DoD's $79.6M Engineering Services Contract Awarded to Torch Technologies Inc. Shows Strong Competition

Contract Overview

Contract Amount: $79,642,107 ($79.6M)

Contractor: Torch Technologies Inc

Awarding Agency: Department of Defense

Start Date: 2008-09-23

End Date: 2014-03-22

Contract Duration: 2,006 days

Daily Burn Rate: $39.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: SERVICES

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35802

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $79.6 million to TORCH TECHNOLOGIES INC for work described as: SERVICES Key points: 1. Contract value of $79.6 million over its period of performance. 2. Awarded under full and open competition, indicating a robust bidding process. 3. The contract duration spans over 5 years, suggesting a long-term need for services. 4. Services provided fall under Engineering Services, a critical sector for defense operations. 5. The contract was awarded as a Delivery Order, a common method for task-specific needs. 6. Fixed-price contract type helps manage cost certainty for the government.

Value Assessment

Rating: good

The total contract value of $79.6 million over approximately 5.5 years averages to about $14.5 million annually. Benchmarking this against similar large-scale engineering services contracts within the Department of Defense suggests this is within a reasonable range, especially considering the specialized nature of defense engineering. The firm fixed-price structure provides cost predictability, which is a positive indicator for value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit a bid. The presence of 3 bidders (as indicated by 'no': 3) suggests a healthy level of competition for this requirement. This competitive environment is generally expected to drive more favorable pricing and innovative solutions for the government.

Taxpayer Impact: The full and open competition ensures that taxpayer dollars are being used efficiently by leveraging market forces to obtain the best possible services at competitive prices.

Public Impact

The primary beneficiaries are the Department of Defense and its various branches, receiving essential engineering support. Services delivered include specialized engineering expertise crucial for defense systems and operations. The contract's geographic impact is primarily within Alabama (ST: AL, SN: ALABAMA), where the contractor is located. Workforce implications include the employment of skilled engineers and technical personnel by Torch Technologies Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if scope creep occurs despite fixed-price nature.
Dependence on a single contractor for critical engineering services could pose a risk if performance falters.

Positive Signals

Awarded through full and open competition, indicating a competitive process.
Firm fixed-price contract type provides cost certainty.
Contract duration suggests a stable, long-term need being met.
Contractor is based in Alabama, potentially supporting local economy.

Sector Analysis

Engineering services are a vital component of the defense industrial base, encompassing design, development, testing, and sustainment of complex military systems. The market for defense engineering services is substantial, with significant government spending allocated annually. This contract fits within the broader category of professional services supporting national security objectives, where specialized expertise is paramount. Comparable spending benchmarks for similar engineering support contracts within the DoD often range in the tens to hundreds of millions of dollars.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a set-aside requirement. The primary focus of competition was likely on larger, established firms capable of meeting the extensive engineering requirements.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program office within the Department of the Army. Accountability measures are embedded in the firm fixed-price contract terms, requiring delivery of specified services. Transparency is generally maintained through contract award databases, though specific performance metrics may not always be publicly disclosed. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Defense Engineering Services
Professional Services Contracts
Department of Defense IT and Engineering Support
Army Acquisition Contracts

Risk Flags

Potential for scope creep impacting fixed-price contract.
Long-term reliance on a single contractor for critical services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $79.6 million to TORCH TECHNOLOGIES INC. SERVICES

Who is the contractor on this award?

The obligated recipient is TORCH TECHNOLOGIES INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $79.6 million.

What is the period of performance?

Start: 2008-09-23. End: 2014-03-22.

What is the specific nature of the engineering services provided under this contract?

The contract falls under the North American Industry Classification System (NAICS) code 541330, which designates 'Engineering Services'. This broad category typically includes services such as aerospace engineering, civil engineering, electrical engineering, mechanical engineering, and systems engineering. For a Department of Defense contract, these services likely involve supporting the design, development, testing, integration, and sustainment of complex military platforms, weapons systems, or related technologies. Specific details would be found in the Statement of Work (SOW) or Performance Work Statement (PWS) associated with the delivery order, outlining the precise technical requirements and deliverables expected from Torch Technologies Inc.

How does the $79.6 million contract value compare to other engineering services contracts awarded by the Department of Defense?

The $79.6 million total contract value, spread over approximately 5.5 years, represents a significant but not exceptionally large award within the Department of Defense's vast procurement landscape. Annual spending averages around $14.5 million. The DoD frequently awards engineering services contracts ranging from a few million to hundreds of millions of dollars, depending on the scope and duration. Contracts for major weapon system development or sustainment can easily exceed this amount. Therefore, while substantial, this contract's value is within a common range for specialized engineering support, especially when awarded through full and open competition.

What are the potential risks associated with a firm fixed-price contract of this duration?

While firm fixed-price (FFP) contracts are generally favored for cost control, risks can still emerge, particularly over a multi-year period. One primary risk is contractor underestimation of costs, potentially leading to quality compromises if the contractor seeks to reduce expenses to maintain profitability. Conversely, if the government's requirements evolve significantly beyond the initial scope, the FFP nature might make it difficult or costly to incorporate necessary changes, potentially leading to disputes or the need for contract modifications. Scope creep, even in an FFP contract, can strain resources and impact delivery timelines if not managed diligently through formal change order processes. Ensuring the initial SOW is comprehensive and anticipating potential future needs is crucial.

What does the 'Delivery Order' award type signify in this context?

The 'Delivery Order' (aw: DELIVERY ORDER) award type indicates that this contract is likely a type of indefinite-delivery, indefinite-quantity (IDIQ) contract or a similar multiple-award contract vehicle, from which specific task orders for goods or services are issued. In this case, the $79.6 million represents the total value of a specific delivery order placed against a larger contract. This means the government has the flexibility to order services as needed up to the specified amount and within the defined period. It allows for phased execution and payment based on actual requirements, rather than obligating the full amount upfront. This approach is common for services that may have fluctuating demand or require phased implementation.

What is Torch Technologies Inc.'s track record with the Department of Defense?

Torch Technologies Inc. has a history of contracting with the Department of Defense. While this specific data point doesn't detail their entire history, the fact that they were awarded a $79.6 million contract through full and open competition suggests they are a recognized and capable provider within the defense sector. Further investigation into contract databases like FPDS or SAM.gov would reveal the full scope of their past performance, including other contracts, their values, agencies served, and performance ratings, providing a more comprehensive view of their track record.

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: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4035 CHRIS DR SW STE C, HUNTSVILLE, AL, 35802

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business

Financial Breakdown

Contract Ceiling: $79,642,107

Exercised Options: $79,642,107

Current Obligation: $79,642,107

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W31P4Q08A0019

IDV Type: IDC

Timeline