DoD's $15.6M Engineering Services Contract Awarded to Systems and Proposal Engineering Company Shows Mixed Value and Competition Signals

Contract Overview

Contract Amount: $15,608,704 ($15.6M)

Contractor: Systems and Proposal Engineering Company

Awarding Agency: Department of Defense

Start Date: 2016-04-01

End Date: 2023-06-30

Contract Duration: 2,646 days

Daily Burn Rate: $5.9K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Official Description: IGF::OT::IGF SYSTEM ENGINEERING IN AREAS OF MISSION ANALYSIS, INTELLECTUAL OUTREACH, AND TECHNICAL REVIEW

Place of Performance

Location: DAHLGREN, KING GEORGE County, VIRGINIA, 22448

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $15.6 million to SYSTEMS AND PROPOSAL ENGINEERING COMPANY for work described as: IGF::OT::IGF SYSTEM ENGINEERING IN AREAS OF MISSION ANALYSIS, INTELLECTUAL OUTREACH, AND TECHNICAL REVIEW Key points: 1. The contract's cost-plus-incentive-fee structure suggests potential for cost overruns if not managed closely. 2. The 'full and open competition after exclusion of sources' indicates a potentially complex procurement process. 3. A single award for a contract spanning over six years warrants scrutiny regarding market responsiveness. 4. The engineering services sector is highly competitive, raising questions about the pricing effectiveness for this specific award. 5. Performance context is limited without specific delivery order details, making a definitive value assessment challenging. 6. The contract's duration and value place it within a significant spending category for defense engineering support.

Value Assessment

Rating: fair

Benchmarking the value of this $15.6 million contract is challenging without specific details on the deliverables within each delivery order. The cost-plus-incentive-fee (CPIF) pricing structure, while allowing for flexibility, can lead to higher costs if incentives are not well-aligned with efficient performance. Compared to similar large-scale engineering support contracts, the pricing would need to be evaluated against the specific technical requirements and the contractor's demonstrated ability to meet them cost-effectively. The absence of a clear per-unit cost benchmark makes direct price comparison difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'full and open competition after exclusion of sources,' which suggests that while the competition was intended to be broad, specific criteria or circumstances led to the exclusion of certain potential bidders. This procurement method can sometimes indicate a specialized need or a desire to leverage specific existing capabilities. The fact that there was only one awardee for this significant contract duration raises questions about the breadth of the competitive landscape and whether all capable firms were effectively engaged.

Taxpayer Impact: The limited competition, despite being 'full and open,' may have resulted in less aggressive pricing than a broader, more inclusive competition. Taxpayers might have paid a premium if alternative, potentially lower-cost solutions were not fully explored or considered.

Public Impact

The Department of the Navy benefits from specialized engineering services in mission analysis, intellectual outreach, and technical review. This contract supports critical defense functions, contributing to national security objectives. The services are likely concentrated within the geographic areas where the Department of the Navy operates, potentially impacting workforce needs in those regions. The contract supports the technical and analytical capabilities of the defense sector workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition for a multi-year contract could lead to suboptimal pricing.
The CPIF contract type requires careful oversight to ensure cost efficiency.
Lack of detailed performance metrics makes it difficult to assess true value for money.
The 'exclusion of sources' clause warrants understanding to ensure fairness in competition.

Positive Signals

The contract was awarded through a 'full and open' process, indicating an attempt at broad solicitation.
The contractor, Systems and Proposal Engineering Company, has secured a significant contract, suggesting some level of established capability.
The CPIF structure can incentivize contractors to meet or exceed performance targets.

Sector Analysis

The engineering services sector is a vital component of the broader professional, scientific, and technical services industry, supporting government and private sector clients with specialized expertise. This contract falls within the engineering services sub-sector, which is characterized by high technical barriers to entry and significant demand from government agencies, particularly in defense and aerospace. The market size for defense engineering services is substantial, driven by the need for advanced technological development and sustainment of complex systems. Comparable spending benchmarks would typically involve analyzing the average cost of similar engineering support contracts awarded by the Department of Defense or other federal agencies over similar timeframes.

Small Business Impact

The data indicates that small business participation was not a primary focus for this contract, as the 'small business set-aside' field is false. There is no explicit mention of subcontracting requirements for small businesses within the provided data. This suggests that the prime contractor is likely a large business, and the direct impact on the small business ecosystem may be minimal unless subcontracting opportunities are proactively pursued by the prime. Further investigation into the subcontracting plan, if one exists, would be necessary to fully assess the impact on small businesses.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. Accountability measures are typically embedded within the contract's terms, including performance standards, reporting requirements, and the CPIF structure which links payment to performance. Transparency is often facilitated through contract award databases and public reporting mechanisms. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arise during the contract's performance.

Related Government Programs

Department of Defense Engineering Services Contracts
Naval Systems Engineering Support
Intelligence Analysis Support Contracts
Technical Review Services
Cost-Plus-Incentive-Fee Contracts

Risk Flags

Potential for cost overruns due to CPIF structure.
Limited competition despite 'full and open' designation.
Lack of detailed performance metrics for value assessment.
Contract duration may exceed actual need if requirements fluctuate.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $15.6 million to SYSTEMS AND PROPOSAL ENGINEERING COMPANY. IGF::OT::IGF SYSTEM ENGINEERING IN AREAS OF MISSION ANALYSIS, INTELLECTUAL OUTREACH, AND TECHNICAL REVIEW

Who is the contractor on this award?

The obligated recipient is SYSTEMS AND PROPOSAL ENGINEERING COMPANY.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $15.6 million.

What is the period of performance?

Start: 2016-04-01. End: 2023-06-30.

What is the track record of Systems and Proposal Engineering Company in delivering similar engineering services for the Department of Defense?

Assessing the track record of Systems and Proposal Engineering Company requires a deeper dive into their past performance on federal contracts. While securing a $15.6 million contract indicates a level of capability and trust from the awarding agency, it doesn't automatically guarantee successful past performance. A thorough review would involve examining past performance evaluations, any documented issues or disputes on previous contracts, and their history with cost control and schedule adherence. Without access to specific past performance reports or a detailed contract history database, it's difficult to definitively state their track record. However, the nature of this contract, spanning over six years, suggests the Navy has confidence in their ability to provide sustained support.

How does the pricing of this contract compare to similar engineering services contracts awarded by the Department of the Navy?

Directly comparing the pricing of this $15.6 million contract is challenging without detailed breakdowns of the services rendered under each delivery order and the specific performance metrics tied to the incentive fee. The Cost Plus Incentive Fee (CPIF) structure means the final cost is variable and dependent on performance outcomes. To benchmark effectively, one would need to identify comparable contracts for similar engineering services (e.g., mission analysis, technical review) awarded around the same period, with similar contract types and durations. Analyzing the 'incentive' portion of the fee and the contractor's historical ability to achieve those incentives would also be crucial. A preliminary assessment suggests the price is substantial, but its value proposition hinges on the quality and efficiency of the services delivered.

What are the primary risks associated with this contract, and how are they being mitigated?

The primary risks associated with this contract include potential cost overruns due to the CPIF structure, performance deficiencies if the contractor fails to meet technical requirements or incentive targets, and risks related to the 'full and open competition after exclusion of sources' process, which could indicate potential bid protests or a lack of robust competition. Mitigation strategies would typically involve stringent oversight by the Department of the Navy, clear definition of performance metrics and incentive targets, regular performance reviews, and potentially robust contract clauses addressing termination for default or convenience. The exclusion of sources clause itself requires careful justification and documentation to ensure fairness and compliance with procurement regulations.

How effective is the 'full and open competition after exclusion of sources' approach in ensuring fair pricing and optimal contractor selection for specialized engineering services?

The 'full and open competition after exclusion of sources' approach is a nuanced procurement method. It aims to ensure broad competition while allowing for specific exclusions based on defined criteria, such as unique capabilities, security requirements, or prior performance. Its effectiveness in ensuring fair pricing and optimal selection depends heavily on the justification for the exclusions. If the exclusions are well-founded and genuinely necessary to meet specific technical requirements, it can lead to the selection of the most qualified contractor. However, if the exclusions are overly broad or not adequately justified, it can limit competition, potentially leading to higher prices and a suboptimal selection. For specialized engineering services, this approach might be necessary, but transparency and rigorous justification are key to its fairness and effectiveness.

What is the historical spending trend for similar engineering services within the Department of the Navy?

Analyzing historical spending trends for similar engineering services within the Department of the Navy is crucial for contextualizing this $15.6 million award. The Navy, like other branches of the DoD, relies heavily on external engineering expertise for complex system development, analysis, and sustainment. Historical data would likely show consistent and significant investment in these services, driven by the continuous evolution of naval technology and operational requirements. Trends might indicate shifts towards specific types of engineering support (e.g., cybersecurity, AI integration) or changes in contracting approaches (e.g., more emphasis on performance-based contracts). Understanding these trends helps determine if this contract represents a typical expenditure or an outlier, and whether spending is aligned with strategic priorities.

Industry Classification

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

Product/Service Code: SPECIAL STUDIES/ANALYSIS, NOT R&D › SPECIAL STUDIES - NOT R and D

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N0002415R3194

Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Address: 10440 BALLS FORD RD STE 230, MANASSAS, VA, 20109

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Woman Owned Business, Women Owned Small Business

Financial Breakdown

Contract Ceiling: $16,176,286

Exercised Options: $16,176,286

Current Obligation: $15,608,704

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017815D8444

IDV Type: IDC

Timeline