Booz Allen Hamilton contract for IT services awarded by Treasury's IRS valued at $16.5M

Contract Overview

Contract Amount: $16,536,891 ($16.5M)

Contractor: Booz Allen Hamilton Inc.

Awarding Agency: Department of the Treasury

Start Date: 2006-05-31

End Date: 2014-08-01

Contract Duration: 2,984 days

Daily Burn Rate: $5.5K/day

Competition Type: COMPETITIVE DELIVERY ORDER

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: RTCP # 2046

Place of Performance

Location: NEW CARROLLTON, PRINCE GEORGE'S County, MARYLAND, 20784

State: Maryland Government Spending

Plain-Language Summary

Department of the Treasury obligated $16.5 million to BOOZ ALLEN HAMILTON INC. for work described as: RTCP # 2046 Key points: 1. Contract awarded through a competitive process, suggesting potential for good value. 2. The contract duration of nearly 10 years indicates a long-term need for these services. 3. Services fall under Computer Systems Design, a common area for federal IT spending. 4. The Cost Plus Fixed Fee pricing structure requires careful monitoring to ensure cost control. 5. The award was a delivery order against a larger contract vehicle. 6. No small business set-aside was indicated for this specific award.

Value Assessment

Rating: fair

The contract's value of $16.5 million over approximately 8 years for computer systems design services appears moderate for a federal IT contract of this nature. Benchmarking against similar contracts is challenging without more specific details on the scope of work. The Cost Plus Fixed Fee (CPFF) structure, while allowing for flexibility, can sometimes lead to higher costs if not managed tightly, warranting a 'fair' assessment pending further cost analysis.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded as a competitive delivery order, indicating that multiple vendors likely had the opportunity to bid. The presence of 3 bidders suggests a reasonable level of competition for this specific task order. A competitive award generally supports price discovery and can lead to more favorable pricing for the government compared to sole-source or limited competition scenarios.

Taxpayer Impact: The competitive nature of this award is beneficial for taxpayers, as it likely resulted in a more efficient use of funds by encouraging multiple vendors to offer competitive pricing and solutions.

Public Impact

Benefits the Internal Revenue Service (IRS) by providing essential computer systems design services. Supports the operational efficiency and technological infrastructure of a critical government agency. The services likely impact IRS employees and potentially taxpayers through improved system functionality. Geographic impact is centered in Maryland, where the contractor is located.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) pricing requires diligent oversight to prevent cost overruns.
Long contract duration (nearly 8 years) necessitates ongoing performance monitoring and adaptation to evolving needs.
Lack of specific details on performance metrics makes it difficult to fully assess value for money.

Positive Signals

Awarded competitively, indicating a degree of market vetting and potential for good value.
Contractor (Booz Allen Hamilton) is a well-established federal contractor with extensive experience.
Services are for computer systems design, a core IT function supporting agency operations.

Sector Analysis

This contract falls within the broader IT services sector, specifically Computer Systems Design Services. The federal government is a significant consumer of these services, with spending often concentrated in areas like modernization, cybersecurity, and data management. The market for these services is large and competitive, with numerous large and small businesses vying for federal contracts. This specific contract represents a portion of the IRS's overall IT modernization and support budget.

Small Business Impact

This particular delivery order was not set aside for small businesses, and there is no indication of subcontracting requirements specifically tied to small businesses within the provided data. This means the primary award went to a large business. The impact on the small business ecosystem is neutral for this specific award, as it did not prioritize small business participation.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program managers within the IRS. Performance reviews, financial audits, and adherence to contract terms are standard oversight mechanisms. As a delivery order against a larger contract vehicle, the underlying contract likely has its own oversight framework. Transparency is generally maintained through contract databases like FPDS, where award details are reported.

Related Government Programs

IRS IT Modernization Programs
Federal Civilian IT Services
Computer Systems Design Services
Department of the Treasury IT Contracts

Risk Flags

Cost Plus Fixed Fee pricing requires robust oversight.
Long contract duration necessitates ongoing performance management.
Limited public detail on specific performance metrics.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $16.5 million to BOOZ ALLEN HAMILTON INC.. RTCP # 2046

Who is the contractor on this award?

The obligated recipient is BOOZ ALLEN HAMILTON INC..

Which agency awarded this contract?

Awarding agency: Department of the Treasury (Internal Revenue Service).

What is the total obligated amount?

The obligated amount is $16.5 million.

What is the period of performance?

Start: 2006-05-31. End: 2014-08-01.

What is the track record of Booz Allen Hamilton with the IRS and similar federal agencies?

Booz Allen Hamilton has a long and extensive track record of contracting with the IRS and numerous other federal agencies across various sectors, particularly in IT services, management consulting, and systems engineering. Their history with the IRS includes numerous awards for complex projects related to tax systems modernization, data analytics, and IT infrastructure support. This extensive experience suggests a deep understanding of the agency's mission and operational challenges. While specific performance metrics for individual contracts are not always publicly detailed, their continued success in winning competitive bids indicates a generally positive performance perception by federal agencies. However, like any large contractor, they have faced scrutiny and reviews on specific contracts over the years, underscoring the importance of ongoing performance management by the government.

How does the $16.5 million value compare to other IRS IT contracts?

The $16.5 million contract value for computer systems design services awarded to Booz Allen Hamilton is a moderate-sized award within the context of the IRS's overall IT spending. The IRS, like many large federal agencies, manages a portfolio of IT contracts that can range from a few million dollars to hundreds of millions or even billions for major modernization efforts. This specific contract, awarded as a delivery order over nearly 8 years, suggests a focused scope of work rather than a comprehensive agency-wide system overhaul. Compared to large-scale system integration or enterprise resource planning (ERP) projects, $16.5 million is relatively modest. However, for specialized design services or support for specific IRS systems, it represents a significant investment. Benchmarking requires detailed comparison of the scope, duration, and specific services rendered against other IRS IT contracts of similar nature.

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

The primary risk associated with a Cost Plus Fixed Fee (CPFF) contract, like the one awarded to Booz Allen Hamilton, is the potential for cost overruns. In a CPFF structure, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. While the fee is fixed, the total cost is not. This can incentivize contractors to incur higher costs if the government's oversight and auditing processes are not robust, as their profit margin (the fixed fee) remains constant regardless of the total project cost. For the government, the risk lies in paying more than necessary if costs escalate beyond initial projections. Effective risk mitigation requires stringent cost monitoring, detailed auditing of expenses, clear definition of allowable costs, and strong program management to ensure the contractor remains efficient and focused on project objectives within the estimated cost parameters.

How effective are competitive delivery orders in ensuring value for money for the government?

Competitive delivery orders are generally an effective mechanism for ensuring value for money, especially when awarded under a well-structured Indefinite Delivery/Indefinite Quantity (IDIQ) or similar multiple-award contract vehicle. By allowing multiple pre-qualified vendors to compete on specific task orders, the government leverages existing competition to drive down prices and encourage innovation. The presence of multiple bidders, as indicated in this case (3 bidders), suggests that the competitive process is functioning. This process allows the government to solicit proposals tailored to specific needs and select the best value offer, which may include a combination of price, technical approach, and past performance. The effectiveness is maximized when the base contract vehicle itself was competitively awarded and when the evaluation criteria for the delivery orders are clearly defined and consistently applied.

What is the typical duration and value range for Computer Systems Design Services contracts at the IRS?

The duration and value range for Computer Systems Design Services (CSDS) contracts at the IRS can vary significantly based on the project's scope and complexity. Contracts can range from short-term, specialized engagements lasting a few months and valued in the hundreds of thousands of dollars, to multi-year, large-scale modernization efforts potentially worth hundreds of millions. The contract in question, valued at $16.5 million over approximately 8 years (2984 days), falls into a mid-range category for a sustained CSDS effort. Many IRS IT projects involve long-term system maintenance, upgrades, and development, justifying multi-year durations. The value is influenced by factors such as the number of systems involved, the level of customization required, the integration with other platforms, and the specific expertise needed. The IRS consistently invests heavily in its IT infrastructure, making CSDS a recurring and substantial category of spending.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: COMPETITIVE DELIVERY ORDER

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

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

Address: 1953 GALLOWS RD STE 600, VIENNA, VA, 11

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $18,778,122

Exercised Options: $17,726,262

Current Obligation: $16,536,891

Parent Contract

Parent Award PIID: TIRNO06D00026

IDV Type: IDC

Timeline