DoD's $80M Sensor & Weapon Systems Engineering Support Contract Awarded to Science Applications International Corporation

Contract Overview

Contract Amount: $79,949,431 ($79.9M)

Contractor: Science Applications International Corporation

Awarding Agency: Department of Defense

Start Date: 2010-01-27

End Date: 2016-07-15

Contract Duration: 2,361 days

Daily Burn Rate: $33.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST NO FEE

Sector: Defense

Official Description: SENSOR&WEAPON SYSTEMS ENGINEERING AND TECHNICAL SUPPORT

Place of Performance

Location: CRANE, MARTIN County, INDIANA, 47522

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $79.9 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION for work described as: SENSOR&WEAPON SYSTEMS ENGINEERING AND TECHNICAL SUPPORT Key points: 1. Contract provides critical engineering and technical support for sensor and weapon systems. 2. Awarded through full and open competition, suggesting a competitive bidding process. 3. Duration of over 6 years indicates a long-term need for these specialized services. 4. Contract type is a delivery order, implying it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract. 5. The 'Cost No Fee' pricing structure requires careful monitoring of incurred costs. 6. The contractor, SAIC, is a major player in defense contracting, suggesting established capabilities.

Value Assessment

Rating: fair

The contract value of approximately $80 million over six years for specialized engineering services appears within a reasonable range for large-scale defense support. However, the 'Cost No Fee' (Cost-Plus-Fixed-Fee or similar, though 'no fee' is unusual and might imply cost-reimbursement with no profit, or a misunderstanding of the abbreviation) pricing structure necessitates close scrutiny of the contractor's cost reporting to ensure value for money. Benchmarking against similar large-scale engineering support contracts for the Navy would provide a clearer picture of cost-effectiveness.

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 presence of two bids suggests a moderate level of competition for this significant engineering support requirement. While two bidders is better than one, a higher number of bidders could potentially drive prices down further and foster greater innovation.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it aims to secure the best value through a wide range of offers, though the specific number of bidders here warrants attention to ensure optimal pricing was achieved.

Public Impact

Benefits the Department of the Navy by providing essential technical expertise for advanced sensor and weapon systems. Ensures the operational readiness and technological advancement of critical defense platforms. Supports specialized engineering and technical roles, potentially impacting the defense industry workforce. Services are likely concentrated within the Navy's operational and acquisition communities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'Cost No Fee' pricing structure requires rigorous cost oversight to prevent potential overruns and ensure fair pricing.
Limited competition (2 bidders) may have resulted in a higher price than a more robust bidding environment.
The long duration of the contract could lead to scope creep if not managed effectively.

Positive Signals

Awarded through full and open competition, maximizing the pool of potential offerors.
The contractor, Science Applications International Corporation, has a significant track record in defense contracting.
The contract addresses a critical need for specialized engineering and technical support for defense systems.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting defense-related R&D and technical services. The market for such specialized engineering support is substantial, driven by continuous defense modernization efforts. Comparable spending often involves large, multi-year contracts for system design, integration, testing, and lifecycle support, with major defense contractors like SAIC being key players.

Small Business Impact

There is no indication of a small business set-aside for this contract, nor is there information suggesting subcontracting opportunities for small businesses. Given the scale and specialized nature of the services, it is possible that the prime contractor may engage small businesses for specific components or support roles, but this is not explicitly stated.

Oversight & Accountability

Oversight would typically be managed by the Department of the Navy contracting and program management offices. Accountability measures would be embedded within the contract's performance work statement and delivery schedules. Transparency is generally maintained through contract award databases, though detailed performance metrics may be considered sensitive.

Related Government Programs

Department of Defense Engineering Services
Naval Systems Support Contracts
Sensor Technology Development
Weapon Systems Integration
Defense Technical Support Services

Risk Flags

Potential for cost overruns due to 'Cost No Fee' structure
Limited competition (2 bidders) may impact price optimization
Long contract duration requires diligent oversight to prevent scope creep

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $79.9 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION. SENSOR&WEAPON SYSTEMS ENGINEERING AND TECHNICAL SUPPORT

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 $79.9 million.

What is the period of performance?

Start: 2010-01-27. End: 2016-07-15.

What is the specific nature of the 'Cost No Fee' (CNF) pricing structure, and how does it impact contractor incentives and government oversight?

The 'Cost No Fee' (CNF) designation in federal contracting is unusual and requires clarification. Typically, contracts are Cost-Plus-Fixed-Fee (CPFF), Cost-Plus-Incentive-Fee (CPIF), or Firm-Fixed-Price (FFP). If 'Cost No Fee' implies a cost-reimbursement contract where the contractor receives reimbursement for allowable costs but no fee or profit, it significantly alters incentives. The contractor's primary motivation would be to recover costs efficiently rather than maximize profit. This necessitates extremely rigorous government oversight of all incurred costs to ensure they are reasonable, allocable, and allowable. The government would need robust auditing and monitoring processes to prevent potential abuses or inefficiencies, as the contractor has less financial incentive to control costs compared to a fixed-fee or incentive-fee arrangement. It's also possible 'no fee' refers to a specific type of delivery order under a larger IDIQ where the fee structure is defined elsewhere, or it could be a misinterpretation of a Cost-Plus-Award-Fee (CPAF) or CPFF where the fee is variable. Clarification from the contract documents is essential.

How does the $80 million contract value compare to similar engineering support contracts for the Navy over the past five years?

Benchmarking this $80 million contract requires access to a comprehensive database of similar Navy engineering support contracts. However, based on general knowledge of defense procurement, $80 million spread over approximately six years (2361 days) equates to roughly $13.3 million per year. This figure is substantial but not extraordinary for large-scale, specialized engineering and technical support services required by the Navy for complex sensor and weapon systems. Major defense contractors frequently secure contracts in this range, and sometimes significantly higher, for similar long-term support, system upgrades, and lifecycle management. A detailed analysis would involve comparing contract scope, duration, specific services rendered (e.g., R&D, sustainment, integration), and the number of bidders to determine if this award represents a competitive and cost-effective outcome relative to market norms.

What are the key performance indicators (KPIs) used to evaluate Science Applications International Corporation's performance under this contract?

While the specific Key Performance Indicators (KPIs) for this contract are not publicly detailed in the provided data, they would typically be outlined in the Performance Work Statement (PWS) or Statement of Work (SOW). For engineering and technical support contracts of this nature, common KPIs often include metrics related to schedule adherence (on-time delivery of reports, milestones, or system readiness), technical performance (meeting specified system performance parameters, accuracy, reliability), cost control (managing expenditures within allocated budgets, especially critical under a cost-reimbursement structure), quality of deliverables (accuracy and completeness of technical documentation, test results), and responsiveness to government requests or issues. The 'Cost No Fee' structure might place additional emphasis on cost-related KPIs and require more frequent and detailed reporting from the contractor.

What is the historical spending trend for sensor and weapon systems engineering support by the Department of the Navy?

Historical spending trends for sensor and weapon systems engineering support by the Department of the Navy are generally characterized by consistent, significant investment, reflecting the continuous need for modernization and maintenance of advanced defense capabilities. Over the past decade, the Navy has allocated billions of dollars annually towards R&D, procurement, and sustainment of its platforms, a substantial portion of which includes specialized engineering and technical services. Spending in this area often fluctuates based on major program milestones, new platform development, and geopolitical priorities. Contracts like the one awarded to SAIC represent a portion of this broader spending category. Analyzing historical data would likely show a steady demand for such services, with peaks corresponding to the introduction of new technologies or major system upgrades.

What is the potential impact of this contract on the broader defense industrial base, particularly concerning innovation and competition?

This contract, awarded to a major defense contractor like SAIC, contributes to the stability and capability of the defense industrial base. It ensures that critical engineering expertise remains available for the Navy's sensor and weapon systems. However, the impact on innovation and broader competition can be mixed. While large contracts provide resources for contractors to invest in R&D, they can also concentrate significant work within a few prime contractors, potentially limiting opportunities for smaller, innovative firms to enter the market or gain traction. The fact that this was competed, even with only two bidders, suggests some level of market engagement. Long-term reliance on incumbent contractors can sometimes stifle disruptive innovation if not actively managed through mechanisms that encourage new entrants or technological advancements.

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: N0002408R3354

Offers Received: 2

Pricing Type: COST NO FEE (S)

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: $235,894,779

Exercised Options: $235,894,779

Current Obligation: $79,949,431

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017804D4119

IDV Type: IDC

Timeline