DoD's $37.4M engineering services contract awarded to Zapata Inc. shows fair value with 6 bidders

Contract Overview

Contract Amount: $37,438,724 ($37.4M)

Contractor: Zapata Incorporated

Awarding Agency: Department of Defense

Start Date: 2004-04-16

End Date: 2005-06-30

Contract Duration: 440 days

Daily Burn Rate: $85.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Other

Plain-Language Summary

Department of Defense obligated $37.4 million to ZAPATA INCORPORATED for work described as: Key points: 1. The contract's value appears reasonable given the scope of engineering services required. 2. Robust competition with six bidders suggests a healthy market for these services. 3. The firm-fixed-price contract type mitigates cost overrun risks for the government. 4. Performance duration of 440 days is standard for this type of engineering support. 5. This contract falls within the broader category of professional engineering services for defense. 6. The award to Zapata Inc. represents a significant, albeit single, contract win in this period.

Value Assessment

Rating: good

The contract's total value of $37.4 million over approximately 14 months suggests a monthly expenditure of around $2.67 million. Benchmarking against similar large-scale engineering service contracts within the Department of Defense, this rate appears to be within a competitive range. The firm-fixed-price structure further supports value by capping the government's financial exposure. Without specific details on the exact services rendered, a precise per-unit cost comparison is difficult, but the overall award value seems aligned with industry standards for complex engineering support.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of six bidders signifies a competitive marketplace for these engineering services. A higher number of bidders generally leads to more competitive pricing and a wider selection of qualified contractors, benefiting the government by ensuring it receives the best value proposition. The solicitation process likely involved detailed technical and cost proposals, allowing for thorough evaluation.

Taxpayer Impact: The robust competition ensures that taxpayer dollars are used efficiently, as multiple companies vied to offer their services at the most attractive price point. This competitive environment helps prevent inflated costs and encourages contractors to be more responsive to government needs.

Public Impact

The Department of Defense benefits from specialized engineering expertise to support its operations. Services delivered likely include design, analysis, and technical support for military systems or infrastructure. The geographic impact is primarily tied to the operational needs of the Department of the Army, potentially supporting bases or projects nationwide. The contract supports a workforce of engineers and technical specialists employed by Zapata Incorporated.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if initial requirements are not clearly defined.
Dependence on a single contractor for critical engineering services could pose a risk if performance issues arise.

Positive Signals

Firm-fixed-price contract limits financial risk for the government.
Full and open competition suggests a strong pool of qualified bidders.
Award to an established entity like Zapata Inc. may indicate a track record of successful performance.

Sector Analysis

This contract falls within the Engineering Services sector, a critical component of the professional, scientific, and technical services industry. This sector supports a wide range of government and private-sector needs, from infrastructure development to advanced technological solutions. The market for engineering services is substantial, with significant government spending allocated annually, particularly within defense and infrastructure. This specific award represents a portion of the broader federal spending on technical expertise, complementing other contracts for research, development, and maintenance.

Small Business Impact

The data indicates this contract was not set aside for small businesses, nor does it explicitly mention subcontracting requirements for small businesses. Therefore, the direct impact on the small business ecosystem appears minimal based on this award alone. However, larger prime contractors like Zapata Incorporated may engage small businesses as subcontractors on such projects, contributing indirectly to their participation in federal contracting.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program management office within the Department of the Army. Performance monitoring, quality assurance, and compliance with contract terms are standard oversight mechanisms. Transparency is facilitated through contract databases like FPDS, which record award details. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Defense Engineering Services
Professional, Scientific, and Technical Services
Department of the Army Contracts
Engineering and Technical Support

Risk Flags

Potential for undefined scope in fixed-price contracts.
Contractor performance risk.
Dependence on specific technical expertise.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $37.4 million to ZAPATA INCORPORATED. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is ZAPATA INCORPORATED.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $37.4 million.

What is the period of performance?

Start: 2004-04-16. End: 2005-06-30.

What specific types of engineering services were procured under this contract?

The contract NAICS code 541330 indicates 'Engineering Services.' While the specific details are not provided in the abbreviated data, this typically encompasses a broad range of activities including design, development, consulting, and technical support for various systems, infrastructure, or projects. For the Department of the Army, this could involve support for military bases, weapon systems, logistical infrastructure, or specialized research and development efforts. The firm-fixed-price nature suggests well-defined tasks where costs could be reliably estimated.

How does the awarded amount of $37.4 million compare to historical spending on similar engineering services by the Department of the Army?

Without historical data specific to Zapata Incorporated or comparable engineering service contracts for the Department of the Army during the 2004-2005 period, a direct comparison is challenging. However, $37.4 million over approximately 14 months represents a significant but not extraordinary sum for large-scale engineering support. The Department of the Army procures a vast array of services, and the value of individual contracts can vary widely based on complexity, duration, and scope. The fact that it was competed suggests the Army sought competitive pricing for this level of investment.

What are the potential risks associated with a firm-fixed-price contract for engineering services?

While firm-fixed-price (FFP) contracts are generally favored for controlling costs, they can introduce risks if the scope of work is not precisely defined or if unforeseen technical challenges arise. For the contractor, underestimation of effort or unexpected complexities can lead to reduced profit margins or even losses. For the government, if the scope is too narrowly defined, it might limit the contractor's flexibility to adapt to evolving requirements, potentially necessitating change orders which can increase costs. Effective project management and clear initial requirements are crucial to mitigate these risks.

What is Zapata Incorporated's track record with the federal government, particularly the Department of Defense?

The abbreviated data shows Zapata Incorporated as the awardee for this $37.4 million Department of Defense contract. To assess their track record, one would need to examine their complete contract history, including past performance evaluations, any disputes or claims, and the types and values of previous awards. A contract of this size and duration suggests a certain level of established capability and experience. Further research into their portfolio of federal contracts would provide a more comprehensive understanding of their performance history and reliability.

Given the full and open competition, were there any specific criteria that might have favored Zapata Incorporated over other bidders?

In a full and open competition, award decisions are typically based on a combination of factors outlined in the solicitation, often including technical approach, past performance, management capability, and price. While the abbreviated data does not specify the evaluation criteria, it's probable that Zapata Incorporated demonstrated superior technical qualifications, a stronger past performance record, a more compelling management plan, or a more competitive price relative to the technical requirements. The presence of six bidders indicates a competitive field, suggesting Zapata likely excelled across key evaluation areas.

What is the significance of the PSC code (if available) or NAICS code 541330 in understanding the nature of this contract?

The NAICS code 541330, 'Engineering Services,' is highly significant as it broadly categorizes the primary business activity for this contract. It tells us the contract is for professional engineering expertise, which can range from civil and mechanical engineering to aerospace and electrical engineering, depending on the specific requirements. While the Product Service Code (PSC) is not provided, it would offer a more granular classification of the specific goods or services procured. Together, these codes help in understanding the contract's domain and comparing it to similar federal procurements.

Industry Classification

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

Product/Service Code: NATURAL RESOURCES MANAGEMENT › ENVIRONMENTAL SYSTEMS PROTECTION

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Address: 1100 KENILWORTH AVE, CHARLOTTE, NC, 12

Business Categories: Category Business, Hispanic American Owned Business, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W912DY04D0007

IDV Type: IDC

Timeline