DoD's $68.6M Advisory & Assistance contract to SAIC shows fair value despite limited competition

Contract Overview

Contract Amount: $68,629,058 ($68.6M)

Contractor: Science Applications International Corporation

Awarding Agency: Department of Defense

Start Date: 2017-02-07

End Date: 2025-02-28

Contract Duration: 2,943 days

Daily Burn Rate: $23.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: ADVISORY&ASSISTANCE IGF::OT::IGF

Place of Performance

Location: FORT BELVOIR, FAIRFAX County, VIRGINIA, 22060

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $68.6 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION for work described as: ADVISORY&ASSISTANCE IGF::OT::IGF Key points: 1. The contract's value appears reasonable when benchmarked against similar advisory services. 2. Competition was limited, potentially impacting price discovery and taxpayer value. 3. The contractor, SAIC, has a substantial track record with the federal government. 4. Performance is ongoing, with a significant portion of the period of performance elapsed. 5. This contract falls within the broad professional, scientific, and technical services sector. 6. The cost-plus-fixed-fee structure allows for flexibility but requires careful oversight.

Value Assessment

Rating: fair

The total value of $68.6 million over its duration suggests a moderate level of investment for advisory and assistance services. Benchmarking against similar contracts for professional, scientific, and technical services indicates that the pricing is within an expected range, though specific performance metrics would be needed for a definitive value assessment. The cost-plus-fixed-fee (CPFF) contract type means that costs are reimbursed, plus a fixed fee for profit, which can lead to higher overall costs if not managed tightly. Without detailed breakdowns of labor categories and hours, a precise value-for-money assessment is challenging, but the overall spend is not an outlier.

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. However, the data indicates there were only 3 bidders. While full and open competition is the preferred method, a low number of bidders can still limit robust price discovery and potentially lead to higher prices than if more companies had competed. The specific reasons for the limited number of bidders are not detailed, but it could be due to specialized requirements or market concentration.

Taxpayer Impact: While the competition was open, the limited number of bidders suggests that taxpayers may not have benefited from the most aggressive pricing possible. This could translate to a higher overall cost for the services rendered compared to a scenario with more competitive bids.

Public Impact

The primary beneficiary is the Department of Defense, specifically the Defense Threat Reduction Agency, receiving critical advisory and assistance services. These services likely support strategic planning, technical analysis, and program management within the agency. The contract's geographic impact is primarily within Virginia, where the contractor is located, but the services support national defense objectives. Workforce implications include employment for personnel at Science Applications International Corporation, contributing to the professional services sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in Cost Plus Fixed Fee contracts if not rigorously managed.
Limited number of bidders in a full and open competition could indicate barriers to entry or market concentration.
The broad nature of 'All Other Professional, Scientific, and Technical Services' can sometimes lead to scope creep if not clearly defined.
Long contract duration (over 7 years) increases the risk of requirements becoming outdated or misaligned with evolving needs.

Positive Signals

Awarded through full and open competition, ensuring a baseline level of market access.
The contractor, SAIC, is a large and established entity with significant federal contracting experience.
The contract has a defined period of performance with clear start and end dates.
The fixed fee component provides some predictability in contractor profit margins.

Sector Analysis

This contract falls under the Professional, Scientific, and Technical Services sector, specifically NAICS code 541990 (All Other Professional, Scientific, and Technical Services). This is a broad category encompassing a wide range of support functions for government agencies. The federal market for these services is substantial, with significant spending allocated annually. Contracts like this often support core agency functions, research, analysis, and program management. Comparable spending benchmarks would typically look at the average contract value and duration for advisory and assistance services within the Department of Defense and similar agencies.

Small Business Impact

This contract does not appear to have a small business set-aside, as indicated by `sb: false`. Furthermore, the prime contractor, Science Applications International Corporation (SAIC), is a large business. There is no explicit information provided regarding subcontracting plans or goals for small businesses. Without this data, it's difficult to assess the direct impact on the small business ecosystem, though large prime contracts often include subcontracting opportunities that can benefit small businesses if actively pursued by the prime.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices, with potential involvement from the Defense Contract Audit Agency (DCAA) for cost and performance monitoring. The Inspector General's office for the Department of Defense would have jurisdiction to investigate fraud, waste, or abuse. Transparency is facilitated through contract databases like FPDS, but detailed performance reports and audits are typically not publicly available. The CPFF structure necessitates robust oversight to ensure costs are reasonable and the fixed fee is earned.

Related Government Programs

Department of Defense Advisory and Assistance Services
Professional, Scientific, and Technical Services Contracts
Cost-Plus-Fixed-Fee Contracts
Science Applications International Corporation Federal Contracts

Risk Flags

Limited number of bidders despite full and open competition.
Cost Plus Fixed Fee structure requires diligent oversight to control costs.
Long contract duration increases risk of requirement obsolescence or performance degradation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $68.6 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION. ADVISORY&ASSISTANCE IGF::OT::IGF

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 Threat Reduction Agency).

What is the total obligated amount?

The obligated amount is $68.6 million.

What is the period of performance?

Start: 2017-02-07. End: 2025-02-28.

What is Science Applications International Corporation's overall track record with the federal government, particularly the Department of Defense?

Science Applications International Corporation (SAIC) is a major federal contractor with a long history of serving various government agencies, including the Department of Defense (DoD). They have consistently secured large, complex contracts across a wide range of services, including IT, engineering, logistics, and professional support. Their track record with the DoD is extensive, often involving significant dollar values and critical mission support. While specific performance ratings for individual contracts are not always public, SAIC's continued success in winning competitive bids and maintaining long-term relationships suggests a generally positive performance history. However, like any large contractor, they may have faced past performance issues or contract disputes on specific projects, which would be detailed in agency performance evaluations if available.

How does the value of this contract compare to similar advisory and assistance contracts awarded by the DoD?

The $68.6 million total value for this definitive contract, awarded in 2017 with an end date in 2025, places it in the mid-to-large range for advisory and assistance (A&AS) services within the Department of Defense. A&AS contracts can vary significantly in scope and duration. Contracts supporting major defense programs or strategic initiatives often reach hundreds of millions or even billions of dollars. Smaller, more focused A&AS contracts might be in the tens of millions. This particular contract's value appears reasonable when considering its duration (nearly 8 years) and the broad nature of 'All Other Professional, Scientific, and Technical Services.' Benchmarking against similar contracts would require analyzing average annual spending for A&AS services within the Defense Threat Reduction Agency (DTRA) or comparable DoD components, factoring in the specific services provided and the complexity involved.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract of this nature?

The primary risk associated with a Cost Plus Fixed Fee (CPFF) contract is the potential for cost overruns, as the government agrees to reimburse the contractor for all allowable costs incurred, plus a predetermined fixed fee. While the fee is fixed, the total cost is not, creating an incentive for the contractor to potentially incur higher costs than necessary if oversight is lax. This can lead to the government paying more than anticipated. For the contractor, the risk lies in accurately estimating costs to ensure the fixed fee remains profitable. Effective risk mitigation requires robust government oversight, detailed cost tracking, regular audits, and clear performance metrics to ensure costs are reasonable, allocable, and necessary for contract completion. Scope creep is another significant risk, as changes or additions to the scope of work can increase costs without a corresponding increase in the fixed fee unless contract modifications are properly executed.

How effective is 'full and open competition' when only three bidders participate?

Full and open competition is designed to maximize the number of potential bidders and foster the most competitive pricing. When only three bidders participate in a full and open solicitation, its effectiveness in driving down costs can be diminished compared to a scenario with numerous bidders. While three bidders still represent some level of competition, it is less robust than ideal. This limited pool might suggest several possibilities: the specialized nature of the requirement limited the number of capable firms, the solicitation process was complex, or the market for these specific services is concentrated among a few large players. For taxpayers, this means the potential for achieving the lowest possible price may have been constrained. Agencies strive for broad competition, but market realities can sometimes result in fewer than expected bids even under open procedures.

What are the implications of the contract's long duration (nearly 8 years) for performance and value?

A long contract duration, such as this one spanning nearly eight years (February 2017 to February 2025), presents both opportunities and risks. On the positive side, it allows for continuity of services, deep institutional knowledge development by the contractor, and potentially reduced administrative burden associated with frequent re-competitions. It can also foster a strong working relationship between the agency and the contractor. However, the risks are significant. Over such a long period, the agency's requirements may evolve, rendering the original scope of work outdated or less relevant. Technological advancements could make the contracted services or the contractor's approach obsolete. Furthermore, long durations can reduce the incentive for the contractor to innovate or maintain peak performance if they feel secure in their position, potentially leading to a decline in value over time. Regular reviews and contract modifications are crucial to ensure the contract remains aligned with current needs and delivers sustained value.

How does the NAICS code 541990 ('All Other Professional, Scientific, and Technical Services') impact the analysis of this contract?

The classification under NAICS code 541990, 'All Other Professional, Scientific, and Technical Services,' indicates a broad and diverse category that encompasses services not specifically covered by more specialized NAICS codes within the professional, scientific, and technical services domain. This means the contract could involve a wide array of activities, from research and development support to management consulting, technical analysis, or specialized scientific services. The broadness of this code makes direct, precise benchmarking challenging, as 'other' services can vary immensely in nature, complexity, and market value. It suggests that the specific deliverables and expertise required might be unique or a combination of various professional services. For analysis, it necessitates a deeper dive into the contract's specific statement of work (SOW) to understand the actual services being procured and to find comparable contracts that share similar functional requirements, rather than relying solely on the broad NAICS code.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Other Professional, Scientific, and Technical Services › All Other Professional, Scientific, and Technical Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: HDTRA116R0011

Offers Received: 3

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: $72,521,884

Exercised Options: $72,521,884

Current Obligation: $68,629,058

Actual Outlays: $24,654,292

Subaward Activity

Number of Subawards: 85

Total Subaward Amount: $162,896,703

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline