DoD's $12.7M Engineering Services Contract Awarded to HII Mission Technologies Corp. Shows Potential Value Concerns

Contract Overview

Contract Amount: $12,743,712 ($12.7M)

Contractor: HII Mission Technologies Corp

Awarding Agency: Department of Defense

Start Date: 2005-10-01

End Date: 2010-02-15

Contract Duration: 1,598 days

Daily Burn Rate: $8.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: TIME AND MATERIALS

Sector: Defense

Official Description: 200603!000001!5700!FA7037!HQ AIA/LGC !GS35F0137J !C!N! !Y!FA703706F0005! !20051001!20060930!096500483!096500483!096500483!N!MACAULAY-BROWN, INC !4021 EXECUTIVE DR !DAYTON !OH!45430!40036!029!48!LACKLAND AFB !BEXAR !TEXAS !+000002762949!N!N!000000000000!R425!ENGINEERING TECHNICAL SERVICES !S1 !SERVICES !000 !NOT DISCERNABLE !541330!E! !6! ! ! ! ! !99990909!B! ! ! ! !A! ! ! !000! ! ! ! ! ! ! ! !B!N! ! ! ! ! ! ! !000! ! ! ! ! ! ! ! ! !0001! !

Place of Performance

Location: SAN ANTONIO, BEXAR County, TEXAS, 78243

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $12.7 million to HII MISSION TECHNOLOGIES CORP for work described as: 200603!000001!5700!FA7037!HQ AIA/LGC !GS35F0137J !C!N! !Y!FA703706F0005! !20051001!20060930!096500483!096500483!096500483!N!MACAULAY-BROWN, INC !4021 EXECUTIVE DR !DAYTON !OH!45430!40036!029!48!LACKLAND AFB !BEXA… Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract's duration of nearly 4 years and total value of $12.7M indicate a significant investment in engineering technical services. 3. The use of Time and Materials pricing could lead to cost overruns if not closely managed. 4. The award to HII Mission Technologies Corp. places it within the large defense contracting sector. 5. Performance context is limited, but the services are categorized under Engineering and Technical Services. 6. Risk indicators include the potential for scope creep and cost escalation inherent in T&M contracts.

Value Assessment

Rating: fair

The total contract value of $12.7 million over approximately 4 years suggests an average annual spend of around $3.18 million. Without specific benchmarks for similar engineering technical services contracts within the Air Force or DoD, it's difficult to definitively assess value for money. However, the Time and Materials (T&M) pricing structure, while flexible, carries inherent risks of cost escalation if not meticulously managed and monitored for efficiency. The number of bids received (2) is on the lower side for a full and open competition, which might suggest less aggressive pricing than a more crowded field.

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. However, only two bids were received. While full and open competition is generally preferred for maximizing price discovery, a low number of bidders can sometimes limit the competitive pressure on pricing. The specific reasons for the limited number of bidders are not detailed, but it could be due to specialized requirements, market concentration, or the specific nature of the solicitation.

Taxpayer Impact: A low number of bidders in a full and open competition means taxpayers may not have benefited from the most aggressive pricing possible. While competition existed, it might not have been robust enough to drive down costs to the lowest feasible level.

Public Impact

The primary beneficiaries are the Department of the Air Force and potentially other DoD entities requiring specialized engineering and technical support. Services delivered include engineering and technical support, crucial for maintaining and advancing military capabilities. The geographic impact is likely centered around Lackland AFB, Texas, where the contractor's facility is located, and potentially other Air Force installations. Workforce implications include employment opportunities for engineers and technical specialists within HII Mission Technologies Corp. and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and Materials (T&M) pricing can lead to cost overruns if not carefully managed.
A limited number of bidders (2) in a full and open competition may indicate less competitive pressure on pricing.
The contract's duration and potential for follow-on work could lead to long-term cost commitments.
Lack of specific performance metrics makes it difficult to assess the efficiency and effectiveness of the services provided.

Positive Signals

Awarded under full and open competition, which is a preferred method for ensuring broad market access.
The contractor, HII Mission Technologies Corp., is a known entity in the defense sector, suggesting some level of established capability.
The contract supports critical engineering and technical services for the Department of the Air Force.

Sector Analysis

This contract falls within the broader professional, scientific, and technical services sector, specifically focusing on engineering and technical support for defense applications. The market for these services is substantial, driven by the continuous need for advanced technological solutions and maintenance within the Department of Defense. Comparable spending benchmarks would typically involve analyzing other large-scale engineering support contracts awarded by the Air Force or DoD to understand typical pricing and contract structures for similar scope and duration.

Small Business Impact

There is no explicit indication of small business set-asides or subcontracting requirements within the provided data. The contract value and nature of services suggest it may not have been specifically targeted for small businesses. Further analysis would be needed to determine if HII Mission Technologies Corp. has a subcontracting plan that includes small businesses, which is a common requirement for larger federal contracts.

Oversight & Accountability

Oversight for this contract would primarily reside with the contracting officer and program management at the Department of the Air Force. The Time and Materials pricing structure necessitates rigorous oversight to ensure that labor hours and material costs are reasonable and allocable to the contract. Transparency is facilitated by the Federal Procurement Data System (FPDS), which records contract awards. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Defense Engineering Services
Air Force Technical Support Contracts
HII Mission Technologies Corp. Contracts
Time and Materials Contracts
Professional, Scientific, and Technical Services

Risk Flags

Potential for cost overruns due to T&M pricing
Limited competition (2 bidders)
Potential NAICS code misalignment
Lack of detailed performance metrics

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.7 million to HII MISSION TECHNOLOGIES CORP. 200603!000001!5700!FA7037!HQ AIA/LGC !GS35F0137J !C!N! !Y!FA703706F0005! !20051001!20060930!096500483!096500483!096500483!N!MACAULAY-BROWN, INC !4021 EXECUTIVE DR !DAYTON !OH!45430!40036!029!48!LACKLAND AFB !BEXAR !TEXAS !+000002762949!N!N!000000000000!R425!ENGINEERING TECHNICAL SERVICES !S1 !SERVICES !000 !NOT DISCERNABLE !541330!E! !6! ! ! ! ! !999

Who is the contractor on this award?

The obligated recipient is HII MISSION TECHNOLOGIES CORP.

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 $12.7 million.

What is the period of performance?

Start: 2005-10-01. End: 2010-02-15.

What is the track record of HII Mission Technologies Corp. in delivering similar engineering technical services to the DoD?

HII Mission Technologies Corp., a subsidiary of Huntington Ingalls Industries, has a significant presence in the defense sector, providing a wide range of technical services, including engineering, cyber, and mission support. While specific performance details for this particular contract (FA703706F0005) are not publicly detailed in the provided data, the company's overall portfolio suggests substantial experience. Analyzing past performance evaluations, contract modifications, and any reported issues on similar DoD contracts would provide a clearer picture of their reliability and effectiveness in delivering complex engineering solutions. Their extensive history in supporting naval and other defense platforms indicates a capacity for handling large, technically demanding projects.

How does the awarded price compare to market rates for similar engineering technical services?

The total contract value of $12.7 million over approximately 4 years equates to an average annual value of roughly $3.18 million. Benchmarking this against similar engineering technical services contracts awarded by the Department of the Air Force or other DoD branches is crucial. Factors such as the specific technical expertise required, geographic location, and the level of security clearance needed can influence pricing. The Time and Materials (T&M) pricing structure makes direct comparison challenging, as it depends heavily on actual hours worked and materials consumed. A comprehensive analysis would involve comparing the loaded labor rates and material markups against industry standards and other government contracts for comparable skill sets and services.

What are the primary risks associated with the Time and Materials (T&M) pricing structure used in this contract?

The primary risk of a Time and Materials (T&M) contract is the potential for cost escalation, as the government pays for the actual labor hours and material costs incurred by the contractor, plus a fixed fee or fixed hourly rate. This structure can incentivize contractors to extend work hours or use more expensive materials if not properly managed. For taxpayers, this means the final cost can exceed initial estimates, and effective oversight is critical to ensure efficiency and prevent overcharging. Robust monitoring of labor hours, validation of material costs, and clear definition of work scope are essential to mitigate these risks and ensure value for money.

How effective has the Air Force been in managing T&M contracts to ensure value for money?

The effectiveness of the Air Force in managing T&M contracts varies significantly. While T&M contracts offer flexibility for requirements that are not well-defined at the outset, they demand stringent oversight to prevent cost overruns and ensure fair pricing. The Air Force employs various mechanisms, including establishing not-to-exceed (NTE) limits, requiring detailed timesheets, conducting audits, and implementing performance metrics. However, challenges persist, particularly in ensuring that labor hours are reasonable and necessary, and that material costs are competitive. Continuous training for contracting officers and program managers, coupled with proactive data analysis, is key to maximizing the value derived from T&M awards.

What is the historical spending trend for engineering technical services at Lackland AFB or within the relevant Air Force commands?

Analyzing historical spending trends for engineering technical services at Lackland AFB or within the relevant Air Force commands (like the Air Force Installation and Mission Support Center, which might oversee such services) would provide valuable context. This involves examining contract awards over several fiscal years for similar services, noting the number of competitors, contract types (e.g., T&M, Firm-Fixed-Price), and average contract values. Significant increases or decreases in spending, or a shift towards or away from T&M contracts, could indicate changes in requirements, budget priorities, or contracting strategies. Such analysis helps in assessing whether the current $12.7M award is consistent with historical patterns or represents a notable deviation.

What is the significance of the NAICS code 541519 (Other Computer Related Services) in relation to the contract description 'ENGINEERING TECHNICAL SERVICES'?

The NAICS code 541519, 'Other Computer Related Services,' appears somewhat misaligned with the contract description 'ENGINEERING TECHNICAL SERVICES.' While engineering often involves significant computer-based analysis and design, NAICS code 541330 ('Engineering Services') or 541712 ('Research and Development in the Physical, Engineering, and Life Sciences') might seem more direct fits. The use of 541519 could imply that a substantial portion of the contract's work involves IT integration, software development, or computer systems engineering as part of the broader engineering support. This discrepancy warrants further investigation to understand the precise nature of the services procured and ensure accurate classification for future analysis and benchmarking.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related 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

Offers Received: 2

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 4021 EXECUTIVE DR, DAYTON, OH, 45430

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

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS35F0137J

IDV Type: FSS

Timeline