DoD's $37.5M IT contract for engineering services awarded to Engility LLC shows potential value concerns

Contract Overview

Contract Amount: $37,513,439 ($37.5M)

Contractor: Engility LLC

Awarding Agency: Department of Defense

Start Date: 2002-06-12

End Date: 2005-09-30

Contract Duration: 1,206 days

Daily Burn Rate: $31.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: 200209!003361!2100!AB07 !USA COMMUNICATIONS-ELECTRONICS !DAAB0702DP001 !A!N! !Y!0013 !20020612!20061031!939131665!939131665!939131665!N!ITEL SOLUTIONS, AN ILEX TELOS !1413 CANTILLION BLVD !MAYS LANDING !NJ!08330!24480!025!34!FORT MONMOUTH !MONMOUTH !NEW JERSEY!+000001640453!N!N!000000000000!R425!ENGINEERING TECHNICAL SERVICES !A7 !ELECTRONICS AND COMMUNICATION !1GCH!GUARDRAIL COMMON SENSOR !513310!E! !5!B!M! !A! !99990909!B! ! !A! !A!N!Y!2!004!B! !C!N!Z! ! !N!C!N! ! ! !D!D!A!A!000!A!C!N! ! ! ! ! !GY0HK8!0001!

Place of Performance

Location: MOUNT LAUREL, BURLINGTON County, NEW JERSEY, 08054

State: New Jersey Government Spending

Plain-Language Summary

Department of Defense obligated $37.5 million to ENGILITY LLC for work described as: 200209!003361!2100!AB07 !USA COMMUNICATIONS-ELECTRONICS !DAAB0702DP001 !A!N! !Y!0013 !20020612!20061031!939131665!939131665!939131665!N!ITEL SOLUTIONS, AN ILEX TELOS !1413 CANTILLION BLVD !MAYS LANDING !NJ!08330!24480!025!34!FORT MONMOUTH !MONMO… Key points: 1. The contract's value appears high relative to its duration and scope, warranting further investigation into cost-effectiveness. 2. Competition was full and open, suggesting a competitive bidding process, but the final price needs benchmarking. 3. The contract's duration of over 3 years (1206 days) for a $37.5M award indicates a significant, long-term commitment. 4. Awarded as a delivery order under a larger contract, its specific performance and value are tied to the parent agreement. 5. The primary service category is Engineering Services, with a specific focus on Electronics and Communication. 6. The contract was awarded to Engility LLC, a large business, with no indication of small business set-aside or subcontracting.

Value Assessment

Rating: fair

The total award of $37.5 million over approximately 3.3 years (1206 days) for engineering technical services presents a blended rate of roughly $31,000 per day. Without specific details on the services rendered or the number of personnel involved, it is difficult to definitively benchmark this against similar contracts. However, the daily rate suggests a need for scrutiny to ensure it aligns with market rates for specialized engineering and technical support within the Department of Defense. Further analysis of the specific tasks and deliverables would be required for a more precise value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The data shows it was a delivery order, suggesting it was part of a pre-existing contract vehicle that itself was competed. The number of bidders for the parent contract is not specified, but the 'full and open' designation implies a robust competitive environment was intended. This generally promotes price discovery and can lead to more favorable pricing for the government.

Taxpayer Impact: A full and open competition process is beneficial for taxpayers as it increases the likelihood of obtaining services at competitive prices, preventing potential overpayment and maximizing the value of government spending.

Public Impact

The primary beneficiary is the Department of Defense, specifically the Army, receiving critical engineering and technical services. Services delivered likely include technical support, system integration, and engineering expertise related to communications and electronics. The geographic impact is centered around Fort Monmouth, New Jersey, a key Army installation for communications and electronics development. Workforce implications may involve skilled engineers and technical specialists employed by Engility LLC, contributing to the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the daily rate is not adequately managed against actual service delivery.
Lack of transparency on specific performance metrics and how they relate to the awarded amount.
Dependence on a single large contractor (Engility LLC) for critical technical services.
The contract's value and duration could indicate a significant, long-term reliance that might benefit from periodic re-competition.
The specific nature of 'engineering technical services' can be broad, potentially leading to scope creep if not tightly managed.

Positive Signals

Awarded through full and open competition, suggesting a fair and transparent initial procurement process.
The contract is for essential engineering and technical services supporting defense communications and electronics.
The duration of the contract allows for sustained support and development of critical systems.
The contractor, Engility LLC, is a known entity in the federal contracting space, implying established processes and capabilities.
The contract is a delivery order, which can offer flexibility in tasking and funding within the scope of a larger, competed contract.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on engineering services for electronics and communication systems. The IT services market for the federal government is substantial, with significant spending allocated to research, development, and sustainment of complex systems. Engineering services, particularly those supporting defense applications, often command higher price points due to the specialized knowledge, security clearances, and rigorous quality standards required. Comparable spending benchmarks would typically involve analyzing other large IT and engineering support contracts awarded by the Department of Defense to similar large businesses.

Small Business Impact

The provided data indicates this contract was awarded to Engility LLC, identified as a large business. There is no indication of a small business set-aside for this specific award. Furthermore, the data does not specify any subcontracting requirements or goals related to small businesses. This suggests that the primary contract value is likely to flow to the large prime contractor, with potential downstream impacts on the small business ecosystem depending on whether Engility LLC utilizes small business subcontractors, which is not detailed here.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Army, likely through contracting officers and program managers responsible for the 'Guardrail Common Sensor' program or related initiatives. Accountability measures would be defined within the contract's terms and conditions, including performance standards and reporting requirements. Transparency is facilitated by the contract's award details being publicly available through federal procurement databases. Inspector General jurisdiction may apply if specific allegations of fraud, waste, or abuse arise during the contract's performance.

Related Government Programs

Defense Information Technology Contracting
Engineering and Technical Services
Communications Systems Support
Army Procurement Data
Large Business Prime Contracts
Delivery Order Contracts

Risk Flags

Potential for cost overruns due to Time and Materials pricing structure.
Complexity of 'Engineering Technical Services' may lead to scope creep or unforeseen technical challenges.
Long contract duration increases exposure to technological obsolescence and shifting program priorities.
Lack of specific performance metrics in provided data hinders detailed value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $37.5 million to ENGILITY LLC. 200209!003361!2100!AB07 !USA COMMUNICATIONS-ELECTRONICS !DAAB0702DP001 !A!N! !Y!0013 !20020612!20061031!939131665!939131665!939131665!N!ITEL SOLUTIONS, AN ILEX TELOS !1413 CANTILLION BLVD !MAYS LANDING !NJ!08330!24480!025!34!FORT MONMOUTH !MONMOUTH !NEW JERSEY!+000001640453!N!N!000000000000!R425!ENGINEERING TECHNICAL SERVICES !A7 !ELECTRONICS AND COMMUNICATION !1GCH!GUARDRAIL COMMON SENSOR !513310!E! !5!B!M! !A! !99990909!B

Who is the contractor on this award?

The obligated recipient is ENGILITY LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $37.5 million.

What is the period of performance?

Start: 2002-06-12. End: 2005-09-30.

What specific engineering technical services were provided under this contract, and how were they critical to the Army's mission?

The contract, awarded to Engility LLC, focused on 'Engineering Technical Services' within the 'Electronics and Communication' domain, specifically related to 'Guardrail Common Sensor'. While the exact deliverables are not detailed in the provided data, such services typically encompass system design, integration, testing, maintenance, and lifecycle support for complex electronic and communication systems. These services are critical for the Army's operational readiness, ensuring reliable command, control, and communication capabilities. The 'Guardrail Common Sensor' likely refers to a surveillance or intelligence gathering system, where robust engineering support is essential for its functionality, accuracy, and adaptability to evolving threats and technological advancements. The $37.5 million award over approximately 3.3 years suggests a significant scope of work, potentially involving multiple engineers and technical specialists over the contract's lifespan.

How does the awarded amount of $37.5 million compare to similar engineering services contracts within the Department of Defense?

Benchmarking the $37.5 million award requires comparing it against contracts with similar scope, duration, and service types within the DoD. This contract spans approximately 3.3 years (1206 days), resulting in an average annual value of roughly $11.4 million, or about $31,000 per day. Engineering technical services for complex defense systems can vary widely in cost based on specialization, security requirements, and personnel seniority. Contracts for large-scale system development or sustainment can easily reach tens or hundreds of millions of dollars. However, without knowing the specific deliverables, number of personnel, and labor mix, a precise comparison is challenging. If this contract primarily involved sustainment or support rather than new development, the daily rate might warrant closer examination against industry standards for similar support roles.

What are the key performance indicators (KPIs) or metrics used to evaluate Engility LLC's performance on this contract?

The provided data does not specify the key performance indicators (KPIs) or metrics used to evaluate Engility LLC's performance. Typically, for engineering technical services contracts, KPIs would focus on aspects such as adherence to project schedules, quality of deliverables (e.g., design accuracy, test results), system uptime and reliability (if applicable), responsiveness to technical issues, and adherence to budget. Performance would likely be assessed through regular progress reports, technical reviews, and potentially user feedback from the Army units utilizing the supported systems. The contract type (Time and Materials, though the data shows 'PT' which is often Time and Materials) can influence how performance is monitored, with a focus on efficient labor utilization and cost control.

What is Engility LLC's track record with the Department of the Army for similar IT and engineering services?

Engility LLC, prior to its acquisition by SAIC in 2018, had a significant track record with the Department of the Army and other federal agencies for providing IT and engineering services. They were known for supporting large, complex programs across various defense and intelligence domains. Their portfolio often included areas like command, control, communications, computers, and intelligence (C4I) systems, enterprise IT, and systems engineering. While this specific contract predates the acquisition, Engility's history suggests substantial experience in delivering technical solutions to the Army. A deeper dive into historical contract performance data, past performance reviews, and any past issues or accolades would provide a more comprehensive view of their track record.

Are there any identified risks associated with this contract, such as technical challenges, schedule delays, or cost overruns?

The primary risks associated with this contract, given the limited data, revolve around potential cost overruns and the inherent complexities of engineering technical services for defense systems. The 'Time and Materials' pricing structure (indicated by 'PT') can increase the risk of cost overruns if not meticulously managed, as it pays for labor hours and materials used rather than a fixed outcome. Technical challenges are also a risk, as the 'Guardrail Common Sensor' system likely involves sophisticated technology requiring specialized expertise. Schedule delays could arise from unforeseen technical hurdles, integration issues, or changes in requirements. Furthermore, the long duration (over 3 years) increases the exposure to evolving threats, technological obsolescence, and potential shifts in program priorities within the Army.

How has spending on engineering and technical services for the Army's communications and electronics sector evolved over time?

Spending on engineering and technical services for the Army's communications and electronics sector has historically been substantial and subject to fluctuations based on technological advancements, geopolitical needs, and budget allocations. In the early 2000s, when this contract was active, the DoD was heavily invested in modernizing communication systems and intelligence gathering capabilities. This period saw significant investment in areas like network-centric warfare, secure communications, and advanced sensor technologies. Spending trends are influenced by the lifecycle of major defense programs; initial development and procurement phases are often followed by sustainment and upgrade phases, both requiring significant engineering support. Overall, the demand for specialized engineering expertise in this sector remains consistently high due to the rapid pace of technological change and the critical nature of these systems for national security.

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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 4

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: Engility Corporation (UEI: 783837672)

Address: 3750 CENTERVIEW DR, CHANTILLY, VA, 20151

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

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: DAAB0702DP001

IDV Type: IDC

Timeline