Booz Allen Hamilton awarded $51M for Navy international support services, raising value-for-money questions
Contract Overview
Contract Amount: $51,049,616 ($51.0M)
Contractor: Booz Allen Hamilton Inc
Awarding Agency: Department of Defense
Start Date: 2009-06-17
End Date: 2014-12-31
Contract Duration: 2,023 days
Daily Burn Rate: $25.2K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: COST PLUS AWARD FEE
Sector: Defense
Official Description: PMW 740 INTEGRATED INTERNATIONAL SUPPORT SERVICES
Place of Performance
Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92110
Plain-Language Summary
Department of Defense obligated $51.0 million to BOOZ ALLEN HAMILTON INC for work described as: PMW 740 INTEGRATED INTERNATIONAL SUPPORT SERVICES Key points: 1. Contract awarded via full and open competition, suggesting a competitive process. 2. Cost-plus award fee structure can incentivize performance but may lead to higher costs. 3. The contract duration of over 5 years warrants scrutiny of cost escalation. 4. Engineering services sector is competitive, but specialized international support may limit bidders. 5. Performance context is crucial for assessing if award fees were justified. 6. No small business set-aside indicates potential for large prime contractor benefits.
Value Assessment
Rating: fair
The contract's value of $51 million over approximately 5.5 years averages around $9.3 million annually. Benchmarking this against similar international support services contracts is challenging without more specific service details. The cost-plus award fee (CPAF) structure, while common for complex services, can lead to costs exceeding fixed-price contracts if not managed tightly. The absence of a specific per-unit cost makes direct value assessment difficult, relying heavily on the achievement of award fee criteria.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. With two bids received, the level of competition appears moderate. While open competition is generally favorable for price discovery, the specific nature of 'integrated international support services' might inherently limit the pool of qualified and interested bidders, potentially impacting the intensity of price competition.
Taxpayer Impact: Taxpayers benefit from the potential for competitive pricing inherent in an open solicitation, but the moderate number of bids suggests that savings may not be maximized.
Public Impact
Naval forces operating internationally benefit from integrated support services. Services likely include logistical, technical, and operational support for naval assets abroad. Geographic impact is global, supporting US Navy operations in various international theaters. Workforce implications include skilled technical and support personnel, potentially both US-based and local hires.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost-plus award fee structure introduces potential for cost overruns if performance targets are not rigorously defined and monitored.
- Long contract duration (over 5 years) increases the risk of cost escalation and potential for scope creep without adequate oversight.
- Limited competition (2 bids) may have resulted in a higher price than if more bidders had participated.
- Lack of specific performance metrics in the provided data makes it difficult to assess the 'award' component's justification.
- The nature of 'international support' can be complex and subject to geopolitical factors, adding inherent risk.
Positive Signals
- Awarded through full and open competition, suggesting a structured procurement process.
- The use of an award fee mechanism incentivizes contractor performance towards specific objectives.
- Booz Allen Hamilton is a large, established contractor with significant experience in government services.
- The contract aims to provide critical support for naval operations, indicating strategic importance.
Sector Analysis
This contract falls within the Engineering Services (NAICS 541330) sector, specifically focusing on specialized international support for defense applications. The broader engineering services market is substantial, encompassing a wide range of consulting, design, and technical support. However, contracts for integrated international support for naval operations are niche, often requiring specific security clearances, global reach, and deep understanding of military logistics and operations, which typically favors large, experienced defense contractors.
Small Business Impact
The contract data indicates that this was not a small business set-aside, and the prime contractor, Booz Allen Hamilton, is a large business. There is no explicit information on subcontracting plans for small businesses. Without this data, it's difficult to assess the direct impact on the small business ecosystem, though large prime contracts often include subcontracting goals that can benefit small businesses.
Oversight & Accountability
Oversight for this contract would typically be managed by the Department of the Navy's contracting and program management offices. The Cost Plus Award Fee (CPAF) structure necessitates robust oversight to ensure that award fees are earned based on demonstrable performance against defined criteria. Transparency would be facilitated through contract reporting mechanisms, and any significant issues or potential fraud could fall under the jurisdiction of the Department of Defense's Inspector General.
Related Government Programs
- Naval Sea Systems Command (NAVSEA) Contracts
- Department of Defense Logistics Support Services
- International Military Assistance Programs
- Defense Engineering Services Contracts
Risk Flags
- Cost-Plus Award Fee structure requires diligent oversight.
- Limited competition may impact price optimization.
- International operations introduce inherent geopolitical and logistical risks.
Tags
defense, department-of-defense, department-of-the-navy, engineering-services, full-and-open-competition, cost-plus-award-fee, delivery-order, california, large-business, international-support, naval-operations
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $51.0 million to BOOZ ALLEN HAMILTON INC. PMW 740 INTEGRATED INTERNATIONAL SUPPORT 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 $51.0 million.
What is the period of performance?
Start: 2009-06-17. End: 2014-12-31.
What is Booz Allen Hamilton's track record with similar Department of Defense contracts, particularly those involving international support?
Booz Allen Hamilton has a long and extensive history of contracting with the Department of Defense (DoD) across various service areas, including intelligence, cybersecurity, logistics, and engineering. They are a major prime contractor for numerous complex programs. For contracts involving international support, their experience likely spans providing technical assistance, operational planning, and logistical solutions to military branches operating abroad. Analyzing their past performance on similar CPAF contracts would be crucial to assess their ability to manage costs effectively and meet performance objectives in complex international environments. Reviewing past performance evaluations and any documented issues or successes on prior international support contracts would provide valuable context for this current award.
How does the $51 million award compare to other integrated international support services contracts awarded by the Navy or DoD?
Direct comparison of the $51 million award for 'PMW 740 INTEGRATED INTERNATIONAL SUPPORT SERVICES' to other similar contracts is challenging without more granular data on the specific services rendered and the contract's duration. However, $51 million over approximately 5.5 years (June 2009 - Dec 2014) represents an average annual value of roughly $9.3 million. This figure falls within a common range for large, complex service contracts supporting major defense programs. Contracts for specialized international support, particularly those requiring extensive logistical coordination, technical expertise, and global reach, can vary significantly in value based on the scope of operations, number of personnel involved, and geographic coverage. Benchmarking would require identifying contracts with comparable service descriptions, agency, and duration.
What are the primary risks associated with a Cost Plus Award Fee (CPAF) contract for international support services?
The primary risks with a CPAF contract for international support services revolve around cost control and performance definition. For the government, the risk is that costs could escalate beyond initial projections, as the contractor is reimbursed for allowable costs plus a fee that includes an award component based on performance. If performance metrics are not clearly defined, measurable, and rigorously monitored, the 'award' portion could be granted without commensurate value realization. For the contractor, the risk lies in not meeting the performance targets required to achieve the maximum award fee. In an international context, geopolitical instability, logistical complexities, and varying local regulations can introduce unforeseen costs and operational challenges, increasing the risk profile for both parties.
What does the moderate competition level (2 bids) imply for the effectiveness of the procurement process and taxpayer value?
A moderate competition level, such as two bids received for this contract, suggests that while the procurement was conducted openly, the pool of qualified and willing bidders may have been limited. This can imply several things for taxpayer value. On one hand, competition still occurred, which is generally better than a sole-source award. On the other hand, with only two bidders, the government may not have achieved the most aggressive pricing possible. A larger number of bids often drives prices down more effectively as contractors compete more intensely. Therefore, the moderate competition here suggests that while a degree of price discovery happened, there might be room for improvement in future solicitations by potentially broadening the scope or encouraging more participation from capable firms to ensure optimal value for taxpayer funds.
How has spending on Engineering Services (NAICS 541330) by the Department of the Navy trended historically, and where does this contract fit?
Spending on Engineering Services (NAICS 541330) by the Department of the Navy (DoN) has historically been substantial, reflecting the complexity and scale of naval platforms and operations. This sector encompasses a wide array of services, from ship design and maintenance to infrastructure development and specialized technical consulting. The $51 million award to Booz Allen Hamilton for integrated international support services fits within this broader category but represents a specific niche focused on operational support rather than pure design or construction engineering. Analyzing historical spending trends for DoN's engineering services would reveal overall budget allocations and identify if contracts of this nature represent a consistent or growing portion of their expenditure. This specific contract's value appears moderate within the context of large-scale defense procurements.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: EDUCATION AND TRAINING › EDUCATION AND TRAINING SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Solicitation ID: N0002409R3206
Offers Received: 2
Pricing Type: COST PLUS AWARD FEE (R)
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
Financial Breakdown
Contract Ceiling: $67,246,623
Exercised Options: $67,246,623
Current Obligation: $51,049,616
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0017804D4024
IDV Type: IDC
Timeline
Start Date: 2009-06-17
Current End Date: 2014-12-31
Potential End Date: 2014-12-31 00:00:00
Last Modified: 2017-12-05
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