DoD awards $61M engineering services contract to Booz Allen Hamilton for IISS follow-on

Contract Overview

Contract Amount: $61,089,752 ($61.1M)

Contractor: Booz Allen Hamilton Inc

Awarding Agency: Department of Defense

Start Date: 2023-02-27

End Date: 2026-02-26

Contract Duration: 1,095 days

Daily Burn Rate: $55.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: IISS FOLLOW-ON.

Place of Performance

Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92110

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $61.1 million to BOOZ ALLEN HAMILTON INC for work described as: IISS FOLLOW-ON. Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract is a follow-on to a previous effort, indicating potential for institutional knowledge and established performance. 3. Engineering services are critical for complex defense systems, highlighting the strategic importance of this award. 4. The cost-plus-fixed-fee pricing structure may incentivize contractor efficiency while managing cost uncertainty. 5. The duration of 1095 days suggests a long-term need for these specialized engineering services. 6. The award value of over $61 million indicates a significant investment in defense engineering capabilities.

Value Assessment

Rating: good

The contract value of $61,089,751.58 for 1095 days of engineering services appears reasonable given the nature of defense contracts. Benchmarking against similar large-scale engineering support contracts within the Department of Defense is necessary for a definitive value assessment. However, the follow-on nature suggests that previous pricing was acceptable. The cost-plus-fixed-fee (CPFF) structure allows for cost reimbursement plus a fixed fee, which can be appropriate for complex projects with evolving requirements, though it carries some risk of cost overruns if not managed tightly.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified bidders had the opportunity to submit proposals. The presence of two bids suggests a moderate level of competition for this specific requirement. While two bidders are better than one, a higher number of proposals would typically lead to more robust price discovery and potentially lower costs for the government. The agency's decision to proceed with two offers implies that the submitted proposals met the evaluation criteria adequately.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages a wider range of pricing and technical solutions, potentially leading to better value. However, with only two bidders, the competitive pressure might be less intense than in a scenario with numerous proposals.

Public Impact

The Department of the Navy benefits from specialized engineering expertise to support its Integrated Intelligence Systems (IISS). This contract ensures the continued development and maintenance of critical defense intelligence systems. The services delivered are likely to enhance national security by improving intelligence gathering and analysis capabilities. The contract is based in California, potentially impacting the local economy and workforce in that region. Specialized engineering roles will be supported, contributing to the defense technology sector workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in Cost Plus Fixed Fee contracts if not rigorously managed.
Limited competition with only two bidders could result in less aggressive pricing than a more crowded field.
Follow-on nature might lead to complacency or reduced innovation if not actively managed against.
Dependence on a single contractor for critical follow-on services can create vendor lock-in risks.

Positive Signals

Awarded via full and open competition, ensuring a broad search for qualified contractors.
Follow-on award suggests successful past performance and institutional knowledge transfer.
Booz Allen Hamilton is a large, established contractor with a significant track record in government services.
Engineering services are crucial for maintaining and advancing complex defense systems.
The contract duration indicates a stable, long-term requirement, providing predictability.

Sector Analysis

The engineering services sector supporting the federal government is substantial, encompassing a wide range of specialized technical support. This contract falls within the broader category of professional, scientific, and technical services, which are essential for the design, development, and maintenance of complex defense systems. The Department of Defense is a major consumer of these services, with significant annual spending allocated to engineering, research, and development. Benchmarking this contract's value against the average cost of similar engineering support contracts within the defense sector would provide further context on its cost-effectiveness.

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 provided regarding subcontracting plans for small businesses. Without specific subcontracting goals or reporting, the direct impact on the small business ecosystem for this particular award is unclear, though large prime contractors often engage small businesses for specialized support.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy's contracting and program management offices. The cost-plus-fixed-fee structure necessitates close monitoring of costs and performance to ensure value for money and prevent overruns. Transparency is typically maintained through contract reporting mechanisms and potential reviews by the Government Accountability Office (GAO) or the Inspector General (IG) if performance or cost issues arise. The fixed fee component provides a degree of accountability for the contractor's performance.

Related Government Programs

Defense Engineering Services
Intelligence Systems Support
Information Technology Services (Defense)
Professional Services (Federal)
Department of Defense IT Contracts
Follow-on Contracts

Risk Flags

Potential for cost overruns with CPFF structure.
Limited competition may impact price discovery.
Follow-on contract dependency.
Contract performance risk.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $61.1 million to BOOZ ALLEN HAMILTON INC. IISS FOLLOW-ON.

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 (Department of the Navy).

What is the total obligated amount?

The obligated amount is $61.1 million.

What is the period of performance?

Start: 2023-02-27. End: 2026-02-26.

What is the historical spending pattern for IISS follow-on contracts awarded to Booz Allen Hamilton?

Analyzing historical spending for IISS follow-on contracts awarded to Booz Allen Hamilton requires access to detailed federal procurement databases. Typically, follow-on contracts indicate a successful prior relationship and a continued need for the services. If this is indeed a direct follow-on, it implies that the previous contract(s) met the government's requirements, leading to this subsequent award. Examining the value and duration of previous IISS contracts with Booz Allen Hamilton would reveal trends in investment and the evolution of the program's scope. A consistent or increasing award value over time might suggest program growth or inflation, while a stable pattern could indicate maturity. Conversely, a decrease might signal scope reduction or increased competition in subsequent procurements. Without specific prior award data, it's difficult to provide precise historical figures, but the current $61M award suggests a significant, ongoing program.

How does the pricing structure (Cost Plus Fixed Fee) compare to other similar engineering service contracts within the DoD?

The Cost Plus Fixed Fee (CPFF) pricing structure is common for complex, research-intensive, or developmental contracts within the Department of Defense (DoD) where the scope may not be fully defined at the outset, or where innovation is a key requirement. This structure reimburses the contractor for allowable costs plus a predetermined fixed fee representing profit. Compared to other structures like Firm-Fixed-Price (FFP), CPFF offers more flexibility for the government if requirements change but carries a higher risk of cost growth. FFP contracts provide greater cost certainty for the government but are less suitable for undefined scopes. Other structures like Cost Plus Incentive Fee (CPIF) or Cost Plus Award Fee (CPAF) introduce performance incentives. For engineering services, especially those involving system design, integration, or R&D, CPFF is often considered appropriate when precise outcomes are difficult to predict, though it necessitates robust government oversight to manage costs effectively.

What are the key performance indicators (KPIs) used to evaluate Booz Allen Hamilton's performance on this contract?

Key Performance Indicators (KPIs) for a contract like this, involving engineering services for intelligence systems, are typically established within the contract's Performance Work Statement (PWS) or Statement of Work (SOW). While specific KPIs are not detailed in the provided data, common metrics for such services include technical performance (e.g., system reliability, accuracy, efficiency), schedule adherence (meeting project milestones and deadlines), cost control (managing expenditures within allocated budgets, especially relevant for CPFF), and quality of deliverables (e.g., reports, designs, software). For intelligence systems, security compliance and data integrity would also be critical KPIs. The government's evaluation would likely involve regular progress reviews, technical assessments, and potentially user feedback to gauge the contractor's effectiveness against these defined metrics.

What is the estimated total value of the IISS program over its lifecycle, considering this award?

Estimating the total lifecycle value of the Integrated Intelligence Systems (IISS) program based solely on this single follow-on delivery order is speculative. This $61 million award covers a 1095-day period (approximately three years), suggesting a significant but finite segment of the program's needs. The IISS program likely encompasses multiple contracts, phases, and potentially other systems or services beyond the scope of this specific award. To determine the overall lifecycle value, one would need to analyze the entire history of IISS-related procurements, including initial development, subsequent upgrades, sustainment contracts, and any planned future enhancements. This single award represents a substantial investment for its duration, but the program's total lifecycle cost could be considerably higher, potentially spanning decades and involving hundreds of millions or even billions of dollars across all its components.

How does the competition level (2 bidders) for this contract compare to the average competition for similar DoD engineering services contracts?

A competition level with two bidders for a significant Department of Defense (DoD) engineering services contract is not uncommon, but it is generally considered moderate rather than high. Many large-scale, specialized contracts within the DoD attract numerous proposals, sometimes exceeding five or ten bidders, especially if the requirements are well-defined and the market is broad. However, for highly specialized technical services, niche areas, or complex follow-on efforts where only a few contractors possess the requisite expertise and security clearances, two bidders can represent a reasonable level of competition. The average competition level can vary significantly by specific service category and agency. A lower number of bidders, like two, suggests that the government might have a more limited pool of qualified sources or that the barriers to entry (e.g., technical requirements, past performance, security) are high, potentially impacting the degree of price negotiation.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering 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: N0003921R3028

Offers Received: 2

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: $137,657,281

Exercised Options: $71,917,525

Current Obligation: $61,089,752

Subaward Activity

Number of Subawards: 11

Total Subaward Amount: $15,494,395

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017819D7264

IDV Type: IDC

Timeline