DoD's $32.7M Amentum contract for engineering services shows fair value, but limited competition raises concerns
Contract Overview
Contract Amount: $32,763,035 ($32.8M)
Contractor: Amentum Technology, Inc.
Awarding Agency: Department of Defense
Start Date: 2008-12-22
End Date: 2013-12-21
Contract Duration: 1,825 days
Daily Burn Rate: $18.0K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: COST NO FEE
Sector: Defense
Official Description: ATSO ENGINEERING SUPPORT
Place of Performance
Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92135
Plain-Language Summary
Department of Defense obligated $32.8 million to AMENTUM TECHNOLOGY, INC. for work described as: ATSO ENGINEERING SUPPORT Key points: 1. Value for money appears reasonable given the scope of engineering support provided. 2. Competition dynamics indicate a shift towards limited bidding on follow-on work. 3. Risk indicators are moderate, with no major red flags identified in performance. 4. Performance context suggests a stable, long-term relationship with the contractor. 5. Sector positioning places this contract within the broader defense engineering services market.
Value Assessment
Rating: good
The contract's total value of $32.7 million over five years suggests a reasonable annual spend of approximately $6.5 million for engineering services. Benchmarking against similar large-scale engineering support contracts within the Department of Defense indicates that this pricing is competitive. The cost-no-fee (CNF) pricing structure, while less common for complex services, suggests the government has confidence in the contractor's ability to manage costs effectively within the agreed-upon fee structure, implying good value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
This contract was initially awarded under full and open competition. However, the data indicates it was a delivery order, suggesting it might be part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract. The 'limited' competition label implies that subsequent orders or renewals may not have been subjected to the same broad solicitation, potentially reducing the number of bidders for specific task orders. This can occur when specific expertise or existing performance is a key factor.
Taxpayer Impact: While initial full and open competition is positive, any subsequent limitation in competition could potentially lead to less favorable pricing for taxpayers if not carefully managed and justified.
Public Impact
The Department of the Navy benefits from specialized engineering expertise to support its operations. Services delivered likely include design, analysis, testing, and technical support for naval systems. Geographic impact is centered around naval facilities, primarily in California where the contractor is located. Workforce implications include the employment of skilled engineers and technical personnel by Amentum Technology, Inc.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for reduced competition on future task orders could impact long-term cost-effectiveness.
- Reliance on a single contractor for extended periods may limit opportunities for innovative solutions from new entrants.
Positive Signals
- Initial award under full and open competition suggests a robust vetting process.
- The contractor has a long-standing relationship, implying consistent performance and reliability.
- Cost-No-Fee (CNF) structure can indicate strong contractor confidence and cost control.
Sector Analysis
This contract falls within the Engineering Services sector, a critical component of the broader defense industrial base. The market for defense engineering services is substantial, with significant government spending allocated annually. Companies like Amentum Technology, Inc. provide essential technical expertise that supports the development, maintenance, and modernization of military platforms and systems. Comparable spending benchmarks would involve analyzing other large engineering support contracts awarded by agencies like the DoD, NASA, and other federal entities.
Small Business Impact
The data indicates that small business participation (sb) was false and that this was not a small business set-aside (ss). Therefore, this contract did not directly benefit small businesses through a set-aside. There is no explicit information on subcontracting plans, but for a contract of this nature and size, it is common for prime contractors to engage small businesses for specialized support, though this is not guaranteed without specific contractual requirements.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. Accountability measures are typically embedded within the contract terms, including performance metrics, delivery schedules, and quality standards. Transparency is facilitated through contract databases like FPDS-NG (now SAM.gov), which record award details. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.
Related Government Programs
- Naval Sea Systems Command (NAVSEA) Contracts
- Department of Defense Engineering Services
- Defense Advanced Research Projects Agency (DARPA) Support Contracts
- Military Sealift Command (MSC) Support Services
Risk Flags
- Potential for reduced competition on future task orders.
- Cost No Fee (CNF) structure requires diligent government oversight of costs.
- Long-term reliance on a single contractor may limit market innovation.
Tags
defense, department-of-the-navy, engineering-services, amentum-technology-inc, cost-no-fee, full-and-open-competition, limited-competition, delivery-order, california, professional-services, long-term-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $32.8 million to AMENTUM TECHNOLOGY, INC.. ATSO ENGINEERING SUPPORT
Who is the contractor on this award?
The obligated recipient is AMENTUM TECHNOLOGY, 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 $32.8 million.
What is the period of performance?
Start: 2008-12-22. End: 2013-12-21.
What specific types of engineering services were provided under this contract?
While the contract is broadly categorized under 'Engineering Services' (NAICS code 541330), the specific deliverables would depend on the task orders issued. Given the contractor is Amentum Technology, Inc. and the agency is the Department of the Navy, these services likely encompassed a range of activities such as systems engineering, design, analysis, testing, integration, and lifecycle support for naval platforms, vessels, or related systems. This could include areas like naval architecture, mechanical engineering, electrical engineering, and software engineering support critical for maintaining and modernizing naval assets.
How does the $32.7 million total value compare to similar engineering support contracts for the Navy?
The total contract value of $32.7 million over a five-year period (approximately $6.5 million annually) appears to be within a moderate range for specialized engineering support services within a large agency like the Department of the Navy. Larger, more complex platform development or sustainment contracts can easily reach hundreds of millions or billions of dollars. However, compared to smaller, more localized or niche engineering support contracts, this represents a significant award. Benchmarking requires detailed analysis of specific service types, contract durations, and the complexity of the systems supported, but the value suggests a substantial and ongoing requirement.
What are the potential risks associated with a Cost No Fee (CNF) contract type for engineering services?
A Cost No Fee (CNF) contract type, while indicating strong contractor confidence in cost control, carries inherent risks. For the contractor, there is no profit margin beyond the recovery of allowable costs, making cost overruns particularly detrimental. For the government, the primary risk is that the contractor might be less motivated to innovate or find efficiencies if they are not directly rewarded for doing so beyond simply covering costs. Additionally, oversight becomes critical to ensure costs are reasonable and allocable, as the government bears the cost risk. This structure is typically used when the scope is well-defined, or when the government has significant leverage.
What does the 'limited' competition status for subsequent orders imply for future spending?
The 'limited' competition status, especially if it pertains to follow-on orders or renewals after an initial 'full and open' award, suggests that the pool of eligible bidders may have been restricted. This could be due to specific technical requirements, past performance evaluations, or the nature of the existing contract vehicle (e.g., an IDIQ). For future spending, this implies that taxpayers might not benefit from the full spectrum of market competition, potentially leading to higher prices or less innovative solutions compared to a scenario with broader bidding. Justification for limited competition is crucial for ensuring fair pricing and value.
What is the historical spending trend for engineering services by the Department of the Navy?
The Department of the Navy consistently allocates significant funds towards engineering services, reflecting the complexity and scale of its operations and assets. Historical spending data would show a substantial and often increasing trend in this category, driven by modernization efforts, platform sustainment, research and development, and acquisition programs. While specific figures fluctuate year-to-year based on budget priorities and program lifecycles, engineering services remain a core expenditure. This particular contract, awarded in 2008 and ending in 2013, represents a portion of that ongoing investment during that period.
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: N0002408R3310
Offers Received: 1
Pricing Type: COST NO FEE (S)
Evaluated Preference: NONE
Contractor Details
Parent Company: Jacobs Engineering Group Inc (UEI: 074103508)
Address: 600 WILLIAM NORTHERN BLVD, TULLAHOMA, TN, 37388
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $43,859,345
Exercised Options: $38,217,869
Current Obligation: $32,763,035
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0017804D4072
IDV Type: IDC
Timeline
Start Date: 2008-12-22
Current End Date: 2013-12-21
Potential End Date: 2013-12-21 00:00:00
Last Modified: 2018-12-14
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