DoD's $135M Combat Environment Simulation contract awarded to Jacobs Technology Inc. shows fair value with a 4.5% cost underrun

Contract Overview

Contract Amount: $135,214,785 ($135.2M)

Contractor: Jacobs Technology Inc

Awarding Agency: Department of Defense

Start Date: 2011-07-19

End Date: 2019-09-30

Contract Duration: 2,995 days

Daily Burn Rate: $45.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: COMBAT ENVIRONMENT SIMULATION

Place of Performance

Location: FORT WALTON BEACH, OKALOOSA County, FLORIDA, 32547

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $135.2 million to JACOBS TECHNOLOGY INC for work described as: COMBAT ENVIRONMENT SIMULATION Key points: 1. The contract demonstrates a strong value proposition, with actual costs falling below initial estimates. 2. Competition was robust, indicating a healthy market for simulation services. 3. Risk indicators are low, suggesting effective management and execution. 4. Performance context shows a long-term engagement, implying consistent service delivery. 5. This contract positions Jacobs Technology within the critical defense simulation sector. 6. The cost-plus-fixed-fee structure allowed for flexibility while maintaining cost control.

Value Assessment

Rating: good

The final cost of $135.2 million represents a 4.5% underrun compared to the estimated value, indicating good value for money. Benchmarking against similar large-scale simulation contracts is challenging due to the specialized nature of combat environment simulation, but the cost efficiency observed here is a positive signal. The fixed fee component likely incentivized efficient performance within the defined scope.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple capable vendors had the opportunity to bid. The presence of a single award indicates that Jacobs Technology Inc. was selected as the most advantageous offer. This level of competition generally leads to better price discovery and ensures the government receives competitive pricing.

Taxpayer Impact: Taxpayers benefit from a competitive bidding process that likely drove down costs and ensured the selection of a qualified contractor for a critical defense capability.

Public Impact

The primary beneficiaries are the U.S. Department of Defense personnel who utilize the simulation for training and mission rehearsal. Services delivered include the development, integration, and maintenance of complex combat environment simulation systems. The contract's geographic impact is primarily within Florida, where the services were likely performed or managed. Workforce implications include employment opportunities for engineers, technicians, and simulation specialists.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep in long-term, complex simulation projects.
Reliance on a single contractor for a critical capability could pose future supply chain risks.

Positive Signals

Demonstrated cost efficiency with a significant underrun.
Successful long-term contract performance over 8 years.
Awarded through full and open competition, ensuring market vetting.
Jacobs Technology Inc. has a strong track record in engineering and technology services.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting the defense industry's need for advanced simulation and training capabilities. The market for defense simulation is substantial, driven by the continuous need for realistic training environments. Comparable spending benchmarks are difficult to pinpoint precisely due to the unique nature of combat environment simulation, but large-scale simulation and training contracts can range from tens to hundreds of millions of dollars.

Small Business Impact

There is no indication that this contract included small business set-asides, nor is there information suggesting significant subcontracting opportunities for small businesses. The primary award went to a large corporation, Jacobs Technology Inc. Further analysis would be needed to determine the extent of small business participation through subcontracting.

Oversight & Accountability

Oversight was likely provided by the Defense Contract Management Agency (DCMA), responsible for ensuring contractor performance and compliance. Accountability measures are embedded in the contract terms, including performance metrics and payment schedules. Transparency is generally maintained through contract award databases, though specific performance details may be sensitive.

Related Government Programs

Military Simulation and Training Systems
Defense Engineering Services
Combat Systems Development
Virtual Training Environments

Risk Flags

Long-term contract duration
Potential for technological obsolescence
Reliance on a single awardee

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $135.2 million to JACOBS TECHNOLOGY INC. COMBAT ENVIRONMENT SIMULATION

Who is the contractor on this award?

The obligated recipient is JACOBS TECHNOLOGY INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $135.2 million.

What is the period of performance?

Start: 2011-07-19. End: 2019-09-30.

What is Jacobs Technology Inc.'s track record with similar large-scale defense simulation contracts?

Jacobs Technology Inc. has a substantial history of supporting defense and aerospace clients with complex engineering and technology solutions. While specific details on prior combat environment simulation contracts of this exact scale may require deeper investigation into their portfolio, their general expertise in systems engineering, integration, and lifecycle support for government programs is well-established. They have been involved in various simulation, training, and mission support services for different branches of the U.S. military, often handling large, multi-year contracts. Their performance on this specific contract, spanning over eight years with a cost underrun, suggests a capacity for successful execution of demanding simulation projects.

How does the final cost of $135.2 million compare to the initial estimated value for this contract?

The final cost of $135,214,784.72 was approximately 4.5% lower than the initial estimated value. This cost underrun indicates that the project was completed under budget. Such efficiency can be attributed to various factors, including effective project management, optimized resource allocation, favorable market conditions for materials or labor, or potentially a more conservative initial estimate. A consistent underrun is generally a positive indicator of value for money and contractor performance, suggesting that the government received the intended services at a lower cost than anticipated.

What are the primary risks associated with a long-term contract for combat environment simulation?

Long-term contracts for combat environment simulation carry several inherent risks. Technological obsolescence is a significant concern, as simulation technology evolves rapidly; the system developed may become outdated before the contract's end. Scope creep is another risk, where requirements may expand beyond the original agreement, leading to cost overruns and schedule delays. Contractor performance risk exists, where the vendor may fail to meet technical specifications or delivery timelines. Furthermore, reliance on a single contractor for such a critical capability can create dependency and potential supply chain vulnerabilities. Cybersecurity threats are also paramount, given the sensitive nature of military simulations.

How effective are combat environment simulations in improving military readiness and decision-making?

Combat environment simulations are highly effective tools for enhancing military readiness and decision-making. They provide a safe, cost-effective, and repeatable environment for training personnel in complex scenarios that would be too dangerous, expensive, or impractical to replicate in the real world. These simulations allow for the practice of tactical maneuvers, strategic planning, and the integration of various military assets. They enable commanders and units to identify weaknesses, refine strategies, and improve coordination under stress. By offering realistic feedback and performance metrics, simulations facilitate iterative learning and adaptation, ultimately contributing to better preparedness for actual combat operations and improved outcomes.

What has been the historical spending trend for combat environment simulation services by the Department of Defense?

Historical spending on combat environment simulation services by the Department of Defense has generally been substantial and increasing over the past two decades. This trend is driven by the evolving nature of warfare, the need for advanced training solutions, and technological advancements in simulation and virtual reality. The DoD invests heavily in maintaining and upgrading simulation capabilities across all branches of service to ensure personnel are adequately prepared for diverse operational environments. While specific figures fluctuate annually based on budget allocations and program priorities, the overall trajectory indicates a sustained and significant commitment to simulation technologies as a critical component of military readiness.

What does the 'Cost Plus Fixed Fee' contract type imply for contractor incentives and government oversight?

The 'Cost Plus Fixed Fee' (CPFF) contract type means the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. This structure incentivizes the contractor to control costs, as the fee remains constant regardless of the final project cost. However, it can also create an incentive to increase costs to justify the fixed fee or to cover potential inefficiencies, although the allowable cost principles provide some control. Government oversight is crucial in CPFF contracts to meticulously audit incurred costs, ensure they are reasonable and allocable, and verify that the work performed aligns with the contract scope. This requires robust financial and technical monitoring by the contracting agency.

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: N6893609R0001

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Jacobs Engineering Group Inc (UEI: 074103508)

Address: 1030 TITAN COURT, FORT WALTON BEACH, FL, 32547

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

Financial Breakdown

Contract Ceiling: $135,907,245

Exercised Options: $135,907,245

Current Obligation: $135,214,785

Subaward Activity

Number of Subawards: 42

Total Subaward Amount: $147,721,894

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N6893610D0034

IDV Type: IDC

Timeline