Federal Contracting

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Federal Contracting Activities and Contract Types

Sandra Greene

BUS 315

Dr. Lena Maslennikova

10 December, 2012

Federal Contracting Activities and Contract Types

This paper will discuss Booz Allen Hamilton. It will briefly discuss its history and then go into who they are today. Finally, it will cover a major contract that they have recently acquired along with a few particulars of that contract.

Edwin G. Booz started his first engineering company after a stint in the navy in 1914. After many changes the firm officially became a management consulting firm called Booz Allen Hamilton in 1942. Today it is one of the most prestigious technology consulting firms in the world with eighty offices throughout the United States (Booz Allen Hamilton).

Booz Allen Hamilton is provides management and technology consulting services to the United States government and commercial services. Booz Allen’s services include strategic planning, human capital and learning, communications, operational improvement, information technology work, systems engineering, organizational change efforts, modeling and simulation, program management, assurance and resilience, and economic business analysis (Booz Allen Hamilton).

As of August 2008, what was formerly Booz Allen Hamilton’s parent company divided in two. The Booz Allen Hamilton name was retained by the half focusing on U.S. governmental matters, with Booz & Company taking sole control of its commercial strategy and international portfolio. Booz Allen Hamilton is majority owned by a private equity firm called The Carlyle Group, while Booz & Company is owned and operated as a partnership. On November 17, 2010, Booz Allen's shares of common stock began trading at the New York Stock Exchange (Booz Allen Hamilton).

In 2012 Booz Allen, for short, acquired a major government contract on 22 October, 2012 to provide IT and Telecom-Other IT and Telecommunication (computer system design). It was an open competition contract with two bidders. The contract was for $12,231,376.42, with a completion date of 22 October, 2014 and the work will be done in Pensacola, Florida (Federal Procurement Data System).

The type of contract is a Cost Plus Award Fee (CPAF), which is one type of Cost-reimbursement contract, with a fee that is adjusted based on the contractor’s performance. With this type of contract a contractor is paid every allowable, allocable, and reasonable cost incurred, plus a fee (incentive award amount) that may be earned (in part or in full) based on the excellence displayed in contract completion time, cost effectiveness, quality of work, and technical ingenuity. The Fee Determining Official (FDO) decides if the award has been earned (Business Dictionary, 2012) (Cost Plus Award Fee Contracts, 2012).

CPAF or Cost-reimbursement contracts are used primarily for research and development tasks. They are used when the costs of performing the tasks cannot be predicted with enough accuracy at the time the contract is signed (Murphy, 2009, p. 24). For instance, it would be difficult to predict with accuracy the costs associated with developing, documenting and revising system design procedures, test procedures, and quality standards for IT systems. A company cannot know what they system needs until it actually starts working on that system and learns the flaws. They cannot know what tests are needed until they work on the system. They cannot develop programs until they know what programs are needed. Predicting costs for most analyzing tasks are just going to be difficult. This is why a Cost-reimbursement contract is better for those types of tasks, rather than a fixed-cost contract.

The contract for Booz Allen will consist of analyzing and designing the computer systems since Booz Allen is a management consulting and analyzing firm. Their job will consist of some or all of the following:...
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