DoD's $36.6M IT contract for engineering services awarded to Engility LLC shows potential value concerns

Contract Overview

Contract Amount: $36,609,620 ($36.6M)

Contractor: Engility LLC

Awarding Agency: Department of Defense

Start Date: 2002-08-20

End Date: 2006-10-31

Contract Duration: 1,533 days

Daily Burn Rate: $23.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: 200211!004418!2100!AB07 !USA COMMUNICATIONS-ELECTRONICS !DAAB0702DP001 !A!N! !Y!0019 !20020820!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!+000000360000!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! ! ! ! ! ! !0001!

Place of Performance

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

State: New Jersey Government Spending

Plain-Language Summary

Department of Defense obligated $36.6 million to ENGILITY LLC for work described as: 200211!004418!2100!AB07 !USA COMMUNICATIONS-ELECTRONICS !DAAB0702DP001 !A!N! !Y!0019 !20020820!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 of $36.6 million over 1533 days suggests a daily rate of approximately $23,881, which warrants further investigation for value for money. 2. Awarded under full and open competition, the contract saw 4 bidders, indicating a healthy competitive environment that should theoretically drive favorable pricing. 3. The use of a Time and Materials contract type introduces potential risks for cost overruns if not managed diligently. 4. The contract's duration of over 4 years provides a long-term engagement, requiring sustained performance monitoring. 5. This contract falls within the Engineering Services sector, specifically related to IT and communication electronics. 6. The absence of small business set-aside flags suggests limited direct impact on small business participation for this specific award.

Value Assessment

Rating: fair

The total award amount of $36.6 million over 1533 days results in a daily burn rate of approximately $23,881. Benchmarking this against similar IT engineering services contracts is crucial. Without specific comparable data, the daily rate appears high, suggesting potential overpricing or a scope of work that justifies the cost. Further analysis of the specific services rendered and the contractor's performance history is needed to definitively assess value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, with four bidders participating. This level of competition is generally positive, as it allows for a wider pool of potential contractors to submit proposals, theoretically leading to better pricing and service offerings. The presence of multiple bidders suggests that the market had sufficient interest and capability to fulfill the requirement.

Taxpayer Impact: The full and open competition with four bidders is a positive signal for taxpayers, as it increases the likelihood of receiving competitive pricing and avoids the potential for inflated costs associated with sole-source or limited competition awards.

Public Impact

The primary beneficiary is the Department of Defense, specifically the Department of the Army, receiving critical IT and communication electronics engineering technical services. The services delivered are essential for maintaining and advancing the technological capabilities of the armed forces. The geographic impact is centered around Fort Monmouth, New Jersey, a key military installation. Workforce implications include the employment of skilled engineers and technical personnel by the contractor, Engility LLC.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and Materials contract type can lead to cost overruns if not closely monitored.
The daily rate of $23,881 warrants scrutiny to ensure cost-effectiveness.
Long contract duration requires sustained oversight to ensure performance remains high.

Positive Signals

Awarded under full and open competition, indicating a competitive bidding process.
Four bidders participated, suggesting a robust market response.
The contract supports critical IT and communication electronics needs for the Department of Defense.

Sector Analysis

This contract falls within the Engineering Services sector, specifically focusing on IT and communication electronics. The North American Industry Classification System (NAICS) code 541330 (Engineering Services) encompasses a broad range of activities. The market for defense-related engineering services is substantial, with significant government spending allocated to maintaining and upgrading technological infrastructure. This contract represents a portion of that broader spending, supporting specialized technical expertise.

Small Business Impact

This contract does not appear to have a small business set-aside. The prime contractor, Engility LLC, is a large business. There is no explicit information regarding subcontracting plans for small businesses within the provided data. Therefore, the direct impact on the small business ecosystem for this specific award is likely minimal, though subcontracting opportunities could exist if pursued by the prime contractor.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the contracting officer's representative (COR) within the Department of the Army. The Time and Materials contract type necessitates rigorous monitoring of labor hours and material costs to ensure compliance and prevent overspending. Transparency is generally maintained through contract reporting mechanisms, though specific details on Inspector General involvement or public-facing dashboards are not provided.

Related Government Programs

Defense Information Technology
Engineering and Technical Services
Communication Systems Support
Department of the Army Contracts
IT Services for Military

Risk Flags

Potential for cost overruns due to T&M contract type.
High daily rate requires justification and benchmarking.
Long contract duration necessitates sustained oversight.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $36.6 million to ENGILITY LLC. 200211!004418!2100!AB07 !USA COMMUNICATIONS-ELECTRONICS !DAAB0702DP001 !A!N! !Y!0019 !20020820!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!+000000360000!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 $36.6 million.

What is the period of performance?

Start: 2002-08-20. End: 2006-10-31.

What was the specific scope of work for Engility LLC under this contract?

The provided data indicates the contract was for 'ENGINEERING TECHNICAL SERVICES' under the Product Service Code (PSC) R425, which relates to 'Engineering and Technical Services'. The specific details of the scope of work are not fully discernible from the abbreviated data, but it is associated with 'ELECTRONICS AND COMMUNICATION'. Given the agency (Department of Defense) and the nature of the services, it likely involved the design, development, integration, testing, or maintenance of communication and electronic systems for military applications. The contract type (Time and Materials) suggests a need for flexibility in addressing evolving technical requirements or unforeseen issues during the project lifecycle.

How does the daily rate of $23,881 compare to industry benchmarks for similar IT engineering services?

A direct comparison of the daily rate of $23,881 to industry benchmarks for IT engineering services is challenging without more specific details on the skill sets, seniority, and geographic location of the personnel involved, as well as the exact nature of the services. However, this rate is on the higher end for standard IT support or development roles. For highly specialized engineering or technical consulting services, particularly those requiring security clearances and deep domain expertise within the defense sector, such rates might be justifiable. A thorough benchmark would require analyzing rates for comparable roles (e.g., senior systems engineers, cybersecurity specialists, network architects) within defense contracting firms operating in similar environments.

What are the potential risks associated with the Time and Materials (T&M) contract type for this award?

The primary risk associated with a Time and Materials (T&M) contract is the potential for cost overruns. Unlike fixed-price contracts, T&M contracts reimburse the contractor for direct labor hours at specified hourly rates and for the actual cost of materials. If the contractor's labor hours are not efficiently managed, or if material costs escalate unexpectedly, the total cost to the government can exceed initial estimates. For this $36.6 million contract spanning over four years, effective oversight by the government is critical to monitor labor utilization, ensure rates are reasonable, and scrutinize material purchases to mitigate these risks and ensure the government receives good value.

What is Engility LLC's track record with similar government contracts?

Engility LLC (which later merged with T-Rex Solutions and then became part of SAIC) has a significant history of performing IT and engineering services for various U.S. government agencies, particularly the Department of Defense. Prior to its mergers, Engility held numerous large-scale contracts across areas like IT modernization, cybersecurity, enterprise resource planning, and systems engineering. While this specific contract data is from 2002-2006, Engility's broader portfolio suggests substantial experience in delivering complex technical solutions to the federal government. A detailed review would involve examining past performance evaluations and any documented issues on previous contracts of similar scope and value.

How has spending in the 'Engineering Services' category for the Department of Defense evolved since this contract was awarded?

Spending in the 'Engineering Services' category for the Department of Defense has generally increased significantly since the period of this contract (2002-2006), driven by evolving threats, technological advancements, and the need for modernization across all military branches. The rise of cybersecurity, artificial intelligence, cloud computing, and advanced communication systems has led to a greater demand for specialized engineering and technical expertise. While specific figures for the NAICS code 541330 within DoD fluctuate annually based on budget allocations and strategic priorities, the overall trend indicates a sustained and often growing investment in these services to maintain military readiness and technological superiority.

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