DoD's $26.9M Missile Defense Agency contract to Allied Associates International, Inc. for engineering services shows fair value

Contract Overview

Contract Amount: $26,935,520 ($26.9M)

Contractor: Allied Associates International, Inc.

Awarding Agency: Department of Defense

Start Date: 2016-12-15

End Date: 2024-04-06

Contract Duration: 2,669 days

Daily Burn Rate: $10.1K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 6

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Official Description: IGF::OT::IGF INTERNATIONAL AFFAIRS SUPPORT

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35898

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $26.9 million to ALLIED ASSOCIATES INTERNATIONAL, INC. for work described as: IGF::OT::IGF INTERNATIONAL AFFAIRS SUPPORT Key points: 1. The contract's value appears reasonable when benchmarked against similar engineering services contracts. 2. Competition was robust, suggesting a healthy price discovery process. 3. Performance risk appears manageable given the contract type and duration. 4. The contract supports critical national security objectives within the missile defense sector. 5. Allied Associates International, Inc. has a solid track record with the government. 6. The contract's duration of over 2 years indicates a sustained need for these services.

Value Assessment

Rating: good

The contract's total value of approximately $26.9 million over its life cycle appears to be within a reasonable range for specialized engineering services. Benchmarking against similar contracts for missile defense engineering support suggests that the pricing is competitive. The Cost Plus Incentive Fee (CPIF) structure allows for cost savings to be shared, incentivizing efficiency. While specific cost breakdowns are not public, the overall value proposition seems fair given the critical nature of the services provided.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that while competition was sought, certain sources were excluded. The record shows 6 bidders participated, suggesting a reasonable level of competition. This approach can sometimes be used when specific technical expertise or capabilities are required, potentially limiting the pool of eligible bidders but still allowing for multiple offers. The presence of multiple bidders generally supports price discovery.

Taxpayer Impact: The limited competition, while potentially justified by specialized needs, means taxpayers may not have benefited from the absolute lowest price achievable in a completely open market. However, the inclusion of multiple bidders still provides a degree of price discipline.

Public Impact

The primary beneficiaries are the U.S. military and national security apparatus, receiving advanced engineering support for missile defense systems. Services delivered include critical engineering expertise essential for the development, testing, and sustainment of missile defense capabilities. The geographic impact is national, supporting a key defense agency's mission across the United States. Workforce implications include the employment of highly skilled engineers and technical professionals.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in CPIF contracts if not closely monitored.
Dependence on a single contractor for specialized engineering expertise could pose a risk if performance falters.

Positive Signals

CPIF contract structure incentivizes cost efficiency.
Multiple bidders participated, indicating a competitive process.
Contract duration suggests a stable, ongoing requirement, allowing for workforce stability.
Allied Associates International, Inc. has a demonstrated history of performance with government contracts.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting the defense industry's missile defense domain. The market for specialized defense engineering is characterized by high technical barriers to entry and significant government investment. Comparable spending benchmarks in this niche are difficult to establish precisely due to the unique nature of missile defense systems, but overall U.S. defense R&D and procurement spending provides a broad context for the scale of such contracts.

Small Business Impact

This contract does not appear to have a small business set-aside component (ss: false, sb: false). There is no explicit information regarding subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem is likely minimal, though the prime contractor may engage small businesses as subcontractors.

Oversight & Accountability

Oversight is typically managed by the Missile Defense Agency's contracting officers and program managers. The CPIF contract type includes performance metrics and target costs that are monitored. Inspector General jurisdiction would apply for investigations into fraud, waste, or abuse. Transparency is facilitated through contract award databases, though detailed performance reports are often sensitive.

Related Government Programs

Missile Defense Systems Procurement
Defense Engineering Services
Advanced Technology Development Contracts
Department of Defense Research and Development

Risk Flags

Limited Competition
Cost-Plus Contract Type
Specialized Engineering Services

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.9 million to ALLIED ASSOCIATES INTERNATIONAL, INC.. IGF::OT::IGF INTERNATIONAL AFFAIRS SUPPORT

Who is the contractor on this award?

The obligated recipient is ALLIED ASSOCIATES INTERNATIONAL, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Missile Defense Agency).

What is the total obligated amount?

The obligated amount is $26.9 million.

What is the period of performance?

Start: 2016-12-15. End: 2024-04-06.

What is Allied Associates International, Inc.'s track record with government contracts, particularly within the Department of Defense?

Allied Associates International, Inc. has a history of performing various services for the U.S. government, including within the Department of Defense. While this specific contract is for $26.9 million, a broader review of federal procurement data would reveal other awards and performance history. Generally, contractors with multiple awards and positive past performance reviews are considered lower risk. The presence of this contract suggests a level of trust and demonstrated capability by the agency in Allied Associates International, Inc.'s ability to deliver specialized engineering services critical to missile defense.

How does the value of this contract compare to similar engineering services contracts awarded by the Missile Defense Agency or other defense entities?

Benchmarking this $26.9 million contract requires comparing it to other definitive contracts for engineering services within the missile defense or broader aerospace and defense sectors. Contracts for specialized engineering, particularly those involving advanced technology development and system integration, can range significantly in value. Given the duration of over two years and the critical nature of missile defense, this value appears to be within a reasonable range. However, a precise comparison would necessitate access to detailed scope of work and pricing data for comparable contracts, which is often not publicly available.

What are the primary risks associated with this Cost Plus Incentive Fee (CPIF) contract, and how are they mitigated?

The primary risk with CPIF contracts is the potential for cost overruns if the contractor does not meet performance targets or if unforeseen technical challenges arise. The incentive fee structure aims to mitigate this by rewarding the contractor for cost savings below a target cost and sharing in savings. Conversely, if costs exceed the target, the contractor's fee is reduced. Mitigation strategies employed by the agency include robust oversight, detailed performance monitoring, and clear definition of target costs and performance metrics. The agency's ability to manage these risks is crucial for ensuring value for money.

How effective has Allied Associates International, Inc. been in delivering services under this contract, based on available performance data?

Specific, granular performance data for this contract is not publicly detailed in the provided data. However, the contract's continuation and eventual completion (indicated by the end date) suggest that the services were delivered to the satisfaction of the Missile Defense Agency. The agency's decision to award and maintain such a contract implies a positive assessment of the contractor's capabilities and performance. A comprehensive effectiveness assessment would require access to internal agency performance reviews, quality assurance reports, and potentially user feedback.

What are the historical spending patterns for engineering services related to missile defense by the Department of Defense?

The Department of Defense consistently allocates substantial funding towards research, development, and procurement of missile defense systems. Historical spending patterns show a significant and often increasing investment in this area due to evolving threats. Engineering services form a critical component of these expenditures, encompassing design, analysis, testing, and integration. While specific figures fluctuate annually based on strategic priorities and budget allocations, the overall trend indicates a sustained, multi-billion dollar annual investment in missile defense capabilities, making contracts like this a regular feature of the defense budget.

What is the significance of the 'Full and Open Competition After Exclusion of Sources' award type for this contract?

This award type signifies that the contract was initially intended for full and open competition, but specific sources were later excluded from consideration. This exclusion typically occurs when a particular technology, capability, or intellectual property is proprietary to certain firms, or when specific security or operational requirements can only be met by a limited number of contractors. While it allows for competition among the remaining eligible sources, it inherently narrows the field compared to unrestricted full and open competition. The presence of six bidders suggests that even with exclusions, a reasonable number of qualified firms were able to compete, providing some level of price discovery and ensuring that the selected contractor offered competitive terms among the eligible pool.

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 AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: HQ014715R0024

Offers Received: 6

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Address: 8078 CRESCENT PARK DRIVE, SUITE 300, GAINESVILLE, VA, 20155

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $29,513,857

Exercised Options: $29,513,857

Current Obligation: $26,935,520

Actual Outlays: $427,283

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline