DoD's $29.3M contract for engineering services awarded to Engility LLC shows potential for cost savings

Contract Overview

Contract Amount: $29,264,808 ($29.3M)

Contractor: Engility LLC

Awarding Agency: Department of Defense

Start Date: 2006-09-26

End Date: 2009-09-30

Contract Duration: 1,100 days

Daily Burn Rate: $26.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: TIME AND MATERIALS

Sector: Defense

Official Description: 200612!008933!2100!W15P7T!USA COMMUNICATIONS-ELECTRONICS !DAAB0702DP001 !A!N! !Y!0108 ! !20060926!20061031!849594288!849594288!849594288!N!L-3 COMMUNICATIONS ILEX SYSTEM!1413 CANTILLON BLVD !MAYS LANDING !NJ!08330!24480!025!34!FORT MONMOUTH !MONMOUTH !NEW JERSEY!+000001936573!N!N!000000000000!R425!ENGINEERING TECHNICAL SERVICES !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !NOT DISCERNABLE !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: MOUNT LAUREL, BURLINGTON County, NEW JERSEY, 08054, UNITED STATES OF AMERICA

State: New Jersey Government Spending

Plain-Language Summary

Department of Defense obligated $29.3 million to ENGILITY LLC for work described as: 200612!008933!2100!W15P7T!USA COMMUNICATIONS-ELECTRONICS !DAAB0702DP001 !A!N! !Y!0108 ! !20060926!20061031!849594288!849594288!849594288!N!L-3 COMMUNICATIONS ILEX SYSTEM!1413 CANTILLON BLVD !MAYS LANDING !NJ!08330!24480!025!34!FORT MONMOUTH !MONM… Key points: 1. The contract's value of $29.3 million over its period of performance suggests a significant investment in engineering and technical services. 2. The award to Engility LLC, a large business, indicates a focus on established contractors for complex defense needs. 3. The 'Full and Open Competition' indicates a broad solicitation process, potentially leading to competitive pricing. 4. The contract's duration of approximately 3 years (1100 days) allows for sustained support but also necessitates ongoing performance monitoring. 5. The 'Engineering Services' category (NAICS 541330) is a critical component of defense readiness and technological advancement. 6. The contract was awarded under the 'Time and Materials' pricing structure, which can pose risks if not managed carefully to control costs.

Value Assessment

Rating: fair

The total award amount of $29.3 million for engineering services over approximately three years requires careful benchmarking against similar contracts. Without specific details on the scope of work and deliverables, it's challenging to definitively assess value for money. However, the 'Time and Materials' pricing structure, while flexible, can sometimes lead to higher costs compared to fixed-price contracts if not rigorously managed. The contract's base value of $26.6 million suggests a substantial portion of the potential value was awarded upfront, but the overall cost-effectiveness will depend on the efficient execution of services and the contractor's ability to stay within estimated labor hours.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'Full and Open Competition,' suggesting that all responsible sources were permitted to submit bids. The presence of two bids indicates a degree of competition, but the exact number of bidders and the nature of their proposals are not detailed. A full and open competition is generally preferred as it allows for the widest possible pool of contractors to participate, theoretically driving down prices and improving the quality of offers. However, the effectiveness of this competition in achieving optimal value depends on the specific requirements and the number of truly capable and competitive bidders.

Taxpayer Impact: A full and open competition is beneficial for taxpayers as it increases the likelihood of receiving competitive pricing and high-quality services by allowing a broad range of contractors to bid.

Public Impact

The primary beneficiaries are the Department of Defense and the Department of the Army, receiving essential engineering and technical services. The services delivered likely support the development, maintenance, or enhancement of defense systems and electronic communication equipment. The contract's performance is likely centered around Fort Monmouth, New Jersey, indicating a geographic focus for service delivery. The contract supports a workforce skilled in engineering and technical services, contributing to the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'Time and Materials' pricing structure carries inherent risks of cost overruns if not closely monitored and managed.
Limited information on the specific deliverables and performance metrics makes it difficult to fully assess the contractor's track record and the contract's effectiveness.
The competition, while 'full and open,' only yielded two bids, which might suggest potential limitations in the market or the attractiveness of the contract's terms.

Positive Signals

The award was made under a 'Full and Open Competition,' indicating an effort to leverage market forces for the best value.
The contract is for engineering services, a critical area for defense modernization and operational effectiveness.
The contractor, Engility LLC, is a known entity in the government contracting space, suggesting a level of established capability.

Sector Analysis

The defense sector relies heavily on specialized engineering services for the research, development, and sustainment of complex military systems. This contract falls within the 'Engineering Services' category (NAICS 541330), a broad field encompassing a wide range of technical expertise. The market for defense engineering services is substantial, driven by continuous technological evolution and the need for robust operational capabilities. Comparable spending benchmarks would typically involve analyzing other contracts for similar engineering support within the Department of Defense or other federal agencies.

Small Business Impact

This contract was awarded to Engility LLC, identified as a large business. There is no indication of a small business set-aside for this particular award. Consequently, the direct impact on small businesses through this specific contract is likely minimal, unless Engility LLC engages in subcontracting with small businesses. The absence of a set-aside suggests that the primary focus was on securing the most capable large contractor for the specified engineering services.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Department of the Army contracting and program management offices. Accountability measures would be defined by the contract's terms and conditions, including performance standards and reporting requirements. Transparency is facilitated through contract databases like FPDS, which provide basic award information. Further oversight might be provided by the Department of Defense Inspector General if specific concerns or irregularities arise.

Related Government Programs

Defense Engineering Services Contracts
Army IT and Engineering Support
Electronics and Communication Equipment Procurement
Time and Materials Contracts
Full and Open Competition Awards

Risk Flags

Potential for cost overruns due to Time and Materials pricing
Limited competition indicated by only two bids
Broad service description requires careful performance monitoring

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $29.3 million to ENGILITY LLC. 200612!008933!2100!W15P7T!USA COMMUNICATIONS-ELECTRONICS !DAAB0702DP001 !A!N! !Y!0108 ! !20060926!20061031!849594288!849594288!849594288!N!L-3 COMMUNICATIONS ILEX SYSTEM!1413 CANTILLON BLVD !MAYS LANDING !NJ!08330!24480!025!34!FORT MONMOUTH !MONMOUTH !NEW JERSEY!+000001936573!N!N!000000000000!R425!ENGINEERING TECHNICAL SERVICES !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !NOT DISCERNABLE !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 $29.3 million.

What is the period of performance?

Start: 2006-09-26. End: 2009-09-30.

What is Engility LLC's track record with the Department of Defense for similar engineering services?

Engility LLC, and its predecessor entities, have a significant history of contracting with the Department of Defense across various service areas, including engineering, IT, and logistics. Prior to its acquisition by SAIC in 2019, Engility held numerous prime contracts with the DoD, often involving complex technical support and system integration. Analyzing their past performance on similar 'Engineering Services' contracts, particularly those under 'Time and Materials' pricing, would reveal their ability to manage costs, meet deadlines, and deliver quality services. Specific contract performance evaluations (C-SPEs) and past performance questionnaires, if available, would provide deeper insights into their reliability and effectiveness in fulfilling DoD requirements.

How does the $29.3 million award compare to other engineering services contracts awarded by the Department of the Army?

The $29.3 million total value for this contract, awarded in 2006, represents a moderate-sized award for engineering services within the Department of the Army at that time. To provide a precise comparison, one would need to analyze the average and median award values for similar NAICS codes (e.g., 541330) during the same period, considering factors like contract duration, scope of work, and specific service requirements. Larger, multi-year contracts for major system development or sustainment could easily exceed this amount by orders of magnitude. Conversely, smaller, more focused engineering support tasks would be significantly less. This contract's value suggests a substantial, but not exceptionally large, requirement for specialized engineering expertise.

What are the primary risks associated with the 'Time and Materials' (T&M) pricing structure for this contract?

The primary risk associated with the 'Time and Materials' (T&M) pricing structure is the potential for cost overruns. Unlike fixed-price contracts, T&M contracts reimburse the contractor for the actual cost of labor (at specified hourly rates) and materials used. If the scope of work is not clearly defined, or if project management is weak on either the government or contractor side, the hours expended and materials consumed can escalate beyond initial estimates. This can lead to the contract exceeding its ceiling value without a proportional increase in the delivered value. Effective government oversight, including detailed monitoring of labor hours, material costs, and progress against milestones, is crucial to mitigate these risks and ensure fair pricing.

What does the 'Engineering Technical Services' description imply about the contract's specific deliverables?

The description 'Engineering Technical Services' is broad but implies that the contract likely involves providing specialized expertise and support related to the design, development, testing, analysis, and maintenance of engineering systems. This could encompass a wide range of activities, such as systems engineering, software engineering, hardware engineering, test and evaluation support, technical documentation, and lifecycle management. Given the context of 'Electronics and Communication Equip,' it's probable that these services are directly related to military communication systems, radar, electronic warfare, or other sophisticated electronic defense technologies. The specific deliverables would be detailed in the contract's Statement of Work (SOW).

How has spending in the 'Engineering Services' category (NAICS 541330) evolved within the Department of Defense since 2006?

Spending within the 'Engineering Services' category (NAICS 541330) by the Department of Defense has generally seen significant fluctuations and overall growth since 2006, driven by evolving threats, technological advancements, and shifts in defense strategy. Initially, spending may have been influenced by ongoing conflicts and modernization efforts. Over time, there has been a sustained demand for engineering support related to cybersecurity, advanced materials, artificial intelligence, and unmanned systems. While specific figures require detailed analysis of historical spending data, it's reasonable to assume that the total dollar volume for engineering services has increased, reflecting the increasing complexity and technological sophistication of modern defense platforms and systems.

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: 2

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

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: DAAB0702DP001

IDV Type: IDC

Timeline