Booz Allen Hamilton awarded $15.2M contract for engineering services by the Department of Defense

Contract Overview

Contract Amount: $15,196,627 ($15.2M)

Contractor: Booz Allen Hamilton Inc

Awarding Agency: Department of Defense

Start Date: 2023-01-09

End Date: 2027-01-08

Contract Duration: 1,460 days

Daily Burn Rate: $10.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: ENGINEERING SERVICES

Place of Performance

Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92152

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $15.2 million to BOOZ ALLEN HAMILTON INC for work described as: ENGINEERING SERVICES Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract duration of 1460 days indicates a long-term need for these engineering services. 3. The cost-plus-fixed-fee pricing structure may incentivize cost control by the contractor. 4. The award is a delivery order under a larger contract, implying a phased approach to service delivery. 5. The contractor, Booz Allen Hamilton, has a significant presence in federal contracting. 6. The contract is for engineering services, a critical function for defense operations.

Value Assessment

Rating: good

The contract value of $15.2 million for engineering services over approximately four years appears reasonable given the contractor's expertise and the nature of defense-related engineering. Benchmarking against similar large-scale engineering contracts awarded by the Department of Defense suggests this value falls within expected ranges for complex projects. The cost-plus-fixed-fee structure, while requiring careful oversight, is common for services where the full scope may evolve.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of two bids suggests a moderate level of competition for this specific delivery order. While two bidders participated, the depth of competition among them and the specific evaluation criteria would determine the extent to which price discovery was optimized.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to more favorable pricing and innovative solutions, even with a limited number of bids for a specific order.

Public Impact

The Department of the Navy benefits from specialized engineering expertise to support its operations and projects. This contract ensures the delivery of essential engineering services critical for defense readiness and technological advancement. The services are likely to have a broad geographic impact, supporting defense infrastructure and operations nationwide or globally. The contract may have implications for the engineering workforce, potentially creating or sustaining jobs within the sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in cost-plus-fixed-fee contracts if not managed diligently.
Reliance on a single contractor for a significant duration could pose risks if performance issues arise.
The limited number of bidders for this specific delivery order might indicate barriers to entry or specialized requirements.

Positive Signals

Award to a well-established contractor with a proven track record in federal services.
The use of full and open competition aligns with best practices for government procurement.
The contract duration suggests a stable and predictable need for these critical engineering services.

Sector Analysis

Engineering services represent a significant segment of the federal contracting market, particularly within the defense sector. This contract for specialized engineering support aligns with the Department of Defense's continuous need for technical expertise in areas such as systems design, analysis, and integration. Comparable spending benchmarks for large-scale engineering support contracts often run into tens or hundreds of millions of dollars annually, depending on the scope and duration.

Small Business Impact

This contract does not indicate any specific small business set-aside provisions. As a delivery order under a larger contract, the subcontracting opportunities for small businesses would depend on the prime contractor's subcontracting plan and the nature of the work being performed. Without explicit set-aside requirements, the direct impact on small businesses may be limited unless they are part of the prime contractor's supply chain.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting officers and program managers. Accountability measures are embedded within the cost-plus-fixed-fee structure, requiring detailed reporting and justification of costs. Transparency is facilitated through contract databases and reporting requirements, though specific performance metrics and IG jurisdiction would depend on the overarching contract's terms.

Related Government Programs

Defense Engineering Support Services
Naval Systems Engineering
Federal IT and Engineering Contracts
Professional Services Contracts
Cost-Plus-Fixed-Fee Contracts

Risk Flags

Potential for cost escalation in CPFF contracts.
Limited competition for this specific delivery order.
Contractor performance risk over a long duration.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $15.2 million to BOOZ ALLEN HAMILTON INC. ENGINEERING SERVICES

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 $15.2 million.

What is the period of performance?

Start: 2023-01-09. End: 2027-01-08.

What is Booz Allen Hamilton's track record with similar Department of Defense engineering contracts?

Booz Allen Hamilton is a major federal contractor with extensive experience in providing engineering and technical services to the Department of Defense across various branches. They have a history of securing large, complex contracts for systems engineering, program management, and technical support. Analyzing their past performance on similar cost-plus-fixed-fee contracts, particularly those with durations exceeding three years, would reveal their ability to manage costs effectively and deliver on complex technical requirements. Their historical data often shows a strong performance record, but it's crucial to examine specific contract close-outs and any associated performance reviews or disputes to get a complete picture.

How does the $15.2 million value compare to other engineering service contracts for the Navy?

The $15.2 million value for this specific delivery order, awarded over approximately four years, represents a moderate investment for specialized engineering services. When compared to the vast landscape of Department of the Navy contracts, this figure is relatively modest, especially considering the multi-billion dollar budgets for shipbuilding, aircraft procurement, and major system development. However, for focused engineering support on specific projects or systems, this amount is substantial and indicative of a significant scope of work. Benchmarking requires comparing it to contracts with similar service descriptions (e.g., systems engineering, technical analysis) and durations, rather than overall program funding.

What are the primary risks associated with a Cost-Plus-Fixed-Fee (CPFF) contract structure for this type of service?

The primary risk with a Cost-Plus-Fixed-Fee (CPFF) contract is the potential for cost overruns. While the contractor is incentivized by the fixed fee, they are reimbursed for all allowable costs. If the contractor does not effectively manage costs or if unforeseen technical challenges arise that increase expenses, the total contract value could escalate. For the government, the risk lies in paying higher-than-anticipated costs. Effective oversight, rigorous cost tracking, and clear definition of allowable costs are crucial to mitigate these risks. The contractor must demonstrate diligent cost management and provide transparent reporting to ensure value for taxpayer money.

How does the 'full and open competition' with only two bidders impact price discovery and value for taxpayers?

While 'full and open competition' is the preferred method, having only two bidders for this specific delivery order suggests that the competition may not have been as robust as ideal. This limited number of bidders could potentially reduce the downward pressure on pricing that occurs with a larger pool of competitors. Taxpayers might not benefit from the most aggressive pricing possible. However, the quality of the two competing proposals and the government's negotiation strategy play a significant role. If both bidders were highly qualified and the government negotiated effectively, a good value could still be achieved. The key is understanding the market dynamics and why only two bids were submitted.

What are the implications of this contract being a 'delivery order' rather than a standalone contract?

This contract being a 'delivery order' signifies that it is a task-specific order issued under a previously awarded indefinite-delivery, indefinite-quantity (IDIQ) or other type of multiple-award contract. This approach allows the agency to procure services incrementally as needed, providing flexibility. For taxpayers, it means that the $15.2 million is the value for this specific order, and the overall IDIQ contract may have a much larger ceiling value. It also implies that the initial competition occurred when the parent contract was awarded, and this delivery order competition might have been more limited, depending on the terms of the parent contract. This structure can streamline procurement but requires careful management of the overall contract.

What is the significance of the contract being for 'Engineering Services' within the Department of Defense?

Engineering services are fundamental to the Department of Defense's mission, encompassing a wide range of activities from research and development to the design, testing, and sustainment of complex military systems. This contract likely supports critical functions such as developing new technologies, maintaining existing platforms, ensuring system interoperability, and providing technical expertise for acquisition programs. The demand for these services underscores the DoD's reliance on specialized technical knowledge to maintain its technological edge and operational readiness. The specific nature of the engineering services will dictate the direct impact on defense capabilities and national security.

Industry Classification

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

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N6600121R0021

Offers Received: 2

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: $18,572,683

Exercised Options: $15,488,197

Current Obligation: $15,196,627

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N6600121D0160

IDV Type: IDC

Timeline