DoD's $156.8M contract for engineering services to L-3 Communications Ilex System shows potential value concerns

Contract Overview

Contract Amount: $156,797,877 ($156.8M)

Contractor: Engility LLC

Awarding Agency: Department of Defense

Start Date: 2004-02-18

End Date: 2009-05-01

Contract Duration: 1,899 days

Daily Burn Rate: $82.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: 200405!003144!2100!W15P7T!USA COMMUNICATIONS-ELECTRONICS !DAAB0702DP001 !A!N! !Y!0033 ! !20040218!20061031!808357131!008898884!008898843!N!L-3 COMMUNICATIONS ILEX SYSTEM!1413 CANTILLION BLVD, SUIT!MAYS LANDING !NJ!08330!27300!023!34!GRAVEL HILL !MIDDLESEX !NEW JERSEY!+000001325508!N!N!000000000000!R425!ENGINEERING TECHNICAL SERVICES !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !* !541330!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: CHANTILLY, FAIRFAX County, VIRGINIA, 20151

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $156.8 million to ENGILITY LLC for work described as: 200405!003144!2100!W15P7T!USA COMMUNICATIONS-ELECTRONICS !DAAB0702DP001 !A!N! !Y!0033 ! !20040218!20061031!808357131!008898884!008898843!N!L-3 COMMUNICATIONS ILEX SYSTEM!1413 CANTILLION BLVD, SUIT!MAYS LANDING !NJ!08330!27300!023!34!GRAVEL HILL !MIDD… 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 pricing environment, but the final price needs benchmarking. 3. Risk indicators are moderate, with a focus on performance and delivery, but the lack of detailed performance metrics is a concern. 4. The contract falls within the broader IT and Defense sectors, specifically supporting electronics and communication equipment. 5. This contract represents a significant investment in specialized engineering services for the Department of the Army.

Value Assessment

Rating: fair

The total award amount of $156,797,876.99 over approximately 5 years (February 2004 to May 2009) averages to roughly $31.36 million per year. Without specific deliverables or performance metrics, it is difficult to benchmark this against similar contracts. However, the annual spend suggests a substantial investment for engineering technical services. Further analysis would require understanding the specific services rendered and comparing them to industry standards and other government contracts for similar support.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. This generally promotes a competitive environment, which should theoretically lead to more favorable pricing for the government. The number of bidders is not specified in the provided data, but the 'full and open' designation suggests a robust competition.

Taxpayer Impact: A full and open competition is generally beneficial for taxpayers as it increases the likelihood of receiving competitive pricing and better value for the services procured.

Public Impact

The Department of the Army benefits from specialized engineering and technical services to support its electronics and communication equipment. This contract likely supports the development, maintenance, or enhancement of critical communication systems for military operations. The geographic impact is primarily within the United States, supporting defense infrastructure and potentially personnel in various locations. Workforce implications include the employment of engineers, technicians, and support staff by the contractor, L-3 Communications Ilex System.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of detailed performance metrics makes it difficult to assess the true value and effectiveness of the services provided.
The significant dollar amount warrants close scrutiny to ensure cost-efficiency and prevent potential overspending.
The contract duration is substantial, requiring ongoing monitoring to ensure continued alignment with evolving defense needs.

Positive Signals

Awarded through full and open competition, suggesting a competitive bidding process.
The contractor, L-3 Communications Ilex System, is a known entity in the defense sector, implying some level of established capability.
The contract type (Firm Fixed Price) provides cost certainty for the government, assuming the scope is well-defined.

Sector Analysis

This contract falls within the broader Information Technology and Defense sectors, specifically focusing on 'Electronics and Communication Equipment' and 'Engineering Services'. The market for defense-related engineering and technical services is substantial, driven by the need for advanced technological solutions and ongoing support for complex military systems. Benchmarking this contract's value would involve comparing its annual spend against other large-scale engineering support contracts within the Department of Defense or similar government agencies.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses arising from a small business set-aside. The primary contractor, L-3 Communications Ilex System, would be responsible for its own subcontracting strategy, which may or may not involve small businesses depending on the nature of the services required.

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. Accountability measures would be tied to the contract's performance clauses and delivery schedules. Transparency is generally facilitated through contract databases like FPDS, where basic award information is publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense IT Services
Army Communication Systems Procurement
Engineering and Technical Support Services
Electronics and Communication Equipment Procurement
Large-Scale Defense Contracts

Risk Flags

Potential for high cost relative to scope without detailed performance metrics.
Contract duration requires ongoing monitoring for continued relevance and efficiency.
Lack of specific deliverables in summary data hinders detailed value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $156.8 million to ENGILITY LLC. 200405!003144!2100!W15P7T!USA COMMUNICATIONS-ELECTRONICS !DAAB0702DP001 !A!N! !Y!0033 ! !20040218!20061031!808357131!008898884!008898843!N!L-3 COMMUNICATIONS ILEX SYSTEM!1413 CANTILLION BLVD, SUIT!MAYS LANDING !NJ!08330!27300!023!34!GRAVEL HILL !MIDDLESEX !NEW JERSEY!+000001325508!N!N!000000000000!R425!ENGINEERING TECHNICAL SERVICES !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !* !541330!E! !5!B!M! !A! !999

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 $156.8 million.

What is the period of performance?

Start: 2004-02-18. End: 2009-05-01.

What specific engineering and technical services were provided under this contract?

The provided data indicates the contract was for 'ENGINEERING TECHNICAL SERVICES' under the Product Service Code (PSC) R425, which covers 'SUPPORT- PROFESSIONAL: ENGINEERING/TECHNICAL SERVICES'. The North American Industry Classification System (NAICS) code 541330 further specifies 'Engineering Services'. However, the exact nature of these services—whether they involved design, development, testing, maintenance, or integration of electronics and communication equipment—is not detailed in the summary data. Understanding the specific tasks performed is crucial for a comprehensive value assessment and for comparing this contract to others.

How does the $156.8 million total award compare to similar engineering services contracts within the Department of the Army?

Benchmarking this $156.8 million contract requires comparing it to other Department of the Army (or broader DoD) contracts for engineering and technical services, particularly those related to electronics and communication equipment, awarded within a similar timeframe (2004-2009). Without access to a detailed database of comparable contracts with specific service descriptions and pricing, a precise comparison is difficult. However, $156.8 million over approximately five years represents a significant annual spend (around $31.36 million/year), suggesting a large-scale, long-term requirement. This level of spending is typical for major defense programs requiring specialized engineering expertise.

What were the key performance indicators (KPIs) or metrics used to evaluate the contractor's performance?

The provided summary data does not include specific Key Performance Indicators (KPIs) or metrics used to evaluate L-3 Communications Ilex System's performance under this contract. Typically, contracts of this magnitude would include clauses related to timely delivery, quality of work, adherence to technical specifications, and potentially system performance metrics if applicable. The absence of this information in the summary data limits the ability to assess the contractor's success and the overall effectiveness of the services rendered. Further review of the contract's statement of work and performance requirements would be necessary.

What is the track record of L-3 Communications Ilex System with government contracts, particularly within the Department of Defense?

L-3 Communications Ilex System (now part of L3Harris Technologies after various mergers and acquisitions) has a substantial history of contracting with the U.S. government, particularly the Department of Defense. While this specific contract award is from 2004, the company has consistently secured and performed on numerous defense contracts across various domains, including communications, electronics, and aerospace. Their track record generally indicates experience in delivering complex technological solutions and services to military branches. However, a detailed review of past performance evaluations, any contract disputes, or past performance issues would be needed for a complete assessment.

Were there any significant cost overruns or changes to the contract's scope during its performance period?

The provided summary data does not contain information regarding cost overruns or significant changes to the contract's scope after its initial award. The total award amount is listed as $156,797,876.99. To determine if there were modifications, change orders, or if the final cost deviated significantly from the initial estimate, one would need to consult the contract's modification history, often available through government contract databases or agency procurement records. Such modifications could indicate evolving requirements or challenges encountered during performance.

How does the pricing structure (Firm Fixed Price) align with the complexity and risk associated with engineering technical services?

A Firm Fixed Price (FFP) contract structure, as indicated for this award, aims to provide price certainty to the government. This structure is generally preferred when the scope of work is well-defined and the risks are manageable. For complex engineering technical services, an FFP contract can be advantageous if the contractor has a clear understanding of the requirements and can accurately estimate costs and risks. However, if unforeseen technical challenges or scope creep occur, the contractor bears the risk of cost overruns, which could potentially lead to performance issues if not managed effectively. The success of an FFP contract often hinges on the thoroughness of the initial SOW and the contractor's technical expertise.

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: 1

Pricing Type: FIRM FIXED PRICE (J)

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, Special Designations, U.S.-Owned 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