DoD's $178.5M contract for engineering services awarded to Global Services Corp. shows potential value concerns

Contract Overview

Contract Amount: $19,956,985 ($20.0M)

Contractor: Global Services Corp.

Awarding Agency: Department of Defense

Start Date: 2005-01-05

End Date: 2006-09-30

Contract Duration: 633 days

Daily Burn Rate: $31.5K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 200504!051014!1700!N00140!FLEET AND INDUSTRIAL SUPPLY CENT!N0014001DD602 !A!N! !Y!0009 !01 !20050105!20051130!178513826!178513826!178513826!N!GLOBAL SERVICES CORP !245 WESTLAKE RD !FAYETTEVILLE !NC!28314!60000!101!42!PHILADELPHIA !PHILADELPHIA !PENN !+000001464957!N!N!000000000000!D399!OTHER ADP & TELECOMMUNICATION SERVICES !S1 !SERVICES !000 !* !541330!E! !5!B!S!C! !D!20050930!B!F!N!A! !A!N!U!2!002!K! !Z!N!Z! ! !N!B!N!N! ! !A! !B!A!000!A!B!N! ! ! ! !1724!N00181!0001! !

Place of Performance

Location: FAYETTEVILLE, CUMBERLAND County, NORTH CAROLINA, 28314

State: North Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $20.0 million to GLOBAL SERVICES CORP. for work described as: 200504!051014!1700!N00140!FLEET AND INDUSTRIAL SUPPLY CENT!N0014001DD602 !A!N! !Y!0009 !01 !20050105!20051130!178513826!178513826!178513826!N!GLOBAL SERVICES CORP !245 WESTLAKE RD !FAYETTEVILLE !NC!28314!60000!101!42!PHILADELPHIA !PHIL… Key points: 1. The contract's cost-plus-fixed-fee structure may incentivize increased spending without guaranteed efficiency. 2. Limited competition, indicated by 'exclusion of sources,' could lead to suboptimal pricing. 3. The contract duration of 633 days suggests a significant, ongoing need for these services. 4. Awarded by the Defense Contract Management Agency, the contract falls under a broad 'Engineering Services' category. 5. The contract's value of over $178 million warrants scrutiny for cost-effectiveness and performance.

Value Assessment

Rating: questionable

The total award amount of $178,513,826.11 for engineering services over approximately 21 months appears substantial. Without specific benchmarks for comparable engineering services within the Department of Defense or for similar project scopes, it is difficult to definitively assess value for money. The cost-plus-fixed-fee (CPFF) contract type, while allowing for flexibility, can sometimes lead to higher costs if not managed rigorously, as the contractor is reimbursed for all allowable costs plus a fixed fee. This structure may not always be the most cost-effective compared to fixed-price contracts for well-defined scopes of work.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' which suggests that while the initial intent might have been broader competition, certain sources were excluded. This type of procurement can limit the pool of potential bidders, potentially reducing the competitive pressure on pricing and innovation. The presence of only two bidders, as indicated by 'no': 2, further reinforces the notion of limited competition. This scenario may not yield the best possible price or terms for the government compared to a scenario with a larger number of engaged and competing firms.

Taxpayer Impact: Limited competition means taxpayers may not be benefiting from the most competitive pricing achievable. The government might be paying more than necessary due to a restricted bidding process.

Public Impact

The primary beneficiaries are likely the Department of Defense and its various components requiring specialized engineering expertise. The services delivered are broadly categorized as 'Engineering Services,' which could encompass a wide range of technical support, design, analysis, and consulting. The geographic impact is likely concentrated where the Defense Contract Management Agency and its supported entities operate, primarily within the United States. The contract supports a workforce of engineers and technical professionals, both within the contractor's organization and potentially indirectly through related industries.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee structure may lead to cost overruns.
Limited competition raises concerns about price optimality.
Exclusion of sources in the procurement process warrants further investigation.
The broad nature of 'Engineering Services' could mask specific performance issues.

Positive Signals

Awarded by a specialized agency (DCMA) suggests adherence to procurement standards.
Contract has a defined period of performance, allowing for reassessment.
The contractor has secured a significant award, indicating some level of capability.

Sector Analysis

Engineering services represent a critical sector supporting various government functions, particularly in defense and infrastructure. The market for these services is vast, with numerous firms ranging from large corporations to specialized small businesses. This contract, valued at over $178 million, falls within the upper tier of service contracts. Comparable spending benchmarks would typically involve analyzing other large-scale engineering support contracts within the DoD or other federal agencies for similar scope and duration to assess cost-effectiveness.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). There is no explicit information regarding subcontracting plans for small businesses. Without specific set-aside requirements or mandated subcontracting goals, the direct impact on the small business ecosystem for this particular contract is likely minimal, unless the prime contractor voluntarily engages small businesses.

Oversight & Accountability

Oversight for this contract would primarily fall under the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. Accountability measures are typically embedded within the contract terms, including performance standards, reporting requirements, and payment schedules tied to milestones. Transparency is often limited for specific contract details due to security and proprietary concerns, but the award itself is publicly reported. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Defense Contract Management Agency Operations
Department of Defense Engineering Support Services
Federal Engineering Consulting Contracts
Cost-Plus-Fixed-Fee Service Contracts
Procurement After Exclusion of Sources

Risk Flags

Limited competition may impact price.
Cost-plus-fixed-fee structure carries inherent cost escalation risk.
Justification for 'exclusion of sources' needs verification.
Broad service category ('Engineering Services') may obscure specific performance issues.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.0 million to GLOBAL SERVICES CORP.. 200504!051014!1700!N00140!FLEET AND INDUSTRIAL SUPPLY CENT!N0014001DD602 !A!N! !Y!0009 !01 !20050105!20051130!178513826!178513826!178513826!N!GLOBAL SERVICES CORP !245 WESTLAKE RD !FAYETTEVILLE !NC!28314!60000!101!42!PHILADELPHIA !PHILADELPHIA !PENN !+000001464957!N!N!000000000000!D399!OTHER ADP & TELECOMMUNICATION SERVICES !S1 !SERVICES !000 !* !541330!E! !5!B!S!C! !D!200

Who is the contractor on this award?

The obligated recipient is GLOBAL SERVICES CORP..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $20.0 million.

What is the period of performance?

Start: 2005-01-05. End: 2006-09-30.

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

The contract identifies the service category as 'OTHER ADP & TELECOMMUNICATION SERVICES' (NAICS 541330, Engineering Services). However, the description 'OTHER ADP & TELECOMMUNICATION SERVICES' suggests a focus on information technology and communication systems engineering. This could include areas such as systems design, integration, network engineering, cybersecurity consulting, or technical support for defense communication platforms. Without more granular details within the contract's statement of work, the precise engineering tasks remain broadly defined, encompassing a wide array of potential technical activities within the ADP and telecommunications domain.

How does the $178.5 million award compare to historical spending on similar engineering services by the Department of Defense?

Comparing this $178.5 million award requires context on the typical scale and frequency of similar engineering service contracts within the DoD. Large-scale engineering support contracts can range significantly in value depending on scope, duration, and specialization. For instance, the DoD procures billions annually in engineering and technical services. This specific contract's value is substantial, suggesting a significant project or long-term support requirement. To provide a precise comparison, one would need to analyze historical data for contracts with similar NAICS codes (like 541330), contract types (CPFF), and agencies (like DCMA or other defense components) to understand if this represents a typical, high, or low value for the services rendered over its duration.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract of this magnitude?

The primary risk with a CPFF contract of this magnitude ($178.5M) is the potential for cost overruns and reduced incentive for efficiency. In a CPFF structure, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee. While the fee is fixed, the contractor has less financial incentive to control costs compared to fixed-price contracts, as their profit margin (the fee) remains constant regardless of the total cost. This can lead to scope creep or less rigorous cost management if oversight is not stringent. For the government, the risk is paying a higher total price than anticipated if costs escalate, potentially exceeding initial budget projections. Effective oversight, detailed cost tracking, and clear performance metrics are crucial to mitigate these risks.

What does 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' imply for the procurement process and potential savings?

This procurement method, 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' is a complex designation. It implies that the agency initially intended or was required to conduct full and open competition but subsequently excluded specific sources. This exclusion must be justified by specific criteria outlined in federal acquisition regulations (e.g., national security, unique capabilities). While it starts with an intent for broad competition, the exclusion narrows the field. This can limit the number of bidders, potentially reducing competitive pressure and leading to higher prices than if all qualified sources had been allowed to compete. The justification for exclusion is critical; if poorly justified, it could indicate a missed opportunity for better value and savings for taxpayers.

What is the track record of Global Services Corp. in securing and performing on large federal contracts, particularly within the DoD?

Global Services Corp. secured this $178.5 million contract, indicating they possess the capability and credentials to win significant federal awards, particularly within the Department of Defense. Information regarding their specific track record would require further investigation into their contract history, including past performance evaluations, any documented issues (e.g., disputes, terminations), and their success rate on similar types of contracts (engineering services, CPFF). A positive track record would suggest reliability and competence, while a history of performance problems could indicate higher risk for this current contract. Accessing databases like the Federal Procurement Data System (FPDS) or CPARS (Contractor Performance Assessment Reporting System) would provide more detailed insights.

Are there any indicators of potential waste, fraud, or abuse associated with this contract award?

Based solely on the provided summary data, there are no direct indicators of waste, fraud, or abuse. However, certain aspects warrant closer monitoring. The 'limited competition' aspect, particularly the 'exclusion of sources,' could be a red flag if not adequately justified, potentially masking preferential treatment or limiting opportunities for cost savings. The CPFF contract type, while standard for certain types of work, inherently carries a higher risk of cost escalation if not managed meticulously. Robust oversight by the Defense Contract Management Agency (DCMA) and adherence to all regulatory requirements are essential to prevent and detect any impropriety. Any future performance reviews or IG reports related to this contract would be key indicators.

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 AFTER EXCLUSION OF SOURCES

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Contractor Details

Address: 245 WESTLAKE ROAD, FAYETTEVILLE, NC, 28314

Business Categories: Category Business, Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: N0014001DD602

IDV Type: IDC

Timeline