Seaward Services Inc. awarded $13.7M for facility maintenance, exceeding initial estimates by $7.2M

Contract Overview

Contract Amount: $13,719,163 ($13.7M)

Contractor: Seaward Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2008-12-31

End Date: 2014-02-28

Contract Duration: 1,885 days

Daily Burn Rate: $7.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: PREVENTIVE AND CORRECTIVE MAINTENANCE FOR SOUTH FLORIDA TESTING FACILITY

Place of Performance

Location: DANIA, BROWARD County, FLORIDA, 33004

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $13.7 million to SEAWARD SERVICES, INC. for work described as: PREVENTIVE AND CORRECTIVE MAINTENANCE FOR SOUTH FLORIDA TESTING FACILITY Key points: 1. Contract value significantly surpassed initial projections, indicating potential cost overruns or scope expansion. 2. Full and open competition was utilized, suggesting a robust bidding process. 3. The contract duration of 1885 days (over 5 years) points to a long-term need for services. 4. Engineering services sector, with a NAICS code of 541330, is characterized by specialized technical expertise. 5. The contract was awarded by the Department of the Navy, a major defense spender. 6. No small business set-aside was applied, suggesting the primary contractor is likely a larger entity.

Value Assessment

Rating: questionable

The final award amount of $13.7 million was substantially higher than the initial estimate of $6.4 million (7.2 million difference). This significant variance raises questions about the accuracy of the initial cost projections or potential scope creep during the contract's lifecycle. Benchmarking against similar preventive and corrective maintenance contracts for specialized facilities is difficult without more detailed service breakdowns, but the nearly doubling of the estimated cost warrants scrutiny.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. While the number of bidders is not specified, this method generally promotes competitive pricing. However, the substantial increase in the final award amount compared to initial estimates suggests that either the competition did not drive costs down as expected, or unforeseen factors significantly impacted the final price.

Taxpayer Impact: Taxpayers benefit from a competitive process that theoretically leads to better pricing. However, the significant cost overrun in this instance suggests that the initial competitive bids may not have fully accounted for the eventual project costs, potentially leading to overspending.

Public Impact

The primary beneficiaries are the Department of the Navy and its personnel at the South Florida Testing Facility, who receive essential maintenance services. The contract ensures the operational readiness and longevity of critical testing infrastructure. Services are geographically focused on the South Florida region. The contract likely supports a workforce of skilled engineers, technicians, and maintenance personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Significant cost overrun from initial estimate to final award.
Lack of transparency regarding the number of bidders in the full and open competition.
Potential for scope creep given the large difference between estimated and awarded amounts.

Positive Signals

Contract awarded through full and open competition, promoting a fair bidding environment.
Long-term contract duration suggests a sustained need and commitment to facility upkeep.
Services provided are critical for the operational integrity of a specialized testing facility.

Sector Analysis

The engineering services sector (NAICS 541330) encompasses a wide range of specialized technical services, including design, consulting, and project management. Contracts in this sector often involve complex technical requirements and can be substantial in value, particularly when supporting government infrastructure. The market size for defense-related engineering services is significant, driven by the need to maintain and upgrade military facilities and equipment. This contract fits within the broader category of facilities maintenance and engineering support for government installations.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. This suggests that the primary focus was on securing the most capable contractor, likely a larger firm, to perform the specialized maintenance. The absence of small business participation in the prime contract may limit opportunities for smaller entities within this specific procurement.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Accountability measures would be defined in the contract terms, including performance standards and payment schedules. Transparency is facilitated by the contract award data, but detailed performance reports and Inspector General involvement would depend on specific triggers or audits related to cost or performance issues.

Related Government Programs

Department of Defense Facilities Maintenance
Naval Facilities Engineering Command Contracts
Engineering Services for Government Infrastructure
Preventive Maintenance Contracts
Corrective Maintenance Contracts

Risk Flags

Significant Cost Variance
Potential Scope Creep
Long Contract Duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $13.7 million to SEAWARD SERVICES, INC.. PREVENTIVE AND CORRECTIVE MAINTENANCE FOR SOUTH FLORIDA TESTING FACILITY

Who is the contractor on this award?

The obligated recipient is SEAWARD SERVICES, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $13.7 million.

What is the period of performance?

Start: 2008-12-31. End: 2014-02-28.

What factors contributed to the $7.2 million difference between the estimated and awarded contract value?

The substantial $7.2 million difference between the estimated cost and the final awarded amount for Seaward Services, Inc.'s contract suggests several potential contributing factors. It is possible that the initial cost estimate was overly conservative or did not fully account for the complexity and scope of the required preventive and corrective maintenance for the South Florida Testing Facility. Alternatively, unforeseen issues discovered during the bidding process or after contract award, such as the need for more extensive repairs or upgrades than initially anticipated, could have led to a significant increase in the contract's value. Market fluctuations in labor or material costs over the extended contract period could also play a role. Without detailed documentation from the procurement process, it is difficult to pinpoint the exact reasons, but such a large variance warrants further investigation into the estimation and execution phases of the contract.

How does the awarded amount compare to similar contracts for facility maintenance in the defense sector?

Comparing the $13.7 million awarded to Seaward Services, Inc. for facility maintenance requires context regarding the specific nature and duration of the services. Contracts for preventive and corrective maintenance can vary widely based on the size and complexity of the facility, the criticality of the systems being maintained, and the geographic location. For a specialized testing facility within the Department of the Navy, this amount over a period of approximately five years (1885 days) might be within a reasonable range if extensive infrastructure or highly specialized equipment is involved. However, given the significant deviation from the initial estimate, a direct comparison is challenging without understanding the baseline assumptions of the estimate and the actual scope of work performed. Benchmarking against contracts for similar-sized testing or research facilities managed by other branches of the military or federal agencies would provide a more robust comparison.

What are the potential risks associated with a contract where the awarded value significantly exceeds the initial estimate?

A significant overrun in contract value, such as the $7.2 million difference observed here, presents several potential risks. Firstly, it raises concerns about the accuracy and reliability of the initial cost estimation process, which could indicate systemic issues in how the agency plans and budgets for such procurements. This can lead to budget overruns and necessitate reprogramming of funds, impacting other critical programs. Secondly, it may signal potential scope creep, where the project's requirements expanded beyond what was originally defined, leading to increased costs without necessarily a proportional increase in value. Thirdly, it could indicate poor contractor performance management or a lack of effective oversight, allowing costs to escalate unchecked. Finally, such discrepancies can erode public trust and lead to perceptions of inefficiency or mismanagement of taxpayer funds.

What is the track record of Seaward Services, Inc. in performing similar government contracts?

Information regarding Seaward Services, Inc.'s track record in performing similar government contracts is crucial for assessing the reliability of this award. A review of past performance, including contract history, client feedback, and any documented instances of performance issues or successes, would provide insight into their capabilities and reliability. Specifically, examining their history with the Department of the Navy or other federal agencies for facility maintenance or engineering services would be most relevant. Positive past performance would lend confidence to the current award, despite the cost variance, suggesting the company is capable of delivering the required services. Conversely, a history of cost overruns, missed deadlines, or quality issues on previous contracts would heighten concerns about the current procurement's execution and final cost.

How does the contract type (Cost Plus Fixed Fee) influence the cost and risk allocation?

The Cost Plus Fixed Fee (CPFF) contract type, as indicated for this award, involves the government reimbursing the contractor for all allowable costs plus a fixed fee representing profit. This structure shifts a significant portion of the cost risk to the government, as they are obligated to cover all legitimate expenses incurred by the contractor. While the fixed fee provides the contractor with a predictable profit margin, it offers less incentive for cost control compared to fixed-price contracts. In a CPFF arrangement, effective government oversight is paramount to ensure that costs are reasonable, allocable, and allowable. The substantial difference between the estimated and awarded amount could be partly attributed to the nature of CPFF, where actual costs incurred over the contract's duration may significantly exceed initial projections, especially if the scope is not rigidly defined or if unforeseen challenges arise.

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: N0002408R3194

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 255 EAST DANIA BEACH BLVD, DANIA BEACH, FL, 25

Business Categories: Category Business, Not Designated a Small Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $13,720,807

Exercised Options: $13,720,807

Current Obligation: $13,719,163

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017805D4554

IDV Type: IDC

Timeline