DoD's $29.6M engineering support contract awarded to SAIC shows fair value and strong competition

Contract Overview

Contract Amount: $29,577,535 ($29.6M)

Contractor: Science Applications International Corporation

Awarding Agency: Department of Defense

Start Date: 2008-02-07

End Date: 2014-07-31

Contract Duration: 2,366 days

Daily Burn Rate: $12.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: ENG, TECH, AND PROG MGMT SUPPORT SERVICES FOR DEFENSE SECURITY SYS AFLOAT/ASHORE

Place of Performance

Location: CRANE, MARTIN County, INDIANA, 47522

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $29.6 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION for work described as: ENG, TECH, AND PROG MGMT SUPPORT SERVICES FOR DEFENSE SECURITY SYS AFLOAT/ASHORE Key points: 1. The contract demonstrates a commitment to value for money through competitive bidding. 2. Strong competition was present, indicating a healthy market for these specialized services. 3. Risk indicators appear manageable given the contract's duration and performance history. 4. Performance context suggests a need for ongoing technical and program management support. 5. This contract fits within the broader Defense sector's need for engineering expertise.

Value Assessment

Rating: good

The contract's total value of approximately $29.6 million over its period of performance suggests a reasonable investment for the engineering, technical, and program management support provided to the Department of the Navy. Benchmarking against similar contracts for specialized defense systems support indicates that the pricing was likely competitive, especially given the full and open competition. The fixed-fee structure on a cost-plus basis allows for cost control while ensuring necessary resources are available for complex defense projects.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors were eligible to bid. The presence of two bidders suggests a reasonable level of competition for these specialized engineering and program management services. This competitive environment is crucial for ensuring that the government receives the best possible value and that pricing is driven by market forces rather than limited options.

Taxpayer Impact: Taxpayers benefit from a competitive process that helps ensure funds are used efficiently and that the selected contractor offers the most advantageous technical solution and price.

Public Impact

The Department of the Navy benefits from essential engineering, technical, and program management support for its defense security systems. This contract supports the operational readiness and modernization of afloat and ashore defense systems. The services delivered contribute to the effective functioning of critical naval infrastructure. Workforce implications include employment for engineers, technical specialists, and program managers, likely concentrated in areas where SAIC has a presence.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in cost-plus contracts if not closely monitored.
Dependency on a single contractor for critical support services could pose a risk if performance falters.

Positive Signals

Awarded through full and open competition, suggesting a competitive pricing environment.
Contract duration of over 6 years indicates a stable, long-term need and potentially successful past performance.
The contractor, Science Applications International Corporation (SAIC), is a well-established entity in the defense sector.

Sector Analysis

The defense engineering services sector is characterized by high technical complexity, stringent security requirements, and significant government investment. Contracts in this space often involve long-term support for sophisticated weapon systems and infrastructure. Spending benchmarks for similar engineering and technical support services for defense agencies typically range in the tens to hundreds of millions of dollars, depending on the scope and duration. SAIC's role here aligns with its established market position as a major provider of such services to the U.S. military.

Small Business Impact

This contract was not specifically set aside for small businesses, and there is no indication of significant subcontracting opportunities for small businesses within the provided data. The primary awardee, SAIC, is a large business. Further analysis would be needed to determine if any small business subcontracting plans were mandated or voluntarily pursued.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting officers and program managers. Accountability measures are embedded within the cost-plus-fixed-fee structure, requiring detailed reporting and justification of costs. Transparency is facilitated through contract award databases, though specific performance metrics and detailed cost breakdowns may not be publicly available. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Defense Engineering Services
Naval Systems Support
Program Management Support
Technical Services Contracts
Cost-Plus-Fixed-Fee Contracts

Risk Flags

Potential for cost escalation in CPFF contracts.
Risk of technological obsolescence over long contract duration.
Limited competition (two bidders) may reduce optimal price discovery.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $29.6 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION. ENG, TECH, AND PROG MGMT SUPPORT SERVICES FOR DEFENSE SECURITY SYS AFLOAT/ASHORE

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 Navy).

What is the total obligated amount?

The obligated amount is $29.6 million.

What is the period of performance?

Start: 2008-02-07. End: 2014-07-31.

What is Science Applications International Corporation's (SAIC) track record with the Department of Defense, particularly in providing engineering and technical support services?

Science Applications International Corporation (SAIC) has a long-standing and extensive track record with the Department of Defense (DoD), serving as a major contractor across various branches and agencies. They specialize in a wide array of services, including systems engineering, cybersecurity, information technology, and program management, often supporting complex defense programs. For the Department of the Navy specifically, SAIC has historically been involved in providing technical support for naval systems, including afloat and ashore platforms, as well as command and control systems. Their performance on contracts like this one, which spans over six years, suggests a capacity to deliver sustained support and manage intricate technical requirements. While specific performance ratings are often proprietary, SAIC's continued success in securing large DoD contracts indicates a generally positive performance history and a strong understanding of military operational needs and acquisition processes.

How does the value of this contract compare to similar engineering support contracts awarded by the Department of the Navy or other defense agencies?

The total contract value of approximately $29.6 million over a period of roughly six years and four months (February 2008 to July 2014) places this contract in the mid-range for specialized engineering and program management support within the defense sector. Contracts for similar services, such as systems integration, technical support for major weapon systems, or IT infrastructure management for naval or other DoD components, can range from a few million dollars for smaller, focused efforts to hundreds of millions or even billions for large-scale, multi-year programs. Given that this contract involved "ENG, TECH, AND PROG MGMT SUPPORT SERVICES FOR DEFENSE SECURITY SYS AFLOAT/ASHORE," it addresses critical but specific operational needs. The competitive nature of the award (full and open competition with two bidders) suggests that the pricing achieved was likely market-driven and represented good value relative to the scope of work. Without direct access to the specific technical requirements and deliverables, a precise benchmark is difficult, but the value appears commensurate with the specialized nature of the support.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract of this nature, and how might they have been mitigated?

The primary risk with a Cost Plus Fixed Fee (CPFF) contract is the potential for cost overruns, as the contractor is reimbursed for allowable costs plus a fixed fee. If costs escalate beyond initial projections, the government bears the burden, although the fixed fee provides the contractor with a defined profit margin. For this contract, risks could include unforeseen technical challenges, scope creep, or inefficiencies in execution. Mitigation strategies typically employed by the government include robust oversight, detailed cost monitoring and auditing, clear definition of allowable costs, and strong program management to control scope. The fixed fee itself incentivizes the contractor to manage costs efficiently to maximize their profit margin. The relatively long duration (over 6 years) also implies that initial cost estimates were likely well-researched, and the contractor's established presence in the defense sector suggests experience in managing such contracts effectively.

How effective is the competition level (2 bidders) in ensuring price discovery and value for money for this type of specialized engineering service?

A competition level with two bidders, as seen in this contract award, generally provides a reasonable degree of price discovery and can lead to good value for money, especially in specialized service areas where the pool of qualified contractors might be limited. While more bidders typically enhance competition, two well-informed and capable bidders can create sufficient pressure to drive competitive pricing. The key is whether these two bidders were truly capable of performing the full scope of work and whether their proposals were thoroughly evaluated. In the context of defense engineering services, where technical expertise and security clearances are paramount, having two strong contenders suggests a healthy market dynamic. It indicates that the government wasn't forced into a sole-source situation and had options to compare technical approaches and costs, thereby achieving a more favorable outcome for taxpayers than a less competitive scenario.

What are the implications of this contract's duration (over 6 years) on the government's ability to adapt to changing technological needs in defense security systems?

A contract duration exceeding six years, while providing stability and continuity of essential services, can pose challenges for adapting to rapidly evolving technological needs in defense security systems. The risk is that the contracted services might become outdated or less effective if the technology landscape shifts significantly during the contract period. To mitigate this, governments often incorporate mechanisms within long-term contracts, such as options for modification, phased approaches, or regular reviews to assess technological relevance. Alternatively, agencies may strategically use shorter-term contracts for specific technology insertions or upgrades, complementing the longer-term support contract. For this specific contract, the nature of 'support services' suggests it might focus on maintaining existing systems, which inherently has a longer lifecycle. However, the government would still need to actively manage the contract to ensure it remains aligned with current and future defense requirements, potentially through contract modifications or by initiating new competitions for advanced capabilities.

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: N0002407R3260

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

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: $161,715,877

Exercised Options: $84,131,301

Current Obligation: $29,577,535

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017804D4119

IDV Type: IDC

Timeline