DoD's $22M Engineering Services Contract with Novonics Corporation: A Deep Dive into Value and Competition

Contract Overview

Contract Amount: $21,952,729 ($22.0M)

Contractor: Novonics Corporation

Awarding Agency: Department of Defense

Start Date: 2011-02-01

End Date: 2017-06-30

Contract Duration: 2,341 days

Daily Burn Rate: $9.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST NO FEE

Sector: Defense

Official Description: MULTINATIONAL/MULTI-AGENCY ENGINEERING SUPPORT

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35806

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $22.0 million to NOVONICS CORPORATION for work described as: MULTINATIONAL/MULTI-AGENCY ENGINEERING SUPPORT Key points: 1. The contract's total value of approximately $22 million over its duration suggests a significant investment in engineering services. 2. Analysis of pricing and comparison to similar contracts is crucial to determine if this represents good value for money. 3. The contract was awarded under full and open competition, indicating a potentially competitive bidding process. 4. Performance context and sector positioning within Defense Engineering Services require further examination to assess effectiveness. 5. Risk indicators associated with this contract are not immediately apparent from the provided data but warrant further investigation.

Value Assessment

Rating: fair

The total award amount of $21,952,728.57 for engineering services over a period of approximately 6.5 years (February 2011 to June 2017) needs to be benchmarked against similar contracts awarded by the Department of Defense during that timeframe. Without specific comparable data, it is difficult to definitively assess the value for money. The 'COST NO FEE' contract type suggests that the government reimburses the contractor for allowable costs, with no fee, which can be a cost-saving measure but also requires robust oversight to control expenses.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'FULL AND OPEN COMPETITION,' which is the preferred method for government contracting as it allows all responsible sources to submit bids. The data indicates one award, but it does not specify the number of bids received. A high level of competition generally leads to better price discovery and potentially lower costs for the government. However, the specifics of the bidding process and the number of competitors are essential for a complete assessment.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it promotes a level playing field, encourages innovation, and can lead to more competitive pricing, ultimately maximizing the value of taxpayer dollars.

Public Impact

The primary beneficiaries of this contract are the Department of Defense, which receives essential engineering support services. The services delivered likely encompass a range of engineering disciplines critical for defense operations and infrastructure. The geographic impact is noted as Alabama (AL), suggesting the services were primarily performed or managed from this state. Workforce implications could include the employment of engineers and technical staff by Novonics Corporation and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific performance metrics makes it difficult to gauge the effectiveness and efficiency of the engineering services provided.
The 'COST NO FEE' contract type, while potentially cost-saving, can lead to cost overruns if not meticulously managed and overseen.
Limited information on the number of bidders in the full and open competition makes it hard to confirm the extent of price discovery.
The duration of the contract (over 6 years) necessitates ongoing monitoring to ensure continued relevance and value.

Positive Signals

Awarded through full and open competition, suggesting a robust and fair bidding process.
The contract type ('COST NO FEE') can be advantageous for the government by eliminating profit margins, potentially reducing overall expenditure.
The contractor, Novonics Corporation, has secured a significant contract, indicating a level of trust and capability recognized by the DoD.
The contract was managed by the Defense Contract Management Agency (DCMA), a specialized agency for contract oversight.

Sector Analysis

This contract falls within the Engineering Services sector (NAICS code 541330), a critical component of the broader professional, scientific, and technical services industry. The defense engineering services sub-sector is characterized by specialized expertise required for military applications, research, development, and sustainment. Spending in this area is often driven by national security priorities and technological advancements. Comparable spending benchmarks would involve analyzing other large-scale engineering support contracts awarded by the DoD and other federal agencies for similar services.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific impacts on the small business ecosystem stemming from a small business set-aside. The focus would be on whether Novonics Corporation, as a prime contractor, engaged small businesses as subcontractors, which is not detailed in this summary data.

Oversight & Accountability

Oversight for this contract was likely managed by the Defense Contract Management Agency (DCMA), given its role in overseeing defense contracts. Accountability measures would be embedded in the contract terms, performance requirements, and payment clauses. Transparency is generally facilitated through contract databases like FPDS-NG, where basic award information is published. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

Department of Defense Engineering Support Contracts
Federal Professional, Scientific, and Technical Services
Defense Contract Management Agency Services

Risk Flags

Cost Control Risk (Cost No Fee)
Performance Monitoring Difficulty (Lack of Metrics)
Potential for Scope Creep (Long Duration)

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.0 million to NOVONICS CORPORATION. MULTINATIONAL/MULTI-AGENCY ENGINEERING SUPPORT

Who is the contractor on this award?

The obligated recipient is NOVONICS CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $22.0 million.

What is the period of performance?

Start: 2011-02-01. End: 2017-06-30.

What was the specific scope of engineering services provided under this contract?

The provided data identifies the contract as being for 'MULTINATIONAL/MULTI-AGENCY ENGINEERING SUPPORT' under NAICS code 541330 (Engineering Services). However, the specific technical tasks, deliverables, and engineering disciplines covered are not detailed. This could range from systems engineering, design, analysis, testing, and integration support for various defense platforms, infrastructure, or technologies. A comprehensive understanding would require reviewing the contract's Statement of Work (SOW) or Performance Work Statement (PWS), which outlines the precise requirements and expectations for the contractor.

How does the 'COST NO FEE' contract type compare to other DoD engineering contracts in terms of cost control?

The 'COST NO FEE' (CNF) contract type is a variation of a cost-reimbursement contract where the contractor is reimbursed for allowable costs but receives no fee or profit. This type is typically used when the cost of the work can be determined but the profit cannot be easily established, or when the government wants to minimize contractor profit. Compared to fixed-price contracts, CNF contracts carry more cost risk for the government, as the final cost is not predetermined. However, when managed effectively with strong oversight, they can be cost-effective by eliminating profit margins. The key to cost control lies in rigorous auditing of allowable costs and strict adherence to the contract's scope.

What are the potential risks associated with a 'COST NO FEE' contract for engineering services?

The primary risk with a 'COST NO FEE' contract is the potential for cost escalation if the contractor does not diligently manage expenses, as their primary incentive is cost reimbursement rather than profit maximization. The government bears the risk of cost overruns. Another risk is the contractor's potential lack of motivation to innovate or improve efficiency, as there is no direct financial reward for doing so. Effective oversight, detailed cost accounting standards, and clear performance metrics are crucial to mitigate these risks. Without a fee, contractors might also be less inclined to invest in business development or long-term improvements related to the contract.

What does the duration of this contract (over 6 years) imply about the nature of the engineering support needed?

A contract duration of over six years for engineering support suggests a long-term, potentially ongoing requirement for specialized technical expertise. This could involve sustainment engineering for existing systems, continuous development and integration support for complex defense programs, or long-term research and analysis projects. Such extended periods often indicate a stable, albeit evolving, need within the Department of Defense that requires consistent contractor support rather than short-term, project-based assistance. It also implies a need for a stable contractor workforce capable of maintaining institutional knowledge over time.

How does the geographic location 'AL' (Alabama) influence the contract's execution and oversight?

The designation 'AL' for Alabama likely indicates the primary location of contract performance or the administrative office of the contractor, Novonics Corporation. This could mean that the engineering services were physically performed at a DoD facility in Alabama, or that the contractor's project management team is based there. For oversight, it might mean that the assigned Defense Contract Management Agency (DCMA) field office responsible for monitoring the contract is located in or near Alabama. This geographic focus can streamline communication and on-site inspections but also means that any issues arising from remote locations might require additional coordination.

What is the significance of the 'MULTINATIONAL/MULTI-AGENCY' designation for this contract?

The 'MULTINATIONAL/MULTI-AGENCY' designation suggests that the engineering support provided under this contract was intended to benefit not only the U.S. Department of Defense but potentially allied nations and/or multiple U.S. government agencies. This implies a broad scope of application and potentially complex coordination requirements involving different stakeholders with varying needs and standards. It could involve supporting joint military operations, international defense programs, or collaborative research initiatives. Such designations often require enhanced communication protocols and adherence to diverse regulatory frameworks.

Industry Classification

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

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N0002410R3321

Offers Received: 1

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Parent Company: Huntington Ingalls Industries, Inc

Address: 1100 NEW JERSEY AVE SE, SUITE 310, WASHINGTON, DC, 20003

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

Financial Breakdown

Contract Ceiling: $46,692,508

Exercised Options: $44,564,325

Current Obligation: $21,952,729

Subaward Activity

Number of Subawards: 9

Total Subaward Amount: $1,592,993

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017804D4092

IDV Type: IDC

Timeline