VA's $75M CRM IT contract awarded to Booz Allen Hamilton Inc. shows fair value despite limited competition

Contract Overview

Contract Amount: $75,110,453 ($75.1M)

Contractor: Booz Allen Hamilton Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2015-08-18

End Date: 2018-09-24

Contract Duration: 1,133 days

Daily Burn Rate: $66.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::OT::IGF - OTHER FUNCTION - T4 TASK ORDER FOR CUSTOMER RELATIONSHIP MANAGEMENT (CRM) PROGRAM DEVELOPMENT AND OPERATION AND MAINTENANCE (O&M) SUPPORT.

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20001

State: District of Columbia Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $75.1 million to BOOZ ALLEN HAMILTON INC for work described as: IGF::OT::IGF - OTHER FUNCTION - T4 TASK ORDER FOR CUSTOMER RELATIONSHIP MANAGEMENT (CRM) PROGRAM DEVELOPMENT AND OPERATION AND MAINTENANCE (O&M) SUPPORT. Key points: 1. Contract awarded via full and open competition, indicating a broad search for qualified vendors. 2. The contract's fixed-price nature helps control costs and shifts risk to the contractor. 3. Performance period of over three years suggests a need for stable, long-term support. 4. The task order was part of a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle, common for IT services. 5. The contractor, Booz Allen Hamilton, is a large, established firm with extensive government contracting experience. 6. The IT services sector is highly competitive, but specific task orders can see varied bidder interest.

Value Assessment

Rating: fair

The contract's total value of approximately $75.1 million over three years averages to about $25 million annually. This is a substantial but not exorbitant amount for comprehensive CRM program development and O&M support for a large agency like the VA. Benchmarking against similar large-scale IT support contracts within the federal government suggests this pricing is within a reasonable range, especially considering the complexity and scope of CRM systems. The firm-fixed-price structure further supports value by ensuring cost certainty for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, meaning all responsible sources were permitted to submit bids. While the specific number of bidders for this particular task order is not detailed, the 'full and open' designation suggests a robust competitive process was intended. This approach generally leads to better price discovery and ensures the government receives offers from a wide range of qualified contractors, potentially driving down costs compared to more restrictive competition methods.

Taxpayer Impact: A full and open competition process is beneficial for taxpayers as it maximizes the potential for competitive pricing and encourages a wider pool of contractors to vie for government work, leading to potentially lower overall spending.

Public Impact

Veterans Affairs (VA) personnel benefit from improved customer relationship management tools and support. The contract supports the development and ongoing operation of critical CRM systems for the VA. This IT support contract has implications for the District of Columbia's technology sector workforce. Enhanced CRM capabilities can lead to more efficient service delivery to veterans.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if CRM system is highly customized and difficult to transition.
Reliance on a single large contractor may limit future competitive opportunities for smaller, specialized firms.
Scope creep could increase costs beyond initial projections if not managed tightly.

Positive Signals

Award to an experienced contractor like Booz Allen Hamilton suggests a lower risk of performance issues.
Firm-fixed-price contract provides cost certainty and limits the government's financial exposure.
Full and open competition, in principle, allows for the best value to be identified.

Sector Analysis

This contract falls within the Computer Systems Design Services sector, a significant segment of the federal IT market. The federal government spends billions annually on IT services, including software development, system integration, and IT operations and maintenance. Contracts like this, focused on CRM, are crucial for agencies managing large constituent bases and complex service delivery operations. The market for CRM solutions is mature, with numerous providers ranging from large system integrators to specialized software vendors.

Small Business Impact

The contract was not set aside for small businesses, and the prime contractor, Booz Allen Hamilton, is a large business. This indicates that small businesses were not specifically targeted for the prime contract award. However, large prime contractors are often required to meet small business subcontracting goals. The extent to which this contract provided subcontracting opportunities to small businesses would depend on the specific requirements outlined in the contract and the prime contractor's subcontracting plan.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the contracting officer's representative (COR) within the Department of Veterans Affairs. Performance monitoring, quality assurance, and adherence to contract terms are key oversight functions. Given the IT nature of the contract, regular technical reviews and progress reports would be expected. Transparency is generally maintained through contract databases like FPDS-NG, which record award details, though detailed performance metrics may not always be publicly available.

Related Government Programs

VA IT Modernization Initiatives
Federal Cloud Computing Strategy
Customer Relationship Management Systems
IT Operations and Maintenance Contracts
Department of Veterans Affairs IT Services

Risk Flags

Potential for cost growth if scope is not tightly managed.
Dependence on contractor expertise could create long-term reliance.
Integration challenges with existing VA systems may arise.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $75.1 million to BOOZ ALLEN HAMILTON INC. IGF::OT::IGF - OTHER FUNCTION - T4 TASK ORDER FOR CUSTOMER RELATIONSHIP MANAGEMENT (CRM) PROGRAM DEVELOPMENT AND OPERATION AND MAINTENANCE (O&M) SUPPORT.

Who is the contractor on this award?

The obligated recipient is BOOZ ALLEN HAMILTON INC.

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $75.1 million.

What is the period of performance?

Start: 2015-08-18. End: 2018-09-24.

What is the track record of Booz Allen Hamilton in delivering similar CRM solutions for federal agencies?

Booz Allen Hamilton has a long and extensive history of providing IT services, including system development, integration, and support, to various federal agencies. While specific details on their CRM project successes and failures are not publicly itemized in a readily accessible format, their status as a major government contractor suggests a significant portfolio of relevant experience. They have been involved in large-scale IT transformations and support contracts across defense, civilian, and intelligence agencies. Their ability to secure and perform on contracts of this magnitude indicates a demonstrated capability, though the success of any specific CRM implementation depends heavily on the agency's requirements, user adoption, and ongoing management.

How does the pricing of this contract compare to similar CRM development and O&M contracts awarded by the VA or other large federal agencies?

Direct, apples-to-apples comparisons are challenging due to variations in scope, complexity, duration, and specific services included in CRM contracts. However, the total value of approximately $75.1 million over three years, averaging around $25 million annually, places this contract in the mid-to-large tier for IT support services. For a comprehensive CRM program development and O&M effort for an agency the size of the VA, this pricing appears reasonable. Larger agencies often face higher costs due to scale, integration needs with legacy systems, and stringent security requirements. Without detailed breakdowns of labor categories, hours, and specific deliverables, a precise benchmark is difficult, but the overall value seems aligned with market rates for similar large-scale federal IT projects.

What are the primary risks associated with this contract, and how are they mitigated?

Key risks include potential cost overruns if the scope expands beyond initial projections (scope creep), technical challenges in developing or integrating the CRM system, and user adoption issues. Mitigation strategies likely include the firm-fixed-price contract type, which shifts cost overrun risk to the contractor. The VA would also employ robust project management, regular performance reviews, and defined milestones to monitor progress and manage scope. User training and engagement plans are crucial for mitigating adoption risks. The contractor's experience also serves as a risk-reduction factor, suggesting a higher likelihood of successful technical execution.

How effective has the VA been in leveraging CRM systems to improve services for veterans, and how does this contract contribute?

The effectiveness of VA's CRM systems in improving services for veterans is a complex and ongoing area of focus. Improved CRM capabilities are intended to streamline communication, personalize outreach, and ensure veterans receive timely and appropriate services. This contract, by funding the development and O&M of CRM programs, directly contributes to the infrastructure needed for these improvements. Success hinges not only on the technology but also on how well VA staff are trained and integrated into using the system, and how effectively the data within the CRM is utilized to inform service delivery strategies. Publicly available data on the direct impact of specific CRM initiatives on veteran satisfaction or service efficiency is limited.

What are the historical spending patterns for CRM-related IT services at the VA, and how does this contract fit within that trend?

The VA, like many large federal agencies, has consistently invested in IT infrastructure, including CRM systems, to manage its vast population of beneficiaries. Historical spending patterns would likely show a trend of increasing investment in digital services and data management capabilities to improve efficiency and veteran experience. This $75 million contract represents a significant, but likely not unprecedented, investment within a broader strategy to modernize VA's IT systems. It fits within the trend of agencies seeking integrated solutions to manage constituent relationships more effectively, often through large, multi-year IT service contracts.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

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

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: $116,223,155

Exercised Options: $75,110,453

Current Obligation: $75,110,453

Subaward Activity

Number of Subawards: 4

Total Subaward Amount: $42,561,600

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: VA11811D1008

IDV Type: IDC

Timeline