DoD's $35.9M Intelligence Systems Contract Awarded to Science Applications International Corp

Contract Overview

Contract Amount: $35,918,543 ($35.9M)

Contractor: Science Applications International Corporation

Awarding Agency: Department of Defense

Start Date: 2011-06-03

End Date: 2014-06-02

Contract Duration: 1,095 days

Daily Burn Rate: $32.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: INTELLIGENCE SYSTEMS HARDWARE, ENGINEERING,&LOGISTICS SUPPORT SERVICES

Place of Performance

Location: CRANE, MARTIN County, INDIANA, 47522

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $35.9 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION for work described as: INTELLIGENCE SYSTEMS HARDWARE, ENGINEERING,&LOGISTICS SUPPORT SERVICES Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract type is Cost Plus Fixed Fee, which can incentivize cost overruns if not managed carefully. 3. The duration of the contract is 1095 days, indicating a medium-term engagement. 4. The award was a delivery order, suggesting it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract. 5. The contractor, Science Applications International Corporation (SAIC), is a large, established defense contractor. 6. The contract falls under Engineering Services (NAICS 541330).

Value Assessment

Rating: fair

Benchmarking the value of this specific delivery order is challenging without knowing the parent IDIQ contract's terms and scope. However, the Cost Plus Fixed Fee (CPFF) contract type, while common in complex engineering services, carries inherent risks of cost escalation. Without detailed performance metrics or comparison to similar engineering support services for intelligence systems, it's difficult to definitively assess value for money. The fixed fee component provides some cost certainty for the contractor's profit, but the cost reimbursement aspect requires diligent oversight to ensure efficiency.

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 bidders suggests a moderate level of competition for this specific delivery order. While full and open competition is generally preferred for maximizing price discovery and ensuring fair market value, the actual level of competition can vary significantly based on the specialized nature of the services and the number of qualified bidders.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a more competitive environment, which can lead to lower prices and better value. However, the effectiveness of this benefit depends on the number and capability of the competing firms.

Public Impact

The primary beneficiaries are the Department of the Navy and the broader Department of Defense, receiving critical intelligence systems hardware, engineering, and logistics support. The services delivered are essential for maintaining and enhancing the operational capabilities of intelligence systems. The contract's geographic impact is noted as Indiana (SN: INDIANA), suggesting a significant operational presence or support hub in that state. The contract likely supports a specialized workforce of engineers, logisticians, and technical personnel, contributing to employment in these fields.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can lead to cost overruns if not closely monitored.
Limited competition (2 bidders) may not have driven the most aggressive pricing.
The specific nature of intelligence systems support can create barriers to entry for smaller or less specialized firms.

Positive Signals

Awarded under full and open competition, ensuring a broad initial solicitation.
Science Applications International Corporation is a well-established contractor with a track record in defense and intelligence.
The contract addresses critical intelligence system needs for the Department of Defense.

Sector Analysis

This contract falls within the Engineering Services sector (NAICS 541330), a significant segment of the federal contracting market supporting defense and national security. The market for intelligence systems hardware, engineering, and logistics is highly specialized, often dominated by large, established defense contractors due to the sensitive nature of the work and the required technical expertise. Spending in this area is driven by evolving threats and the need for advanced technological capabilities.

Small Business Impact

This contract does not appear to have a small business set-aside (SS: false, SB: false). As a large prime contract awarded to a major defense contractor, there may be subcontracting opportunities for small businesses. However, the extent to which small businesses will participate depends on the prime contractor's subcontracting plan and the specific technical requirements of the work.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the contract administration office within the Department of the Navy. Given the CPFF structure, rigorous oversight of costs, performance, and compliance is crucial. Transparency is generally limited for intelligence-related contracts due to national security considerations, but internal DoD oversight mechanisms and potentially Inspector General reviews would apply.

Related Government Programs

Intelligence, Surveillance, and Reconnaissance (ISR) Systems Support
Defense Engineering Services
Logistics Support Services for Military Hardware
Department of Defense IT and Systems Engineering Contracts

Risk Flags

Cost Plus Fixed Fee contract type carries inherent risk of cost overruns.
Limited number of bidders (2) may indicate potential barriers to entry or a niche market.
Intelligence systems support is a critical and sensitive area requiring robust oversight.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $35.9 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION. INTELLIGENCE SYSTEMS HARDWARE, ENGINEERING,&LOGISTICS SUPPORT 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 Navy).

What is the total obligated amount?

The obligated amount is $35.9 million.

What is the period of performance?

Start: 2011-06-03. End: 2014-06-02.

What is the historical spending pattern for Science Applications International Corporation (SAIC) with the Department of Defense, specifically for intelligence systems support?

Science Applications International Corporation (SAIC) is a major defense contractor with a substantial history of receiving contracts from the Department of Defense (DoD) across various service areas, including intelligence systems support. Analyzing SAIC's historical spending with the DoD reveals a consistent pattern of significant contract awards, often in the hundreds of millions or billions of dollars annually. For intelligence systems, SAIC typically provides a range of services encompassing hardware, software, engineering, integration, and lifecycle support. Their involvement often spans complex, high-technology programs critical to national security. Specific to intelligence systems, SAIC has been a key player in developing and maintaining platforms and capabilities used for data collection, analysis, and dissemination. Their track record indicates a strong capability and a preferred vendor status for many DoD intelligence-related procurements, suggesting a deep understanding of the agency's evolving needs and technical requirements.

How does the Cost Plus Fixed Fee (CPFF) contract type typically perform in terms of cost control compared to other contract types for engineering services?

The Cost Plus Fixed Fee (CPFF) contract type is designed for research and development or complex services where the scope is not well-defined, allowing for flexibility. The contractor is reimbursed for allowable costs plus a fixed fee representing profit. While the fixed fee provides some incentive for the contractor to control costs (as profit is capped), it can also lead to cost overruns if the initial cost estimates are inaccurate or if scope creep occurs without adequate adjustments. Compared to Firm-Fixed-Price (FFP) contracts, CPFF generally offers less cost certainty for the government and can be more susceptible to budget increases. However, compared to Cost Plus Incentive Fee (CPIF) or Cost Plus Award Fee (CPAF) contracts, the profit incentive for cost reduction might be less direct in CPFF, as the fee is fixed regardless of the final cost. Effective oversight and robust cost accounting standards are critical for managing CPFF contracts to mitigate risks of excessive spending.

What are the potential risks associated with awarding intelligence systems contracts to a single large incumbent contractor like SAIC?

Awarding intelligence systems contracts to a single large incumbent contractor like SAIC carries several potential risks. Firstly, it can lead to a lack of innovation and complacency, as the contractor may face reduced pressure to improve services or adopt new technologies if competition is limited. Secondly, there's a risk of vendor lock-in, where the government becomes heavily reliant on the incumbent's proprietary systems or processes, making it difficult and costly to switch providers in the future. This can also lead to 'brain drain' from the government side, as institutional knowledge becomes concentrated with the contractor. Thirdly, without robust competition, pricing may not be optimized, potentially leading to higher costs for the government over the contract's lifecycle. Finally, a single point of failure could arise if the contractor experiences significant performance issues or financial instability, potentially disrupting critical intelligence operations.

What does the 'Delivery Order' (AW: DELIVERY ORDER) designation imply about the overall contract structure and potential future spending?

The 'Delivery Order' designation indicates that this $35.9 million award is a specific task order issued under a larger, pre-existing indefinite-delivery/indefinite-quantity (IDIQ) contract. IDIQ contracts establish the terms and conditions for services or supplies over a period, allowing the government to issue multiple delivery or task orders as needed. This structure provides flexibility for the agency to procure services incrementally. The existence of a delivery order implies that there is a parent IDIQ contract in place, which likely has a broader scope, longer duration, and a higher ceiling value than this individual order. Future spending under this umbrella contract could be significant, depending on the government's ongoing requirements and the contract's overall value ceiling. It also suggests that other delivery orders may have been or could be issued to the same contractor or potentially to other contractors under different IDIQ vehicles.

How does the engineering services sector (NAICS 541330) typically function within the federal contracting landscape, and what are its key characteristics?

The engineering services sector, classified under NAICS code 541330, encompasses firms that provide specialized engineering consulting and design services. Within the federal contracting landscape, this sector is crucial for supporting a wide array of government functions, particularly in defense, infrastructure, research and development, and technology. Key characteristics include a high degree of technical expertise, often requiring advanced degrees and professional certifications. Contracts in this sector frequently involve complex problem-solving, system design, analysis, and project management. The federal government is a major client, procuring engineering services for everything from military hardware development and aerospace engineering to civil infrastructure projects and environmental consulting. Competition can range from highly specialized, niche procurements favoring a few expert firms to broader solicitations where larger, diversified engineering companies compete. The nature of the work often necessitates close collaboration between government agencies and engineering firms.

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: N0002410R3393

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: $38,790,891

Exercised Options: $38,790,891

Current Obligation: $35,918,543

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $609,191

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017804D4119

IDV Type: IDC

Timeline