DoD's $224M engineering services contract awarded to SVERDRUP TECHNOLOGY, INC. shows potential value concerns

Contract Overview

Contract Amount: $22,448,878 ($22.4M)

Contractor: Amentum Technology, Inc.

Awarding Agency: Department of Defense

Start Date: 2005-10-13

End Date: 2010-11-25

Contract Duration: 1,869 days

Daily Burn Rate: $12.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 21

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 200603!060446!1700!N68936!NAVAL AIR WARFARE CENTER !N0017804D4072 !A!N! !N!GM01 ! !20051013!20061016!007923014!007923014!074103508!N!SVERDRUP TECHNOLOGY, INC !600 WILLIAM NORTHERN BLVD !TULLAHOMA !TN!37388!57930!111!06!POINT MUGU !VENTURA !CALIFORNIA!+000000255000!N!N!000000000000!R425!ENGINEERING TECHNICAL SERVICES !S1 !SERVICES !000 !NOT DISCERNABLE !541330!E! !5!B!M! !A!D!20090331!B! ! !A! !A!N!U!2!021!B! !Z!N!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! !1700!N68936!0001! !

Place of Performance

Location: TULLAHOMA, COFFEE County, TENNESSEE, 37388

State: Tennessee Government Spending

Plain-Language Summary

Department of Defense obligated $22.4 million to AMENTUM TECHNOLOGY, INC. for work described as: 200603!060446!1700!N68936!NAVAL AIR WARFARE CENTER !N0017804D4072 !A!N! !N!GM01 ! !20051013!20061016!007923014!007923014!074103508!N!SVERDRUP TECHNOLOGY, INC !600 WILLIAM NORTHERN BLVD !TULLAHOMA !TN!37388!57930!111!06!POINT MUGU !VENT… Key points: 1. Contract awarded for engineering technical services, with a significant total value. 2. The contract type is Cost Plus Fixed Fee, which can sometimes lead to cost overruns. 3. Awarded by the Naval Air Warfare Center, indicating a focus on defense-related engineering. 4. The contract duration was substantial, spanning over 1800 days. 5. The awarded amount suggests a large-scale, long-term requirement for specialized engineering expertise. 6. Competition level was 'Full and Open', which is generally positive for price discovery.

Value Assessment

Rating: questionable

The total contract value of $224,488,78.38 over nearly five years for engineering technical services warrants scrutiny. While the specific services are not detailed, the Cost Plus Fixed Fee (CPFF) contract type carries inherent risks of cost escalation if not managed tightly. Benchmarking against similar large-scale engineering services contracts within the Department of Defense would be necessary to definitively assess value for money. The absence of detailed performance metrics in the provided data makes a precise value assessment challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. The data shows 21 bids were received, suggesting a robust competitive environment. A high number of bids typically benefits the government by fostering price discovery and potentially leading to more favorable pricing. However, the specific details of the evaluation process and the winning proposal are not provided.

Taxpayer Impact: The full and open competition suggests that taxpayers likely benefited from a competitive bidding process, potentially leading to a more cost-effective outcome compared to sole-source or limited competition awards.

Public Impact

The primary beneficiaries are likely the Department of Defense, specifically naval air warfare programs, which receive critical engineering and technical support. Services delivered include engineering and technical support, crucial for the development, maintenance, and advancement of naval aviation systems. The geographic impact is centered around Point Mugu, California, where the Naval Air Warfare Center is located, and potentially extends to other naval facilities. Workforce implications include employment for engineers, technicians, and support staff at SVERDRUP TECHNOLOGY, INC. and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type can lead to cost overruns if not rigorously managed.
Lack of detailed performance metrics makes it difficult to assess the true value and effectiveness of the services provided.
The substantial contract value over a long duration requires continuous oversight to ensure continued relevance and efficiency.

Positive Signals

Awarded under full and open competition with a significant number of bids received.
Contractor SVERDRUP TECHNOLOGY, INC. has a track record, though specific performance on this contract needs further review.
The contract addresses critical engineering and technical services for naval air warfare, indicating strategic importance.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting defense applications. The market for defense engineering services is substantial, driven by the continuous need for technological advancement and system sustainment within military branches. Comparable spending benchmarks would involve analyzing other large-scale engineering support contracts awarded by the DoD to various defense contractors for similar technical capabilities.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss=false, sb=false). Therefore, there are no direct subcontracting implications for small businesses arising from a set-aside provision. The prime contractor, SVERDRUP TECHNOLOGY, INC., would be responsible for any subcontracting decisions made as part of fulfilling the contract requirements.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Defense's contracting and program management offices, potentially involving the Defense Contract Management Agency (DCMA). Accountability measures would be tied to the terms of the Cost Plus Fixed Fee contract, including performance milestones and financial reporting. Transparency is generally facilitated through contract award databases, though detailed performance data may be less accessible.

Related Government Programs

Naval Air Systems Command (NAVAIR) Contracts
Department of Defense Engineering Services
Research, Development, Test, and Evaluation (RDT&E) Support Contracts
Aerospace Engineering Services
Technical Support Services Contracts

Risk Flags

Potential for cost overruns due to CPFF structure.
Lack of detailed performance metrics in public data.
Long contract duration increases risk of scope creep and obsolescence.
Need for detailed benchmarking to assess value for money.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.4 million to AMENTUM TECHNOLOGY, INC.. 200603!060446!1700!N68936!NAVAL AIR WARFARE CENTER !N0017804D4072 !A!N! !N!GM01 ! !20051013!20061016!007923014!007923014!074103508!N!SVERDRUP TECHNOLOGY, INC !600 WILLIAM NORTHERN BLVD !TULLAHOMA !TN!37388!57930!111!06!POINT MUGU !VENTURA !CALIFORNIA!+000000255000!N!N!000000000000!R425!ENGINEERING TECHNICAL SERVICES !S1 !SERVICES !000 !NOT DISCERNABLE !541330!E! !5!B!M! !A!D!200

Who is the contractor on this award?

The obligated recipient is AMENTUM TECHNOLOGY, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $22.4 million.

What is the period of performance?

Start: 2005-10-13. End: 2010-11-25.

What was the specific nature of the engineering technical services provided under this contract?

The provided data indicates the contract was for 'ENGINEERING TECHNICAL SERVICES' under the PSC code 'R425'. While the specific tasks are not detailed, this typically encompasses a broad range of activities such as systems engineering, design, analysis, testing, integration, and lifecycle support for complex systems, likely related to naval aviation platforms given the awarding agency. These services are critical for ensuring the operational readiness, technological advancement, and sustainment of defense assets. Further details would likely be found in the contract's Statement of Work (SOW).

How does the Cost Plus Fixed Fee (CPFF) structure impact value for money compared to other contract types?

The Cost Plus Fixed Fee (CPFF) contract type is used when the exact costs are difficult to estimate beforehand, common in R&D or complex services. The government agrees to pay the contractor's actual costs plus a fixed fee, which represents the contractor's profit. While this allows flexibility, it shifts much of the cost risk to the government. If the contractor's costs are higher than anticipated, the total contract price increases, potentially reducing value for money if not managed stringently. Fixed-price contracts, conversely, offer greater cost certainty to the government but may require more detailed upfront cost estimation and carry higher risk for the contractor.

What is the track record of SVERDRUP TECHNOLOGY, INC. with similar DoD contracts?

SVERDRUP TECHNOLOGY, INC. (now part of Amentum) has a significant history of performing contracts for the Department of Defense. While this specific contract data doesn't detail their performance quality, their continued awards suggest a capacity to meet DoD requirements. A comprehensive assessment would involve reviewing past performance evaluations, any contract disputes, and the success of their deliverables on previous, similar engineering services contracts across various military branches. Their longevity in the defense sector implies a level of established capability and client relationships.

Were there any significant cost underruns or overruns on this contract?

The provided data does not explicitly state whether there were cost underruns or overruns for this contract. The total award amount is listed as $224,488,78.38. As a Cost Plus Fixed Fee (CPFF) contract, the final cost is dependent on the actual allowable costs incurred by the contractor, plus the fixed fee. Without access to the final incurred costs and a comparison to the initial estimates or target costs, it is impossible to determine if significant overruns or underruns occurred. Such details are typically found in contract close-out reports or agency financial records.

How does the $224M contract value compare to typical spending for engineering technical services in the defense sector?

A $224 million contract for engineering technical services over approximately five years is a substantial award within the defense sector. Large-scale engineering support is a significant component of the DoD's budget, particularly for complex platforms like naval aircraft. While this figure represents a large investment, it is not uncommon for major defense programs requiring specialized, long-term technical expertise. Benchmarking against similar contracts for systems engineering, R&D support, or lifecycle management for major defense platforms would provide better context on whether this specific value is high, low, or typical for the scope of services rendered.

What are the potential risks associated with a contract of this duration and value?

Contracts of this duration (1869 days, approx. 5 years) and value ($224M) carry several risks. These include: scope creep, where requirements expand beyond the original agreement; technological obsolescence, where the technology supported becomes outdated during the contract period; contractor performance degradation over time; and potential for cost overruns, especially with CPFF structures. Additionally, long-term reliance on a single contractor can reduce flexibility and potentially stifle innovation if not managed proactively. Robust oversight, clear performance metrics, and mechanisms for adapting to changing requirements are crucial to mitigate these risks.

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: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 21

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Jacobs Engineering Group Inc (UEI: 074103508)

Address: 600 WILLIAM NORTHERN BLVD, TULLAHOMA, TN, 04

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Parent Contract

Parent Award PIID: N0017804D4072

IDV Type: IDC

Timeline