DoD's $453M PEO SUBS support services contract awarded to Amentum Services, Inc. shows fair value

Contract Overview

Contract Amount: $453,317,335 ($453.3M)

Contractor: Amentum Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2012-06-13

End Date: 2023-03-31

Contract Duration: 3,943 days

Daily Burn Rate: $115.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: SUPPORT SERVICES FOR PEO SUBS

Place of Performance

Location: GERMANTOWN, MONTGOMERY County, MARYLAND, 20876

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $453.3 million to AMENTUM SERVICES, INC. for work described as: SUPPORT SERVICES FOR PEO SUBS Key points: 1. The contract demonstrates a reasonable value for the extensive support services provided over its multi-year duration. 2. Competition was robust, indicating a healthy market for these specialized engineering services. 3. Performance risk appears manageable given the contractor's experience and the contract's structure. 4. The contract's duration and scope suggest a significant, long-term need within the DoD. 5. This contract falls within the broader 'Engineering Services' sector, supporting complex defense programs. 6. The cost-plus-fixed-fee structure allows for flexibility while maintaining cost control.

Value Assessment

Rating: good

The total award value of $453.3 million over approximately 10 years suggests a competitive pricing strategy for comprehensive support services. Benchmarking against similar large-scale engineering support contracts within the Department of Defense indicates that the average annual value is within an expected range. The fixed fee component, coupled with cost reimbursement, provides a balanced approach to managing contractor incentives and ensuring value for taxpayer dollars. The consistent performance over the contract's life further supports its fair value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified bidders had the opportunity to submit proposals. The presence of four bidders, as noted, suggests a competitive environment for these specialized engineering services. This level of competition is generally favorable for price discovery and ensures that the government receives proposals from a range of capable contractors, potentially leading to more innovative solutions and better pricing.

Taxpayer Impact: Full and open competition typically results in more competitive pricing, which is beneficial for taxpayers by ensuring that government funds are used efficiently and effectively.

Public Impact

The primary beneficiaries are the Program Executive Offices (PEOs) within the Department of Defense, receiving critical support for their acquisition programs. Services delivered include a wide range of engineering, technical, and program management support essential for defense acquisition. The geographic impact is primarily concentrated within the United States, supporting various DoD installations and program offices. Workforce implications include the employment of numerous engineers, technical specialists, and program managers, both directly by the contractor and indirectly through subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in cost-plus contracts if not rigorously managed.
Contract duration could lead to contractor complacency if performance metrics are not consistently monitored.
Reliance on a single contractor for extensive support may limit future flexibility in sourcing specialized skills.

Positive Signals

Awarded under full and open competition, suggesting a competitive selection process.
Contractor has a long-standing relationship with the DoD, indicating familiarity with requirements.
The fixed fee component provides a degree of cost certainty for the government.
The contract's duration reflects a sustained and critical need for these services.

Sector Analysis

This contract operates within the Engineering Services sector, a critical component of the defense industrial base. This sector is characterized by high technical expertise, complex project management, and significant government spending, particularly within defense. The market size for defense engineering services is substantial, with numerous firms competing for contracts that support the development, acquisition, and sustainment of military systems. This specific contract fits within the broader category of professional services supporting program management and technical oversight.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). While there is no direct indication of small business subcontracting requirements in the provided snippet, large prime contracts of this nature often include provisions for small business participation. The absence of a small business set-aside means that large businesses were the primary focus of the competition. Future analysis could explore subcontracting plans to assess the extent of small business involvement.

Oversight & Accountability

Oversight for this contract is likely managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. Accountability measures are embedded within the contract's terms, including performance metrics and reporting requirements. Transparency is facilitated through contract award databases and reporting mechanisms. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense Acquisition Support Services
Engineering and Technical Services
Program Management Support
Department of Defense Professional Services
Cost-Plus-Fixed-Fee Contracts

Risk Flags

Cost-Plus contract type requires diligent oversight to manage costs.
Long contract duration necessitates continuous performance monitoring.
Potential for scope creep in complex engineering support services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $453.3 million to AMENTUM SERVICES, INC.. SUPPORT SERVICES FOR PEO SUBS

Who is the contractor on this award?

The obligated recipient is AMENTUM SERVICES, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $453.3 million.

What is the period of performance?

Start: 2012-06-13. End: 2023-03-31.

What is the contractor's track record with the Department of Defense, particularly on similar large-scale support contracts?

Amentum Services, Inc. has a significant history of performing contracts for the Department of Defense. While specific details on past performance for this exact contract vehicle are not provided, the company has been a major player in defense contracting, often taking over portfolios from legacy companies like AECOM's Management Services division. Their experience typically spans a wide range of services including base operations, logistics, engineering, and technical support. For large, multi-year support contracts, the DoD generally assesses a contractor's past performance through formal evaluations, which would have been a key factor in the award of this contract. A review of contract databases and performance assessment reports would provide a more granular understanding of their specific track record on similar endeavors, including any challenges or successes encountered.

How does the total contract value compare to other similar engineering support contracts awarded by the DoD in recent years?

The total contract value of approximately $453 million over its duration places this contract within the mid-to-large tier for engineering and technical support services within the Department of Defense. Comparable contracts often range from tens of millions to several billion dollars, depending on the scope, duration, and criticality of the services. For instance, large-scale base operations support contracts or major system acquisition program support can exceed this value significantly. However, for specialized engineering services focused on specific program executive offices (PEOs), this value is substantial and indicative of a comprehensive, long-term requirement. Benchmarking requires careful consideration of the specific services rendered, the number of bidders, and the contract type (e.g., cost-plus vs. fixed-price).

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract of this magnitude and duration?

The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract of this magnitude and duration revolve around cost control and contractor incentive alignment. For the government, the risk is that actual costs incurred by the contractor could exceed initial estimates, although the fixed fee provides a ceiling on the contractor's profit. Effective oversight is crucial to ensure that costs are reasonable and allocable to the contract. For the contractor, the risk lies in accurately estimating costs to ensure the fixed fee is sufficient compensation. If costs escalate beyond expectations, the contractor's profit margin shrinks. The long duration (nearly 10 years) amplifies these risks, requiring sustained vigilance in monitoring performance, costs, and adherence to scope. Scope creep is another significant risk, where the requirements expand beyond the original intent, potentially leading to cost increases and schedule delays if not managed properly through contract modifications.

What is the expected impact of these support services on the efficiency and effectiveness of the PEOs they serve?

These support services are expected to significantly enhance the efficiency and effectiveness of the Program Executive Offices (PEOs) by providing specialized expertise and resources that may not be available internally or would be more costly to maintain. By outsourcing functions such as technical analysis, program management, acquisition support, and engineering services, PEOs can focus their core military and civilian personnel on strategic decision-making and mission execution. This allows for greater agility in responding to evolving threats and technological advancements. The continuity of support provided by a single contractor over a long period can also lead to institutional knowledge retention and streamlined processes, ultimately contributing to the timely and successful delivery of defense capabilities to the warfighter.

How has spending on similar engineering and support services evolved within the DoD over the past decade?

Spending on engineering and support services within the DoD has generally trended upwards over the past decade, driven by increasing complexity of weapon systems, evolving threats, and a strategic shift towards leveraging private sector expertise. While specific figures fluctuate based on budget priorities and geopolitical events, the overall demand for specialized technical, engineering, and program management support has remained robust. There has been a continuous effort to optimize these contracts, balancing cost-effectiveness with the need for high-quality, mission-critical support. Trends include a greater emphasis on performance-based contracting, cybersecurity requirements, and the integration of advanced technologies. The substantial value of contracts like this one reflects the ongoing reliance on external expertise to manage and execute complex defense programs.

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: N0002412R3249

Offers Received: 4

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: PAE Government Services Inc.

Address: 4800 WESTFIELDS BLVD STE 400, CHANTILLY, VA, 20151

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

Financial Breakdown

Contract Ceiling: $664,676,163

Exercised Options: $631,283,799

Current Obligation: $453,317,335

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $1,207,323

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017804D4042

IDV Type: IDC

Timeline