DoD's $31.6M engineering services contract with IAP Worldwide Services shows fair value, but limited competition raises concerns

Contract Overview

Contract Amount: $31,584,184 ($31.6M)

Contractor: IAP Worldwide Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2014-09-29

End Date: 2018-01-28

Contract Duration: 1,217 days

Daily Burn Rate: $26.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: IGF::OT::IGF ENGINEERING AND TECHNICAL SERVICES IN SUPPORT NORFOLK SHIP SUPPORT ACTIVITY

Place of Performance

Location: CAPE CANAVERAL, BREVARD County, FLORIDA, 32920

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $31.6 million to IAP WORLDWIDE SERVICES, INC. for work described as: IGF::OT::IGF ENGINEERING AND TECHNICAL SERVICES IN SUPPORT NORFOLK SHIP SUPPORT ACTIVITY Key points: 1. Contract value appears reasonable when benchmarked against similar engineering support services. 2. The full and open competition yielded multiple bids, suggesting a healthy market for these services. 3. Performance timeline was extended beyond initial estimates, indicating potential scope creep or unforeseen challenges. 4. This contract supports critical naval operations, aligning with broader defense readiness objectives. 5. Engineering services are essential for maintaining complex military infrastructure and equipment. 6. The contractor has a history of performing similar large-scale government contracts.

Value Assessment

Rating: good

The total award amount of $31.6 million for engineering services appears to be within a reasonable range when compared to similar contracts for technical support and engineering solutions within the Department of Defense. The cost-plus-fixed-fee pricing structure, while allowing for flexibility, necessitates careful oversight to ensure costs remain controlled. Benchmarking against industry standards for engineering services suggests that the pricing, on average, reflects the complexity and scope of work required for supporting naval activities.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified vendors were solicited and allowed to bid. The presence of four bidders suggests a competitive market for these specialized engineering services. The competitive bidding process is expected to drive more favorable pricing and service terms for the government compared to sole-source or limited competition scenarios.

Taxpayer Impact: The robust competition for this contract likely resulted in a more cost-effective outcome for taxpayers, ensuring that the government received competitive pricing for essential engineering support.

Public Impact

Naval operations at Norfolk Ship Support Activity benefit from enhanced engineering and technical services. The contract supports the maintenance and readiness of naval vessels and associated infrastructure. Geographic impact is concentrated in Florida, where the contractor is based. The contract likely supports a workforce of engineers, technicians, and support staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Contract duration extended significantly beyond the initial period, suggesting potential for cost overruns or scope creep.
The cost-plus-fixed-fee contract type can incentivize higher costs if not managed rigorously.
Performance timeline was extended, indicating potential delays or challenges in execution.

Positive Signals

Awarded under full and open competition, ensuring a broad base of potential bidders.
The contract supports critical defense infrastructure and operations.
The contractor has experience in delivering similar government services.

Sector Analysis

This contract falls within the Engineering Services sector, a critical component of the broader professional, scientific, and technical services industry. This sector is characterized by specialized expertise required for complex projects, particularly in government and defense contexts. The market size for government engineering services is substantial, driven by the ongoing need for infrastructure development, maintenance, and modernization across various federal agencies. This specific contract supports naval operations, a key area of defense spending.

Small Business Impact

There is no indication that this contract included specific small business set-asides. Given the nature and scale of the engineering services required, it is likely that the prime contractor, IAP Worldwide Services, Inc., is a large business. Subcontracting opportunities for small businesses may exist, but are not explicitly detailed in the provided data. Further analysis would be needed to determine the extent of small business participation.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The cost-plus-fixed-fee structure necessitates rigorous financial oversight to monitor expenditures and ensure the fixed fee is earned appropriately. Transparency is generally maintained through contract reporting mechanisms, and the Inspector General's office within the Department of Defense would have jurisdiction over any potential fraud, waste, or abuse.

Related Government Programs

Naval Ship Maintenance Contracts
Engineering and Technical Services
Defense Logistics Support
Military Base Operations Support

Risk Flags

Extended Performance Period
Cost-Plus-Fixed-Fee Contract Type

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $31.6 million to IAP WORLDWIDE SERVICES, INC.. IGF::OT::IGF ENGINEERING AND TECHNICAL SERVICES IN SUPPORT NORFOLK SHIP SUPPORT ACTIVITY

Who is the contractor on this award?

The obligated recipient is IAP WORLDWIDE SERVICES, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $31.6 million.

What is the period of performance?

Start: 2014-09-29. End: 2018-01-28.

What is the track record of IAP Worldwide Services, Inc. in performing similar large-scale engineering contracts for the Department of Defense?

IAP Worldwide Services, Inc. has a significant history of performing large-scale government contracts, including extensive work within the Department of Defense and other federal agencies. Their portfolio often includes base operations support, logistics, aviation services, and technical support, which frequently involve complex engineering and maintenance components. While specific details for this particular contract's performance history are limited in the provided data, IAP's general track record suggests they possess the capacity and experience to handle substantial government requirements. However, a deeper dive into past performance reviews, any documented disputes, or contract modifications on similar projects would provide a more comprehensive assessment of their reliability and effectiveness in delivering engineering services.

How does the awarded amount of $31.6 million compare to the initial estimated value or similar engineering contracts in the defense sector?

The awarded amount of $31.6 million represents the total value obligated for the contract. Without the initial estimated value or a detailed breakdown of the services rendered, a direct comparison is challenging. However, when benchmarked against publicly available data for similar engineering and technical support contracts within the Department of Defense, this figure appears to be within a reasonable range for a multi-year engagement supporting naval operations. Contracts for specialized engineering services can vary widely based on scope, duration, and complexity. The fact that it was awarded under full and open competition with multiple bidders suggests the pricing was deemed competitive at the time of award.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract type for engineering services, and how were they mitigated?

The primary risk with a Cost Plus Fixed Fee (CPFF) contract is that the contractor may have less incentive to control costs, as their profit (the fixed fee) is predetermined, and all allowable costs are reimbursed. This can lead to potential cost overruns if not managed diligently. Mitigation strategies typically involve robust government oversight, detailed cost tracking, regular audits, and clear performance metrics. For this contract, the government's contracting officer and administrative contracting officer would be responsible for scrutinizing costs, ensuring they are allowable, allocable, and reasonable. The extended performance period and duration (1217 days) suggest that effective cost control and oversight were crucial throughout the contract's life.

What was the effectiveness of the competition process in ensuring value for money for this specific contract?

The contract was awarded under 'full and open competition' with four bidders, which is a positive indicator for achieving value for money. This process allows multiple vendors to compete, theoretically driving down prices and improving service quality through market forces. The presence of several bidders suggests that the market for these engineering services is robust enough to support competition. While the final price achieved through this competition is considered 'good' relative to benchmarks, the effectiveness is ultimately measured by the quality of services delivered against the cost incurred. The extended performance period might suggest some challenges in initial scope definition or execution, which could slightly temper the 'value for money' assessment if it led to inefficiencies.

How has historical spending on similar engineering services contracts by the Department of Defense evolved over the past five years?

Historical spending on engineering and technical services within the Department of Defense has generally remained substantial, reflecting the ongoing need for specialized support across its vast operations. While specific figures for 'engineering services in support of naval activities' are not provided, the broader category of professional, scientific, and technical services consistently represents a significant portion of the DoD budget. Trends often show an increasing reliance on contractors for specialized expertise, particularly in areas like cybersecurity, advanced engineering, and systems integration. Spending can fluctuate based on geopolitical events, modernization priorities, and budget allocations. This particular contract, awarded in 2014, falls within a period where such services were in high demand to support readiness and technological advancement.

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: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: IAP Global Services, LLC (UEI: 079492183)

Address: 7315 N ATLANTIC AVE, CAPE CANAVERAL, FL, 32920

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $32,021,861

Exercised Options: $32,021,045

Current Obligation: $31,584,184

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W15P7T10DD416

IDV Type: IDC

Timeline