Engility LLC awarded $19.6M contract for professional employer organization services by the Department of the Army
Contract Overview
Contract Amount: $19,607,004 ($19.6M)
Contractor: Engility LLC
Awarding Agency: Department of Defense
Start Date: 2007-12-01
End Date: 2008-11-30
Contract Duration: 365 days
Daily Burn Rate: $53.7K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 8
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: RECRUITERS
Place of Performance
Location: FORT KNOX, HARDIN County, KENTUCKY, 40121
State: Kentucky Government Spending
Plain-Language Summary
Department of Defense obligated $19.6 million to ENGILITY LLC for work described as: RECRUITERS Key points: 1. Contract value represents a significant investment in specialized HR support services. 2. The firm fixed-price structure suggests a defined scope and predictable costs. 3. Competition dynamics for this contract are crucial for assessing value for money. 4. Performance context will be key to understanding the effectiveness of these services. 5. This contract falls within the professional services sector, supporting administrative functions. 6. The duration of the contract (365 days) indicates a short-term or specific project need.
Value Assessment
Rating: fair
Benchmarking the $19.6 million award against similar professional employer organization contracts is challenging without more specific service details. However, the award amount suggests a substantial scope of services. The firm fixed-price contract type provides cost certainty, but the ultimate value depends on the quality and efficiency of the services delivered by Engility LLC. Further analysis would require comparing the per-unit costs of specific HR functions (e.g., payroll processing, benefits administration) to industry benchmarks.
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 had the opportunity to bid. With 8 bidders, the competition level appears healthy, which typically drives more competitive pricing and better service offerings. This broad competition suggests the government sought a wide range of solutions and likely secured a reasonable price point relative to the market.
Taxpayer Impact: A competitive bidding process for this contract is beneficial for taxpayers, as it encourages vendors to offer their best pricing and service terms to win the award, potentially leading to cost savings.
Public Impact
The Department of the Army benefits from specialized professional employer organization services, likely improving HR efficiency and compliance. Services delivered are expected to encompass a range of human resources functions, such as payroll, benefits, and employee support. The geographic impact is likely focused on the personnel supported by the Department of the Army, wherever they are located. Workforce implications may include streamlined HR processes for military and civilian personnel, allowing them to focus on core duties.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for scope creep if service definitions are not precise.
- Dependence on contractor performance for critical HR functions.
- Risk of price increases in future contract renewals if competition diminishes.
Positive Signals
- Awarded through full and open competition, suggesting competitive pricing.
- Firm fixed-price contract provides cost certainty for the government.
- Experienced contractor (Engility LLC) likely brings established expertise.
Sector Analysis
The Professional Employer Organizations (PEO) industry, classified under NAICS code 561330, provides comprehensive HR solutions for businesses, including payroll, benefits administration, and compliance. This contract fits within the broader professional and business support services sector. The federal government is a significant consumer of such services to manage its large and diverse workforce efficiently. Comparable spending benchmarks would depend on the specific HR functions outsourced and the scale of the workforce supported.
Small Business Impact
The data indicates this contract was not specifically set aside for small businesses, and Engility LLC is likely a large business. There is no explicit information on subcontracting plans for small businesses. The absence of a small business set-aside suggests that the primary focus was on obtaining the best value from the most capable bidders, regardless of size, in a fully competed environment.
Oversight & Accountability
Oversight for this contract would typically be managed by the contracting officer and the relevant program office within the Department of the Army. Accountability measures are embedded in the firm fixed-price contract terms, requiring delivery of specified services. Transparency is generally maintained through contract award databases, though detailed performance metrics may not always be publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.
Related Government Programs
- Human Resources Support Services
- Professional and Business Support Services
- Department of Defense Administrative Contracts
Risk Flags
- Potential for service gaps if scope is not precisely defined.
- Contractor performance risk for critical HR functions.
Tags
professional-employer-organizations, human-resources, department-of-defense, department-of-the-army, firm-fixed-price, full-and-open-competition, large-business, professional-services, administrative-support, us-federal-government
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $19.6 million to ENGILITY LLC. RECRUITERS
Who is the contractor on this award?
The obligated recipient is ENGILITY LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $19.6 million.
What is the period of performance?
Start: 2007-12-01. End: 2008-11-30.
What specific professional employer organization services were included in this $19.6 million contract?
The provided data indicates the contract was for 'Professional Employer Organizations' (NAICS 561330) awarded to Engility LLC by the Department of the Army. However, the specific breakdown of services is not detailed. Typically, PEO services encompass a broad range of human resources functions, including payroll processing, benefits administration (health insurance, retirement plans), HR compliance (labor laws, tax regulations), workers' compensation management, and employee onboarding. The $19.6 million value suggests a comprehensive suite of these services, likely supporting a significant portion of the Army's civilian or potentially military personnel administrative needs over the contract period.
How does the $19.6 million award compare to typical federal spending on PEO services?
Directly comparing the $19.6 million award to 'typical' federal spending on PEO services is difficult without more granular data on the specific services rendered and the size of the workforce supported. Federal spending on HR outsourcing and PEO-like services can vary widely based on agency size, mission requirements, and the extent to which HR functions are centralized or outsourced. However, $19.6 million for a single contract over approximately one year (based on the 365-day duration) suggests a substantial requirement, potentially indicating a large employee base or a complex set of HR needs being addressed by this contract. It is within the range of significant federal service contracts but requires context regarding the scope.
What is Engility LLC's track record with federal PEO or HR support contracts?
Engility LLC, the contractor awarded this $19.6 million PEO services contract, has a history of performing various IT and professional services for the federal government. While specific details on their PEO-specific contract history are not in the provided data, their general experience suggests they possess the capability to manage large, complex government contracts. A deeper dive into their past performance, client feedback, and any relevant certifications would be necessary to fully assess their track record specifically for professional employer organization services. Their prior work in related areas might indicate transferable skills in managing HR functions and compliance.
What are the potential risks associated with this firm fixed-price contract for PEO services?
The primary risk with a firm fixed-price (FFP) contract for PEO services, despite its cost certainty, lies in potential scope definition issues. If the PEO services required by the Department of the Army evolve or are more extensive than initially defined, Engility LLC might be incentivized to limit service delivery to the contracted scope, potentially impacting the quality or comprehensiveness of HR support. Conversely, if the government requires services beyond the original scope, change orders would be necessary, potentially increasing costs. Another risk is ensuring the contractor maintains high performance standards and compliance throughout the contract term, as the FFP structure can sometimes disincentivize exceeding basic requirements without additional compensation.
How does the 'full and open competition' with 8 bidders impact the value proposition for the taxpayer?
The fact that this contract was awarded under 'full and open competition' with eight bidders is a strong positive signal for taxpayer value. A larger number of bidders generally indicates a more robust and competitive marketplace for the services sought. This increased competition typically drives down prices as vendors strive to offer the most attractive bid to secure the contract. Furthermore, it allows the government to select from a wider pool of potential providers, increasing the likelihood of finding a contractor that offers not only competitive pricing but also superior quality, innovation, and efficiency in delivering the required professional employer organization services. This scenario enhances price discovery and reduces the risk of overpayment.
What is the significance of the contract duration (365 days) in the context of PEO services?
A contract duration of 365 days for professional employer organization services suggests a defined, potentially short-term need or a pilot program. PEO services often involve ongoing, long-term support for payroll, benefits, and HR compliance. A one-year term might indicate that the Department of the Army is testing the effectiveness of outsourcing these functions, plans to re-compete the contract frequently, or requires support for a specific project or period. If it's a recurring need, the short duration could lead to administrative overhead from frequent re-procurement. However, it also provides flexibility to adjust requirements or switch providers if performance is unsatisfactory or market conditions change.
Industry Classification
NAICS: Administrative and Support and Waste Management and Remediation Services › Employment Services › Professional Employer Organizations
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: W9124D07R0054
Offers Received: 8
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: L-3 Communications Holdings, Inc. (UEI: 008898843)
Address: 1320 BRADDOCK PL, ALEXANDRIA, VA, 08
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $19,607,004
Exercised Options: $19,607,004
Current Obligation: $19,607,004
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W9124D08D0006
IDV Type: IDC
Timeline
Start Date: 2007-12-01
Current End Date: 2008-11-30
Potential End Date: 2008-11-30 00:00:00
Last Modified: 2010-06-06
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