Keyw Corporation awarded $41.5M for custom computer programming, competing fully

Contract Overview

Contract Amount: $41,551,850 ($41.6M)

Contractor: THE Keyw Corporation

Awarding Agency: Department of Defense

Start Date: 2015-03-27

End Date: 2019-11-25

Contract Duration: 1,704 days

Daily Burn Rate: $24.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: IGF::CL,CT::IGF THIS TASK ORDER KX01 IS ISSUED ON A COST PLUS FIXED FEE - TERM AND COST-REIMBURSEMENT BASIS IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF CONTRACT W15P7T-12-D-E003, AND SUBSEQUENT MODIFICATIONS THERETO. THE SSES NEXGEN SOLICITATION NUMBER ASSOCIATED WITH THIS TASK ORDER IS SSESR-2032.

Place of Performance

Location: FORT HUACHUCA, COCHISE County, ARIZONA, 85613

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $41.6 million to THE KEYW CORPORATION for work described as: IGF::CL,CT::IGF THIS TASK ORDER KX01 IS ISSUED ON A COST PLUS FIXED FEE - TERM AND COST-REIMBURSEMENT BASIS IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF CONTRACT W15P7T-12-D-E003, AND SUBSEQUENT MODIFICATIONS THERETO. THE SSES NEXGEN SOLICITATION NUMBER ASSOCIATED WITH THIS TAS… Key points: 1. Contract awarded on a cost-plus-fixed-fee basis, indicating potential for cost overruns. 2. Full and open competition suggests a competitive bidding process. 3. Delivery order issued under an existing contract, implying a pre-established relationship. 4. Contract duration of 1704 days (approx. 4.6 years) suggests a long-term service requirement. 5. Services fall under custom computer programming, a critical area for defense operations. 6. The contract was not set aside for small businesses, potentially limiting small business participation.

Value Assessment

Rating: fair

The contract's cost-plus-fixed-fee structure requires careful monitoring to ensure value for money. While the total award is substantial, the fixed fee component provides some cost control. Benchmarking against similar custom computer programming services would be necessary to fully assess pricing fairness. The duration suggests a significant, ongoing need for these services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This task order was issued under a full and open competition, indicating that multiple bidders were likely considered. The presence of 6 bidders (no=6) suggests a reasonable level of competition for this specific task order. This competitive process is generally favorable for price discovery and achieving market-based pricing.

Taxpayer Impact: A competitive award process helps ensure that taxpayer funds are used efficiently by driving down costs through bidding.

Public Impact

The Department of the Army benefits from custom computer programming services essential for its operations. Services delivered likely include software development, integration, and maintenance tailored to specific defense needs. The contract has a geographic impact in Arizona (AZ), where the contractor is located. Workforce implications include employment opportunities for skilled IT professionals within The Keyw Corporation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contracts can incentivize contractors to increase costs to maximize their fee, requiring robust oversight.
The lack of small business set-aside may limit opportunities for smaller, innovative firms in this sector.
Long contract duration increases the risk of scope creep or evolving technological requirements not being adequately addressed.

Positive Signals

Full and open competition generally leads to better pricing and a wider pool of qualified contractors.
Issuance under an existing contract (W15P7T-12-D-E003) suggests a streamlined procurement process for a known requirement.
The specific NAICS code (541511) indicates a focus on specialized custom computer programming services.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically custom computer programming services. The IT services market for the federal government is substantial, with significant spending allocated to software development, system integration, and IT support. Comparable spending benchmarks would involve analyzing other large IT service contracts awarded by the Department of Defense and other federal agencies for similar custom programming solutions.

Small Business Impact

This contract was not awarded as a small business set-aside, nor does it indicate any specific subcontracting requirements for small businesses. This means that larger prime contractors were likely the focus of the competition. The absence of explicit small business provisions may limit the direct flow-down of work to the small business ecosystem for this particular award.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. Accountability measures are inherent in the cost-plus-fixed-fee structure, requiring detailed reporting and auditing of costs. Transparency is facilitated by the contract's public availability, though specific performance metrics and detailed cost breakdowns may be sensitive. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Department of Defense IT Services
Custom Software Development Contracts
Information Technology Professional Services
Defense Logistics Agency IT Support
Army Command and Control Systems

Risk Flags

Cost-Plus-Fixed-Fee contract type requires diligent oversight to prevent cost escalation.
Long contract duration increases risk of scope creep and evolving requirements.
Lack of small business set-aside may limit broader economic participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $41.6 million to THE KEYW CORPORATION. IGF::CL,CT::IGF THIS TASK ORDER KX01 IS ISSUED ON A COST PLUS FIXED FEE - TERM AND COST-REIMBURSEMENT BASIS IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF CONTRACT W15P7T-12-D-E003, AND SUBSEQUENT MODIFICATIONS THERETO. THE SSES NEXGEN SOLICITATION NUMBER ASSOCIATED WITH THIS TASK ORDER IS SSESR-2032.

Who is the contractor on this award?

The obligated recipient is THE KEYW CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $41.6 million.

What is the period of performance?

Start: 2015-03-27. End: 2019-11-25.

What is the historical spending pattern for The Keyw Corporation with the Department of the Army?

Analyzing historical spending for The Keyw Corporation with the Department of the Army requires access to a broader dataset of federal procurement awards. However, this specific contract, valued at approximately $41.5 million and spanning from March 2015 to November 2019, represents a significant award for custom computer programming services. Without access to a comprehensive contract database, it's difficult to establish a precise historical trend. Generally, a contract of this size and duration suggests a sustained relationship and a level of trust in the contractor's ability to deliver complex IT solutions. Further investigation into other contracts awarded to The Keyw Corporation by the Army, and their respective values and durations, would be needed to identify patterns of consistent or fluctuating engagement.

How does the pricing of this contract compare to similar custom computer programming services awarded by the DoD?

Benchmarking the pricing of this $41.5 million contract against similar custom computer programming services requires detailed analysis of labor rates, overhead, and profit margins, which are not fully disclosed in the provided data. The contract type is Cost Plus Fixed Fee (CPFF), which means the contractor is reimbursed for allowable costs plus a fixed fee representing profit. To compare, one would need to identify comparable contracts awarded by the DoD for similar services (NAICS 541511) within a similar timeframe. Key comparison points would include the fixed fee percentage relative to total costs, average labor rates for different skill sets, and the overall cost per unit of service delivered (e.g., per hour, per deliverable). Without access to detailed pricing breakdowns and a broader set of comparable contracts, a definitive value-for-money assessment is challenging, but the full and open competition suggests an attempt to achieve market-based pricing.

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

The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract of this magnitude ($41.5 million) revolve around cost control and potential for contractor inefficiency. While the fixed fee provides a ceiling on profit, the contractor is reimbursed for all allowable costs. This can create an incentive for the contractor to incur higher costs, as their fee remains constant regardless of the total cost. Key risks include: 1) Cost Overruns: If actual costs exceed estimates, the government bears the burden. 2) Inadequate Cost Controls: The contractor might not implement stringent cost management practices if they are assured of cost reimbursement. 3) Scope Creep: Without careful management, the scope of work can expand, leading to increased costs beyond the initial projections. 4) Performance Issues: While the fee is fixed, the quality of performance might be impacted if the contractor focuses on cost accumulation rather than efficient delivery. Robust government oversight, detailed cost reporting, and clear performance metrics are crucial to mitigate these risks.

What is the track record of The Keyw Corporation in delivering custom computer programming services to the federal government?

The Keyw Corporation's track record in delivering custom computer programming services to the federal government can be assessed through its contract history. This specific $41.5 million delivery order, awarded in March 2015 and ending in November 2019, indicates a significant engagement with the Department of the Army for services under NAICS code 541511. The fact that this was a full and open competition suggests they were competitive among other potential providers. To fully evaluate their track record, one would need to examine other federal contracts awarded to The Keyw Corporation, looking at factors such as past performance evaluations, contract modifications (and their reasons), on-time delivery rates, and any instances of disputes or contract terminations. A history of successful contract completions and positive performance reviews would indicate a strong track record.

How does the competition level (6 bidders) impact the value for money for this contract?

A competition level of 6 bidders for this contract generally suggests a healthy degree of market interest and a reasonable opportunity for price discovery. With multiple companies vying for the award, The Keyw Corporation likely had to submit a competitive proposal to secure the contract. This competitive pressure typically drives down prices and encourages efficiency, leading to better value for money for the government. A higher number of bidders often correlates with more aggressive pricing and a wider range of innovative solutions. Conversely, if the competition had been limited to only one or two bidders, there would be a greater risk of the contractor charging a premium due to reduced market pressure. Therefore, 6 bidders is a positive indicator for achieving value for taxpayer dollars in this instance.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Custom Computer Programming Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 6

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

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

Address: 7740 MILESTONE PKWY STE 400, HANOVER, MD, 21076

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

Financial Breakdown

Contract Ceiling: $41,552,350

Exercised Options: $41,552,350

Current Obligation: $41,551,850

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W15P7T12DE003

IDV Type: IDC

Timeline