DoD's $34.3M engineering support contract for Integrated Base Defense shows fair value, but limited competition

Contract Overview

Contract Amount: $34,327,902 ($34.3M)

Contractor: Cortek, Inc.

Awarding Agency: Department of Defense

Start Date: 2012-12-26

End Date: 2016-12-25

Contract Duration: 1,460 days

Daily Burn Rate: $23.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Official Description: CONTRACTOR SHALL PROVIDE ENGINEERING SUPPORT FOR THE INTEGRATED BASE DEFENSE (IBD) PROGRAM IN SUPPORT OF CBR DEFENSE DIVISION/Z20 AT NAVAL SURFACE WARFARE CENTER, DAHLGREN.

Place of Performance

Location: FREDERICKSBURG, SPOTSYLVANIA County, VIRGINIA, 22407

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $34.3 million to CORTEK, INC. for work described as: CONTRACTOR SHALL PROVIDE ENGINEERING SUPPORT FOR THE INTEGRATED BASE DEFENSE (IBD) PROGRAM IN SUPPORT OF CBR DEFENSE DIVISION/Z20 AT NAVAL SURFACE WARFARE CENTER, DAHLGREN. Key points: 1. Contract value appears reasonable given the specialized engineering services required for a critical defense program. 2. Full and open competition was utilized, suggesting a broad search for qualified bidders. 3. The contract type (Cost Plus Incentive Fee) allows for flexibility but requires careful monitoring of costs. 4. Performance period of four years provides a stable base for program execution. 5. The contractor, CORTEK, INC., is positioned within the defense engineering services sector. 6. The contract is a delivery order under a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle, indicating potential for future task orders.

Value Assessment

Rating: good

The total contract value of $34.3 million over four years averages to approximately $8.5 million annually. This figure seems within a reasonable range for specialized engineering support services for a defense program like Integrated Base Defense. Benchmarking against similar contracts for engineering services in the defense sector would provide a more precise assessment, but the initial value does not raise immediate red flags for being excessively high or low.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that the Department of the Navy sought bids from all responsible sources. While the specific number of bidders is not provided, this method generally promotes a competitive environment, which should theoretically lead to better pricing and value. The use of full and open competition suggests that there were likely multiple capable firms vying for this work.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it maximizes the pool of potential offerors, increasing the likelihood of receiving competitive bids and thus potentially lower prices for the government.

Public Impact

The primary beneficiaries are the Department of Defense and the Naval Surface Warfare Center, Dahlgren, who receive essential engineering support for the Integrated Base Defense program. The services delivered are critical for enhancing base security and defense capabilities, particularly in the context of CBR (Chemical, Biological, Radiological) defense. The geographic impact is primarily within Virginia, where the Naval Surface Warfare Center is located, but the defense capabilities supported have national security implications. The contract supports specialized engineering roles, potentially impacting a skilled workforce within the defense industry.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific bidder count makes it difficult to fully assess the intensity of competition.
Cost Plus Incentive Fee contracts can sometimes lead to cost overruns if not managed diligently.
The contract is a delivery order, meaning its value is part of a larger IDIQ, making it harder to assess the total program cost in isolation.

Positive Signals

Awarded under full and open competition, maximizing potential bidder pool.
Contract duration of four years provides stability for program execution.
Focus on critical defense capabilities (Integrated Base Defense, CBR Defense) indicates strategic importance.

Sector Analysis

The defense engineering services sector is a significant part of the broader aerospace and defense industry. This contract falls under engineering services (NAICS 541330), which includes firms providing specialized engineering expertise for complex systems. Spending in this area is driven by national security needs, technological advancements, and the maintenance of existing defense infrastructure. Comparable spending benchmarks would involve analyzing other large-scale engineering support contracts awarded by the DoD or its various branches for similar defense programs.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). As a result, small businesses are unlikely to be direct recipients of this prime contract. However, CORTEK, INC. may engage small businesses as subcontractors to fulfill specific aspects of the engineering support, depending on their subcontracting plans and the nature of the work. The absence of a small business set-aside suggests the primary focus was on securing the most capable large or mid-sized firms for this specialized requirement.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. The Contracting Officer's Representative (COR) would be responsible for monitoring performance, ensuring compliance with contract terms, and managing payments. Given the nature of defense contracts, the Inspector General's office for the Department of Defense may also conduct audits or investigations into cost, performance, or potential fraud. Transparency is facilitated through contract databases, but detailed performance metrics are often not publicly disclosed.

Related Government Programs

Integrated Base Defense Program
CBR Defense Division Support
Naval Surface Warfare Center Dahlgren Contracts
Department of Defense Engineering Services
Cost Plus Incentive Fee Contracts

Risk Flags

Contract type (CPIF) requires diligent oversight to manage costs.
Limited information on the number of bidders makes full competition assessment difficult.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $34.3 million to CORTEK, INC.. CONTRACTOR SHALL PROVIDE ENGINEERING SUPPORT FOR THE INTEGRATED BASE DEFENSE (IBD) PROGRAM IN SUPPORT OF CBR DEFENSE DIVISION/Z20 AT NAVAL SURFACE WARFARE CENTER, DAHLGREN.

Who is the contractor on this award?

The obligated recipient is CORTEK, 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 $34.3 million.

What is the period of performance?

Start: 2012-12-26. End: 2016-12-25.

What is CORTEK, INC.'s track record with the Department of the Navy and similar defense engineering contracts?

CORTEK, INC. has a history of performing contracts with the Department of Defense, including the Navy. Analyzing their past performance on similar engineering support or defense program contracts would reveal their reliability, quality of work, and ability to manage complex projects within budget and schedule. Information on past performance, including any awards or negative feedback, is crucial for assessing their suitability for this role. While this specific contract is a delivery order, their broader contract history provides context for their capabilities and experience in delivering specialized engineering services to the government.

How does the $34.3 million contract value compare to similar engineering support contracts for defense programs?

The $34.3 million contract value over four years, averaging approximately $8.5 million annually, appears to be within a reasonable range for specialized engineering support services for a defense program like Integrated Base Defense. However, a precise comparison requires benchmarking against contracts with similar scope, complexity, and duration within the defense sector. Factors such as the specific technical requirements, the level of security clearance needed, and the criticality of the program influence pricing. Without access to detailed data on comparable contracts, it's challenging to definitively state if this represents excellent or merely fair value, but it does not appear to be an outlier.

What are the key performance indicators (KPIs) and risk mitigation strategies for this contract?

Key performance indicators for this contract would likely focus on the timely and accurate delivery of engineering support, adherence to technical specifications, and effective problem-solving for the Integrated Base Defense program. Risk mitigation strategies would involve robust project management, clear communication channels between CORTEK, INC. and the Naval Surface Warfare Center, and potentially performance incentives tied to meeting critical milestones. The Cost Plus Incentive Fee (CPIF) contract type itself includes a risk-sharing mechanism where both the contractor and the government share in cost savings or overruns, incentivizing cost control. Regular progress reviews and technical assessments would be crucial for identifying and addressing potential risks early.

What is the historical spending pattern for engineering support related to the Integrated Base Defense program?

Historical spending on engineering support for the Integrated Base Defense program prior to this contract would provide valuable context. Understanding the trend of spending over previous years can indicate whether the current $34.3 million award represents an increase, decrease, or stable level of investment. This analysis helps in assessing the program's lifecycle stage and the sustained need for such services. If spending has been consistently high, it suggests a long-term requirement; if it's a new or increasing expenditure, it might signal program expansion or new technological integration efforts. Without prior data, it's difficult to establish a historical pattern.

How does the Cost Plus Incentive Fee (CPIF) structure impact cost control and contractor performance?

The Cost Plus Incentive Fee (CPIF) contract structure is designed to incentivize the contractor to control costs while achieving performance targets. Under CPIF, the final fee (profit) is adjusted based on the relationship between the final costs and the target costs, as well as the achievement of specific performance objectives. This means that if CORTEK, INC. can complete the engineering support services under the target cost and meet performance goals, they can earn a higher fee. Conversely, if costs exceed the target, their fee is reduced. This structure encourages efficiency and cost-consciousness from the contractor, aligning their financial interests with those of the government, but requires careful negotiation of target costs and performance metrics.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N0002412R3148

Offers Received: 1

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Parent Company: Decisionpoint Corporation (UEI: 967175071)

Address: 6508 PROSPECT ST, FREDERICKSBURG, VA, 22407

Business Categories: Category Business, Service Disabled Veteran Owned Business, Small Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $38,982,791

Exercised Options: $38,982,791

Current Obligation: $34,327,902

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017807D5016

IDV Type: IDC

Timeline