DoD's $16.16M engineering support contract for submarine security awarded to Systems Planning and Analysis, Inc. via sole-source negotiation

Contract Overview

Contract Amount: $16,157,682 ($16.2M)

Contractor: Systems Planning and Analysis, Inc.

Awarding Agency: Department of Defense

Start Date: 2018-12-07

End Date: 2023-12-06

Contract Duration: 1,825 days

Daily Burn Rate: $8.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ENGINEERING, OPERATIONAL, TECHNICAL, ANALYTICAL, AND PROGRAMMATIC SUPPORT FOR PROGRAMS DIRECTLY RELATED TO SUBMARINE SECURITY

Place of Performance

Location: ALEXANDRIA, ALEXANDRIA CITY County, VIRGINIA, 22311

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $16.2 million to SYSTEMS PLANNING AND ANALYSIS, INC. for work described as: ENGINEERING, OPERATIONAL, TECHNICAL, ANALYTICAL, AND PROGRAMMATIC SUPPORT FOR PROGRAMS DIRECTLY RELATED TO SUBMARINE SECURITY Key points: 1. Contract provides critical engineering, operational, and programmatic support for submarine security initiatives. 2. Sole-source award raises questions about potential cost efficiencies and market competition. 3. Long contract duration of 5 years suggests a need for sustained, specialized expertise. 4. Firm Fixed Price contract type aims to control costs, but requires careful oversight for scope creep. 5. Contractor has a history of supporting defense programs, indicating relevant experience. 6. The specific nature of submarine security may necessitate specialized contractor capabilities.

Value Assessment

Rating: fair

The contract's value of $16.16 million over five years for specialized engineering and programmatic support for submarine security appears to be within a reasonable range for niche defense services. However, without direct comparable contracts for similar submarine security support, a precise value-for-money assessment is challenging. The firm fixed-price structure suggests an attempt to control costs, but the lack of competition means there's less external pressure to ensure the most competitive pricing. Benchmarking against broader engineering services contracts indicates a potentially higher per-hour rate, but this is often justified by the highly specialized nature of the work.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning that only one contractor, Systems Planning and Analysis, Inc., was solicited. This approach is typically used when there is a lack of competition, such as when only one responsible source is available or when urgent and compelling reasons exist. The absence of a competitive bidding process limits the government's ability to explore a wider range of technical solutions and potentially secure more favorable pricing through market forces. This can lead to higher costs for taxpayers compared to a fully competed contract.

Taxpayer Impact: A sole-source award means taxpayers did not benefit from the price reductions and innovation that typically arise from a competitive bidding process. This could result in the government paying more than necessary for the services rendered.

Public Impact

The primary beneficiaries are the U.S. Navy's submarine programs, receiving essential technical and programmatic support. Services delivered include engineering, operational, technical, and programmatic assistance crucial for maintaining submarine security. The geographic impact is likely concentrated around naval bases and defense contractor facilities, primarily in Virginia. Workforce implications include the employment of specialized engineers and technical personnel within Systems Planning and Analysis, Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potentially increases costs for taxpayers.
Lack of competition may reduce incentives for the contractor to innovate or improve efficiency.
Long-term nature of the contract could lead to contractor complacency if not actively managed.
The highly specialized nature of submarine security might create barriers to entry for potential competitors.

Positive Signals

Contractor has demonstrated experience in supporting defense programs, suggesting a good understanding of requirements.
Firm Fixed Price contract type provides cost certainty for the government, assuming effective management.
The contract's focus on submarine security addresses a critical national defense need.
Long duration allows for continuity of essential services and development of deep expertise.

Sector Analysis

This contract falls within the Engineering Services sector (NAICS 541330), a broad category encompassing firms that provide specialized engineering expertise across various industries. The defense sector, particularly submarine security, represents a highly specialized niche within this market. The total addressable market for such specialized defense engineering services is substantial, driven by ongoing national security requirements. Comparable spending benchmarks are difficult to establish due to the unique nature of submarine security, but overall government spending on engineering services is in the billions annually.

Small Business Impact

This contract was not competed and there is no indication of small business set-asides or subcontracting requirements. As a sole-source award to a large business, it does not directly contribute to the small business contracting goals. The absence of subcontracting opportunities means that small businesses are unlikely to benefit from this specific contract, potentially limiting their access to this segment of the defense market.

Oversight & Accountability

Oversight for this contract is managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The firm fixed-price nature of the contract provides a degree of cost control, but requires diligent monitoring of deliverables and adherence to scope. Transparency is facilitated through contract databases, but detailed performance metrics and cost breakdowns may not be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Naval Sea Systems Command (NAVSEA) Programs
Submarine Force Support Contracts
Defense Engineering Services
National Security Programs

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns without competitive pressure
Limited transparency on performance metrics

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $16.2 million to SYSTEMS PLANNING AND ANALYSIS, INC.. ENGINEERING, OPERATIONAL, TECHNICAL, ANALYTICAL, AND PROGRAMMATIC SUPPORT FOR PROGRAMS DIRECTLY RELATED TO SUBMARINE SECURITY

Who is the contractor on this award?

The obligated recipient is SYSTEMS PLANNING AND ANALYSIS, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $16.2 million.

What is the period of performance?

Start: 2018-12-07. End: 2023-12-06.

What is the track record of Systems Planning and Analysis, Inc. in supporting submarine security programs?

Systems Planning and Analysis, Inc. (SPA) has a significant track record in supporting defense programs, including those related to naval systems and strategic capabilities. While specific details on their involvement in submarine security are often classified or proprietary, their general expertise in systems engineering, analysis, and program management for complex defense initiatives is well-established. SPA has historically secured contracts with various branches of the U.S. military, indicating a capacity to meet stringent defense requirements. Their longevity and continued success in obtaining defense contracts suggest a strong understanding of the operational and technical demands inherent in programs like submarine security, which require specialized knowledge and adherence to strict security protocols.

How does the $16.16 million contract value compare to similar engineering support contracts for defense programs?

Comparing the $16.16 million value for this five-year contract to similar defense engineering support contracts requires careful consideration of scope and specialization. Broad engineering services contracts for less specialized areas might have lower annual values. However, contracts for highly niche areas like submarine security, which demand specific technical expertise, security clearances, and long-term program understanding, can command significant funding. Without access to classified contract data or direct comparables for submarine security support, it's challenging to definitively benchmark this value. However, given the critical nature and specialized requirements of submarine programs, this funding level appears plausible for sustained, high-level engineering and programmatic support, though the lack of competition prevents a definitive value-for-money assessment against market alternatives.

What are the primary risks associated with a sole-source award for critical defense services?

The primary risks associated with a sole-source award for critical defense services like submarine security include potential overpricing due to the absence of competitive pressure, reduced incentive for the contractor to innovate or improve efficiency, and a lack of alternative solutions if the incumbent contractor fails to perform adequately. Taxpayers may bear a higher cost than if the contract had been competed. Furthermore, sole-source awards can limit the government's visibility into the full spectrum of available technologies and approaches. In the long term, reliance on a single provider for highly specialized services can create strategic vulnerabilities if that provider's capabilities diminish or if market conditions change, making it difficult to transition to new solutions.

How effective is the firm fixed-price contract type in managing costs for specialized engineering services?

The Firm Fixed-Price (FFP) contract type is generally effective in managing costs for specialized engineering services when the scope of work is well-defined and unlikely to change significantly. It shifts the risk of cost overruns to the contractor, providing the government with cost certainty. However, for highly complex or evolving areas like submarine security, there's a risk that the initial scope definition might be incomplete, leading to change orders or disputes. Effective management by the contracting agency is crucial to ensure the contractor is meeting all requirements within the fixed price and to prevent scope creep. While FFP aims for cost control, the lack of competition in this sole-source award means the baseline price itself might not be as competitive as it could be in a bidding scenario.

What are the historical spending patterns for engineering and programmatic support related to submarine security?

Historical spending patterns for engineering and programmatic support related to submarine security are often embedded within broader naval and defense budgets and can be difficult to isolate due to classification and the integrated nature of defense programs. However, it is understood that submarine programs represent a significant and sustained investment for the Department of Defense, given their strategic importance. Spending in this area typically involves long-term contracts for research, development, acquisition, and sustainment, including specialized engineering, technical analysis, and operational support. Annual expenditures can fluctuate based on modernization cycles, new threats, and strategic priorities, but generally represent a consistent, high-priority allocation within the defense budget, often in the hundreds of millions or billions of dollars when considering all related activities.

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: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0001419RSS03

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2001 N BEAUREGARD ST., SUITE 100, ALEXANDRIA, VA, 22311

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

Financial Breakdown

Contract Ceiling: $16,398,855

Exercised Options: $16,398,855

Current Obligation: $16,157,682

Actual Outlays: $1,191,499

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline