GSA's $193M IT Systems Development Contract to Booz Allen Hamilton Shows Moderate Value and Limited Competition

Contract Overview

Contract Amount: $192,882,226 ($192.9M)

Contractor: Booz Allen Hamilton Inc

Awarding Agency: General Services Administration

Start Date: 2009-06-29

End Date: 2014-10-27

Contract Duration: 1,946 days

Daily Burn Rate: $99.1K/day

Competition Type: COMPETITIVE DELIVERY ORDER

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: IT

Official Description: IT SYSTEMS DEVELOPMENT SERVICES - DOD

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20548, UNITED STATES OF AMERICA

State: District of Columbia Government Spending

Plain-Language Summary

General Services Administration obligated $192.9 million to BOOZ ALLEN HAMILTON INC for work described as: IT SYSTEMS DEVELOPMENT SERVICES - DOD Key points: 1. The contract's value proposition appears fair, with a significant portion allocated to IT systems development, though specific performance metrics are not detailed. 2. Competition was limited, with only one bid received, raising questions about price discovery and potential cost efficiencies. 3. The contract's duration of nearly five years suggests a substantial, long-term engagement for IT systems development. 4. The use of a Cost Plus Award Fee (CPAF) pricing structure introduces performance incentives but can also lead to cost overruns if not managed carefully. 5. The primary recipient of services is the Department of Defense, indicating a focus on national security IT infrastructure. 6. The contract was awarded by the General Services Administration, leveraging its expertise in IT procurement for federal agencies.

Value Assessment

Rating: fair

The total award amount of approximately $193 million over five years for IT systems development services is substantial. Benchmarking against similar large-scale IT development contracts is challenging without more granular data on the specific services rendered and performance outcomes. The Cost Plus Award Fee structure, while allowing for incentives, necessitates careful oversight to ensure value for money. The contract's duration suggests a significant investment in developing or enhancing critical IT systems for the Department of Defense.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded as a competitive delivery order, but only one bid was received. This limited competition suggests potential barriers to entry for other contractors or a lack of market interest. While technically competed, the single-bid nature raises concerns about whether the government received the best possible pricing and innovative solutions. The GSA's procurement process likely aimed for competition, but the outcome indicates a less robust market response than ideal.

Taxpayer Impact: A single bidder limits the government's ability to negotiate favorable terms and prices, potentially leading to higher costs for taxpayers. It also reduces the incentive for contractors to offer their most competitive rates.

Public Impact

The Department of Defense is the primary beneficiary, receiving IT systems development services crucial for its operations. The contract supports the development and enhancement of complex IT systems, likely impacting national security and defense capabilities. Services are delivered within the District of Columbia, suggesting a concentration of IT development activities in the nation's capital. The contract likely supports a workforce of IT professionals, including developers, systems analysts, and project managers, contributing to the federal IT sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may result in higher costs for taxpayers.
The Cost Plus Award Fee structure requires diligent oversight to prevent cost escalation.
Lack of detailed performance metrics makes it difficult to assess true value for money.
The long duration could lead to vendor lock-in if not managed proactively.

Positive Signals

Awarded by GSA, a reputable agency for IT procurement.
The contractor, Booz Allen Hamilton, is a well-established firm with extensive federal contracting experience.
The contract aims to deliver critical IT systems development services to the DoD.
The competitive delivery order process, despite limited bids, indicates an attempt at market engagement.

Sector Analysis

This contract falls within the IT Systems Development Services sector, a critical component of the broader Information Technology industry. The market for such services is highly competitive, with numerous large and small firms offering specialized expertise. Federal spending in this area is substantial, driven by the need for modernization, cybersecurity, and operational efficiency across various agencies. Comparable spending benchmarks would typically involve analyzing the average cost of similar IT development projects, factoring in complexity, duration, and required skill sets. The $193 million awarded to Booz Allen Hamilton represents a significant investment in a specific IT capability for the Department of Defense.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Booz Allen Hamilton is a large business. There is no explicit information regarding subcontracting plans for small businesses within the provided data. Therefore, the direct impact on the small business ecosystem is likely minimal, and there is no indication of specific efforts to leverage small business capabilities through this particular award.

Oversight & Accountability

The General Services Administration (GSA) typically employs robust oversight mechanisms for its contracts, including performance monitoring and financial reviews. As a Cost Plus Award Fee contract, performance metrics and award criteria would be key elements of oversight, ensuring the contractor meets defined objectives. Transparency is generally maintained through contract databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected within the contract's execution.

Related Government Programs

IT Systems Development
Department of Defense IT Procurement
General Services Administration IT Services
Cost Plus Award Fee Contracts
Large Business IT Contracts

Risk Flags

Limited competition
Cost Plus Award Fee structure requires careful monitoring
Lack of specific performance metrics hinders value assessment

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $192.9 million to BOOZ ALLEN HAMILTON INC. IT SYSTEMS DEVELOPMENT SERVICES - DOD

Who is the contractor on this award?

The obligated recipient is BOOZ ALLEN HAMILTON INC.

Which agency awarded this contract?

Awarding agency: General Services Administration (Federal Acquisition Service).

What is the total obligated amount?

The obligated amount is $192.9 million.

What is the period of performance?

Start: 2009-06-29. End: 2014-10-27.

What specific IT systems were developed or enhanced under this contract, and what were their primary functions for the Department of Defense?

The provided data indicates the contract was for 'IT SYSTEMS DEVELOPMENT SERVICES - DOD' under NAICS code 541512 (Computer Systems Design Services). However, it does not specify the exact IT systems developed or enhanced. These services could range from custom software development, system integration, database management, to the creation of new IT infrastructure components. The primary functions would likely align with the Department of Defense's operational needs, which could include command and control systems, intelligence processing, logistics management, personnel systems, or cybersecurity solutions. Without more detailed contract documentation or performance reports, the precise nature and function of the developed systems remain unspecified.

How does the per-unit cost or overall value of this contract compare to similar IT systems development contracts awarded by the GSA or DoD to large businesses?

Benchmarking the value of this $193 million contract against similar IT systems development contracts is challenging without specific details on the scope of work, complexity, and duration of comparable awards. However, the contract's duration of 1946 days (approximately 5.3 years) suggests a significant, long-term engagement. The use of a Cost Plus Award Fee (CPAF) structure means the final cost can vary based on performance, making direct comparisons difficult. Generally, large-scale IT development projects for agencies like the DoD are substantial investments. The fact that only one bid was received might suggest that the market for such specialized, large-scale services is concentrated among a few large contractors, potentially influencing pricing dynamics compared to more broadly competed contracts.

What are the key performance indicators (KPIs) and award criteria used in the Cost Plus Award Fee (CPAF) structure for this contract, and how were they measured?

The provided data does not detail the specific Key Performance Indicators (KPIs) or award criteria associated with the Cost Plus Award Fee (CPAF) structure for this contract. In a CPAF arrangement, the government typically establishes objective performance standards related to factors such as schedule adherence, cost control, technical quality, and user satisfaction. The contractor earns a base fee plus an award fee based on how well they meet or exceed these pre-defined criteria. The assessment of performance and the determination of the award fee are usually conducted by a Contracting Officer's Representative (COR) or a similar government official. Without access to the contract's Performance Work Statement (PWS) or award fee plan, it is impossible to ascertain the precise metrics used or how they were measured.

Given the limited competition (one bidder), what steps did the GSA take to ensure fair and reasonable pricing and to mitigate potential risks associated with a sole-source-like outcome?

Although the contract was awarded as a 'COMPETITIVE DELIVERY ORDER,' the receipt of only one bid suggests a limited competitive environment. In such scenarios, the GSA would typically rely on various methods to ensure fair and reasonable pricing. This could include conducting market research to understand price ranges, obtaining cost and technical proposals, performing detailed cost analysis (e.g., evaluating labor rates, material costs, indirect costs), and potentially negotiating with the single bidder. Risk mitigation might involve incorporating strong contract clauses, detailed performance monitoring, and clear deliverables. However, the inherent limitation of having only one bidder reduces the government's leverage in price negotiations and potentially limits the range of innovative solutions considered.

What is Booz Allen Hamilton's track record with similar large-scale IT systems development contracts for the Department of Defense, and have there been any notable issues?

Booz Allen Hamilton is a major federal contractor with extensive experience in providing IT systems development services to the Department of Defense (DoD). They have a long history of securing and executing large, complex contracts across various defense and intelligence agencies. While specific details on past performance for this exact contract are not provided, Booz Allen Hamilton is generally known for its capabilities in areas like systems engineering, cybersecurity, data analytics, and digital transformation. Like any large contractor handling numerous complex projects, there may have been past instances of contract disputes, performance challenges, or audits on other contracts. However, without specific data related to this particular award or direct comparisons, it's difficult to provide a definitive assessment of their track record solely based on this single contract's data.

What is the historical spending trend for IT Systems Development Services by the General Services Administration or the Department of Defense in the years surrounding this contract's award (2009-2014)

The period between 2009 and 2014 was marked by significant federal spending on IT modernization and systems development, driven by evolving technological needs and security requirements. The Department of Defense, in particular, consistently represents one of the largest federal spenders on IT. The General Services Administration (GSA), acting as an intermediary and procurement facilitator, plays a crucial role in managing IT contracts. Historical data would likely show substantial and potentially increasing investments in IT services, including systems development, during these years, reflecting ongoing efforts to upgrade legacy systems, enhance cybersecurity, and adopt new technologies like cloud computing and data analytics. Specific trends would depend on agency priorities, budget allocations, and major IT initiatives undertaken during that timeframe.

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: 1

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

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

Address: 8283 GREENSBORO DR # 700, MC LEAN, VA, 22102

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $3,290,840,444

Exercised Options: $192,882,226

Current Obligation: $192,882,226

Parent Contract

Parent Award PIID: GS00T99ALD0202

IDV Type: GWAC

Timeline