DOL's $80M NCFMS contract awarded to Booz Allen Hamilton for financial system support

Contract Overview

Contract Amount: $80,252,068 ($80.3M)

Contractor: Booz Allen Hamilton Inc

Awarding Agency: Department of Labor

Start Date: 2016-07-01

End Date: 2019-09-30

Contract Duration: 1,186 days

Daily Burn Rate: $67.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: LABOR HOURS

Sector: IT

Official Description: IGF::CL,CT::IGF THE PURPOSE OF THIS REQUISITION IS TO OBTAIN SERVICES TO SUPPORT THE U.S. DEPARTMENT OF LABOR (DOL) IN OPERATING AND MAINTAINING A FINANCIAL MANAGEMENT SYSTEM IN A HOSTED ENVIRONMENT. DOL SEEKS TO ESTABLISH A CONTRACT THAT WILL PROVIDE A RANGE OF SUPPORT FOR OPERATION AND MAINTENANCE OF A FINANCIAL MANAGEMENT SYSTEM, CALLED THE NEW CORE FINANCIAL MANAGEMENT SYSTEM (NCFMS).

Place of Performance

Location: MCLEAN, FAIRFAX County, VIRGINIA, 22102

State: Virginia Government Spending

Plain-Language Summary

Department of Labor obligated $80.3 million to BOOZ ALLEN HAMILTON INC for work described as: IGF::CL,CT::IGF THE PURPOSE OF THIS REQUISITION IS TO OBTAIN SERVICES TO SUPPORT THE U.S. DEPARTMENT OF LABOR (DOL) IN OPERATING AND MAINTAINING A FINANCIAL MANAGEMENT SYSTEM IN A HOSTED ENVIRONMENT. DOL SEEKS TO ESTABLISH A CONTRACT THAT WILL PROVIDE A RANGE OF SUPPORT FOR OPER… Key points: 1. Contract provides essential operational and maintenance support for the Department of Labor's New Core Financial Management System (NCFMS). 2. The contract was awarded under full and open competition, suggesting a competitive bidding process. 3. The duration of the contract is approximately 3.2 years, indicating a medium-term commitment. 4. The contract type is a delivery order, suggesting it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle. 5. The primary service category is Computer Systems Design Services, aligning with the need for financial system support. 6. The contract value of $80.25 million represents a significant investment in maintaining critical financial infrastructure.

Value Assessment

Rating: good

The contract value of $80.25 million over approximately 3.2 years for operating and maintaining a financial management system appears reasonable for a government-wide system. Benchmarking against similar large-scale IT system support contracts within federal agencies would provide a more precise value-for-money assessment. The pricing structure, based on labor hours, allows for flexibility but requires diligent oversight to ensure efficiency and prevent cost overruns. Without specific performance metrics or comparison data, a definitive assessment of cost-effectiveness is challenging, but the scope of services suggests a necessary investment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors were likely invited to bid. This approach generally fosters a competitive environment, encouraging vendors to offer competitive pricing and innovative solutions to win the contract. The number of bidders and the specific evaluation criteria would further illuminate the intensity of the competition. A robust competition is expected to lead to better value for the government.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically drives down costs through market forces and encourages a wider pool of qualified contractors, potentially leading to more efficient service delivery.

Public Impact

The primary beneficiaries are the various departments and personnel within the U.S. Department of Labor who rely on the NCFMS for financial operations. The services delivered include operation and maintenance of the financial management system, ensuring its stability and functionality. The geographic impact is primarily national, supporting the DOL's operations across its various offices and functions. Workforce implications include the potential for IT professionals and support staff employed by the contractor to maintain and operate the system.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if system requirements evolve significantly during the contract period.
Reliance on a single contractor for critical financial system operations could pose a risk if performance issues arise.
Ensuring continued alignment with evolving cybersecurity best practices and federal data protection mandates.

Positive Signals

Awarded through full and open competition, suggesting a competitive and potentially cost-effective process.
The contract duration provides stability for essential financial system operations.
Booz Allen Hamilton is a well-established contractor with significant experience in government IT services.

Sector Analysis

This contract falls within the Computer Systems Design Services sector, a critical component of the IT services market supporting government operations. The federal IT services market is vast, with agencies investing heavily in maintaining and modernizing their systems. This contract for a financial management system is representative of the ongoing need for robust IT infrastructure to support core government functions. Comparable spending benchmarks would involve analyzing other large-scale IT system operations and maintenance contracts across federal agencies.

Small Business Impact

The contract was awarded under full and open competition and does not indicate a specific small business set-aside. While the prime contractor is Booz Allen Hamilton, a large business, there may be opportunities for small businesses to participate as subcontractors. The extent of small business subcontracting would depend on the contractor's own subcontracting plan and the specific needs of the NCFMS support services.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Labor's contracting officers and program managers. Accountability measures would be defined in the contract's statement of work and performance standards. Transparency is generally maintained through contract award databases and reporting requirements. The Inspector General's office for the Department of Labor would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Federal Financial Management Systems
IT Operations and Maintenance
Core Financial Management Systems
Government IT Services

Risk Flags

Potential for cost overruns due to labor-hours contract type.
Reliance on a single vendor for critical system operations.
Ensuring ongoing compliance with evolving federal cybersecurity mandates.

Frequently Asked Questions

What is this federal contract paying for?

Department of Labor awarded $80.3 million to BOOZ ALLEN HAMILTON INC. IGF::CL,CT::IGF THE PURPOSE OF THIS REQUISITION IS TO OBTAIN SERVICES TO SUPPORT THE U.S. DEPARTMENT OF LABOR (DOL) IN OPERATING AND MAINTAINING A FINANCIAL MANAGEMENT SYSTEM IN A HOSTED ENVIRONMENT. DOL SEEKS TO ESTABLISH A CONTRACT THAT WILL PROVIDE A RANGE OF SUPPORT FOR OPERATION AND MAINTENANCE OF A FINANCIAL MANAGEMENT SYSTEM, CALLED THE NEW CORE FINANCIAL MANAGEMENT SYSTEM (NCFMS).

Who is the contractor on this award?

The obligated recipient is BOOZ ALLEN HAMILTON INC.

Which agency awarded this contract?

Awarding agency: Department of Labor (Office of the Assistant Secretary for Administration and Management).

What is the total obligated amount?

The obligated amount is $80.3 million.

What is the period of performance?

Start: 2016-07-01. End: 2019-09-30.

What is the track record of Booz Allen Hamilton in supporting federal financial management systems?

Booz Allen Hamilton has a long-standing and extensive track record of providing IT services to the federal government, including support for financial management systems. They have been involved in numerous large-scale IT projects for various agencies, encompassing system design, implementation, operations, and maintenance. Their experience often includes managing complex enterprise resource planning (ERP) systems and financial platforms. While specific performance data for this particular contract is not detailed here, their general reputation and history suggest a capacity to handle such requirements. However, a deeper dive into past performance reviews, contract awards, and any reported issues on similar contracts would provide a more comprehensive understanding of their specific capabilities and reliability in this domain.

How does the cost of this contract compare to similar federal financial system support contracts?

Directly comparing the $80.25 million cost for approximately 3.2 years of support for the NCFMS requires access to detailed cost breakdowns and performance metrics, as well as data from comparable contracts. However, for a system of this nature, supporting a major federal agency like the Department of Labor, this expenditure appears within a plausible range for comprehensive operations and maintenance. Factors influencing cost include the system's complexity, the number of users, the scope of services (e.g., help desk, system upgrades, cybersecurity), and the labor rates. Benchmarking against contracts for similar-sized financial systems in other large federal agencies would be necessary for a precise value-for-money assessment. The 'labor hours' pricing model offers flexibility but necessitates vigilant oversight to ensure cost efficiency.

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

Key risks include potential cost overruns due to the labor-hours pricing model, which can be mitigated through strong contract oversight, detailed work breakdown structures, and regular performance reviews. Another risk is vendor lock-in or over-reliance on a single provider, which can be addressed by ensuring clear exit strategies and maintaining institutional knowledge within the agency. Cybersecurity threats are a constant risk for financial systems; mitigation involves strict adherence to federal security standards, regular audits, and prompt patching of vulnerabilities. Performance degradation or failure to meet service level agreements (SLAs) is also a risk, managed through performance monitoring, defined penalties, and clear communication channels for issue resolution.

How effective is the NCFMS in meeting the Department of Labor's financial management needs?

The effectiveness of the NCFMS is not directly detailed in the provided data. However, the continued investment in its operation and maintenance, as evidenced by this contract, suggests it is considered a critical system for the Department of Labor. Its effectiveness would be measured by its ability to accurately process financial transactions, generate timely reports, ensure compliance with federal regulations, and support informed decision-making. User satisfaction, system uptime, and the efficiency gains it provides are also key indicators. Ongoing assessments, user feedback, and audits would provide a clearer picture of its operational effectiveness and whether it fully meets evolving agency needs.

What are the historical spending patterns for financial management system support at the Department of Labor?

The provided data focuses on a single contract award ($80.25M from 2016-2019). To understand historical spending patterns, one would need to examine previous contracts for the NCFMS or its predecessors, as well as other financial management IT support contracts awarded by the DOL over a longer period. This would involve analyzing contract databases to identify trends in spending, contract types, durations, and awarded vendors. Understanding these patterns would reveal whether spending has been consistent, increasing, or decreasing, and whether there have been shifts in contracting strategies or vendor relationships for financial system support.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: DOL-OPS-16-R-00027

Offers Received: 1

Pricing Type: LABOR HOURS (Z)

Evaluated Preference: NONE

Contractor Details

Parent Company: Booz Allen Hamilton Holding Corporation

Address: 8283 GREENSBORO DR, MCLEAN, VA, 22102

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $80,252,068

Exercised Options: $80,252,068

Current Obligation: $80,252,068

Actual Outlays: $3,863,741

Subaward Activity

Number of Subawards: 3

Total Subaward Amount: $2,586,400

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: GS35F0306J

IDV Type: FSS

Timeline