DoD's $27M engineering support contract awarded to SAIC shows strong competition and long duration

Contract Overview

Contract Amount: $27,000,074 ($27.0M)

Contractor: Science Applications International Corporation

Awarding Agency: Department of Defense

Start Date: 2014-05-08

End Date: 2024-01-25

Contract Duration: 3,549 days

Daily Burn Rate: $7.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: IGF::CT::IGF ENGINEERING, TECHNICAL, LOGISTIC, CONFIGURATION MANAGEMENT, DATA MANAGEMENT, AND PROGRAM MANAGEMENT SUPPORT SERVICES FOR THE PLATFORM AND LAUNCH SYSTEMS DIVISION, GXP

Place of Performance

Location: ANDOVER, ESSEX County, MASSACHUSETTS, 01810

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $27.0 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION for work described as: IGF::CT::IGF ENGINEERING, TECHNICAL, LOGISTIC, CONFIGURATION MANAGEMENT, DATA MANAGEMENT, AND PROGRAM MANAGEMENT SUPPORT SERVICES FOR THE PLATFORM AND LAUNCH SYSTEMS DIVISION, GXP Key points: 1. Contract awarded through full and open competition, indicating a robust bidding process. 2. Long contract duration of nearly 10 years suggests a sustained need for these services. 3. Cost-plus fixed-fee pricing structure requires careful monitoring to manage potential cost overruns. 4. The contract supports critical platform and launch systems, highlighting its strategic importance. 5. The awardee, Science Applications International Corporation (SAIC), is a major defense contractor. 6. The contract value of $27 million over its term indicates significant investment in engineering support.

Value Assessment

Rating: good

The contract value of $27 million over approximately 9.6 years averages to about $2.8 million per year, which appears reasonable for specialized engineering, technical, and program management support services for complex defense systems. Benchmarking against similar large-scale engineering support contracts for defense platforms would provide a more precise value assessment, but the duration and scope suggest a fair market price was likely achieved through the competitive process.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit bids. The presence of multiple bidders in such a competitive environment typically drives prices down and encourages innovation. The specific number of bidders is not provided, but the designation 'full and open' suggests a healthy level of market interest and engagement.

Taxpayer Impact: Taxpayers benefit from the competitive nature of this award, as it is expected to have resulted in a more favorable price and better service quality compared to a sole-source or limited competition scenario.

Public Impact

The primary beneficiaries are the Department of Defense's Platform and Launch Systems Division, which receive essential engineering and program management support. Services delivered include configuration management, data management, and technical support crucial for the development and maintenance of defense platforms. The geographic impact is likely concentrated around defense installations and contractor facilities involved in platform and launch systems development. The contract supports a workforce of engineers, technical specialists, and program managers, contributing to specialized employment within the defense industry.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus fixed-fee contracts can incentivize contractors to increase costs to maximize profit if not adequately monitored.
The long duration of the contract may lead to complacency or a decrease in service quality over time if performance metrics are not rigorously enforced.
Reliance on a single large contractor for critical support services could pose a risk if the contractor faces financial difficulties or strategic shifts.

Positive Signals

Awarded through full and open competition, suggesting a competitive market and potentially better value.
The extensive duration indicates a stable and ongoing requirement, providing continuity for critical defense programs.
The contractor, SAIC, has a significant track record in providing complex technical and engineering services to the government.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting defense-related platforms and launch systems. The market for such specialized engineering support is substantial, driven by ongoing defense modernization and maintenance requirements. Comparable spending benchmarks would involve analyzing other large, long-term engineering support contracts awarded by the DoD or other federal agencies for complex weapon systems.

Small Business Impact

The provided data indicates that small business participation (sb) was false and there was no small business set-aside (ss). This suggests the contract was not specifically targeted towards small businesses, and large prime contractors like SAIC are likely to fulfill the majority of the work. Subcontracting opportunities for small businesses may exist but are not explicitly detailed in this award information.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. Accountability measures are embedded within the contract's terms and conditions, including performance standards and payment schedules. Transparency is facilitated through contract databases like FPDS, though detailed performance reports are often internal.

Related Government Programs

Defense Engineering Services
Platform and Launch Systems Support
Program Management Support
Technical Services Contracts
Cost-Plus Fixed-Fee Contracts

Risk Flags

Cost-plus pricing requires diligent oversight to prevent cost overruns.
Long contract duration may necessitate proactive performance management to maintain service quality.
Lack of specific small business subcontracting goals could limit opportunities for smaller enterprises.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $27.0 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION. IGF::CT::IGF ENGINEERING, TECHNICAL, LOGISTIC, CONFIGURATION MANAGEMENT, DATA MANAGEMENT, AND PROGRAM MANAGEMENT SUPPORT SERVICES FOR THE PLATFORM AND LAUNCH SYSTEMS DIVISION, GXP

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 (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $27.0 million.

What is the period of performance?

Start: 2014-05-08. End: 2024-01-25.

What is Science Applications International Corporation's (SAIC) track record with similar large-scale engineering support contracts for the Department of Defense?

SAIC has a long and extensive history of providing a wide array of engineering, technical, and program management services to the Department of Defense and other federal agencies. They are a major defense contractor known for supporting complex systems, including command, control, communications, computers, and intelligence (C4I) systems, as well as space and missile defense programs. Their track record includes numerous large, multi-year contracts similar in scope and complexity to this one, often involving critical infrastructure and advanced technology development. While specific performance metrics for past contracts are not detailed here, SAIC's continued success in winning and performing on such significant government contracts suggests a generally positive performance history and established expertise in the defense sector.

How does the average annual value of this contract compare to similar engineering support contracts for defense platforms?

The average annual value of this contract is approximately $2.8 million ($27 million / 9.6 years). This figure falls within a reasonable range for specialized engineering, technical, and program management support services for complex defense systems. Large-scale engineering support contracts for major defense platforms can range significantly, from a few million dollars annually for specific system components to tens or even hundreds of millions per year for overarching program management and development. Given the description of supporting 'Platform and Launch Systems Division,' this contract's value appears moderate to substantial, suggesting it covers critical but perhaps not the entirety of the division's engineering needs. A precise comparison would require access to detailed data on comparable contracts, including their specific scope, duration, and the systems they support.

What are the primary risks associated with the Cost Plus Fixed Fee (CPFF) pricing structure used in this contract?

The Cost Plus Fixed Fee (CPFF) pricing structure presents inherent risks, primarily related to cost control. In a CPFF contract, the government agrees to pay the contractor's allowable costs plus a predetermined fixed fee representing profit. The primary risk for the government is that the contractor may have less incentive to control costs compared to fixed-price contracts, as cost overruns are generally reimbursed. This can lead to the total contract cost exceeding initial estimates. To mitigate this, rigorous oversight, detailed cost accounting, and clear definitions of allowable costs are crucial. The government must actively monitor expenditures and ensure that the contractor is operating efficiently and within the spirit of the agreement to prevent unnecessary cost escalation and protect taxpayer funds.

What does the long contract duration (nearly 10 years) imply about the stability and nature of the requirement for these engineering services?

The long contract duration of approximately 9.6 years (3549 days) strongly implies a stable, long-term, and critical requirement for the engineering, technical, and program management support services being provided. Such extended periods are typically awarded for functions that are integral to the ongoing operations, maintenance, or development of essential defense systems, like platforms and launch systems. This longevity suggests that the services are not project-based or temporary but rather represent a sustained need within the Platform and Launch Systems Division. It also indicates a level of confidence from the awarding agency in the contractor's ability to consistently deliver the required support over an extended timeframe, fostering continuity and predictability for these vital defense functions.

How does the 'full and open competition' award type influence the potential value and innovation for this contract?

Awarding this contract through 'full and open competition' is a significant positive indicator for both value and potential innovation. This method ensures that all responsible sources are allowed to compete, maximizing the pool of potential bidders and fostering a competitive environment. Competition typically drives down prices as contractors strive to offer the most attractive bids to win the contract. Furthermore, a wider range of companies, potentially with diverse approaches and technologies, can propose solutions, which can spur innovation. The government benefits from potentially lower costs and access to a broader spectrum of expertise and cutting-edge solutions compared to limited or sole-source procurements.

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: N0002413R3444

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: $30,496,479

Exercised Options: $30,496,479

Current Obligation: $27,000,074

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $58,700

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