Booz Allen Hamilton awarded $105M for IPPS-A PMO support, raising questions on sole-source competition

Contract Overview

Contract Amount: $105,156,187 ($105.2M)

Contractor: Booz Allen Hamilton Inc

Awarding Agency: Department of Defense

Start Date: 2014-02-01

End Date: 2019-02-07

Contract Duration: 1,832 days

Daily Burn Rate: $57.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: IGF::OT::IGF THIS ACQUISITION IS FOR THE PROJECT MANAGEMENT OFFICE (PMO) INTEGRATED PERSONNEL AND PAY SYSTEM ARMY (IPPS-A) PROGRAM MANAGEMENT SUPPORT SERVICES. THE IPPS-A SYSTEM PROVIDES THE ARMY WITH AN INTEGRATED, MULTI-COMPONENT, PERSONNEL AND PAY SYSTEM WHICH STREAMLINES ARMY HUMAN RESOURCES, ENHANCES THE EFFICIENCY AND ACCURACY OF ARMY PERSONNEL AND PAY PROCEDURES, AND SUPPORTS SOLDIERS AND THEIR FAMILIES. THE PROPOSED SOLE SOURCE CONTRACT WOULD PROVIDE UNINTERRUPTED SYSTEMS ENGINEERING AND TECHNICAL ASSESSMENT (SETA) SERVICES TO PMO IPPS-A AND THE ARMY G-1 FUNCTIONAL MANAGEMENT DIVISION (FMD) IN THE AREAS OF PROGRAM AND PROJECT MANAGEMENT; SYSTEMS ENGINEERING; LIFECYCLE MANAGEMENT; TEST AND EVALUATION; BUSINESS PROCESSING RE-ENGINEERING; FUNCTIONAL DESIGN; AND INTEGRATED LOGISTICS FOR THE DEVELOPMENT OF THE IPPS-A SYSTEM.

Place of Performance

Location: MCLEAN, FAIRFAX County, VIRGINIA, 22102

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $105.2 million to BOOZ ALLEN HAMILTON INC for work described as: IGF::OT::IGF THIS ACQUISITION IS FOR THE PROJECT MANAGEMENT OFFICE (PMO) INTEGRATED PERSONNEL AND PAY SYSTEM ARMY (IPPS-A) PROGRAM MANAGEMENT SUPPORT SERVICES. THE IPPS-A SYSTEM PROVIDES THE ARMY WITH AN INTEGRATED, MULTI-COMPONENT, PERSONNEL AND PAY SYSTEM WHICH STREAMLINES ARMY… Key points: 1. Contract provides critical program management and systems engineering for the Army's Integrated Personnel and Pay System (IPPS-A). 2. Sole-source award for a significant duration (5 years) may limit competitive pricing and innovation. 3. The contract's cost-plus-fixed-fee structure could incentivize cost overruns if not closely monitored. 4. Services encompass a broad range of expertise from lifecycle management to business process re-engineering. 5. The award is for essential support to the Army's HR and pay modernization efforts. 6. Lack of competition raises concerns about achieving best value for taxpayer dollars.

Value Assessment

Rating: fair

The contract value of $105.16 million over five years for program management and systems engineering support for IPPS-A appears substantial. Benchmarking this against similar large-scale IT program support contracts is challenging without more specific service details. However, the sole-source nature of the award means direct price comparisons to competitive bids are unavailable, potentially impacting the assessment of value for money. The cost-plus-fixed-fee (CPFF) contract type, while allowing flexibility, requires diligent oversight to ensure costs remain reasonable and aligned with project objectives.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. The justification for a sole-source award typically involves unique capabilities or the need for continuity of services. In this case, Booz Allen Hamilton likely possesses specialized knowledge of the IPPS-A system and its ongoing development. However, the absence of a competitive bidding process means the Army did not benefit from the price discovery and innovation that typically arises from a full and open competition.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no direct competitive pressure to drive down prices. This limits the government's ability to secure the most cost-effective solution.

Public Impact

Soldiers and their families benefit from a more streamlined and accurate personnel and pay system. The Army's Human Resources functions are modernized, leading to increased efficiency and accuracy. Support services are delivered across the Army, impacting personnel management nationwide. The contract supports a significant IT modernization effort within the Department of Defense. Workforce implications include the continued employment of specialized technical and program management personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially leading to higher costs.
Cost-plus-fixed-fee structure requires robust oversight to prevent cost overruns.
Long contract duration (5 years) without re-competition may reduce incentives for contractor efficiency.
Limited transparency into the specific technical assessments and engineering services provided.

Positive Signals

Contractor has established expertise in supporting the IPPS-A program.
Ensures continuity of essential program management and systems engineering services.
Supports a critical modernization initiative for Army personnel and pay systems.
Addresses a broad range of complex IT and HR functional requirements.

Sector Analysis

This contract falls within the IT services sector, specifically focusing on program management and systems engineering for a large-scale government software implementation. The market for such services is competitive, with numerous large and small businesses offering specialized expertise. However, for highly specialized, long-term support on a critical program like IPPS-A, incumbent contractors often have an advantage. The total IT spending by the Department of Defense is in the tens of billions annually, making this contract a relatively small but vital component of their overall IT modernization efforts.

Small Business Impact

The data indicates this contract was not set aside for small businesses and the prime contractor is not a small business. There is no explicit information regarding subcontracting plans for small businesses within this award. Without specific subcontracting goals or reporting, the direct impact on the small business ecosystem is unclear, though large sole-source contracts can sometimes limit opportunities for smaller, specialized firms to enter or expand their footprint.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contract management and program management structures, potentially involving the Defense Contract Management Agency (DCMA) and the Army's Program Executive Office (PEO) for IPPS-A. The cost-plus-fixed-fee nature necessitates rigorous financial oversight to ensure costs are allowable, allocable, and reasonable. Transparency is generally maintained through contract reporting requirements, but the specifics of technical assessments and program management decisions may have limited public visibility.

Related Government Programs

Integrated Personnel and Pay System - Army (IPPS-A)
Army Human Resources Systems
Defense IT Modernization Programs
Program Management Support Services
Systems Engineering and Technical Assistance (SETA)

Risk Flags

Sole-source award
Cost-plus contract type
Long contract duration without re-competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $105.2 million to BOOZ ALLEN HAMILTON INC. IGF::OT::IGF THIS ACQUISITION IS FOR THE PROJECT MANAGEMENT OFFICE (PMO) INTEGRATED PERSONNEL AND PAY SYSTEM ARMY (IPPS-A) PROGRAM MANAGEMENT SUPPORT SERVICES. THE IPPS-A SYSTEM PROVIDES THE ARMY WITH AN INTEGRATED, MULTI-COMPONENT, PERSONNEL AND PAY SYSTEM WHICH STREAMLINES ARMY HUMAN RESOURCES, ENHANCES THE EFFICIENCY AND ACCURACY OF ARMY PERSONNEL AND PAY PROCEDURES, AND SUPPORTS SOLDIERS AND THEIR FAMILIES. THE PROPOSED SOLE SOURCE CONTRACT WOULD PROVIDE UNINTERRUPTED SYSTEMS ENGINEERING AND

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 $105.2 million.

What is the period of performance?

Start: 2014-02-01. End: 2019-02-07.

What is Booz Allen Hamilton's track record with the IPPS-A program prior to this award?

Booz Allen Hamilton has a significant history of supporting the Integrated Personnel and Pay System - Army (IPPS-A) program. As the incumbent contractor for Program Management Office (PMO) Integrated Personnel and Pay System Army (IPPS-A) Program Management Support Services, they have been involved in providing essential systems engineering and technical assessment (SETA) services. This includes expertise in program and project management, systems engineering, lifecycle management, test and evaluation, business process re-engineering, functional design, and integrated logistics. Their long-standing involvement suggests a deep understanding of the program's complexities, requirements, and ongoing challenges, which likely formed the basis for the sole-source justification.

How does the $105 million contract value compare to similar IT program management support contracts within the DoD?

Comparing the $105.16 million contract value for Booz Allen Hamilton's IPPS-A support to similar IT program management contracts within the DoD requires context regarding the scope, duration, and complexity of services. Large-scale IT modernization programs, especially those involving personnel and pay systems for a military branch, often command significant budgets. Contracts for program management and systems engineering support can range from tens to hundreds of millions of dollars over several years. While $105 million over five years is substantial, it may be within the expected range for supporting a program as critical and complex as IPPS-A, especially given the sole-source nature which implies a specific, ongoing need that wasn't re-competed. However, without direct comparisons of contracts with identical service definitions and performance metrics, a precise value benchmark is difficult.

What are the primary risks associated with a sole-source award of this magnitude and duration?

The primary risks associated with a sole-source award of this magnitude ($105.16 million) and duration (5 years) include a lack of competitive pressure, which can lead to suboptimal pricing and reduced incentives for innovation and efficiency. Taxpayers may not be receiving the best possible value for their money compared to what could be achieved through a competitive process. There's also a risk of vendor lock-in, where the government becomes overly reliant on a single provider, potentially hindering future flexibility. Furthermore, without the vetting process of multiple bids, there's a slightly elevated risk that potential performance issues or unforeseen challenges might not be as thoroughly identified upfront as they might be in a competitive scenario. Robust oversight is crucial to mitigate these risks.

How effective is the Cost Plus Fixed Fee (CPFF) contract type in managing large IT projects like IPPS-A?

The Cost Plus Fixed Fee (CPFF) contract type is often used for complex research and development or system integration efforts where the scope is not fully defined at the outset, or where significant uncertainties exist. For large IT projects like IPPS-A, CPFF allows for flexibility as requirements evolve. The 'cost-plus' element covers allowable costs incurred by the contractor, while the 'fixed fee' represents the contractor's profit, negotiated upfront. This structure aims to incentivize the contractor to control costs, as their profit is fixed regardless of the final cost. However, it requires stringent government oversight to ensure costs are reasonable and necessary, and to prevent potential cost overruns from eroding the value proposition. If not managed carefully, the contractor may have less incentive to minimize costs compared to fixed-price contracts.

What are the historical spending patterns for IPPS-A program management support?

Historical spending patterns for IPPS-A program management support, particularly concerning Booz Allen Hamilton's involvement, would likely show consistent investment over the program's lifecycle. While the provided data focuses on a single award of $105.16 million from February 2014 to February 2019, it represents a significant portion of the program's support costs during that period. Prior to this definitive contract, there may have been earlier contract vehicles, task orders, or other agreements funding similar support services. Analyzing cumulative spending across different contract types and awardees over the entire history of IPPS-A would provide a clearer picture of the overall investment in program management and systems engineering, revealing trends in cost growth, funding allocation, and the duration of support required.

What are the implications of the 'Other Computer Related Services' NAICS code (541519) for this contract?

The North American Industry Classification System (NAICS) code 541519, 'Other Computer Related Services,' is a broad category that encompasses a wide range of IT services not specified elsewhere. For this contract supporting the IPPS-A program, it suggests that the services provided by Booz Allen Hamilton extend beyond standard software development or IT support. This could include specialized consulting, systems integration, technical assessment, program management, and lifecycle support, which are all critical for a complex system like IPPS-A. The broadness of the code highlights the multifaceted nature of the support required, encompassing various technical and managerial functions necessary to ensure the successful implementation and sustainment of the personnel and pay system.

Industry Classification

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

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W15QKN14R0060

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Booz Allen Hamilton Holding Corporation

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: $123,663,434

Exercised Options: $106,218,053

Current Obligation: $105,156,187

Subaward Activity

Number of Subawards: 23

Total Subaward Amount: $27,560,326

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline