VA's $29M Business Transformation Contract Awarded to Booz Allen Hamilton for Management Consulting Services

Contract Overview

Contract Amount: $29,068,296 ($29.1M)

Contractor: Booz Allen Hamilton Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2009-02-13

End Date: 2014-05-08

Contract Duration: 1,910 days

Daily Burn Rate: $15.2K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: VBA - BUSINESS TRANSFORMATION CONTRACT

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20420

State: District of Columbia Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $29.1 million to BOOZ ALLEN HAMILTON INC for work described as: VBA - BUSINESS TRANSFORMATION CONTRACT Key points: 1. Contract focused on administrative and general management consulting, indicating a need for strategic guidance. 2. Awarded through full and open competition, suggesting a robust selection process. 3. The contract duration of approximately 5 years points to a significant, long-term project. 4. The firm-fixed-price structure aims to control costs and provide predictability. 5. The contractor, Booz Allen Hamilton, is a well-established entity in the federal contracting space. 6. The contract's value suggests a substantial investment in improving VA's business operations.

Value Assessment

Rating: good

The contract value of approximately $29 million over five years for management consulting services appears reasonable given the scope of business transformation. Benchmarking against similar large-scale consulting engagements within federal agencies suggests this pricing is within expected ranges. The firm-fixed-price contract type helps manage cost overruns, providing a degree of value certainty for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'full and open competition after exclusion of sources,' indicating that multiple potential bidders were considered and the process aimed for broad participation. While the exact number of bidders is not specified, this procurement method generally fosters competitive pricing and allows the government to select the best-value offer.

Taxpayer Impact: A full and open competition process is beneficial for taxpayers as it increases the likelihood of obtaining competitive pricing and ensures that the most capable contractor is selected, maximizing the return on investment for public funds.

Public Impact

Veterans will benefit from improved business processes and potentially more efficient service delivery by the VA. The contract supports the modernization and transformation of the Department of Veterans Affairs' administrative and management functions. The primary geographic impact is within the District of Columbia, where the VA's headquarters are located, but improvements could have nationwide implications for veterans. The contract likely involves a team of consultants, impacting the professional workforce in the management consulting sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep in long-term transformation projects if not managed tightly.
Reliance on a single large contractor for critical business process improvements.
Ensuring effective knowledge transfer from consultants to VA staff for long-term sustainability.

Positive Signals

Awarded through full and open competition, suggesting a competitive selection.
Firm-fixed-price contract type helps control costs.
Booz Allen Hamilton has extensive experience in federal consulting.
Contract duration aligns with the complexity of business transformation initiatives.

Sector Analysis

This contract falls within the professional services sector, specifically management and administrative consulting. The federal government is a significant consumer of these services to improve efficiency, implement new technologies, and manage complex programs. The market for federal management consulting is substantial, with numerous large and small firms competing for these contracts. This engagement represents a significant investment by the VA in optimizing its operational framework.

Small Business Impact

The contract was awarded to Booz Allen Hamilton, a large business, and there is no indication of a small business set-aside. While the primary contract is with a large firm, there may be opportunities for small businesses to participate as subcontractors, depending on the specific needs and subcontracting plans developed by Booz Allen Hamilton. The absence of a direct set-aside means the primary focus was on securing the best overall solution, rather than specifically promoting small business participation.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program managers within the Department of Veterans Affairs. Performance reviews, regular reporting requirements, and adherence to the firm-fixed-price terms are key accountability measures. Transparency is facilitated through contract award databases and public reporting, though detailed internal operational oversight specifics are generally not public.

Related Government Programs

VA IT Modernization Programs
Federal Management Consulting Services
Government Business Process Re-engineering
VA Strategic Planning Initiatives

Risk Flags

Potential for contractor lock-in due to specialized knowledge.
Risk of misalignment between consultant recommendations and agency operational realities.
Dependency on contractor expertise for critical business functions.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $29.1 million to BOOZ ALLEN HAMILTON INC. VBA - BUSINESS TRANSFORMATION CONTRACT

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 $29.1 million.

What is the period of performance?

Start: 2009-02-13. End: 2014-05-08.

What specific business transformation initiatives were undertaken under this contract?

This contract, valued at approximately $29 million and awarded to Booz Allen Hamilton, was intended to support the Department of Veterans Affairs' (VA) broader business transformation efforts. While the specific deliverables are not detailed in the provided data, such contracts typically encompass a range of activities aimed at improving operational efficiency, modernizing administrative processes, and enhancing service delivery. This could include areas like organizational restructuring, process re-engineering, strategic planning, change management, and the implementation of new management systems or technologies. The 'Administrative Management and General Management Consulting Services' NAICS code further suggests a focus on high-level strategic and operational guidance rather than purely technical IT implementation.

How does the $29 million contract value compare to similar VA transformation efforts?

The $29 million contract value for Booz Allen Hamilton's business transformation services over approximately five years represents a significant, but not extraordinary, investment for a large federal agency like the VA. Large-scale transformation and management consulting contracts within federal agencies can range from tens to hundreds of millions of dollars, depending on the scope, duration, and complexity. For instance, major IT modernization or agency-wide strategic overhauls often command higher price tags. This contract's value appears commensurate with a substantial, multi-year engagement focused on improving core administrative and management functions, suggesting it aligns with typical spending for such strategic initiatives within the VA.

What are the key risks associated with a contract of this nature and duration?

A primary risk with a long-term, large-value transformation contract like this is the potential for scope creep, where the project's objectives expand beyond the original agreement, leading to increased costs and delays. Another significant risk is the contractor's ability to deliver the promised transformation outcomes effectively and sustainably. Over-reliance on external consultants can also pose a risk if adequate knowledge transfer to internal VA staff is not prioritized, potentially creating a dependency. Furthermore, changes in VA leadership or strategic priorities over the contract's five-year duration could necessitate adjustments, introducing uncertainty. Finally, ensuring the consultant's recommendations are practical and align with the VA's unique operational environment is crucial.

What was Booz Allen Hamilton's track record with the VA prior to this award?

Booz Allen Hamilton is a major federal contractor with a long history of providing consulting services across numerous government agencies, including the Department of Veterans Affairs. While the provided data doesn't detail their specific VA contract history prior to this $29 million award, their established presence suggests they have likely held numerous contracts with the VA for various services, potentially including management consulting, IT support, and strategic planning. Their extensive experience with federal agencies generally indicates a familiarity with government procurement processes, regulatory environments, and the unique challenges faced by public sector organizations like the VA.

How does the 'firm fixed price' contract type influence value for money?

The 'firm fixed price' (FFP) contract type is generally considered advantageous for achieving value for money when the scope of work is well-defined and unlikely to change significantly. Under an FFP contract, the contractor agrees to a set price for a specific product or service, regardless of the actual costs incurred. This shifts the risk of cost overruns to the contractor, incentivizing them to manage their resources efficiently and control expenses. For the government, it provides cost certainty and predictability, making budgeting easier. In the context of this VA business transformation contract, the FFP structure aims to ensure that the VA receives the defined consulting services within the agreed-upon budget, maximizing the return on investment by preventing unexpected cost escalations.

What does the 'full and open competition after exclusion of sources' procurement method imply?

The procurement method 'full and open competition after exclusion of sources' indicates that the VA sought proposals from all responsible sources capable of meeting the requirements, but at some point, specific sources were excluded from consideration. This is often used when certain conditions apply, such as when a previous contract was terminated, or specific capabilities are required that only a limited number of entities possess. However, the 'full and open' aspect suggests a broad initial solicitation. The implication for taxpayers is that while the competition might not have been entirely unrestricted from the outset, the process aimed to leverage competitive forces to achieve the best value. The exclusion of sources, if justified and documented, should not inherently compromise the government's ability to secure competitive pricing or optimal performance.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Administrative Management and General Management Consulting Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: VA-798-09-RQ-0003

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: $37,362,414

Exercised Options: $29,068,296

Current Obligation: $29,068,296

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline