DoD's $219.8M IT contract for engineering services awarded to Engility LLC shows potential value concerns

Contract Overview

Contract Amount: $219,873,385 ($219.9M)

Contractor: Engility LLC

Awarding Agency: Department of Defense

Start Date: 2002-08-01

End Date: 2006-10-31

Contract Duration: 1,552 days

Daily Burn Rate: $141.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: 200211!004228!2100!AB07 !USA COMMUNICATIONS-ELECTRONICS !DAAB0702DP001 !A!N! !Y!0018 !20020801!20061031!939131665!939131665!939131665!N!ITEL SOLUTIONS, AN ILEX TELOS !1413 CANTILLION BLVD !MAYS LANDING !NJ!08330!24670!003!04!FORT HUACHUCA !COCHISE !ARIZONA !+000008312053!N!N!000000000000!R425!ENGINEERING TECHNICAL SERVICES !A7 !ELECTRONICS AND COMMUNICATION !1000!NOT DISCERNABLE OR CLASSIFIED !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 $219.9 million to ENGILITY LLC for work described as: 200211!004228!2100!AB07 !USA COMMUNICATIONS-ELECTRONICS !DAAB0702DP001 !A!N! !Y!0018 !20020801!20061031!939131665!939131665!939131665!N!ITEL SOLUTIONS, AN ILEX TELOS !1413 CANTILLION BLVD !MAYS LANDING !NJ!08330!24670!003!04!FORT HUACHUCA !COCHI… Key points: 1. The contract's value appears high relative to its duration and the number of delivery orders. 2. Limited public data makes a precise value-for-money assessment challenging. 3. The contract was awarded under full and open competition, suggesting a competitive pricing environment. 4. The use of Time and Materials pricing could lead to cost overruns if not managed carefully. 5. The contract's duration of over four years indicates a significant, long-term need for these services. 6. The specific services provided are broadly categorized as engineering and technical services, lacking granular detail.

Value Assessment

Rating: fair

The total value of $219.8 million over approximately four years, with four delivery orders, suggests an average order value of over $54 million. This appears substantial, especially considering the Time and Materials pricing structure which can inflate costs if not closely monitored. Benchmarking against similar large-scale engineering services contracts for the Department of Defense is difficult without more specific service details. However, the sheer scale of the award warrants scrutiny regarding efficiency and cost control.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition,' indicating that all responsible sources were permitted to submit offers. This typically fosters a competitive environment, which should theoretically lead to more favorable pricing for the government. The presence of four delivery orders suggests that multiple phases or taskings were executed under this overarching contract, potentially involving different competitive sub-selections or modifications.

Taxpayer Impact: Taxpayers benefit from the competitive nature of the award, as it is intended to drive down costs and ensure the government receives fair market value for the engineering and technical services procured.

Public Impact

The primary beneficiaries are the Department of Defense, specifically the Department of the Army, which receives critical engineering and technical support. The services delivered likely encompass a range of technical expertise essential for military operations and infrastructure. The contract's geographic impact is centered around Fort Huachuca, Arizona, a key Army installation. Workforce implications include the potential employment of numerous engineers, technicians, and support staff by Engility LLC and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and Materials (T&M) pricing can lead to cost overruns if not managed with strict oversight, as contractor hours and material costs are directly reimbursed.
The broad 'Engineering Services' category lacks specificity, making it difficult to assess if the most cost-effective solutions were pursued.
The significant contract value over a multi-year period necessitates robust performance monitoring to ensure continued value and prevent scope creep.

Positive Signals

Awarded under 'Full and Open Competition,' suggesting a competitive process that should have yielded fair pricing.
The contract was awarded to Engility LLC, a known entity in government contracting, implying a level of established capability.
The contract duration of over four years indicates a sustained need and potentially a successful track record in delivering required services.

Sector Analysis

This contract falls within the Engineering Services sector, specifically related to IT and communications electronics. The market for such services is substantial within the federal government, driven by the ongoing need for technical expertise in areas like system design, integration, and maintenance. Comparable spending benchmarks are difficult to establish without more granular service details, but large-scale engineering support contracts for defense agencies often run into hundreds of millions of dollars over their lifecycle.

Small Business Impact

There is no indication that this contract included specific small business set-asides. As a large prime contract awarded to Engility LLC, it is possible that subcontracting opportunities may have been available to small businesses. However, without specific subcontracting plans or performance data, the direct impact on the small business ecosystem remains unclear. Further analysis would be needed to determine if small businesses were effectively utilized.

Oversight & Accountability

Oversight for this contract would primarily reside with the contracting officers and program managers within the Department of the Army at Fort Huachuca. Accountability measures would be tied to the delivery orders, performance metrics, and invoicing procedures under the Time and Materials structure. Transparency is limited by the nature of federal contracting data, but the contract award itself and its basic terms are publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense Information Technology Contracting
Engineering and Technical Services
Army Communications Systems Support
IT Services for Federal Agencies
Large-Scale IT Support Contracts

Risk Flags

Potential for cost overruns due to Time and Materials pricing.
Lack of specific service details hinders precise value assessment.
Contract duration necessitates ongoing performance monitoring.
Limited public data on contractor performance and specific rates.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $219.9 million to ENGILITY LLC. 200211!004228!2100!AB07 !USA COMMUNICATIONS-ELECTRONICS !DAAB0702DP001 !A!N! !Y!0018 !20020801!20061031!939131665!939131665!939131665!N!ITEL SOLUTIONS, AN ILEX TELOS !1413 CANTILLION BLVD !MAYS LANDING !NJ!08330!24670!003!04!FORT HUACHUCA !COCHISE !ARIZONA !+000008312053!N!N!000000000000!R425!ENGINEERING TECHNICAL SERVICES !A7 !ELECTRONICS AND COMMUNICATION !1000!NOT DISCERNABLE OR CLASSIFIED !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 $219.9 million.

What is the period of performance?

Start: 2002-08-01. End: 2006-10-31.

What was Engility LLC's track record with similar Department of Defense contracts prior to or during this period?

Engility LLC, and its predecessor entities, have a significant history of contracting with the Department of Defense across various service areas. Prior to and during the period of this contract (2002-2006), Engility was involved in numerous large-scale IT, engineering, and support services contracts. Analyzing their performance on comparable contracts during this timeframe would involve reviewing past performance evaluations, any contract disputes, and the overall volume and scope of their work with the DoD. A deeper dive would require accessing specific contract databases and performance reports, which are not fully detailed in the provided data. However, their sustained presence suggests a capacity to meet DoD requirements, though not necessarily optimal value or efficiency on every award.

How does the per-unit cost or hourly rate for the engineering services compare to market rates or similar government contracts?

The provided data does not include specific hourly rates or detailed breakdowns of the 'per-unit' costs associated with this contract. It was awarded using a Time and Materials (T&M) pricing structure, which means costs are based on direct labor hours at specified rates and the actual cost of materials plus a percentage for overhead and profit. Without access to these specific labor rates, material markups, and the total hours/materials consumed, a direct comparison to market rates or similar government contracts is not feasible. Generally, T&M contracts require careful monitoring to ensure rates are fair and reasonable, and that the total cost does not exceed estimates or benchmarks for comparable services.

What were the primary risks associated with this contract, and how were they managed?

Key risks associated with this contract likely included cost overruns due to the Time and Materials (T&M) pricing structure, potential scope creep, and ensuring the contractor maintained the required technical expertise throughout the contract period. T&M contracts inherently carry a risk of escalating costs if labor hours or material usage are not tightly controlled and justified. Managing these risks would typically involve robust oversight from the government, including detailed review of invoices, regular performance reviews, and potentially establishing cost ceilings or fixed-price components for certain tasks. The contract's duration also presented a risk of technological obsolescence or changing requirements, necessitating flexibility and proactive contract management.

How effective was Engility LLC in delivering the engineering and technical services as specified in the contract?

The provided data does not contain specific performance metrics or evaluations that would allow for an assessment of Engility LLC's effectiveness in delivering the engineering and technical services under this contract. Effectiveness would typically be measured against contract requirements, delivery schedules, quality standards, and user satisfaction. While the contract was awarded and executed over its term, indicating a baseline level of acceptable performance, detailed insights into the quality, timeliness, and overall success of the services rendered are not available. Further investigation into contract performance reports or agency assessments would be necessary to determine effectiveness.

What were the historical spending patterns for similar engineering and technical services within the Department of the Army around the time of this contract?

Historical spending patterns for similar engineering and technical services within the Department of the Army during the early 2000s were substantial, reflecting the military's continuous need for advanced technological support. Contracts of this nature, particularly those supporting IT, communications, and complex systems, often ran into tens or hundreds of millions of dollars. Spending was driven by modernization efforts, operational requirements, and the outsourcing of specialized technical functions. This $219.8 million contract for engineering services aligns with the general trend of significant investment in these areas, though specific year-over-year or program-specific spending data would be needed for a more precise comparison.

Were there any significant contract modifications or change orders that altered the scope or cost of this contract?

The provided data indicates the contract was awarded with an initial value and has a duration, but it does not detail specific modifications or change orders that may have altered the scope or cost. Large, multi-year contracts, especially those using Time and Materials, often undergo modifications to adjust for evolving requirements, unforeseen issues, or scope changes. Without access to the contract's modification history, it's impossible to determine if significant changes occurred. Such modifications would be crucial for a complete understanding of the final cost and the services ultimately delivered.

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

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