DoD's $455M Digital Engineering Contract to CACI, Inc. Fuels Naval Surface Warfare Center R&D

Contract Overview

Contract Amount: $454,587,959 ($454.6M)

Contractor: CACI, Inc. - Federal

Awarding Agency: Department of Defense

Start Date: 2022-05-04

End Date: 2027-05-04

Contract Duration: 1,826 days

Daily Burn Rate: $249.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: DIGITAL ENGINEERING AND DIGITAL TRANSFORMATION RESEARCH, ANALYSIS, AND DEVELOPMENT FOR THE NAVY DIGITAL INTEGRATION SUPPORT CELL AND NAVAL SURFACE WARFARE CENTER, CRANE DIVISION

Place of Performance

Location: ABERDEEN PROVING GROUND, HARFORD County, MARYLAND, 21005

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $454.6 million to CACI, INC. - FEDERAL for work described as: DIGITAL ENGINEERING AND DIGITAL TRANSFORMATION RESEARCH, ANALYSIS, AND DEVELOPMENT FOR THE NAVY DIGITAL INTEGRATION SUPPORT CELL AND NAVAL SURFACE WARFARE CENTER, CRANE DIVISION Key points: 1. Contract supports critical digital engineering and transformation initiatives for Navy platforms. 2. Focus on research and development in physical, engineering, and life sciences. 3. Significant duration of 5 years indicates a long-term strategic investment. 4. Awarded under full and open competition, suggesting a robust market. 5. CACI, Inc. - Federal is a major defense contractor with extensive experience. 6. Contract type is Cost Plus Fixed Fee, which can incentivize cost control. 7. Geographic concentration in Maryland may indicate a hub for this type of R&D.

Value Assessment

Rating: good

The total contract value of $454.6 million over five years represents a substantial investment in digital engineering capabilities. Benchmarking this against similar large-scale R&D contracts for advanced technological development is challenging due to the specialized nature of digital transformation for naval warfare. However, the Cost Plus Fixed Fee (CPFF) structure, while common for R&D, requires careful monitoring to ensure costs remain aligned with the fixed fee and project objectives. The value appears reasonable given the scope and duration, but detailed cost breakdowns would be needed for a more precise 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 capable vendors had the opportunity to bid. The presence of 3 delivery orders suggests a structured approach to tasking within the larger contract. While the number of bidders is not explicitly stated, full and open competition generally fosters a competitive environment, which can lead to better pricing and innovation. This approach is favorable for the government in securing the best value.

Taxpayer Impact: Full and open competition ensures that taxpayer dollars are used efficiently by allowing the market to determine the most competitive pricing and solutions, maximizing the return on investment for this critical R&D.

Public Impact

The primary beneficiaries are the U.S. Navy's digital integration efforts, enhancing naval surface warfare capabilities. Services delivered include research, analysis, and development in advanced engineering and digital transformation. The geographic impact is concentrated in Maryland, a known hub for defense contracting and R&D. Workforce implications include potential job creation for highly skilled engineers, researchers, and technical specialists in the defense sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can sometimes lead to cost overruns if not managed diligently.
The long duration of the contract requires sustained oversight to ensure continued alignment with evolving technological needs.
Reliance on a single large contractor for such a critical function warrants careful performance monitoring.

Positive Signals

Awarded through full and open competition, indicating a competitive process.
CACI, Inc. - Federal is a well-established contractor with a proven track record in defense IT and R&D.
The contract supports a strategic initiative (digital transformation) crucial for future naval capabilities.
The fixed fee component of the CPFF contract provides a degree of cost certainty.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences, excluding nanotechnology and biotechnology. The digital engineering and transformation domain is rapidly growing within the defense industry, driven by the need for more agile, efficient, and technologically advanced military platforms. Spending in this area is critical for maintaining a technological edge. Comparable spending benchmarks would likely be found within other large-scale R&D efforts for advanced defense systems and software development.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a large prime contract awarded to CACI, Inc. - Federal, there is potential for subcontracting opportunities for small businesses. However, the extent to which small businesses will be involved is not detailed in this award information. Future analysis could explore subcontracting plans and actual utilization to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract will likely be managed by the Naval Surface Warfare Center, Crane Division, and the Department of the Air Force (as the servicing agency). The Cost Plus Fixed Fee structure necessitates rigorous financial and performance oversight to ensure adherence to scope and budget. Transparency is typically maintained through contract reporting mechanisms and potential reviews by the Department of Defense's Inspector General, especially concerning R&D expenditures.

Related Government Programs

Naval Surface Warfare Center Research and Development
Digital Engineering Initiatives
Defense Digital Transformation Programs
Advanced Technology Research Contracts
Department of Defense R&D Spending

Risk Flags

Cost Overrun Risk (CPFF)
Scope Creep Potential
Technological Obsolescence
Integration Challenges
Cybersecurity Vulnerabilities

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $454.6 million to CACI, INC. - FEDERAL. DIGITAL ENGINEERING AND DIGITAL TRANSFORMATION RESEARCH, ANALYSIS, AND DEVELOPMENT FOR THE NAVY DIGITAL INTEGRATION SUPPORT CELL AND NAVAL SURFACE WARFARE CENTER, CRANE DIVISION

Who is the contractor on this award?

The obligated recipient is CACI, INC. - FEDERAL.

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 $454.6 million.

What is the period of performance?

Start: 2022-05-04. End: 2027-05-04.

What is CACI, Inc. - Federal's track record with similar large-scale R&D contracts for the Department of Defense?

CACI, Inc. - Federal has a substantial history of performing large-scale IT, intelligence, and engineering services for the Department of Defense and other federal agencies. They are a significant prime contractor on numerous complex programs, including those involving research, development, systems engineering, and digital transformation. Their experience often spans across various branches of the military, providing a broad base of relevant expertise. While specific performance metrics for every contract are not publicly available, their consistent presence as a major awardee suggests a generally positive track record in delivering on complex government requirements. This particular contract leverages their capabilities in areas critical to modernizing naval systems.

How does the $454.6 million total contract value compare to other digital engineering R&D investments by the Navy or DoD?

The $454.6 million value for this five-year digital engineering and transformation R&D contract is substantial, placing it among significant investments in advanced technological development within the DoD. While precise comparative figures for 'digital engineering R&D' are difficult to isolate due to varied categorization, it aligns with the scale of major system development or modernization programs. For context, large platform development contracts or significant cybersecurity initiatives can reach hundreds of millions or even billions. This contract's value reflects the strategic importance and complexity of integrating digital technologies into naval warfare systems, indicating a considerable commitment by the Navy to this domain.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for R&D, and how are they mitigated?

The primary risk with CPFF contracts, especially in R&D, is the potential for cost overruns if the scope is not well-defined or if unforeseen technical challenges arise. The contractor is reimbursed for allowable costs plus a fixed fee, meaning they have less direct financial incentive to control costs compared to fixed-price contracts. Mitigation strategies include rigorous government oversight of incurred costs, detailed progress reviews, clear definition of deliverables and milestones, and strong contract management. The fixed fee itself acts as a ceiling on the profit, and the government's ability to audit costs is crucial. Effective communication and collaboration between the contractor and the government are essential to manage R&D uncertainties.

How effective is the 'full and open competition' approach likely to be in ensuring value for money on this specific R&D contract?

The 'full and open competition' approach is generally considered highly effective in ensuring value for money for R&D contracts. By allowing all responsible sources to submit proposals, it maximizes the pool of potential solutions and encourages competitive pricing. This broad competition can drive innovation as contractors vie to offer the most compelling technical approach at the best price. For this specific contract, it suggests that the Navy sought the most capable and cost-effective provider for its digital engineering and transformation needs. While R&D inherently involves uncertainty, a competitive process helps establish a baseline for reasonable cost and performance expectations.

What are the historical spending patterns for digital engineering and R&D within the Naval Surface Warfare Command (NSWC) or similar Navy entities?

Historical spending patterns for digital engineering and R&D within entities like the Naval Surface Warfare Command (NSWC) have shown a consistent and increasing trend towards modernization and advanced technology integration. As the Navy shifts towards more digital-centric operations, investments in areas like digital twins, simulation, data analytics, and AI/ML for warfare systems have grown significantly. While specific figures for 'digital engineering R&D' are often embedded within broader R&D or IT budgets, the overall trajectory indicates a strategic prioritization of these capabilities. This $454.6 million contract aligns with that trend, representing a substantial, but likely consistent with recent strategic focus, allocation of resources.

What are the potential implications of this contract on the broader defense industrial base, particularly for innovation in digital technologies?

This contract has significant implications for the broader defense industrial base by signaling a strong commitment to digital transformation within the Navy. It encourages investment and innovation among contractors and subcontractors in areas like advanced software development, cybersecurity, data science, and systems engineering. By awarding a large contract through open competition, the DoD fosters a competitive environment that can spur technological advancements. It also validates the market for digital engineering solutions, potentially attracting new entrants and encouraging existing players to enhance their capabilities. The success of this program could serve as a model for other digital modernization efforts across the DoD.

Industry Classification

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

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 3

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: CACI International Inc

Address: 14370 NEWBROOK DRIVE, 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: $557,826,681

Exercised Options: $557,826,681

Current Obligation: $454,587,959

Actual Outlays: $11,173,029

Subaward Activity

Number of Subawards: 182

Total Subaward Amount: $278,338,084

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA807518D0006

IDV Type: IDC

Timeline