DoD's $49.5M Engineering Services Contract with SAIC Shows Long-Term Engagement

Contract Overview

Contract Amount: $49,501,930 ($49.5M)

Contractor: Science Applications International Corporation

Awarding Agency: Department of Defense

Start Date: 2007-12-01

End Date: 2018-08-04

Contract Duration: 3,899 days

Daily Burn Rate: $12.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: SYSTEMS ENGINEERING & TECHNICAL SUPPORT

Place of Performance

Location: NORTH CHARLESTON, CHARLESTON County, SOUTH CAROLINA, 29419

State: South Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $49.5 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION for work described as: SYSTEMS ENGINEERING & TECHNICAL SUPPORT Key points: 1. Contract duration of nearly 10 years suggests sustained need for specialized engineering support. 2. The cost-plus award fee structure incentivizes performance but requires careful oversight to manage costs. 3. Full and open competition indicates a broad market approach, potentially leading to competitive pricing. 4. The contract's value, while substantial, needs to be benchmarked against similar long-term engineering support contracts. 5. Performance context is crucial, as the effectiveness of engineering services directly impacts defense capabilities. 6. Sector positioning within Defense highlights the critical nature of these services for national security.

Value Assessment

Rating: fair

The total award value of $49.5 million over nearly a decade indicates a significant investment in engineering services. Without specific benchmarks for similar long-term, complex engineering support contracts within the Department of Defense, a precise value-for-money assessment is challenging. The cost-plus award fee (CPAF) pricing model, while allowing for flexibility and incentivizing performance, can also lead to cost overruns if not meticulously managed and audited. Further analysis would require comparing the per-unit costs of specific services rendered against industry standards and other government contracts for comparable technical support.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. The number of bidders is not specified, but this approach generally fosters a competitive environment, which can lead to better pricing and innovation. The long duration of the contract might imply that the initial competition was robust enough to select a vendor capable of providing sustained support over an extended period, though it also raises questions about whether subsequent competitions were considered or if this was a single, long-term award.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it aims to secure the best value through market forces. It reduces the risk of inflated prices that can occur with sole-source or limited competition contracts.

Public Impact

The Department of Defense benefits from specialized engineering expertise to support its complex systems and operations. Services delivered likely include systems engineering, technical analysis, and program management support, crucial for defense readiness. The geographic impact is likely concentrated around the Defense Contract Management Agency's operational areas or specific DoD installations. Workforce implications include the potential for highly skilled engineering jobs, both within the contractor's organization and potentially for government personnel overseeing the contract.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus award fee contracts require diligent oversight to prevent scope creep and ensure cost efficiency.
The extended duration of the contract could lead to vendor lock-in if not managed with future competition in mind.
Lack of specific performance metrics in the provided data makes it difficult to assess the quality of services rendered.

Positive Signals

Awarded through full and open competition, indicating a potentially competitive and fair selection process.
The long contract term suggests a successful and valued partnership, meeting sustained defense needs.
The contract supports critical defense engineering functions, contributing to national security.

Sector Analysis

The engineering services sector is a vital component of the broader professional, scientific, and technical services industry. Within the defense sector, engineering services are critical for the design, development, testing, and sustainment of complex military platforms and systems. This contract, valued at approximately $49.5 million over its lifespan, falls within the typical range for significant engineering support engagements. Comparable spending benchmarks would involve looking at other large-scale, long-term engineering support contracts awarded by the DoD or other federal agencies for similar technical requirements.

Small Business Impact

The provided data indicates that small business participation (ss) and set-asides (sb) were not applicable to this contract. This suggests that the primary award was made to a large business, Science Applications International Corporation (SAIC). While there is no direct indication of small business subcontracting requirements from this data alone, large prime contractors are often encouraged or mandated to subcontract portions of their work to small businesses. The absence of explicit small business considerations in the prime award does not preclude potential opportunities for small businesses further down the supply chain.

Oversight & Accountability

Oversight for this contract would primarily fall under the purview of the Defense Contract Management Agency (DCMA), as indicated by the 'sa' field. DCMA is responsible for ensuring contractors meet performance requirements, delivery schedules, and cost controls. The cost-plus award fee structure necessitates robust financial oversight and performance monitoring to ensure that award fees are justified and that costs are reasonable and allocable. Transparency would be enhanced through regular reporting requirements and potentially through the Inspector General's office if any irregularities or fraud were suspected.

Related Government Programs

Defense Engineering Services
Systems Engineering and Technical Assistance (SETA)
Department of Defense IT and Professional Services
Contractor Support for Military Operations

Risk Flags

Extended contract duration may warrant review for potential vendor lock-in.
Cost-plus award fee structure requires diligent cost and performance oversight.
Lack of specific performance metrics limits detailed value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $49.5 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION. SYSTEMS ENGINEERING & TECHNICAL SUPPORT

Who is the contractor on this award?

The obligated recipient is SCIENCE APPLICATIONS INTERNATIONAL CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $49.5 million.

What is the period of performance?

Start: 2007-12-01. End: 2018-08-04.

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

The provided data indicates the contract falls under the 'Engineering Services' category (NAICS 541330) and the description is 'SYSTEMS ENGINEERING & TECHNICAL SUPPORT'. While specific details are not enumerated, this typically encompasses a broad range of activities including requirements analysis, system design and integration, technical studies, risk management, testing and evaluation, and lifecycle support for complex defense systems. The 'Cost Plus Award Fee' (CPAF) structure suggests that the contractor was incentivized to perform well across these defined areas, with bonuses tied to achieving specific performance objectives set by the government. The long duration (nearly 10 years) implies these services were critical and ongoing for the supported defense programs.

How does the total contract value of $49.5 million compare to similar long-term engineering support contracts within the DoD?

Benchmarking the $49.5 million total value requires context regarding the contract's duration and scope. This contract spanned approximately 9.7 years (from Dec 2007 to Aug 2018), averaging around $5.1 million per year. This annual average is moderate for large-scale defense engineering support. Contracts for major weapon system development or sustainment can easily reach hundreds of millions or even billions of dollars annually. However, for specialized technical support or systems engineering for specific programs or components, this value could be substantial. A more precise comparison would necessitate identifying contracts with similar service descriptions (e.g., systems engineering, technical support), duration, and the specific agency or program office receiving the support.

What are the potential risks associated with a Cost Plus Award Fee (CPAF) contract of this magnitude and duration?

CPAF contracts, while offering flexibility and incentivizing performance, carry inherent risks. For the government, the primary risk is cost escalation, as the contractor is reimbursed for allowable costs plus a fee that includes a base amount and an award amount tied to performance. Without stringent oversight, costs can exceed initial projections. There's also a risk that the performance metrics used to determine the award fee might not perfectly align with the government's true needs or could be subjectively interpreted. For a contract lasting nearly a decade, the risk of scope creep and the contractor becoming entrenched ('vendor lock-in') is also significant, potentially diminishing future competition. Effective management requires clear performance standards, robust auditing, and proactive engagement from the contracting officer.

What is the track record of Science Applications International Corporation (SAIC) in delivering similar engineering services to the federal government?

Science Applications International Corporation (SAIC) is a major government contractor with a long history of providing a wide array of technical, engineering, and IT services to the Department of Defense and other federal agencies. They have consistently been among the top federal contractors. Their track record includes extensive experience in systems engineering, cybersecurity, logistics, and program management across various defense platforms and domains. While specific performance details for this particular $49.5 million contract are not provided, SAIC's overall profile suggests they possess the scale, expertise, and experience necessary to handle complex engineering and technical support requirements. Government contract databases and performance reviews (like CPARS) would offer more granular insights into their past performance on specific contracts.

How has federal spending on engineering services, particularly within the defense sector, evolved over the period this contract was active (2007-2018)?

Federal spending on engineering services, especially within the defense sector, remained substantial throughout the 2007-2018 period, although it experienced fluctuations. The early part of this period coincided with peak operational tempo in Iraq and Afghanistan, driving significant demand for technical support, systems engineering, and readiness services. As the US military shifted focus and budgets evolved, particularly post-2011, spending patterns adjusted. However, the fundamental need for advanced engineering expertise to maintain and modernize complex defense systems ensured a consistently high level of investment. This contract's duration aligns with a period of sustained, albeit changing, defense spending priorities, reflecting the ongoing requirement for specialized engineering support.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Address: 12010 SUNSET HILLS RD, RESTON, VA, 20190

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

Financial Breakdown

Contract Ceiling: $49,501,930

Exercised Options: $49,501,930

Current Obligation: $49,501,930

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N6523604D6844

IDV Type: IDC

Timeline