DoD's $24.86M contract for stealth engineering services awarded to NTI Corporation shows fair value with a reasonable per-unit cost
Contract Overview
Contract Amount: $24,859,328 ($24.9M)
Contractor: NTI Corporation
Awarding Agency: Department of Defense
Start Date: 2012-04-05
End Date: 2017-12-31
Contract Duration: 2,096 days
Daily Burn Rate: $11.9K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: ENGINEERING SERVICES FOR STEALTH TECHNOLOGY DEVELOPMENT AND SHIP DESIGN APPLICATION
Place of Performance
Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20852
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $24.9 million to NTI CORPORATION for work described as: ENGINEERING SERVICES FOR STEALTH TECHNOLOGY DEVELOPMENT AND SHIP DESIGN APPLICATION Key points: 1. The contract was awarded through full and open competition, suggesting a competitive pricing environment. 2. NTI Corporation, the sole awardee, has a track record in engineering services, but specific performance metrics for this contract are not detailed. 3. The contract's duration of approximately 5.7 years indicates a long-term need for specialized stealth technology and ship design expertise. 4. The Cost Plus Fixed Fee (CPFF) contract type allows for cost reimbursement plus a fixed fee, which can incentivize efficiency but requires careful oversight. 5. The contract falls under the Engineering Services category, a critical sector for defense innovation and technological advancement. 6. The geographic location of performance in Maryland aligns with established defense industry hubs.
Value Assessment
Rating: good
The total award amount of $24.86 million for engineering services related to stealth technology and ship design appears reasonable given the specialized nature of the work and the contract duration. Benchmarking against similar complex defense engineering contracts suggests that the pricing structure, while a CPFF type, is within expected ranges for R&D intensive projects. The fixed fee component provides a degree of cost control for the government, and the absence of significant cost overruns (based on available data) points to effective management.
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 offers. While the specific number of bidders is not provided, this procurement method generally fosters a competitive environment, which should lead to better pricing and value for the government. The open competition suggests that the Navy sought the best available technical solutions and pricing from the market.
Taxpayer Impact: Full and open competition is beneficial for taxpayers as it maximizes the potential for cost savings and ensures that the government receives the most advantageous offers available in the marketplace.
Public Impact
The primary beneficiaries are the Department of the Navy and the broader U.S. defense apparatus, receiving advanced stealth technology and ship design engineering services. The services delivered are critical for maintaining naval technological superiority and enhancing the survivability of naval assets. The geographic impact is concentrated in Maryland, a state with a significant defense industry presence, potentially supporting local technical expertise and employment. The contract supports a specialized workforce of engineers and technical experts in stealth technology and naval architecture.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- The Cost Plus Fixed Fee (CPFF) contract type can lead to cost overruns if not managed diligently, as the contractor is reimbursed for costs incurred.
- Lack of detailed performance metrics makes it difficult to fully assess the contractor's efficiency and effectiveness throughout the contract period.
- The specialized nature of stealth technology development implies inherent technical risks and potential for unforeseen challenges.
Positive Signals
- Awarded through full and open competition, suggesting a robust and competitive bidding process.
- The contract duration indicates a sustained commitment to critical defense capabilities.
- The fixed fee component in the CPFF contract provides a ceiling on contractor profit, offering some cost predictability.
Sector Analysis
This contract falls within the Engineering Services sector, specifically supporting advanced defense applications like stealth technology and ship design. The market for such specialized engineering services is characterized by high barriers to entry due to the need for advanced technical expertise, security clearances, and proprietary knowledge. Spending in this area is crucial for maintaining a technological edge in national defense. Comparable spending benchmarks would typically involve other large-scale R&D and engineering support contracts awarded by defense agencies for similar complex systems.
Small Business Impact
There is no indication that this contract included a small business set-aside. Given the specialized and advanced nature of stealth technology development and ship design, it is likely that the prime contractor, NTI Corporation, possesses unique capabilities. Subcontracting opportunities for small businesses may exist, but they would likely be in niche areas supporting the prime contractor's efforts rather than direct prime performance.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. The CPFF structure necessitates rigorous financial oversight to ensure that costs are reasonable and allocable to the contract. Transparency is generally maintained through contract reporting requirements. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.
Related Government Programs
- Naval Ship Design and Engineering
- Advanced Materials Research
- Aerospace Engineering Services
- Defense Research and Development
- Stealth Aircraft Development
Risk Flags
- Cost Overrun Risk (CPFF)
- Technical Feasibility Risk
- Contractor Performance Uncertainty
Tags
defense, department-of-the-navy, engineering-services, full-and-open-competition, cost-plus-fixed-fee, stealth-technology, ship-design, maryland, research-and-development, nticorporation
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $24.9 million to NTI CORPORATION. ENGINEERING SERVICES FOR STEALTH TECHNOLOGY DEVELOPMENT AND SHIP DESIGN APPLICATION
Who is the contractor on this award?
The obligated recipient is NTI 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 $24.9 million.
What is the period of performance?
Start: 2012-04-05. End: 2017-12-31.
What is NTI Corporation's overall track record with the Department of Defense, particularly on similar engineering services contracts?
NTI Corporation has a history of performing various engineering and technical services for the Department of Defense. While specific details on past performance for this exact stealth technology and ship design contract are not publicly detailed, their portfolio generally includes support for complex defense systems. Analyzing their broader contract history, including past performance evaluations and any reported issues on other DoD contracts, would provide a more comprehensive understanding of their reliability and capability. However, the award of this significant contract suggests they met the DoD's requirements for technical expertise and past performance in relevant areas.
How does the $24.86 million award compare to other engineering services contracts for stealth technology development?
Direct comparisons for stealth technology development contracts are challenging due to the highly classified and specialized nature of the work, often leading to limited public data. However, $24.86 million for approximately 5.7 years of engineering services, including ship design applications, appears to be within a reasonable range for complex, R&D-intensive defense projects. Larger, more comprehensive stealth system development programs can run into hundreds of millions or even billions of dollars. This contract likely represents a specific phase or component of a broader stealth initiative, making its value proportionate to its defined scope and duration.
What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for advanced engineering services?
The primary risks with a CPFF contract for advanced engineering services like stealth technology development revolve around cost control and contractor efficiency. While the fixed fee provides a ceiling on profit, the contractor is reimbursed for all allowable costs. This can incentivize cost-plus behavior if not rigorously monitored, potentially leading to expenditures exceeding initial estimates. Furthermore, the contractor may have less incentive to innovate cost-saving measures compared to fixed-price contracts. Effective government oversight, detailed cost tracking, and clear performance metrics are crucial to mitigate these risks and ensure value for money.
How effective is the 'full and open competition' approach in ensuring optimal value for taxpayer money in specialized defense engineering contracts?
Full and open competition is generally considered the most effective method for ensuring optimal value for taxpayer money, even in specialized defense engineering contracts. By allowing all responsible sources to compete, it fosters a robust marketplace, driving innovation and competitive pricing. While specialized fields may have fewer bidders, the process still encourages potential offerors to present their best technical solutions and pricing. The Navy's decision to use this method suggests confidence that sufficient competition existed or could be stimulated for these critical stealth and ship design services, ultimately benefiting the government through potentially lower costs and superior technical outcomes compared to sole-source or limited competition.
What is the historical spending trend for engineering services related to naval stealth technology within the Department of the Navy?
Historical spending trends for naval stealth technology engineering services within the Department of the Navy are difficult to quantify precisely due to the classified nature of much of this work. However, it is understood that significant and consistent investment has been made over decades to maintain and advance naval stealth capabilities. This includes funding for research, development, design, and integration of stealth technologies across various platforms. The annual spending likely fluctuates based on program lifecycles, technological advancements, and strategic priorities, but it represents a substantial and ongoing commitment within the broader naval R&D and procurement budgets.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Solicitation ID: N0002411R3161
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 6539 WINDERMERE CIR, ROCKVILLE, MD, 20852
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Subchapter S Corporation
Financial Breakdown
Contract Ceiling: $27,052,816
Exercised Options: $27,052,816
Current Obligation: $24,859,328
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0017804D4093
IDV Type: IDC
Timeline
Start Date: 2012-04-05
Current End Date: 2017-12-31
Potential End Date: 2017-12-31 00:00:00
Last Modified: 2022-12-12
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