Booz Allen Hamilton awarded $31.1M contract for engineering services, highlighting significant defense sector spending

Contract Overview

Contract Amount: $31,107,847 ($31.1M)

Contractor: Booz Allen Hamilton Inc

Awarding Agency: Department of Defense

Start Date: 2015-09-18

End Date: 2020-06-30

Contract Duration: 1,747 days

Daily Burn Rate: $17.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: IGF::OT::IGF

Place of Performance

Location: MCLEAN, FAIRFAX County, VIRGINIA, 22102

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $31.1 million to BOOZ ALLEN HAMILTON INC for work described as: IGF::OT::IGF Key points: 1. Contract value of $31.1M for engineering services indicates substantial investment in specialized defense support. 2. The 'FULL AND OPEN COMPETITION' suggests a robust bidding process, potentially leading to competitive pricing. 3. A contract duration of 1747 days (approx. 4.8 years) points to a long-term need for these engineering services. 4. The 'COST PLUS FIXED FEE' contract type implies that costs are reimbursed plus a fixed fee, with potential for cost overruns. 5. Awarded by the Department of Defense, this contract aligns with significant national security and defense infrastructure requirements. 6. The 'Engineering Services' category (NAICS 541330) is a critical component of defense readiness and technological advancement.

Value Assessment

Rating: good

The contract value of $31.1M for engineering services appears reasonable given the 4.8-year duration and the nature of defense contracting. Benchmarking against similar large-scale engineering support contracts within the Department of Defense would provide a more precise value-for-money assessment. The 'COST PLUS FIXED FEE' structure, while common, warrants scrutiny for cost control and efficiency throughout the contract's life.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'FULL AND OPEN COMPETITION,' indicating that all responsible sources were permitted to submit bids. This suggests a competitive environment where multiple firms likely vied for the opportunity. The number of bidders is not specified, but the open competition generally fosters price discovery and encourages contractors to offer their best terms.

Taxpayer Impact: Taxpayers benefit from a competitive bidding process that aims to secure the best possible price for the required engineering services, reducing the risk of overpayment.

Public Impact

The Department of Defense benefits from specialized engineering expertise to support its complex operational and technological needs. Services delivered likely include design, analysis, testing, and integration of defense systems and infrastructure. The geographic impact is primarily centered around the Department of Defense's operational areas, potentially including various military installations. Workforce implications include the employment of highly skilled engineers and technical professionals within Booz Allen Hamilton and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost overruns are a potential concern with 'COST PLUS FIXED FEE' contracts if not managed diligently.
The long duration of the contract could lead to scope creep or evolving requirements that may not be fully captured in the initial pricing.
Reliance on a single large contractor for critical engineering services could pose a risk if performance issues arise.

Positive Signals

The 'FULL AND OPEN COMPETITION' suggests a healthy market for these services and a potentially competitive pricing structure.
The contract's duration indicates a stable, long-term requirement, providing continuity for defense projects.
Booz Allen Hamilton is a well-established contractor with a significant presence in the defense sector, suggesting a degree of reliability.

Sector Analysis

The engineering services sector is a vital component of the defense industry, providing essential technical expertise for the development, maintenance, and modernization of military systems and infrastructure. This contract falls within a market segment characterized by high technical barriers to entry and significant government spending. Comparable spending benchmarks in this sector often involve multi-year, multi-million dollar awards for specialized technical support.

Small Business Impact

There is no explicit indication of small business set-asides for this contract, nor is there information on subcontracting plans. Given the nature and scale of the award, it is possible that larger prime contractors like Booz Allen Hamilton may engage small businesses for specialized support, but this is not guaranteed without specific subcontracting goals being outlined.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Defense's contracting and program management offices, potentially involving the Defense Contract Management Agency (DCMA). Accountability measures are embedded in the contract terms, including performance standards and fee structures. Transparency is generally maintained through contract award databases, though specific performance details may be sensitive.

Related Government Programs

Defense Engineering Services
Department of Defense IT Services
Military Systems Modernization
Aerospace Engineering Support
Naval Systems Engineering

Risk Flags

Cost Plus Fixed Fee contract type requires diligent oversight to manage potential cost overruns.
Long contract duration may increase risk of scope creep or evolving requirements.
No explicit mention of small business subcontracting goals.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $31.1 million to BOOZ ALLEN HAMILTON INC. IGF::OT::IGF

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 $31.1 million.

What is the period of performance?

Start: 2015-09-18. End: 2020-06-30.

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

Booz Allen Hamilton has a long and extensive history of contracting with the Department of Defense, providing a wide array of services including engineering, IT, cybersecurity, and management consulting. They are a major prime contractor on numerous large-scale defense programs. Their track record includes managing complex projects, delivering technical solutions, and navigating stringent regulatory and security requirements. While specific performance metrics for individual contracts are often not publicly detailed, their continued success in securing significant defense contracts suggests a generally positive performance history and a strong understanding of DoD needs. However, like any large contractor, they may have faced past performance reviews or disputes on specific projects, which would be detailed in government performance databases if publicly accessible.

How does the $31.1M value compare to other engineering services contracts awarded by the DoD?

The $31.1M contract value for engineering services awarded to Booz Allen Hamilton is substantial but falls within the typical range for large, multi-year engineering support contracts within the Department of Defense. The DoD frequently awards contracts in the tens or hundreds of millions of dollars for specialized engineering expertise, system development, and technical support. For instance, contracts for aircraft design, missile system development, or complex IT infrastructure engineering can easily exceed this amount. The value is also influenced by the contract type (Cost Plus Fixed Fee) and duration (nearly 5 years), which allows for cost reimbursement plus a profit margin. To provide a precise benchmark, one would need to compare it against contracts with similar NAICS codes (541330), contract types, and durations awarded within the same agency or defense branch over a comparable period.

What are the primary risks associated with a 'Cost Plus Fixed Fee' contract for engineering services?

The primary risks associated with a 'Cost Plus Fixed Fee' (CPFF) contract, like the one awarded to Booz Allen Hamilton, revolve around cost control and potential for overruns. In a CPFF structure, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing their profit. While the fee is fixed, the total cost is not. This can incentivize contractors to incur higher costs, as their profit margin remains constant regardless of the total expenditure, potentially leading to costs exceeding initial estimates. Effective oversight by the government is crucial to monitor allowable costs, prevent inefficiencies, and ensure the contractor exercises prudent fiscal management. Scope creep, where project requirements expand beyond the original agreement without corresponding adjustments to the fee, can also inflate costs.

How effective is 'Full and Open Competition' in ensuring value for taxpayer money in defense engineering contracts?

'Full and Open Competition' is generally considered the most effective method for ensuring value for taxpayer money in defense engineering contracts. By allowing all responsible sources to compete, it fosters a competitive environment that drives down prices and encourages innovation. Multiple bidders are incentivized to offer their best technical solutions and most competitive pricing to win the contract. This process enhances price discovery and reduces the likelihood of awarding contracts at inflated rates. While the administrative effort to manage a full and open competition is higher, the potential savings and improved quality of services typically outweigh these costs. However, the effectiveness is contingent on clear and well-defined requirements and robust evaluation criteria to ensure the lowest price isn't chosen at the expense of critical technical capabilities.

What are the implications of this contract's duration (1747 days) on program stability and cost?

A contract duration of 1747 days (approximately 4.8 years) suggests a long-term, stable requirement for the engineering services being procured. This extended period can be beneficial for program stability, allowing for consistent application of expertise and continuity in project execution without frequent re-competition. For taxpayers, this can translate to cost savings by avoiding the administrative and transition costs associated with shorter-term contracts. It also allows the contractor to invest in specialized resources and personnel dedicated to the program. However, a long duration also increases the risk of requirements evolving over time. If not managed through contract modifications or option periods, the initial pricing might become misaligned with the final scope of work, potentially leading to cost inefficiencies or the need for renegotiation.

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

Solicitation ID: N0002415R3145

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Booz Allen Hamilton Holding Corporation

Address: BOOZ ALLEN HAMILTON INC, MC LEAN, VA, 22102

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $31,826,699

Exercised Options: $31,808,889

Current Obligation: $31,107,847

Subaward Activity

Number of Subawards: 3

Total Subaward Amount: $194,944

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017804D4024

IDV Type: IDC

Timeline