DOD's $4.6M Engineering Services Contract Awarded to MAG DS CORP Shows Fair Value

Contract Overview

Contract Amount: $55,240,391 ($55.2M)

Contractor: MAG DS Corp

Awarding Agency: Department of Defense

Start Date: 2014-08-08

End Date: 2017-09-28

Contract Duration: 1,147 days

Daily Burn Rate: $48.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: IGF::OT::IGF 12 MONTH , 2 OPTIONS (6 MONTHS) ; SETA SUPPORT FOR PM EW, $4,639,899.74 FUNDED

Place of Performance

Location: ABERDEEN PROVING GROUND, HARFORD County, MARYLAND, 21005

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $55.2 million to MAG DS CORP for work described as: IGF::OT::IGF 12 MONTH , 2 OPTIONS (6 MONTHS) ; SETA SUPPORT FOR PM EW, $4,639,899.74 FUNDED Key points: 1. Contract awarded through full and open competition, suggesting a competitive pricing environment. 2. The contract's duration of 1147 days (over 3 years) indicates a significant, long-term need for engineering services. 3. The cost-plus-fixed-fee (CPFF) contract type allows for flexibility but requires careful oversight to manage costs. 4. The award amount of $4,639,899.74 is within a reasonable range for specialized engineering support. 5. The contract is for SETA support for PM EW, highlighting its role in program management and electronic warfare. 6. The presence of options suggests potential for continued support and scalability. 7. The contractor, MAG DS CORP, has a track record with federal contracts, implying some level of established performance. 8. The contract was awarded by the Department of the Army, a major component of the Department of Defense.

Value Assessment

Rating: good

The contract's value appears reasonable given the specialized nature of SETA support for program management in electronic warfare. While specific benchmarks for this niche are difficult to ascertain without more granular data, the total award amount over its multi-year duration suggests a competitive pricing structure was likely achieved through the full and open competition. The CPFF structure, while common for complex services, necessitates diligent cost tracking to ensure value for money is maintained throughout the performance period.

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. The fact that it was competed openly suggests a healthy level of market interest and provides a basis for price discovery. The number of bidders (3) is moderate, which can still yield competitive pricing, though a higher number of bidders often leads to more aggressive pricing.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that drives down prices and encourages innovation from multiple vendors.

Public Impact

The primary beneficiaries are the Department of Defense and specifically the Department of the Army, receiving critical engineering and program management support. The services delivered are essential for the effective management and execution of electronic warfare programs. The geographic impact is likely concentrated within the operational areas and program management offices of the Army, potentially across various installations. Workforce implications include the direct employment of engineers and technical specialists by MAG DS CORP, contributing to the specialized defense industry workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The cost-plus-fixed-fee (CPFF) contract type can lead to cost overruns if not managed meticulously, potentially exceeding initial estimates.
Limited transparency on the specific performance metrics and deliverables may obscure the true value and effectiveness of the SETA support.
The moderate number of bidders (3) could indicate potential limitations in the market for highly specialized EW program management support, possibly leading to less aggressive pricing than in broader service categories.
The contract's duration and funding structure (initial funding with options) require ongoing budget allocation and could be subject to future funding uncertainties.

Positive Signals

Awarded through full and open competition, maximizing the potential for competitive pricing and vendor selection.
The contractor, MAG DS CORP, has experience with federal contracts, suggesting a degree of reliability and understanding of government requirements.
The contract includes options, providing flexibility and the potential for continued support for critical EW programs.
The specific nature of SETA support indicates a focus on critical program management functions within the Department of Defense.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting defense program management. The market for specialized engineering, procurement, and technical assistance (SETA) services for defense programs is substantial, driven by the complex and evolving nature of military technology, particularly in areas like electronic warfare. Benchmarks for such specialized support are often project-specific, but the overall spending on defense engineering services runs into billions annually across the federal government.

Small Business Impact

The data indicates that small business participation was not a primary focus for this specific contract, as the 'sb' field is false. There is no explicit mention of small business set-asides or subcontracting requirements in the provided data. This suggests that the prime contractor, MAG DS CORP, is likely a larger entity, and opportunities for small businesses would depend on their subcontracting plans, which are not detailed here.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program management office within the Department of the Army. As a Cost Plus Fixed Fee contract, rigorous financial oversight and performance monitoring are crucial to ensure adherence to scope and budget. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse. Transparency is generally facilitated through contract award databases, but detailed performance reports are often internal.

Related Government Programs

Department of Defense Research, Development, Test, and Evaluation
Department of Defense Procurement
Army Program Executive Offices
Electronic Warfare Systems Development
Defense Engineering Services Contracts

Risk Flags

Cost-plus-fixed-fee contract type requires diligent oversight to manage potential cost overruns.
Moderate number of bidders may limit price competition compared to contracts with numerous offers.
Specialized nature of SETA support for EW programs could present unique performance risks.
Long contract duration necessitates sustained performance monitoring to ensure continued value.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $55.2 million to MAG DS CORP. IGF::OT::IGF 12 MONTH , 2 OPTIONS (6 MONTHS) ; SETA SUPPORT FOR PM EW, $4,639,899.74 FUNDED

Who is the contractor on this award?

The obligated recipient is MAG DS CORP.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $55.2 million.

What is the period of performance?

Start: 2014-08-08. End: 2017-09-28.

What is the track record of MAG DS CORP with similar Department of Defense contracts?

MAG DS CORP has a history of performing federal contracts, including those with the Department of Defense. While the provided data does not detail specific past performance metrics for this contractor on similar electronic warfare program management contracts, their ability to secure this award suggests they meet the basic qualifications and have demonstrated capability in prior engagements. A deeper dive into their contract history, including past performance evaluations and any reported issues, would be necessary for a comprehensive assessment of their track record. Federal procurement databases often contain award histories and sometimes performance ratings that can offer further insights into their reliability and effectiveness in delivering services to the government.

How does the pricing of this contract compare to similar SETA support contracts for electronic warfare programs?

Benchmarking the pricing of this $4.6 million contract for SETA support in electronic warfare is challenging without access to detailed cost breakdowns and comparable contract data. SETA contracts are highly specialized, and their pricing is influenced by factors such as the specific technical expertise required, the level of security clearance, the duration of the program, and the complexity of the electronic warfare systems involved. The fact that this contract was awarded under full and open competition with three bidders suggests a degree of market competitiveness. However, without specific data on the labor rates, overhead, and profit margins compared to other similar contracts, it is difficult to definitively state whether the pricing is above, below, or at market rates. The CPFF structure also means that actual costs can vary.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for SETA support?

The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for SETA support revolve around cost control and contractor incentives. For the government, the risk is that the contractor may not have a strong incentive to control costs, as the fee is fixed regardless of the actual expenses incurred. This can lead to cost overruns if the contractor is inefficient or if unforeseen complexities arise. The government bears the risk of cost increases. For the contractor, the risk lies in accurately estimating the costs to ensure the fixed fee is profitable. Effective oversight, detailed cost tracking, and clear performance metrics are crucial to mitigate these risks and ensure the government receives good value for its investment. Regular audits and reviews are essential.

How effective is the competition level (3 bidders) in ensuring optimal value for taxpayers on this contract?

A competition level of three bidders for this specialized SETA support contract is generally considered moderate. While more bidders typically lead to more aggressive pricing and a wider selection of innovative solutions, three bidders can still provide sufficient competition to drive reasonable prices and ensure a degree of market validation. The effectiveness in ensuring optimal value for taxpayers depends on several factors: the specificity of the requirement (which may limit the number of qualified bidders), the clarity of the solicitation, and the evaluation criteria used. If the requirement is highly niche, three bidders might represent a significant portion of the available qualified market. Taxpayers benefit from this competition by avoiding sole-source situations and encouraging contractors to offer their best value propositions.

What are the potential implications of the contract's duration (over 3 years) on program stability and contractor performance?

The contract's duration of over three years (1147 days) offers significant advantages for program stability and contractor performance in the realm of electronic warfare program management. A longer contract term allows the contractor, MAG DS CORP, to develop deep expertise and institutional knowledge regarding the specific program's objectives, challenges, and evolving requirements. This continuity can lead to more efficient operations, better problem-solving, and a more stable support environment for the Department of the Army. It also provides the contractor with a predictable revenue stream, potentially encouraging investment in specialized personnel and resources. However, it also necessitates robust oversight to ensure performance remains high throughout the contract's life and to guard against complacency or potential cost creep over the extended 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

Offers Received: 3

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 1 RADAR WAY, TINTON FALLS, NJ, 07724

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

Financial Breakdown

Contract Ceiling: $76,690,730

Exercised Options: $76,690,730

Current Obligation: $55,240,391

Subaward Activity

Number of Subawards: 17

Total Subaward Amount: $40,935,414

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W15P7T10DD421

IDV Type: IDC

Timeline