TECNICO CORPORATION awarded $14.5M engineering services contract by Department of Defense

Contract Overview

Contract Amount: $14,545,937 ($14.5M)

Contractor: Tecnico Corporation

Awarding Agency: Department of Defense

Start Date: 2003-04-11

End Date: 2006-09-30

Contract Duration: 1,268 days

Daily Burn Rate: $11.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Place of Performance

Location: CHESAPEAKE, CHESAPEAKE (CITY) County, VIRGINIA, 23324

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $14.5 million to TECNICO CORPORATION for work described as: Key points: 1. Contract awarded under full and open competition, suggesting a competitive bidding process. 2. The contract type is Cost Plus Fixed Fee, which can incentivize cost control but also carries inherent risks. 3. The duration of the contract is over 3 years, indicating a significant, long-term need for these services. 4. The award was made by the Defense Contract Management Agency, a key oversight body. 5. The North American Industry Classification System (NAICS) code 541330 points to a focus on engineering services. 6. The contract was awarded in Virginia, a state with a significant federal contracting presence.

Value Assessment

Rating: fair

Benchmarking the value of this $14.5 million contract requires more detailed cost breakdowns and comparisons to similar engineering service contracts. The Cost Plus Fixed Fee (CPFF) structure means the government pays actual costs plus a fixed fee, which can lead to cost overruns if not managed tightly. Without specific performance metrics or a comparison to industry benchmarks for engineering services of this scope and duration, it's difficult to definitively assess value for money. However, the fixed fee component provides some level of cost predictability for the contractor's profit.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit a bid. The presence of 6 bidders (as indicated by 'no': 6) suggests a healthy level of competition for this engineering services requirement. A competitive process generally leads to better price discovery and potentially more favorable terms for the government.

Taxpayer Impact: A competitive award means taxpayer dollars are more likely to be used efficiently, as contractors are incentivized to offer competitive pricing to win the contract.

Public Impact

The primary beneficiaries are likely components of the Department of Defense requiring specialized engineering expertise. The services delivered are engineering support, crucial for defense readiness and technological advancement. The geographic impact is primarily within Virginia, where the contract was managed and potentially where services were rendered. The contract supports a workforce skilled in engineering and related technical fields.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can incentivize contractors to incur costs, as the government reimburses them.
The long duration of the contract (over 3 years) increases the risk of scope creep or evolving requirements not being adequately addressed in the initial pricing.
Lack of specific performance metrics in the provided data makes it hard to assess the quality and effectiveness of the engineering services delivered.

Positive Signals

Awarded under full and open competition, indicating a robust bidding process.
The fixed fee component of the contract provides a degree of cost certainty for the contractor's profit.
The contract is managed by the Defense Contract Management Agency, suggesting established oversight processes.

Sector Analysis

This contract falls within the Engineering Services sector (NAICS 541330), a critical component of the broader professional, scientific, and technical services industry. This sector supports a wide range of government and private-sector activities, including defense, infrastructure, and technology development. The market for engineering services is substantial, with significant government spending directed towards defense-related engineering needs. Comparable spending benchmarks would typically involve analyzing the average cost of similar engineering support contracts awarded by the Department of Defense over specific periods.

Small Business Impact

The provided 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 stemming from a set-aside provision. However, the prime contractor, TECNICO CORPORATION, may still engage small businesses as subcontractors, depending on their own subcontracting plans and the nature of the engineering services required. Without specific subcontracting goals or reports, the direct impact on the small business ecosystem is not quantifiable from this data alone.

Oversight & Accountability

The Defense Contract Management Agency (DCMA) is responsible for overseeing this contract, implying established oversight mechanisms. DCMA's role typically includes ensuring contract compliance, monitoring performance, and managing payments. The 'Cost Plus Fixed Fee' (CPFF) contract type necessitates close financial oversight to ensure that costs are reasonable and allowable. Transparency would be enhanced by public reporting of performance reviews and cost audits, though such details are not provided here. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Department of Defense Engineering Services Contracts
Cost Plus Fixed Fee Contracts
Professional, Scientific, and Technical Services
Defense Contract Management Agency Contracts

Risk Flags

Cost Plus Fixed Fee contract type carries inherent risk of cost overruns.
Long contract duration may increase exposure to scope creep.
Limited data on specific performance metrics makes value assessment difficult.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.5 million to TECNICO CORPORATION. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is TECNICO 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 $14.5 million.

What is the period of performance?

Start: 2003-04-11. End: 2006-09-30.

What is TECNICO CORPORATION's track record with the Department of Defense, particularly on similar engineering services contracts?

Assessing TECNICO CORPORATION's track record requires a deeper dive into their contract history with the Department of Defense (DoD). While this specific $14.5 million contract provides a data point, understanding their performance on past DoD engagements is crucial. This would involve reviewing past performance evaluations, any documented disputes or contract modifications, and the types of engineering services they have previously provided to the DoD. A history of successful project completion, adherence to budget and schedule, and positive performance reviews would indicate a reliable contractor. Conversely, a pattern of issues could raise concerns about their capability to deliver effectively on this current contract. Without access to a comprehensive database of contractor performance information (like the Contractor Performance Assessment Reporting System - CPARS), a definitive assessment is limited.

How does the $14.5 million value of this contract compare to other engineering services contracts awarded by the DoD for similar scope and duration?

To benchmark the $14.5 million value, we would need to compare it against a dataset of similar engineering services contracts awarded by the Department of Defense (DoD) around the same period (2003-2006). Key comparison factors would include the specific engineering disciplines required, the contract duration (1268 days), and the contract type (Cost Plus Fixed Fee). If similar contracts for comparable services and durations were awarded for significantly less, it might suggest this contract's value is on the higher side. Conversely, if it aligns with or is lower than the average for comparable contracts, it could indicate reasonable pricing. The 'full and open competition' with 6 bidders suggests a competitive environment that should theoretically drive pricing towards market rates, but without specific benchmark data, a definitive value assessment remains challenging.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract structure for engineering services?

The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract structure, like the one awarded to TECNICO CORPORATION, revolve around cost control and potential for overruns. While the fixed fee provides the contractor with a predictable profit margin, the government bears the risk of actual costs incurred. If the contractor's cost estimation or management is poor, or if unforeseen technical challenges arise, the total cost to the government can escalate significantly beyond initial projections. This structure can also reduce the contractor's incentive to aggressively control costs, as their profit is fixed regardless of the final cost. Effective oversight, detailed cost accounting, and clear definition of allowable costs are critical to mitigate these risks for the government.

How effective is the Defense Contract Management Agency (DCMA) in overseeing engineering services contracts of this magnitude?

The Defense Contract Management Agency (DCMA) is a primary agency responsible for contract administration and oversight for the Department of Defense. Their effectiveness in overseeing engineering services contracts like this $14.5 million award hinges on several factors, including the adequacy of their staffing, the expertise of their contract administrators, and the robustness of their surveillance processes. DCMA's role typically involves monitoring contractor performance, ensuring compliance with contract terms, verifying costs, and managing payments. For CPFF contracts, their oversight of cost allowability and reasonableness is particularly crucial. While DCMA has established procedures, the effectiveness can vary based on the specific contract complexity, the contractor's cooperation, and the resources allocated to oversight. Generally, DCMA is considered a key component of DoD's acquisition and oversight framework.

What are the historical spending patterns for engineering services within the Department of Defense, and how does this contract fit?

The Department of Defense (DoD) historically represents one of the largest government spenders on engineering services, driven by the complex needs of military readiness, research and development, and infrastructure maintenance. Spending in this category typically fluctuates based on geopolitical events, modernization programs, and budget allocations. This $14.5 million contract, awarded in 2003, fits within the broader pattern of DoD's consistent reliance on external engineering expertise to support its vast array of projects. It represents a single award within a much larger ecosystem of engineering service procurements that the DoD undertakes annually to maintain its technological edge and operational capabilities.

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

Offers Received: 6

Pricing Type: COST PLUS FIXED FEE (U)

Contractor Details

Parent Company: American Maritime Holdings, LLC (UEI: 827462636)

Address: 831 INDUSTRIAL AVENUE, CHESAPEAKE, VA, 90

Business Categories: Category Business, Small Business

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0014002DD710

IDV Type: IDC

Timeline