DoD's $135M Engineering Services Contract Awarded to Systems Planning and Analysis, Inc. for Long-Term Support

Contract Overview

Contract Amount: $134,885,223 ($134.9M)

Contractor: Systems Planning and Analysis, Inc.

Awarding Agency: Department of Defense

Start Date: 2010-06-22

End Date: 2018-03-31

Contract Duration: 2,839 days

Daily Burn Rate: $47.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: TO N00178-05-D-4592-EH01

Place of Performance

Location: WASHINGTON NAVY YARD, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20376

State: District of Columbia Government Spending

Plain-Language Summary

Department of Defense obligated $134.9 million to SYSTEMS PLANNING AND ANALYSIS, INC. for work described as: TO N00178-05-D-4592-EH01 Key points: 1. Contract provides long-term engineering services, indicating a need for sustained technical expertise. 2. The award was made under full and open competition, suggesting a competitive bidding process. 3. The contract duration of nearly 8 years points to a significant, ongoing requirement. 4. The use of Cost Plus Fixed Fee (CPFF) pricing can present cost control challenges if not closely managed. 5. The contractor, Systems Planning and Analysis, Inc., has a substantial contract value, implying significant past performance. 6. The contract was awarded to a single entity, highlighting the specialized nature of the services required. 7. The geographic location of the contractor is in the District of Columbia.

Value Assessment

Rating: good

The contract value of approximately $135 million over nearly 8 years suggests a substantial investment in engineering services. Benchmarking this against similar long-term, specialized engineering support contracts within the Department of Defense is crucial for a precise value-for-money assessment. The CPFF contract type requires diligent oversight to ensure costs remain reasonable and aligned with the fixed fee. Without specific comparable contract data, it's difficult to definitively state if the pricing is optimal, but the scale and duration imply a recognized need and a competitive award process.

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 bids. The presence of 3 bids suggests a moderate level of competition for this specialized engineering service requirement. While three bidders is not a large number, it does demonstrate that multiple firms were interested and capable of meeting the government's needs, which generally aids in price discovery and achieving a fair market price.

Taxpayer Impact: The full and open competition, despite a limited number of bidders, suggests that taxpayers likely benefited from a competitive process that helped to moderate costs compared to a sole-source award.

Public Impact

The Department of the Navy benefits from sustained engineering expertise to support its missions. The contract delivers critical engineering services essential for defense operations. The primary geographic impact is likely within the operational areas supported by the Department of the Navy, with the contractor based in Washington D.C. The contract supports specialized engineering roles, potentially impacting the workforce in the engineering and defense sectors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type requires robust oversight to manage costs effectively and prevent potential overruns.
A limited number of bidders (3) for a contract of this magnitude could indicate high barriers to entry or a niche market, potentially reducing competitive pressure.
The long duration of the contract (nearly 8 years) necessitates ongoing performance monitoring to ensure continued quality and value.
The specific nature of 'Engineering Services' can be broad, requiring clear definition of deliverables and performance metrics to avoid scope creep.

Positive Signals

Awarded under full and open competition, ensuring a broad range of potential contractors could compete.
The substantial contract value suggests the contractor has a proven track record and capacity to handle large-scale government requirements.
The long contract duration indicates a stable, long-term need for the services, providing predictability for both the government and the contractor.
The contract is for essential engineering services, directly supporting critical defense functions.

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 and often supports complex government and commercial projects. The market size for engineering services supporting the federal government, particularly the Department of Defense, is substantial, driven by ongoing modernization, maintenance, and operational support needs. This specific contract likely represents a significant portion of the spending within a niche area of defense engineering.

Small Business Impact

The contract was not set aside for small businesses, and the 'sb' field is false, indicating no explicit small business set-aside. Given the large contract value and specialized nature of engineering services, it is likely that large businesses were the primary bidders. However, the prime contractor may engage small businesses as subcontractors to fulfill specific aspects of the contract, contributing to the small business ecosystem indirectly. Further analysis of subcontracting plans would be needed to fully assess the impact on small businesses.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program management office within the Department of the Navy. Performance monitoring, financial audits, and compliance checks are standard oversight mechanisms. The CPFF structure necessitates particularly close scrutiny of costs and contractor performance to ensure value for money. Transparency is generally maintained through contract databases and reporting requirements, though specific operational details may be sensitive.

Related Government Programs

Department of Defense Engineering Support Services
Naval Sea Systems Command (NAVSEA) Contracts
Professional, Scientific, and Technical Services Contracts
Cost-Plus-Fixed-Fee Contracts
Long-Term Defense Support Contracts

Risk Flags

Cost Plus Fixed Fee (CPFF) contract type requires diligent oversight to manage costs.
Limited number of bidders (3) may indicate reduced competitive pressure.
Long contract duration necessitates adaptability to technological changes.
Potential for scope creep in engineering services contracts.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $134.9 million to SYSTEMS PLANNING AND ANALYSIS, INC.. TO N00178-05-D-4592-EH01

Who is the contractor on this award?

The obligated recipient is SYSTEMS PLANNING AND ANALYSIS, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $134.9 million.

What is the period of performance?

Start: 2010-06-22. End: 2018-03-31.

What is the track record of Systems Planning and Analysis, Inc. with the Department of Defense, particularly on similar engineering services contracts?

Systems Planning and Analysis, Inc. (SPA) has a significant history of contracting with the Department of Defense. While this specific contract (TO N00178-05-D-4592-EH01) represents a substantial award of approximately $135 million, SPA has secured numerous other contracts across various defense agencies. Their portfolio often includes complex analytical, engineering, and program management support services. Reviewing SPA's past performance ratings on similar contracts, particularly those involving long-term engineering support and CPFF structures, would provide insight into their reliability, technical capability, and cost management effectiveness. A history of successful contract completions and positive performance reviews would bolster confidence in their ability to execute this current requirement effectively.

How does the awarded value of $135 million compare to the average cost of similar long-term engineering support contracts within the Department of the Navy?

Comparing the $135 million award value to the average cost of similar long-term engineering support contracts within the Department of the Navy requires access to detailed historical contract data and market analysis. However, given the contract's duration of nearly 8 years (approximately 2839 days), the annual value averages around $17.3 million. This figure needs to be benchmarked against contracts for comparable services, such as systems engineering, technical support, and program management, awarded to other large defense contractors. Factors like the specific technical requirements, security clearances needed, and the level of expertise demanded will influence cost. A higher average annual value for similar contracts might suggest this award is within a reasonable range, while a significantly lower average could indicate potential overpricing or a less competitive bid.

What are the primary risks associated with the Cost Plus Fixed Fee (CPFF) contract type for this engineering services requirement?

The primary risk with a Cost Plus Fixed Fee (CPFF) contract type, as used here, is the potential for cost overruns. While the contractor is incentivized to control costs to protect their fixed fee, the government bears the risk of increased costs above the estimated amount. This necessitates robust government oversight to scrutinize all allowable costs, ensure efficiency, and prevent scope creep that could inflate the cost base. If the government's oversight is insufficient, the contractor may not be adequately incentivized to minimize costs, potentially leading to a higher final price than anticipated. Effective management of the CPFF structure requires detailed cost tracking, regular audits, and clear communication between the government and contractor.

How effective is the 'full and open competition' strategy likely to be in ensuring optimal value for taxpayers on this $135 million contract?

The 'full and open competition' strategy is generally the most effective method for ensuring optimal value for taxpayers, as it allows all responsible sources to compete, fostering price reduction and innovation. In this case, with 3 bids received for the $135 million engineering services contract, the competition level is moderate. While more bidders would typically lead to greater price pressure, the fact that it was competed openly means that the government likely received proposals that reflected market rates for these specialized services. The value realized will depend on the government's ability to evaluate proposals effectively and negotiate terms that balance cost, performance, and risk. The open competition provides a strong foundation for achieving good value, assuming diligent contract administration.

What are the implications of the contract's long duration (nearly 8 years) on program stability and potential obsolescence of services?

The long duration of nearly 8 years for this engineering services contract offers significant program stability and continuity, which is often crucial for complex defense initiatives requiring sustained expertise. It allows the contractor to develop deep institutional knowledge and a vested interest in the program's success. However, a potential risk is the obsolescence of services or technologies if the contract is not structured with flexibility. The Department of the Navy must ensure that the contract includes mechanisms for adapting to evolving technological landscapes and changing mission requirements. Regular reviews and potential modifications can mitigate the risk of relying on outdated methodologies or support, ensuring the services remain relevant and effective throughout the contract's life.

How does the contractor's location in the District of Columbia (DC) potentially impact contract performance and oversight?

The contractor's location in the District of Columbia (DC) places Systems Planning and Analysis, Inc. in close proximity to numerous federal agencies and decision-making bodies, which can facilitate communication and collaboration with the Department of the Navy and other stakeholders. This proximity can streamline oversight activities, allowing for easier site visits, meetings, and access to government personnel. However, operating in a high-cost-of-living area like DC might also contribute to higher labor costs compared to contractors located in regions with lower overhead. The specific impact on performance and oversight is generally neutral, but the accessibility can be a logistical advantage for both parties involved in managing this substantial contract.

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

Solicitation ID: N0002409R3265

Offers Received: 3

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 2000 N BEAUREGARD ST, ALEXANDRIA, VA, 22311

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $146,226,923

Exercised Options: $145,406,851

Current Obligation: $134,885,223

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017805D4592

IDV Type: IDC

Timeline