DoD's $13.6M engineering services contract with MAGNACOM INC. awarded via full and open competition

Contract Overview

Contract Amount: $13,594,249 ($13.6M)

Contractor: Magnacom Inc.

Awarding Agency: Department of Defense

Start Date: 2007-11-26

End Date: 2012-08-31

Contract Duration: 1,740 days

Daily Burn Rate: $7.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: MDA ANALYSIS AND TESTING

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35806

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $13.6 million to MAGNACOM INC. for work described as: MDA ANALYSIS AND TESTING Key points: 1. Contract awarded for engineering services, indicating a need for specialized technical expertise. 2. The contract was competed openly, suggesting a competitive environment for the services. 3. A fixed-fee structure was used, which can provide cost certainty for the government. 4. The contract duration of nearly five years suggests a long-term requirement for these services. 5. The award was made to a single contractor, MAGNACOM INC., for the entirety of the work. 6. The contract was awarded as a delivery order, implying it was part of a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle or a similar framework.

Value Assessment

Rating: fair

Benchmarking the value of this $13.6 million contract is challenging without more specific details on the engineering services provided. The cost-plus-fixed-fee (CPFF) pricing structure means that while the fee is fixed, the direct costs can vary. Comparing this to similar engineering services contracts within the Department of the Navy or across the DoD would require access to detailed scope of work and performance metrics. The duration of the contract (1740 days) suggests a substantial, ongoing need, but the overall value-for-money is difficult to ascertain without performance data.

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 fact that it was competed openly suggests a healthy market for these engineering services, and the government likely received multiple proposals. The specific number of bidders is not provided, but open competition generally leads to better price discovery and potentially more favorable terms for the government compared to limited or sole-source procurements.

Taxpayer Impact: Taxpayers benefit from full and open competition through the potential for lower prices and higher quality services as contractors vie for the award. This process helps ensure that government funds are used efficiently by leveraging market forces.

Public Impact

The Department of the Navy benefits from specialized engineering expertise to support its operations and projects. This contract likely supports critical defense infrastructure or technological development within the Navy. The services delivered are expected to enhance the Navy's engineering capabilities and project execution. The geographic impact is primarily within Alabama (AL), where the contractor is located, but the services may support broader naval operations. The contract supports the workforce of MAGNACOM INC. and potentially its subcontractors, contributing to employment in the engineering sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contracts can incentivize contractors to incur higher costs if not closely monitored, as the fixed fee remains constant.
Lack of specific performance metrics makes it difficult to assess the true value and effectiveness of the engineering services provided.
The duration of the contract (nearly 5 years) could lead to contractor complacency if not managed actively.
Limited information on the specific nature of the engineering services makes it hard to identify potential risks or areas for improvement.

Positive Signals

Awarded through full and open competition, suggesting a competitive process that should yield fair pricing.
The fixed fee component of the contract provides a degree of cost certainty for the government regarding the contractor's profit.
The contract duration indicates a stable, long-term requirement, allowing for potential relationship building and efficiency gains with the contractor.
The award to MAGNACOM INC. suggests they possess the necessary qualifications and capabilities to meet the DoD's engineering needs.

Sector Analysis

This contract falls within the Engineering Services sector (NAICS code 541330). This sector is crucial for government operations, providing design, consulting, and technical expertise for complex projects. The Department of Defense is a significant consumer of engineering services, utilizing them for everything from infrastructure development to advanced weapons systems. Comparable spending benchmarks for engineering services within the DoD can vary widely based on project complexity and duration, but contracts in the multi-million dollar range are common for specialized support.

Small Business Impact

There is no indication that this contract included a small business set-aside. The contract was awarded under full and open competition, and the data does not specify if MAGNACOM INC. is a small business. If MAGNACOM INC. is a large business, there may be opportunities for small businesses to participate as subcontractors, depending on the scope of work and subcontracting plans, which are not detailed here. The absence of a specific small business set-aside means that the primary award was not directed towards small businesses.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy contracting officers and program managers. Accountability measures would be embedded in the contract terms, including performance standards, reporting requirements, and payment schedules tied to deliverables. Transparency is generally facilitated through contract award databases like FPDS-NG, which provide basic information on contract value, duration, and parties involved. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Engineering Services Contracts
Naval Sea Systems Command (NAVSEA) Contracts
Cost-Plus-Fixed-Fee Contracts
Engineering and Technical Services IDIQ Contracts

Risk Flags

Cost-plus-fixed-fee contract type requires diligent oversight to manage costs.
Lack of detailed performance metrics makes value assessment difficult.
Contract duration of nearly 5 years necessitates ongoing performance monitoring.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $13.6 million to MAGNACOM INC.. MDA ANALYSIS AND TESTING

Who is the contractor on this award?

The obligated recipient is MAGNACOM INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $13.6 million.

What is the period of performance?

Start: 2007-11-26. End: 2012-08-31.

What specific engineering services were provided under this contract, and how do they align with the Department of the Navy's mission requirements?

The provided data indicates the contract is for 'MDA ANALYSIS AND TESTING' and falls under NAICS code 541330 (Engineering Services). While the specific nature of 'MDA ANALYSIS AND TESTING' is not detailed, it likely pertains to Missile Defense Agency (MDA) related activities, which could involve system analysis, performance testing, simulation, or evaluation of missile defense technologies. These services are critical for the Department of the Navy's role in national defense, particularly in areas related to fleet protection and strategic deterrence. The alignment with the Navy's mission would depend on how these MDA-related engineering services contribute to naval capabilities, such as integrating missile defense systems onto naval platforms or supporting research and development efforts relevant to naval warfare.

How does the $13.6 million contract value compare to other engineering services contracts awarded by the Department of the Navy for similar services?

Comparing the $13.6 million value requires context on the scope and duration. This contract ran for approximately 1740 days (about 4.7 years). If the services were for ongoing analysis and testing related to missile defense systems, this value might be considered moderate. However, without knowing the specific deliverables, the number of personnel involved, or the complexity of the systems analyzed, a direct comparison is difficult. Larger, more complex engineering projects or those involving extensive R&D could easily exceed this amount. Conversely, smaller, more focused analytical tasks might be awarded for less. Benchmarking would ideally involve looking at contracts with similar NAICS codes, similar contract types (CPFF), and similar agencies within DoD for comparable durations.

What were the key performance indicators (KPIs) or metrics used to evaluate MAGNACOM INC.'s performance on this contract?

The provided data does not include specific Key Performance Indicators (KPIs) or metrics used to evaluate MAGNACOM INC.'s performance. For Cost-Plus-Fixed-Fee (CPFF) contracts, performance is typically assessed against the Statement of Work (SOW), adherence to schedule, quality of deliverables, and overall technical execution. Government contract officers would have monitored progress through regular reporting, technical reviews, and potentially user feedback. Without access to the contract's SOW or performance reports, it's impossible to detail the specific KPIs. However, common metrics in engineering services might include on-time delivery of reports, accuracy of analyses, successful completion of test objectives, and adherence to budget for direct costs (though the fee is fixed).

What is MAGNACOM INC.'s track record with the Department of Defense, particularly in providing 'MDA ANALYSIS AND TESTING' services?

The data shows MAGNACOM INC. was awarded this $13.6 million contract by the Department of the Navy for 'MDA ANALYSIS AND TESTING' services. To assess their track record, one would need to examine their contract history with the DoD. This includes looking at the number and value of previous contracts, the types of services rendered, past performance reviews, and any history of contract disputes or awards. A comprehensive review would involve searching databases like the Federal Procurement Data System (FPDS) for all their DoD awards. Without that broader context, we can only confirm they have experience in this specific area based on this award, but cannot definitively state their overall track record or expertise level in 'MDA ANALYSIS AND TESTING'.

What are the potential risks associated with a Cost-Plus-Fixed-Fee contract for engineering services, and how might they have been mitigated?

The primary risk with Cost-Plus-Fixed-Fee (CPFF) contracts is that the contractor may have less incentive to control costs, as their profit (the fixed fee) is guaranteed regardless of the actual direct costs incurred. This can lead to cost overruns if not managed diligently. To mitigate this, the government relies on robust oversight, detailed SOWs, and careful monitoring of incurred costs. The contracting officer and technical team must ensure that all costs claimed are reasonable, allocable, and allowable according to contract terms and federal regulations. Performance metrics and regular progress reviews are also crucial to ensure the contractor is delivering value and meeting objectives efficiently. The fixed fee itself acts as a ceiling on profit, but not on total cost.

How has historical spending on engineering services by the Department of the Navy trended, and where does this $13.6M contract fit within that trend?

Historical spending on engineering services by the Department of the Navy is substantial, often running into billions of dollars annually across various categories like design, analysis, testing, and consulting. This $13.6 million contract, awarded over nearly five years, represents a moderate-sized engagement within the broader context of the Navy's extensive procurement of technical expertise. It's not an exceptionally large contract in the scale of major defense programs, but it signifies a significant investment in specialized analytical and testing capabilities, likely related to critical defense systems like missile defense. To place it precisely within trends, one would need to analyze the Navy's annual spending on NAICS code 541330 and similar service categories over several fiscal years.

Industry Classification

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

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N0002407R3423

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Technology Service Corp (UEI: 053885604)

Address: 615 DISCOVERY DR NW STE B, HUNTSVILLE, AL, 35806

Business Categories: Category Business, Small Business

Financial Breakdown

Contract Ceiling: $89,348,993

Exercised Options: $34,628,078

Current Obligation: $13,594,249

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017807D5142

IDV Type: IDC

Timeline