DoD's $22.3M SEW Support contract to Sigmatech Inc. awarded under full and open competition

Contract Overview

Contract Amount: $22,339,900 ($22.3M)

Contractor: Sigmatech Inc

Awarding Agency: Department of Defense

Start Date: 2020-05-01

End Date: 2026-04-30

Contract Duration: 2,190 days

Daily Burn Rate: $10.2K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: R&D

Official Description: SPACE ELECTRONIC WARFARE (SEW) SUPPORT

Place of Performance

Location: COLORADO SPRINGS, EL PASO County, COLORADO, 80914

State: Colorado Government Spending

Plain-Language Summary

Department of Defense obligated $22.3 million to SIGMATECH INC for work described as: SPACE ELECTRONIC WARFARE (SEW) SUPPORT Key points: 1. Contract awarded for research and development in physical, engineering, and life sciences. 2. Sigmatech Inc. is the sole contractor for this specific delivery order. 3. The contract duration spans approximately 6 years, indicating a long-term need. 4. The contract type is Firm Fixed Price, which shifts cost risk to the contractor. 5. This contract falls under the Research and Development sector, focusing on electronic warfare. 6. The award was made after excluding other sources, suggesting a specific justification. 7. The contract is a delivery order, implying it's part of a larger indefinite-delivery contract.

Value Assessment

Rating: fair

Benchmarking the value of this specific delivery order is challenging without knowing the parent contract or comparable SEW support services. The $22.3 million over six years averages to approximately $3.7 million annually. This figure needs to be compared against industry standards for similar R&D support services in electronic warfare. The firm fixed-price nature suggests a defined scope, but the absence of detailed performance metrics makes a definitive value assessment difficult. Further analysis would require understanding the specific deliverables and their criticality to the Department of Defense's electronic warfare capabilities.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES.' This designation implies that while the initial solicitation may have been open, specific circumstances led to the exclusion of certain sources before the final award. The 'NO' field indicates 2 offers were received, suggesting some level of competition, but the 'exclusion of sources' clause raises questions about the breadth of the initial competition. Understanding the rationale for excluding other sources is crucial to assessing the true competitive landscape.

Taxpayer Impact: The limited competition, even with two offers, may have resulted in a higher price for taxpayers than if a truly open and unrestricted competition had been conducted. The exclusion of potential bidders could limit price discovery and innovation.

Public Impact

The Department of Defense benefits from specialized support in electronic warfare capabilities. This contract supports research and development efforts crucial for national security. The services delivered are likely to enhance the effectiveness of military electronic systems. The geographic impact is primarily within the defense sector, potentially supporting operations globally. Workforce implications include specialized R&D roles for scientists and engineers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of transparency regarding the 'exclusion of sources' could mask reduced competition.
Limited public information on specific performance metrics makes value assessment difficult.
The long duration of the contract could lead to cost overruns if not managed effectively.
Dependence on a single contractor for this delivery order may pose supply chain risks.

Positive Signals

Firm Fixed Price contract structure shifts cost risk to the contractor.
Awarded under a research and development category, indicating focus on innovation.
The contract supports critical electronic warfare capabilities for national defense.
Two offers were received, suggesting some level of market interest despite source exclusion.

Sector Analysis

This contract falls within the Research and Development (R&D) sector, specifically focusing on physical, engineering, and life sciences, excluding biotechnology. The North American Industry Classification System (NAICS) code 541712 confirms this focus. The electronic warfare (EW) domain is a critical and specialized area within defense R&D, involving the study and development of technologies to protect against or exploit enemy use of the electromagnetic spectrum. Market size for defense R&D is substantial, with significant government investment annually. This contract represents a portion of that investment aimed at advancing EW capabilities.

Small Business Impact

The data indicates this contract was not set aside for small businesses (SS: false, SB: false). Therefore, there are no direct subcontracting implications or specific benefits for small businesses mandated by this award. The primary contractor, Sigmatech Inc., is likely a mid-to-large-sized business given the contract value. The impact on the small business ecosystem would be indirect, potentially through opportunities if Sigmatech Inc. chooses to subcontract, but no specific set-aside requirements are present.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force, a component of the Department of Defense. Accountability measures are inherent in the Firm Fixed Price (FFP) contract type, which obligates the contractor to deliver specified goods or services at an agreed-upon price. Transparency is limited by the public availability of detailed performance reports and the specific justifications for the 'exclusion of sources.' Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

Department of Defense Research and Development Contracts
Electronic Warfare Systems Development
Air Force Research Laboratory Contracts
Information Technology R&D Support
Aerospace Engineering Services

Risk Flags

Potential for reduced competition due to 'exclusion of sources'.
Lack of detailed public performance metrics hinders value assessment.
Long contract duration may introduce unforeseen risks.
Dependence on a single contractor for this delivery order.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.3 million to SIGMATECH INC. SPACE ELECTRONIC WARFARE (SEW) SUPPORT

Who is the contractor on this award?

The obligated recipient is SIGMATECH INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $22.3 million.

What is the period of performance?

Start: 2020-05-01. End: 2026-04-30.

What is Sigmatech Inc.'s track record with similar Department of Defense contracts, particularly in electronic warfare R&D?

Sigmatech Inc. has a history of performing contracts for the Department of Defense, often in areas related to engineering, technical support, and research and development. While specific details on their electronic warfare R&D performance require deeper database analysis, their presence as a contractor suggests they possess relevant capabilities. Examining past performance reviews, contract modifications, and the types of services rendered on previous DoD contracts would provide a clearer picture of their expertise and reliability in this specialized field. Their ability to secure this $22.3 million contract indicates a level of trust and proven capability within the DoD ecosystem.

How does the $22.3 million value compare to other contracts for similar electronic warfare support services?

Comparing the $22.3 million value requires context regarding the specific scope of 'SPACE ELECTRONIC WARFARE (SEW) SUPPORT.' If this encompasses advanced research, system design, prototyping, and testing over a six-year period, the annual average of approximately $3.7 million might be within a reasonable range for specialized defense R&D. However, without detailed deliverables, it's difficult to benchmark accurately. Contracts for less complex support or shorter durations would naturally be lower. Conversely, major system development contracts could be significantly higher. Benchmarking against contracts with similar NAICS codes (541712) and contract types (FFP) awarded by DoD agencies would provide a more robust comparison, considering factors like the number of bidders and contract duration.

What are the primary risks associated with this contract, and how are they being mitigated?

Key risks include potential cost overruns if the scope is not precisely defined (though mitigated by FFP), contractor performance issues in a highly technical domain, and the risk associated with 'exclusion of sources' potentially limiting competition and innovation. Mitigation strategies likely involve rigorous oversight by the Department of the Air Force, clear performance metrics within the contract, and potentially requiring Sigmatech Inc. to provide detailed progress reports. The FFP structure inherently mitigates cost overrun risk for the government. The risk related to source exclusion is harder to assess without knowing the justification, but it could impact long-term cost-effectiveness and technological advancement.

How effective is the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' approach in ensuring value for taxpayers?

The effectiveness of this approach for taxpayer value is questionable and highly dependent on the justification for excluding sources. While it allows for some competition, excluding potential bidders can limit price discovery and prevent the government from obtaining the best possible value. If the exclusion was based on specific, justifiable technical requirements or unique capabilities that only a limited number of firms possess, it might be necessary. However, if the exclusion was arbitrary or served to limit competition unnecessarily, it could lead to higher costs for taxpayers. Transparency regarding the reasons for exclusion is crucial for assessing value.

What is the historical spending trend for Space Electronic Warfare (SEW) support within the Department of Defense?

Analyzing historical spending trends for SEW support requires access to comprehensive federal procurement data over several fiscal years. Without specific historical data for this exact service category, it's difficult to provide a precise trend. However, spending in defense R&D, particularly in areas like electronic warfare, tends to fluctuate based on geopolitical threats, technological advancements, and budget allocations. Given the increasing importance of the electromagnetic spectrum in modern warfare, it is plausible that spending in SEW support has been stable or increasing. This $22.3 million award represents a specific investment within that broader trend.

What are the implications of this contract being a 'Delivery Order' rather than a standalone contract?

This contract being a 'Delivery Order' (AW: DELIVERY ORDER) signifies that it is a task order issued under a larger, pre-existing indefinite-delivery/indefinite-quantity (IDIQ) contract or a similar master agreement. This structure allows the government to procure services or supplies incrementally as needed, providing flexibility. For taxpayers, it can offer efficiencies if the parent contract was competitively awarded. However, it also means that the full value and competitive history are tied to the parent IDIQ contract, not just this individual delivery order. The $22.3 million represents the value of this specific order, not necessarily the total potential value of the underlying contract.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Sigmatech, Inc.

Address: 631 DISCOVERY DR NW, HUNTSVILLE, AL, 35806

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

Financial Breakdown

Contract Ceiling: $22,357,156

Exercised Options: $22,356,930

Current Obligation: $22,339,900

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS00Q14OADS617

IDV Type: IDC

Timeline