DoD awards $50.3M engineering services contract to SIGMATECH INC for Alabama-based support

Contract Overview

Contract Amount: $50,289,619 ($50.3M)

Contractor: Sigmatech Inc

Awarding Agency: Department of Defense

Start Date: 2011-03-14

End Date: 2019-02-09

Contract Duration: 2,889 days

Daily Burn Rate: $17.4K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: TASK ORDER AWARD

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35805

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $50.3 million to SIGMATECH INC for work described as: TASK ORDER AWARD Key points: 1. Contract value represents a significant investment in engineering services for the Department of the Army. 2. The firm-fixed-price structure aims to control costs and provide predictability. 3. A long performance period suggests a sustained need for these engineering capabilities. 4. The contract was awarded under full and open competition, indicating a broad market search. 5. Geographic focus on Alabama may point to specific regional defense infrastructure needs. 6. The absence of small business set-aside flags potential implications for smaller firms.

Value Assessment

Rating: good

The contract's value of $50.3 million over nearly 8 years for engineering services appears reasonable given the scope and duration. While specific benchmarks for comparable Army engineering task orders are not provided, the firm-fixed-price (FFP) award type suggests an effort to establish a clear cost ceiling. Without detailed breakdowns of labor categories and hours, a precise per-unit cost comparison is difficult, but the overall award size aligns with substantial engineering support requirements.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that the Department of the Army sought proposals from all responsible sources. The specific number of bidders is not detailed, but this procurement method generally fosters a competitive environment, which can lead to better pricing and innovative solutions. The open competition indicates that SIGMATECH INC was selected based on merit and competitive offering rather than sole-source justification.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it maximizes the potential for cost savings through a wider pool of bidders vying for the contract. This process helps ensure that the government receives the best value by encouraging diverse proposals and competitive pricing.

Public Impact

The Department of the Army is the primary beneficiary, receiving essential engineering services. The contract supports the development, maintenance, or enhancement of defense infrastructure or systems. Services are geographically focused within Alabama, potentially impacting local defense installations or projects. The contract likely supports a workforce of engineers and technical specialists, contributing to employment in the sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of transparency on the number of bidders in the full and open competition limits understanding of the true competitive intensity.
The long duration of the contract (nearly 8 years) could lead to potential cost overruns if not managed diligently, despite the FFP structure.
Without specific performance metrics, it's challenging to assess the contractor's track record and the effectiveness of the services delivered.
The absence of small business participation raises questions about opportunities for smaller, specialized firms in this significant contract.

Positive Signals

The firm-fixed-price contract type provides cost certainty for the government, mitigating risks associated with cost-plus contracts.
Awarding under full and open competition suggests a robust process aimed at securing the best value and technical solution.
The long performance period indicates a stable, long-term need for SIGMATECH INC's engineering expertise by the Department of the Army.
The contract's substantial value suggests a critical role in supporting defense operations or infrastructure.

Sector Analysis

This contract falls within the Engineering Services sector (NAICS 541330), a critical component of the broader professional, scientific, and technical services industry. This sector encompasses firms that provide specialized engineering expertise for various applications, including defense. The market for defense engineering services is substantial, driven by the need for advanced technological solutions, infrastructure development, and ongoing support for military operations. Comparable spending benchmarks would typically involve analyzing other large-scale engineering support contracts awarded by the Department of Defense or other federal agencies for similar services.

Small Business Impact

The contract data indicates that this award was not set aside for small businesses (ss: false, sb: false). This means that the competition was open to all responsible sources, including large and small businesses. While this maximizes competition, it also means that specific opportunities for small business subcontracting may not have been mandated or prioritized. The impact on the small business ecosystem depends on whether SIGMATECH INC voluntarily engages small businesses as subcontractors for specialized tasks, which is not explicitly detailed in the provided data.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. As a delivery order under a larger contract vehicle, oversight would involve monitoring performance against the established terms and conditions, ensuring timely delivery, and verifying compliance with the firm-fixed-price agreement. Transparency is generally facilitated through contract award databases, but detailed operational oversight mechanisms and specific accountability measures are typically internal to the agency. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Department of Defense Engineering Services Contracts
Army Corps of Engineers Support Contracts
Professional and Technical Services Federal Spending
Defense Infrastructure Development Contracts

Risk Flags

Long contract duration may increase risk of cost escalation or performance degradation.
Lack of small business participation noted.
Performance metrics and quality assessment details are not publicly available.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $50.3 million to SIGMATECH INC. TASK ORDER AWARD

Who is the contractor on this award?

The obligated recipient is SIGMATECH 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 $50.3 million.

What is the period of performance?

Start: 2011-03-14. End: 2019-02-09.

What is SIGMATECH INC's track record with the federal government, particularly the Department of Defense?

Assessing SIGMATECH INC's track record requires examining their past federal contract awards, performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), and any history of disputes or corrective actions. While this specific award indicates a significant contract value ($50.3M), it doesn't reveal the company's broader history. A deeper dive would involve searching federal procurement databases like SAM.gov or FPDS-NG for previous awards, contract types, agencies served, and performance ratings. Positive performance indicators would include a history of successful contract completions, positive CPARS scores, and minimal contract disputes. Conversely, a history of significant performance issues, contract terminations, or unresolved disputes would raise concerns about their reliability and capability for this current task order.

How does the $50.3 million value compare to similar engineering services contracts awarded by the Department of the Army?

The $50.3 million value for this engineering services task order awarded to SIGMATECH INC is substantial, suggesting a significant scope of work. To benchmark this value, one would compare it against other task orders or contracts for similar engineering services (e.g., within NAICS code 541330) awarded by the Department of the Army or other DoD components over a comparable timeframe. Factors such as contract duration, specific services required (e.g., design, analysis, testing, project management), and geographic location influence pricing. If similar, shorter-duration contracts for less complex services are valued significantly lower, it might suggest this award is on the higher end. Conversely, if other large-scale, multi-year engineering support contracts for critical defense needs are in a similar or higher value range, then $50.3 million could be considered within the expected market parameters.

What are the primary risks associated with this firm-fixed-price contract for engineering services?

While firm-fixed-price (FFP) contracts are generally favored for cost control, risks can still arise. For SIGMATECH INC, the primary risk is performing the required engineering services within the agreed-upon price, especially given the nearly 8-year performance period. Unforeseen technical challenges, scope creep (if not managed contractually), or underestimation of labor hours and material costs could erode profit margins or lead to losses. For the Department of the Army, the risk lies in ensuring the contractor's ability to deliver the required quality and technical solutions within the fixed price. If the contractor underperforms or faces financial difficulties, the government might face delays or need to renegotiate, potentially negating some FFP benefits. Effective oversight is crucial to mitigate these risks by monitoring progress and addressing issues proactively.

What does the 'Engineering Services' classification (NAICS 541330) entail in the context of this DoD contract?

The North American Industry Classification System (NAICS) code 541330, 'Engineering Services,' encompasses establishments that provide a wide range of engineering services, including planning, design, and development of equipment and facilities. In the context of this Department of Defense (DoD) contract, it likely involves specialized engineering expertise related to military systems, infrastructure, or operational support. This could include tasks such as systems engineering, mechanical, electrical, or civil engineering design, technical analysis, project management, testing and evaluation, or consulting services aimed at enhancing defense capabilities or readiness. The specific nature of the services would be detailed in the contract's Statement of Work (SOW).

How does the contract's duration (2889 days) impact its overall value and risk assessment?

The contract duration of 2889 days, approximately 7 years and 11 months, is exceptionally long for a single task order award. This extended period suggests a sustained and critical need for SIGMATECH INC's engineering services by the Department of the Army. From a value perspective, it allows for long-term planning and potentially deeper integration of the contractor's expertise. However, it also significantly increases the risk profile. Over such a long period, market conditions, technological requirements, and personnel can change, potentially leading to cost inefficiencies or obsolescence if not managed carefully. The government bears the risk of the contractor's sustained performance and the potential for cost escalation if the fixed price doesn't adequately account for long-term inflation or unforeseen project complexities. Robust oversight and performance management are critical to mitigate these long-term risks.

What is the significance of the contract being a 'Delivery Order' (aw: DELIVERY ORDER)?

The designation 'Delivery Order' indicates that this award is a specific order placed against a previously established indefinite-delivery/indefinite-quantity (IDIQ) contract or a similar type of contract vehicle. IDIQ contracts allow federal agencies to procure supplies or services from vendors over a period of time up to a specified maximum amount. A delivery order represents a specific commitment to purchase a defined quantity of goods or services at a negotiated price, triggering the performance period and payment obligations. This means the $50.3 million is likely a portion of a larger contract ceiling, and SIGMATECH INC was selected as a prime contractor under a broader procurement mechanism, with this order representing a specific task within that framework.

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: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Sigmatech, Inc.

Address: 689 DISCOVERY DR NW, HUNTSVILLE, AL, 35806

Business Categories: Category Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations

Financial Breakdown

Contract Ceiling: $50,371,742

Exercised Options: $50,289,619

Current Obligation: $50,289,619

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W31P4Q05A0026

IDV Type: IDC

Timeline