: Booz Allen Hamilton Inc

Awarding Agency: Department of Defense

Start Date: 2005-10-01

End Date: 2006-09-30

Contract Duration: 364 days

Daily Burn Rate: $161.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Place of Performance

Location: MCLEAN, FAIRFAX County, VIRGINIA, 22102

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $58.7 million to BOOZ ALLEN HAMILTON INC for work described as: Key points: 1. The contract value of $58.7 million represents a significant investment in essential support services. 2. Competition dynamics for this contract were robust, indicating a healthy market for these services. 3. Performance risk appears manageable given the nature of professional employer organization services. 4. The contract duration of one year provides a defined period for service delivery and evaluation. 5. This contract positions the Department of the Navy to leverage specialized HR and payroll expertise.

Value Assessment

Rating: good

The contract value of $58.7 million for a one-year period for professional employer organization services appears reasonable when benchmarked against similar large-scale government contracts for HR and administrative support. While specific per-unit cost data is not provided, the fixed fee structure suggests a degree of cost control. The award to a well-established contractor like Booz Allen Hamilton Inc. implies a level of confidence in their ability to deliver value, though further analysis of detailed performance metrics would be needed for a more definitive assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple qualified vendors had the opportunity to bid. This competitive process is designed to ensure fair pricing and access to the best available services. The presence of a single award suggests that Booz Allen Hamilton Inc. was selected as the most advantageous offer based on the evaluation criteria, which likely included factors beyond just price.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down costs through market forces and ensuring that government funds are used efficiently to procure high-quality services.

Public Impact

Department of the Navy personnel will benefit from streamlined HR and payroll processes. Services delivered include professional employer organization functions, likely encompassing payroll, benefits administration, and HR support. The geographic impact is primarily within the Department of the Navy's operational areas. Workforce implications include the potential for improved employee satisfaction and administrative efficiency within the Navy.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if fixed-fee structure does not adequately account for all service complexities.
Dependence on a single contractor could create challenges if performance issues arise.
Ensuring consistent service quality across all Navy units may require robust oversight.

Positive Signals

Award to a reputable contractor with a strong track record in government services.
Full and open competition suggests a competitive pricing environment was established.
Clear contract terms and performance expectations are likely defined for this service.

Sector Analysis

The Professional Employer Organization (PEO) sector provides outsourced HR services, including payroll, benefits, and compliance, to businesses and government entities. This contract falls within the broader professional, scientific, and technical services industry. Government spending in this area is substantial, as agencies increasingly rely on specialized firms to manage complex administrative functions efficiently. Benchmarks for similar PEO contracts within the federal government would typically consider the scope of services, number of employees supported, and contract duration.

Small Business Impact

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

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the contract administration office within the Department of the Navy. Performance monitoring, invoicing review, and compliance checks are standard oversight mechanisms. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Human Resources Services Contracts
Professional and Management Support Services
Department of Defense Administrative Support Contracts

Risk Flags

Potential for cost overruns if not managed effectively.
Dependence on contractor performance for critical HR functions.
Data security and privacy risks associated with sensitive employee information.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $58.7 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 (Department of the Navy).

What is the total obligated amount?

The obligated amount is $58.7 million.

What is the period of performance?

Start: 2005-10-01. End: 2006-09-30.

What is Booz Allen Hamilton Inc.'s track record with the Department of Defense for similar services?

Booz Allen Hamilton Inc. has a long-standing and extensive track record of providing a wide array of professional, scientific, and technical services to the Department of Defense (DoD) and its various branches, including the Department of the Navy. Their engagements often span areas such as IT consulting, cybersecurity, management support, and data analytics. While this specific contract focuses on Professional Employer Organization (PEO) services, the company's deep familiarity with government contracting processes, security protocols, and operational requirements within the DoD suggests a strong foundation for successful performance. Historical data from contract databases would reveal the volume and nature of their previous work, including any performance ratings or past issues, which would be crucial for a comprehensive assessment.

How does the awarded amount compare to market rates for PEO services for an organization of the Navy's size?

Benchmarking the $58.7 million award against market rates for PEO services for an organization the size of the Department of the Navy is complex due to the scale and unique requirements of federal contracts. Typically, PEO services are priced on a per-employee-per-month (PEPM) basis. For large enterprises, this rate can range from $50 to $200 PEPM, depending on the services included (e.g., payroll, benefits administration, HR compliance, talent management). If we assume the Navy has hundreds of thousands of personnel, the total cost could indeed reach tens of millions annually. The 'full and open competition' aspect suggests the Navy sought competitive bids, implying the awarded price reflects market dynamics for large-scale government PEO solutions, though direct comparisons to commercial rates are challenging due to differing service scopes and regulatory environments.

What are the primary risks associated with this type of contract and contractor?

The primary risks associated with this Professional Employer Organization (PEO) contract include potential performance deficiencies, where Booz Allen Hamilton Inc. might fail to meet the service level agreements for payroll accuracy, benefits administration, or HR compliance, leading to operational disruptions or employee dissatisfaction within the Navy. Another risk is cost escalation, although this is a fixed-fee contract, scope creep or unforeseen complexities could strain the budget if not managed tightly. Contractor dependency is also a concern; a sole awardee means the Navy relies heavily on Booz Allen Hamilton's capabilities and stability. Finally, data security and privacy risks are inherent when handling sensitive employee information, requiring robust cybersecurity measures from the contractor.

What is the historical spending pattern for PEO services by the Department of the Navy?

Analyzing historical spending patterns for PEO services by the Department of the Navy requires access to detailed federal procurement data over several fiscal years. Without specific historical data for this contract vehicle or similar PEO services, it's difficult to provide precise figures. However, it is reasonable to infer that the Navy, like other large federal agencies, has consistently required outsourced HR and payroll support to manage its vast workforce efficiently. Spending in this category would likely fluctuate based on strategic decisions to outsource certain functions, changes in workforce size, and the competitive landscape for PEO providers. The $58.7 million awarded in this instance suggests a significant, ongoing need for such services, potentially indicating a sustained or increasing trend in this spending category.

How does the contract type (Cost Plus Fixed Fee) influence value for money?

The contract type is listed as 'COST PLUS FIXED FEE' (CPFF), which is a common structure for services where the scope may not be perfectly defined at the outset, but the final cost can be reasonably estimated. In a CPFF contract, the contractor is reimbursed for allowable costs plus a fixed fee representing profit. This structure aims to provide a degree of cost certainty for the government while allowing flexibility. For value for money, the effectiveness of CPFF hinges on robust cost monitoring and control by the government. If costs are well-managed and the fixed fee is competitive, it can offer good value. However, there's a risk that costs could exceed initial estimates, potentially impacting the overall value if the fixed fee doesn't adequately compensate for the effort required. The government's ability to define requirements and oversee incurred costs is critical.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Employment Services › Professional Employer Organizations

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

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

Address: 8283 GREENSBORO DRIVE, MCLEAN, 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