Air Force awards $40.4M contract for engineering, development, and sustainment services to Science Applications International Corporation

Contract Overview

Contract Amount: $40,352,628 ($40.4M)

Contractor: Science Applications International Corporation

Awarding Agency: Department of Defense

Start Date: 2020-07-18

End Date: 2027-06-01

Contract Duration: 2,509 days

Daily Burn Rate: $16.1K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS AWARD FEE

Sector: R&D

Official Description: ENGINEERING, DEVELOPMENT, INTEGRATION AND SUSTAINMENT SERVICES

Place of Performance

Location: RESTON, FAIRFAX County, VIRGINIA, 20190

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $40.4 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION for work described as: ENGINEERING, DEVELOPMENT, INTEGRATION AND SUSTAINMENT SERVICES Key points: 1. Contract focuses on critical R&D services, aligning with national security objectives. 2. Full and open competition suggests a robust bidding process. 3. Potential for cost overruns due to Cost Plus Award Fee (CPA) structure. 4. Long contract duration (2020-2027) indicates sustained need for services. 5. Services are essential for maintaining advanced technological capabilities. 6. Contract value is moderate within the context of large defense procurements.

Value Assessment

Rating: good

The contract value of $40.4 million over its period of performance appears reasonable for comprehensive engineering, development, integration, and sustainment services. Benchmarking against similar large-scale R&D contracts within the Department of Defense would provide a more precise value-for-money assessment. The Cost Plus Award Fee (CPA) pricing structure allows for flexibility but also introduces potential for increased costs if performance targets are not met efficiently. The contract's duration of approximately 7 years suggests a significant and ongoing requirement for these specialized services.

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 specific number of bidders is not provided, but this procurement method generally fosters a competitive environment, which can lead to better pricing and innovation. The Air Force's decision to use full and open competition suggests confidence in the market's ability to provide the required services.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure the best value and potentially lower costs through market forces.

Public Impact

The Department of the Air Force is the primary beneficiary, receiving critical R&D and sustainment support. Services delivered are essential for the development and maintenance of advanced aerospace and defense technologies. Geographic impact is likely concentrated around Air Force research and development facilities, primarily in Virginia. Workforce implications include highly skilled engineers, scientists, and technical personnel employed by the contractor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Award Fee (CPA) contracts can incentivize performance but also carry the risk of higher final costs if not managed carefully.
The long duration of the contract (nearly 7 years) necessitates ongoing monitoring to ensure continued relevance and cost-effectiveness.
Lack of specific performance metrics or award fee criteria details makes it difficult to fully assess performance incentives.

Positive Signals

Awarded under full and open competition, suggesting a competitive bidding process that should yield fair pricing.
Science Applications International Corporation (SAIC) is a large, established defense contractor with a track record in R&D and systems integration.
The contract addresses critical R&D needs for the Air Force, indicating strategic alignment with defense priorities.

Sector Analysis

This contract falls within the Research and Development in the Physical, Engineering, and Life Sciences sector, specifically NAICS code 541715. This sector is characterized by significant government investment, particularly in defense and aerospace. The market is competitive, with major players like SAIC vying for large, long-term contracts. Spending in this area is crucial for maintaining technological superiority and innovation within the defense industrial base. Comparable spending benchmarks would involve analyzing other large R&D service contracts awarded by the DoD.

Small Business Impact

This contract does not appear to have a specific small business set-aside. Given the scale and nature of the services (engineering, development, integration, and sustainment), it is likely that the prime contractor, Science Applications International Corporation, will engage subcontractors. Analysis of subcontracting plans would be necessary to determine the extent of small business participation and its impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily reside with the contracting officer and program management office within the Department of the Air Force. The Cost Plus Award Fee structure implies performance-based oversight to determine award fee payouts. Transparency is generally maintained through contract award notices and reporting requirements. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

DoD Research and Development Contracts
Air Force Systems Engineering Support
Aerospace Engineering Services
Defense Technology Development
Science and Technology Support Services

Risk Flags

Cost Plus Award Fee (CPA) contract type requires careful monitoring to manage costs.
Long contract duration necessitates ongoing performance evaluation and potential adjustments.
Specific performance metrics and award fee criteria are not detailed, impacting transparency of incentives.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $40.4 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION. ENGINEERING, DEVELOPMENT, INTEGRATION AND SUSTAINMENT SERVICES

Who is the contractor on this award?

The obligated recipient is SCIENCE APPLICATIONS INTERNATIONAL CORPORATION.

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 $40.4 million.

What is the period of performance?

Start: 2020-07-18. End: 2027-06-01.

What is the track record of Science Applications International Corporation (SAIC) in delivering similar engineering, development, integration, and sustainment services for the Department of Defense?

Science Applications International Corporation (SAIC) has a substantial track record in providing a wide array of services to the Department of Defense, including engineering, development, integration, and sustainment. They are a major defense contractor with extensive experience across various platforms and systems. SAIC has historically secured numerous large contracts for complex projects, often involving advanced technology development, cybersecurity, and mission support. Their performance on previous contracts, while generally positive, has varied. Specific performance metrics and past performance evaluations for contracts of similar scope and complexity would offer a more detailed understanding of their capabilities and reliability in executing this particular award. Reviewing publicly available contract award data and CPARS (Contractor Performance Assessment Reporting System) summaries, where accessible, can provide insights into their historical success rates and areas of strength or concern.

How does the $40.4 million contract value compare to similar R&D service contracts awarded by the Air Force or DoD in recent years?

The $40.4 million contract value for engineering, development, integration, and sustainment services is a moderate-sized award within the broader landscape of Department of Defense (DoD) procurements. Large-scale R&D and sustainment contracts for major weapon systems or technological initiatives can easily reach hundreds of millions or even billions of dollars over their lifecycle. However, for a specific delivery order or a contract focused on a particular set of R&D services, $40.4 million represents a significant investment. Comparing it to similar contracts requires identifying procurements with comparable NAICS codes (e.g., 541715) and service descriptions (engineering, development, integration, sustainment) awarded by the Air Force or other DoD branches. Without specific comparable contract data, it's challenging to definitively state if this represents a high, low, or average value. However, it signifies a substantial commitment to acquiring specialized technical expertise.

What are the primary risks associated with the Cost Plus Award Fee (CPA) contract type used for this award?

The primary risks associated with a Cost Plus Award Fee (CPA) contract type, as used in this award, revolve around cost control and contractor incentives. While CPA aims to incentivize superior performance by offering award fees based on achieving specific metrics, it also allows the contractor to recover all allowable costs. This can lead to less pressure on the contractor to minimize costs compared to fixed-price contracts. The government bears the risk of cost overruns if the contractor's costs exceed initial estimates, even if performance is satisfactory. Furthermore, defining objective and measurable award fee criteria can be challenging, potentially leading to disputes or subjective assessments. Effective oversight and robust performance management by the government are crucial to mitigate these risks and ensure the contractor is motivated to deliver high-quality services efficiently.

What is the expected impact of these engineering and sustainment services on the Air Force's technological capabilities and readiness?

These engineering, development, integration, and sustainment services are expected to have a significant positive impact on the Air Force's technological capabilities and readiness. By providing ongoing support for research and development, the contract ensures that the Air Force can maintain, upgrade, and potentially advance its complex systems and platforms. Sustainment services are critical for ensuring the operational availability and reliability of existing technologies, reducing downtime and enhancing mission effectiveness. Development and integration efforts contribute to the modernization of capabilities, incorporating new technologies and improving system performance. Ultimately, this contract supports the Air Force's ability to adapt to evolving threats, maintain a technological edge, and execute its missions effectively in a dynamic security environment.

How has federal spending in the R&D sector (NAICS 541715) trended over the past five years, and how does this contract fit into that trend?

Federal spending in the Research and Development in the Physical, Engineering, and Life Sciences sector (NAICS 541715) has generally shown a consistent or increasing trend over the past five years, driven largely by defense, health, and energy initiatives. The Department of Defense is consistently one of the largest federal spenders in this category, focusing on areas like advanced materials, aerospace, cybersecurity, and artificial intelligence. This $40.4 million contract for engineering, development, integration, and sustainment services fits within this trend by representing a specific investment by the Air Force to maintain and advance its technological base. While this single contract value is modest in the context of the entire federal R&D budget, it reflects the ongoing commitment to acquiring specialized expertise necessary for innovation and maintaining a technological advantage, particularly within the defense industrial base.

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: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Address: 12010 SUNSET HILLS RD, RESTON, VA, 20190

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

Financial Breakdown

Contract Ceiling: $54,867,168

Exercised Options: $48,249,826

Current Obligation: $40,352,628

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $3,267,170

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA881820D0009

IDV Type: IDC

Timeline