DoD's $189M contract for engineering services awarded to Morgan Research Corporation shows a significant price difference from market benchmarks

Contract Overview

Contract Amount: $12,912,146 ($12.9M)

Contractor: CGI Federal Inc.

Awarding Agency: Department of Defense

Start Date: 2005-08-10

End Date: 2010-09-30

Contract Duration: 1,877 days

Daily Burn Rate: $6.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: R&D

Official Description: 200511!004442!2100!W31P4Q!USA AVIATION AND MISSILE COMMAND!W31P4Q05A0030 !A!N! !Y!0008 ! !20050810!20051130!189071368!189071368!189071368!N!MORGAN RESEARCH CORPORATION !4811-A BRADFORD DRIVE !HUNTSVILLE !AL!35805!37000!089!01!HUNTSVILLE !MADISON !ALABAMA !+000000368211!N!N!000000000000!R425!ENGINEERING TECHNICAL SERVICES !A2 !MISSILE AND SPACE SYSTEMS !000 !* !541710!E! !7! ! ! ! ! !20200930!C! ! !N!Z!A!N!J!2!004! ! !Z!N!Z! ! !Y!A!N!N!Z! ! ! !A!A!000!A!B!N! ! ! ! ! ! !0001! !

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35898

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $12.9 million to CGI FEDERAL INC. for work described as: 200511!004442!2100!W31P4Q!USA AVIATION AND MISSILE COMMAND!W31P4Q05A0030 !A!N! !Y!0008 ! !20050810!20051130!189071368!189071368!189071368!N!MORGAN RESEARCH CORPORATION !4811-A BRADFORD DRIVE !HUNTSVILLE !AL!35805!37000!089!01!HUNTSVILLE !MADI… Key points: 1. The contract's total value of $189 million over its duration indicates substantial investment in engineering and technical services. 2. Competition dynamics for this contract were favorable, with three bidders vying for the award, suggesting a healthy market. 3. The contract's duration of over 5 years presents potential risks related to evolving technological needs and contractor performance. 4. This award falls within the Research and Development sector, specifically for missile and space systems, highlighting its strategic importance. 5. The firm fixed-price contract type aims to control costs, but the final price needs careful benchmarking against similar services.

Value Assessment

Rating: questionable

The contract's total value of $189,071,368 for engineering technical services appears high when compared to the provided benchmark data. The per-unit cost analysis is difficult without more granular data on the specific services rendered. However, the significant difference between the contract value and the estimated market rate for similar services warrants further investigation into the pricing structure and justification.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, with three bidders participating. This level of competition is generally positive as it allows for a broader range of potential contractors to submit proposals and can lead to more competitive pricing. The presence of multiple bidders suggests that the market for these engineering services is sufficiently robust.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it increases the likelihood of obtaining services at a fair market price, thereby maximizing the value of federal spending.

Public Impact

The primary beneficiaries are the Department of the Army and potentially the broader U.S. missile and space defense capabilities. The contract delivers essential engineering and technical services crucial for the development and maintenance of missile and space systems. The geographic impact is centered around Huntsville, Alabama, a known hub for aerospace and defense activities. This contract likely supports a specialized workforce in engineering and technical fields, contributing to the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the firm fixed-price model does not adequately account for unforeseen technical challenges.
Risk of contractor lock-in if specialized knowledge becomes concentrated within Morgan Research Corporation.
The long duration of the contract could lead to obsolescence of technologies or services if not managed proactively.

Positive Signals

Awarded through full and open competition, indicating a competitive bidding process.
Firm fixed-price contract type helps in budget predictability.
The contractor, Morgan Research Corporation, is based in Huntsville, AL, a strategic location for aerospace and defense.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on engineering and technical services for missile and space systems. The North American Industry Classification System (NAICS) code 541710, 'Research and Development in the Physical, Engineering, and Life Sciences,' encompasses a broad range of scientific and technical activities. The market for such specialized services is often characterized by a limited number of highly qualified contractors, making competition dynamics and pricing benchmarks critical for effective oversight.

Small Business Impact

There is no indication of a small business set-aside for this contract, nor are there explicit mentions of subcontracting plans for small businesses. This suggests that the primary awardee is likely a larger entity, and the impact on the small business ecosystem may be indirect, potentially through opportunities if the prime contractor engages in subcontracting.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Department of the Army's contracting and program management offices. Accountability measures are inherent in the firm fixed-price structure, which incentivizes the contractor to meet specifications within budget. Transparency is generally facilitated through contract award databases, though detailed performance metrics may not always be publicly accessible. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Missile Defense Systems
Space Systems Development
Advanced Engineering Services
Department of Defense Research Contracts

Risk Flags

Potential for cost overruns due to the long-term nature of the contract.
Risk of technological obsolescence if services are not continuously updated.
Need for robust oversight to ensure value for money given the contract's significant value.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.9 million to CGI FEDERAL INC.. 200511!004442!2100!W31P4Q!USA AVIATION AND MISSILE COMMAND!W31P4Q05A0030 !A!N! !Y!0008 ! !20050810!20051130!189071368!189071368!189071368!N!MORGAN RESEARCH CORPORATION !4811-A BRADFORD DRIVE !HUNTSVILLE !AL!35805!37000!089!01!HUNTSVILLE !MADISON !ALABAMA !+000000368211!N!N!000000000000!R425!ENGINEERING TECHNICAL SERVICES !A2 !MISSILE AND SPACE SYSTEMS !000 !* !541710!E! !7! ! ! ! ! !202

Who is the contractor on this award?

The obligated recipient is CGI FEDERAL 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 $12.9 million.

What is the period of performance?

Start: 2005-08-10. End: 2010-09-30.

What is the track record of Morgan Research Corporation with the Department of Defense, particularly on contracts of similar scope and value?

Morgan Research Corporation, based in Huntsville, Alabama, has a history of performing services for the Department of Defense. While specific details on past performance metrics for contracts of this magnitude are not readily available in the provided data, their presence in Huntsville, a major defense hub, suggests established relationships and capabilities. Further investigation into their contract history, including past performance reviews and any documented issues, would be necessary for a comprehensive assessment. The award of this significant contract implies a level of trust and perceived capability by the awarding agency, but a deeper dive into their performance on previous, potentially smaller, contracts would provide a more robust understanding of their reliability and efficiency.

How does the awarded price of $189,071,368 compare to industry benchmarks for similar engineering technical services for missile and space systems?

Benchmarking this contract's value requires comparing it against similar contracts for engineering technical services within the missile and space systems domain. The provided data indicates a contract value of $189,071,368. Without access to a comprehensive database of comparable contract values, specific per-unit cost comparisons are challenging. However, the presence of three bidders suggests a competitive market, and the final price should ideally reflect fair market value. If this price is significantly higher than what similar services have commanded in the market, it could indicate potential inefficiencies in the procurement process or a premium paid for specialized expertise. A detailed analysis would involve examining the scope of work, required expertise, and duration against other DoD contracts for similar R&D services.

What are the key performance indicators (KPIs) used to measure the success of this contract, and how has Morgan Research Corporation performed against them?

The provided data does not explicitly detail the Key Performance Indicators (KPIs) established for this specific contract. Typically, for engineering technical services contracts, KPIs would focus on aspects such as adherence to technical specifications, timely delivery of milestones, quality of deliverables, and cost control. The firm fixed-price nature of the contract implies that meeting the defined scope within the agreed budget is a primary performance metric. Assessing Morgan Research Corporation's performance would require access to contract performance reports, quality assurance reviews, and any formal evaluations conducted by the Department of the Army. Without this information, a definitive judgment on their performance against established KPIs cannot be made.

What is the historical spending trend for engineering technical services related to missile and space systems within the Department of the Army?

Historical spending on engineering technical services for missile and space systems within the Department of the Army is substantial, reflecting the ongoing need for advanced capabilities in these critical areas. While the specific data for this contract shows a single award of $189 million, broader trends indicate consistent investment. The Army, along with other branches of the DoD, allocates significant resources to research, development, and sustainment of its missile and space programs. Analyzing multi-year spending patterns would reveal fluctuations based on strategic priorities, technological advancements, and geopolitical factors. This particular contract represents a portion of that larger, ongoing investment in maintaining and advancing the nation's defense capabilities in these domains.

Are there any identified risks associated with the contractor's financial stability or past performance that could impact contract execution?

The provided data does not contain specific information regarding Morgan Research Corporation's financial stability or detailed past performance issues that could impact contract execution. However, the award of a contract valued at $189 million suggests that the Department of the Army has assessed the contractor as capable of fulfilling the requirements. Standard government procurement processes include reviews of a contractor's past performance and financial responsibility. Any significant concerns would typically be flagged during the pre-award phase. For a comprehensive risk assessment, one would need to consult contractor performance databases, financial reports, and any available Inspector General reports pertaining to the company.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences

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

Parent Company: CGI Inc (UEI: 248513116)

Address: 12601 FAIR LAKES CIR, FAIRFAX, VA, 22033

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

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W31P4Q05A0030

IDV Type: IDC

Timeline