Treasury's $27.2M IT Support Contract with Booz Allen Hamilton Faces Scrutiny Over Competition and Value
Contract Overview
Contract Amount: $27,209,704 ($27.2M)
Contractor: Booz Allen Hamilton Inc.
Awarding Agency: Department of the Treasury
Start Date: 2006-10-10
End Date: 2012-04-27
Contract Duration: 2,026 days
Daily Burn Rate: $13.4K/day
Competition Type: COMPETITIVE DELIVERY ORDER
Number of Offers Received: 3
Pricing Type: COST PLUS FIXED FEE
Sector: IT
Official Description: TOTAL INFORMATION PROCESSING SUPPORT SER
Place of Performance
Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20220, UNITED STATES OF AMERICA
Plain-Language Summary
Department of the Treasury obligated $27.2 million to BOOZ ALLEN HAMILTON INC. for work described as: TOTAL INFORMATION PROCESSING SUPPORT SER Key points: 1. Contract awarded via competitive delivery order, but limited competition details raise questions. 2. High cost-plus-fixed-fee structure warrants close examination for potential overruns. 3. IT sector spending benchmarks suggest potential for cost savings. 4. Lack of small business participation noted. 5. Long contract duration (2006-2012) may not reflect current market efficiencies.
Value Assessment
Rating: questionable
The contract's cost-plus-fixed-fee (CPFF) structure, while common for complex IT services, can lead to higher costs if not managed tightly. Benchmarking against similar CPFF IT support contracts is crucial to assess if the $27.2M total award value was reasonable.
Cost Per Unit: N/A
Competition Analysis
Competition Level: unknown
Awarded as a competitive delivery order, suggesting multiple bids were considered. However, the specific details of the competition and the number of bidders are not provided, making it difficult to fully assess price discovery and the extent of true competition.
Taxpayer Impact: The CPFF structure and potential lack of aggressive price negotiation could lead to higher taxpayer costs if efficiencies were not maximized.
Public Impact
Taxpayers may have overpaid due to the CPFF structure and potentially limited competitive pressure. Government reliance on a single large contractor for critical IT support can create vendor lock-in. The long duration of the contract raises questions about adaptability to evolving technology and market prices.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost-plus-fixed-fee structure
- Limited competition details
- No small business participation
- Long contract duration
Positive Signals
- Awarded via competitive delivery order
- Services provided by a reputable contractor
Sector Analysis
This contract falls within the IT sector, specifically computer systems design services. Spending in this area is substantial across government agencies. Benchmarks for similar IT support contracts often focus on labor rates, project management efficiency, and the effectiveness of the contract type in controlling costs.
Small Business Impact
The data indicates that small businesses were not involved in this contract (sb: false). This is a missed opportunity to foster small business growth and potentially leverage specialized capabilities at competitive prices.
Oversight & Accountability
The competitive delivery order mechanism implies some level of oversight, but the lack of detailed competition data and the CPFF structure necessitate robust monitoring to ensure cost control and performance accountability.
Related Government Programs
- Computer Systems Design Services
- Department of the Treasury Contracting
- Internal Revenue Service Programs
Risk Flags
- Potential for cost overruns due to CPFF structure.
- Lack of transparency in the competitive bidding process.
- Absence of small business participation.
- Long contract duration may indicate a lack of agility or market responsiveness.
- High total contract value warrants detailed cost scrutiny.
Tags
computer-systems-design-services, department-of-the-treasury, dc, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of the Treasury awarded $27.2 million to BOOZ ALLEN HAMILTON INC.. TOTAL INFORMATION PROCESSING SUPPORT SER
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 $27.2 million.
What is the period of performance?
Start: 2006-10-10. End: 2012-04-27.
Was the cost-plus-fixed-fee structure truly necessary for these IT support services, or could a firm-fixed-price contract have yielded better value?
The necessity of a CPFF structure depends heavily on the predictability of the work scope. For IT support with evolving requirements, CPFF can offer flexibility. However, it shifts cost risk to the government. A thorough analysis comparing potential cost savings of FFP against the flexibility benefits of CPFF, considering the specific tasks performed, would be needed to determine if better value was achievable.
What was the competitive landscape for this delivery order, and did the chosen contractor offer the best value considering price and technical merit?
While designated as a 'competitive delivery order,' the specifics of the bidding process are crucial. Understanding the number of bidders, the evaluation criteria, and how price was weighed against technical factors is essential. Without this, it's difficult to ascertain if the government secured the best possible value or if the competition was robust enough to drive down costs effectively.
How did the performance and cost-effectiveness of this contract compare to industry benchmarks for similar IT support services during its 2006-2012 period?
Comparing performance and cost-effectiveness requires access to detailed contract performance reports and financial data. Benchmarking against industry standards for IT support during that era would involve analyzing metrics like uptime, response times, issue resolution rates, and comparing the contractor's labor rates and overhead against market averages for similar skill sets and services.
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, 22182
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $54,161,946
Exercised Options: $46,326,538
Current Obligation: $27,209,704
Parent Contract
Parent Award PIID: TIRNO06D00026
IDV Type: IDC
Timeline
Start Date: 2006-10-10
Current End Date: 2012-04-27
Potential End Date: 2012-04-27 00:00:00
Last Modified: 2017-04-20
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