Defense contract for administrative services awarded to Engility LLC for over $363 million

Contract Overview

Contract Amount: $363,509,526 ($363.5M)

Contractor: Engility LLC

Awarding Agency: Department of Defense

Start Date: 2005-04-21

End Date: 2010-10-31

Contract Duration: 2,019 days

Daily Burn Rate: $180.0K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: Other

Place of Performance

Location: RESTON, FAIRFAX County, VIRGINIA, 20190

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $363.5 million to ENGILITY LLC for work described as: Key points: 1. Contract value suggests a significant need for administrative support services within the Department of Defense. 2. The award was not competed, raising questions about potential cost efficiencies and market-driven pricing. 3. A long performance period indicates a sustained requirement, but also potential for cost overruns if not managed tightly. 4. The use of Time and Materials pricing can lead to cost uncertainty if not carefully monitored. 5. The contract's duration and value place it in the large-scale category for administrative services. 6. The absence of small business set-aside flags suggests this contract was not specifically targeted for small business participation.

Value Assessment

Rating: fair

The total award amount of over $363 million for administrative services is substantial. Without specific benchmarks for comparable contracts or detailed cost breakdowns, it is difficult to definitively assess value for money. The Time and Materials pricing structure, while flexible, carries inherent risks of cost escalation if not rigorously managed and monitored against established labor rates and overheads. The long duration of the contract (over 5 years) also presents opportunities for cost savings through efficiency gains, but also risks of the contract becoming outdated or overpriced if market conditions change significantly.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under a 'NOT AVAILABLE FOR COMPETITION' (sole-source) designation. This means that the agency determined that only one source was capable of satisfying the agency's needs. Consequently, there was no competitive bidding process, which limits the agency's ability to leverage market forces to achieve the best possible pricing and terms. The lack of competition means that the price and terms were negotiated directly with Engility LLC.

Taxpayer Impact: For taxpayers, a sole-source award means that the government may not be achieving the most cost-effective outcome. Without competitive pressure, there is a higher risk that the price paid is not the lowest possible price achievable in a competitive market.

Public Impact

The Department of Defense benefits from the provision of essential administrative support services, enabling its core functions. The contract delivers a range of administrative and office support services crucial for operational efficiency. Services are likely delivered across various Department of Defense facilities, with a primary focus on Virginia. The contract supports a workforce engaged in providing administrative and office support functions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potential savings.
Time and Materials contract type can lead to cost overruns if not closely managed.
Long contract duration increases risk of price becoming uncompetitive over time.
Lack of specific performance metrics in provided data makes assessing effectiveness challenging.

Positive Signals

Significant contract award indicates a critical need for services.
Long-term award suggests a stable and reliable provider relationship.
Contracting with a single entity can streamline administrative processes for the agency.

Sector Analysis

The administrative services sector is a broad category encompassing a wide range of support functions essential for the operation of government agencies and private businesses. This contract falls within the professional, scientific, and technical services industry, specifically focusing on office administrative services. The federal government is a major consumer of these services, often outsourcing functions to specialized contractors to achieve cost efficiencies and access expertise. Comparable spending benchmarks for administrative services can vary widely based on the specific services required, geographic location, and contract type, but large-scale contracts like this one represent a significant portion of federal spending in this category.

Small Business Impact

The provided data indicates that this contract was not awarded as a small business set-aside (ss=false, sb=false). This suggests that the primary award was not specifically targeted to encourage small business participation. While Engility LLC may utilize small businesses as subcontractors, the initial award structure does not prioritize them. This could mean that larger prime contractors are expected to fulfill the bulk of the requirements, potentially limiting direct opportunities for small businesses to engage with the government on this specific contract.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The agency's contracting officers and program managers would be accountable for monitoring expenditures, adherence to contract terms, and the quality of services delivered. Transparency is facilitated through contract databases like FPDS, which provide basic award information. However, detailed oversight reports or Inspector General investigations are not publicly available through this data alone, limiting a full assessment of accountability measures.

Related Government Programs

Defense Administrative Support Services
Office Administrative Services Contracts
Professional, Scientific, and Technical Services
Federal Administrative Support Contracts
Department of Defense Service Contracts

Risk Flags

Sole-source award may limit cost savings.
Time and Materials pricing increases cost uncertainty.
Long contract duration risks price becoming uncompetitive.
Lack of competition reduces potential for innovation.
Performance data not publicly available for detailed assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $363.5 million to ENGILITY LLC. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is ENGILITY LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $363.5 million.

What is the period of performance?

Start: 2005-04-21. End: 2010-10-31.

What is the track record of Engility LLC in performing similar administrative services contracts for the Department of Defense?

Engility LLC, and its predecessor entities, have a substantial history of performing various service contracts for the Department of Defense and other federal agencies. While specific details on administrative services performance require deeper dives into contract histories, the company has been involved in large-scale IT, engineering, and support services. Assessing their track record would involve reviewing past performance evaluations, any documented disputes or contract terminations, and the overall success in meeting performance metrics on similar engagements. Without access to detailed performance reviews for this specific contract or comparable ones, a definitive judgment on their track record for administrative services is limited to their general presence and scale of operations within the federal contracting space.

How does the awarded amount of over $363 million compare to typical spending on administrative services by the Department of Defense?

The awarded amount of over $363 million for administrative services is substantial and indicates a significant, long-term requirement. To benchmark this against typical spending, one would need to analyze historical data for similar administrative support contracts within the DoD. Factors such as the scope of services (e.g., general office support, specialized administrative functions), the number of personnel supported, and the duration of the contract heavily influence total cost. While this figure is large, the DoD's overall budget is vast, and spending on essential support services is expected. A direct comparison would require identifying contracts with similar service descriptions, contract types, and performance periods to determine if this represents an outlier or a standard investment for such comprehensive support.

What are the primary risks associated with a sole-source award of this magnitude for administrative services?

The primary risks associated with a sole-source award of this magnitude are related to cost and performance. Without competition, there is a reduced incentive for the contractor to offer the lowest possible price, potentially leading to overpayment by the government. The government also loses the benefit of innovative solutions or efficiencies that might have emerged from a competitive bidding process. Furthermore, the agency is reliant on a single provider, increasing the risk if that provider experiences financial difficulties, performance issues, or fails to adapt to changing needs. Robust contract management, including detailed performance monitoring and potentially price audits, becomes critical to mitigate these risks.

How effective is Time and Materials (T&M) pricing for managing administrative services contracts over a long duration?

Time and Materials (T&M) pricing can be effective for administrative services contracts when the scope of work is not clearly defined at the outset or is expected to evolve. It offers flexibility, allowing the agency to adjust service levels as needed. However, T&M contracts carry inherent risks of cost escalation, as the government pays for the actual labor hours and material costs incurred by the contractor. For long-duration contracts, this risk is amplified. Effective management requires stringent oversight, including detailed tracking of labor hours, verification of direct labor rates, and controls on material costs. Without rigorous monitoring, T&M contracts can become significantly more expensive than fixed-price alternatives, especially if the contractor's efficiency is not optimized.

What are the implications of the contract's long duration (2019 years) for cost control and service relevance?

The provided duration of '2019' appears to be an error, likely representing the number of days or a typo. Assuming a multi-year duration, a long contract term for administrative services presents both opportunities and risks. On the positive side, it can provide stability and predictability for both the agency and the contractor, potentially fostering a strong working relationship and allowing for economies of scale. However, it also increases the risk that the contracted services and pricing may become outdated or uncompetitive over time. Market rates for administrative support can change, and technological advancements might offer more efficient ways to deliver services. Without mechanisms for periodic review and adjustment, the government could end up paying above-market rates or receiving services that do not fully leverage current best practices.

What is the significance of the NAICS code 561110 (Office Administrative Services) in the context of this contract?

The North American Industry Classification System (NAICS) code 561110 signifies that the primary business activity of this contract is 'Office Administrative Services.' This category includes establishments primarily engaged in providing a variety of documented office administrative services, such as facilities support services, cleaning services, and security services. For this contract, it indicates that Engility LLC is providing a broad range of support functions essential for the day-to-day operations of the Department of Defense offices. This could encompass tasks like mail handling, scheduling, record keeping, general clerical support, and potentially managing office supplies and equipment, all crucial for maintaining the operational readiness and efficiency of the agency.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Office Administrative Services › Office Administrative Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: Science Applications International Corporation

Address: 4803 STONECROFT BLVD, CHANTILLY, VA, 20151

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: W91CRB05D0014

IDV Type: IDC

Timeline