VA's $42.8M IT contract for VBMS Core Acceleration awarded to Booz Allen Hamilton shows fair value

Contract Overview

Contract Amount: $42,852,517 ($42.9M)

Contractor: Booz Allen Hamilton Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2014-09-23

End Date: 2017-12-22

Contract Duration: 1,186 days

Daily Burn Rate: $36.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: IGF::OT::IGF TASK ORDER 0062 - VBMS CORE ACCELERATION

Place of Performance

Location: MCLEAN, FAIRFAX County, VIRGINIA, 22102

State: Virginia Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $42.9 million to BOOZ ALLEN HAMILTON INC for work described as: IGF::OT::IGF TASK ORDER 0062 - VBMS CORE ACCELERATION Key points: 1. Contract awarded via full and open competition, suggesting a competitive pricing environment. 2. Performance period of nearly 4 years indicates a significant, long-term IT need. 3. Task order awarded under a larger IDIQ contract, common for IT services. 4. The contract type (Time and Materials) can pose cost control risks if not managed closely. 5. No small business set-aside, indicating the primary awardee is a large business. 6. The specific service category (Computer Systems Design) is a common area for federal IT spending.

Value Assessment

Rating: fair

The contract's total value of $42.8 million over approximately 4 years suggests a moderate annual spend. Benchmarking against similar IT system design contracts is challenging without more granular data on specific deliverables. However, the award to a large, established contractor like Booz Allen Hamilton for a complex system acceleration project is not unusual. The Time and Materials pricing structure warrants careful monitoring to ensure value for money, as it can lead to cost overruns if not managed effectively.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, indicating that multiple bidders were likely considered. The presence of 6 bids suggests a reasonable level of competition for this IT services requirement. Full and open competition generally promotes price discovery and allows the government to select from a wide range of qualified contractors, potentially leading to better pricing and solutions.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure the best value for the government's investment in IT modernization.

Public Impact

Veterans will benefit from improvements to the Veterans Benefits Management System (VBMS), potentially leading to faster and more efficient processing of their claims. The contract supports the modernization of critical IT infrastructure within the Department of Veterans Affairs. The geographic impact is primarily within the VA's operational centers, but the ultimate beneficiaries are veterans nationwide. The contract likely supports a workforce of IT professionals, including developers, project managers, and systems designers, primarily within the contractor's organization.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and Materials contract type can lead to uncontrolled cost growth if not closely monitored.
Lack of specific performance metrics in the provided data makes it difficult to assess efficiency.
The duration of the contract (nearly 4 years) requires sustained oversight to ensure continued alignment with VA goals.

Positive Signals

Awarded through full and open competition, indicating a robust bidding process.
Contract awarded to a well-established contractor with a significant presence in government IT services.
The contract addresses a critical need for IT system acceleration within the VA.

Sector Analysis

This contract falls within the broader IT services sector, specifically focusing on computer systems design. The federal government is a significant consumer of these services, with spending often concentrated in areas like system modernization, cybersecurity, and data management. Comparable spending benchmarks would typically be found within IT services categories, often aggregated by NAICS code 541512. The market for these services is highly competitive, with numerous large and small businesses vying for government contracts.

Small Business Impact

The provided data indicates this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the competition was open to all qualified offerors, including large businesses. While there is no direct indication of subcontracting requirements for small businesses, large prime contractors are often encouraged or required to meet small business subcontracting goals on larger contracts. The absence of a small business set-aside means that opportunities for direct prime contracting were not specifically reserved for small entities in this instance.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Veterans Affairs contracting officers and program managers. As a task order under an IDIQ, the underlying contract likely has established oversight mechanisms. Transparency is generally facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected or identified during the contract's performance or closeout.

Related Government Programs

Veterans Benefits Management System (VBMS)
Department of Veterans Affairs IT Modernization Programs
Federal Civilian IT Services Contracts
Computer Systems Design Services Contracts

Risk Flags

Potential for cost overruns due to Time and Materials pricing structure.
Need for continuous oversight due to long contract duration.
Scope definition and management critical for T&M effectiveness.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $42.9 million to BOOZ ALLEN HAMILTON INC. IGF::OT::IGF TASK ORDER 0062 - VBMS CORE ACCELERATION

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 $42.9 million.

What is the period of performance?

Start: 2014-09-23. End: 2017-12-22.

What is the track record of Booz Allen Hamilton with the Department of Veterans Affairs for similar IT services?

Booz Allen Hamilton is a large, established government contractor with a significant history of providing IT and management consulting services across various federal agencies, including the Department of Veterans Affairs. They have been involved in numerous contracts related to IT modernization, system development, and support services for the VA. Their track record typically includes managing complex projects and delivering solutions in areas such as claims processing, electronic health records, and data analytics. While specific performance details for every contract are not publicly available, their continued success in winning and performing on VA contracts suggests a generally positive working relationship and a demonstrated capability to meet the agency's requirements. However, like any large contractor, they may have faced scrutiny or performance issues on specific projects, which would be detailed in contract performance reports or IG investigations if they occurred.

How does the $42.8 million value compare to other VBMS-related IT contracts?

The $42.8 million value for this specific task order, awarded over approximately 4 years, represents a substantial investment in accelerating the VBMS core. To compare it effectively, one would need to analyze the total lifecycle cost of the VBMS program and other major IT modernization efforts within the VA. For instance, larger enterprise-wide IT system implementations or upgrades can run into hundreds of millions or even billions of dollars over their lifespan. This particular contract appears to be a focused effort on a specific component ('Core Acceleration') rather than a complete system overhaul. Therefore, its value should be assessed relative to the scope of 'core acceleration' and compared to similar targeted IT enhancement projects within the VA or other large federal agencies managing complex benefit systems.

What are the primary risks associated with a Time and Materials (T&M) contract for IT system acceleration?

The primary risk with a Time and Materials (T&M) contract, like the one awarded here, is the potential for cost overruns. Unlike fixed-price contracts, T&M contracts reimburse the contractor for the actual labor hours and material costs incurred. If the scope of work is not well-defined, or if project management is weak, the contractor may take longer than anticipated or use more resources, leading to a higher final cost than initially projected. For IT system acceleration, this risk is amplified if unforeseen technical challenges arise or if requirements evolve significantly during the performance period. Effective oversight, including detailed monitoring of labor hours, resource allocation, and progress against milestones, is crucial to mitigate these risks and ensure the government receives good value for its investment.

What does the 'Computer Systems Design Services' NAICS code imply about the services rendered?

The North American Industry Classification System (NAICS) code 541512, 'Computer Systems Design Services,' indicates that the primary services procured under this contract involve the planning, design, development, and integration of computer systems. This typically includes activities such as analyzing user needs, designing system architecture, developing software, implementing hardware, and providing consulting on IT infrastructure. For the VBMS Core Acceleration project, this likely means Booz Allen Hamilton was engaged in activities to improve the underlying technology, architecture, or functionality of the Veterans Benefits Management System. This could involve software development, system integration, database enhancements, or infrastructure upgrades aimed at making the system more efficient, scalable, or capable of handling increased workloads.

How does the duration of the contract (1186 days) impact oversight and value assessment?

A contract duration of 1186 days (approximately 3.25 years) necessitates a sustained and adaptive oversight approach. Short-term contracts allow for quicker assessments of performance and value, whereas longer durations require ongoing monitoring to ensure the contractor remains aligned with evolving agency needs and objectives. For this VBMS Core Acceleration contract, the extended period means that the VA must continuously evaluate the contractor's progress, the relevance of the work being performed, and the cost-effectiveness of the T&M structure. It also provides the contractor with a stable period to implement potentially complex changes. However, it increases the risk that the project's goals might drift or that the technology implemented could become outdated before the contract concludes if oversight is not diligent.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 6

Pricing Type: TIME AND MATERIALS (Y)

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: $82,278,569

Exercised Options: $42,852,517

Current Obligation: $42,852,517

Subaward Activity

Number of Subawards: 4

Total Subaward Amount: $78,500,000

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: VA11811D1008

IDV Type: IDC

Timeline