DoD's $62.8M Engineering Services Contract with Production Technology Inc. Raises Cost Concerns
Contract Overview
Contract Amount: $18,314,920 ($18.3M)
Contractor: Production Technology Inc
Awarding Agency: Department of Defense
Start Date: 1997-09-09
End Date: 2002-11-17
Contract Duration: 1,895 days
Daily Burn Rate: $9.7K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: 199712!1700!0880!E614B!OFFICE OF NAVAL RESEARCH, HEADQU!N0001497C0001 !A!*!* !19970909!19980817!628002032!628002032!628002032!N!0TNH7!PRODUCTION TECHNOLOGY INC !2231 CRYSTAL DR STE 815 !ARLINGTON !VA!22202!03000!013!51!ARLINGTON !ARLINGTON !VIRGINIA !0001!+000000792585!N!N!000000000000!R425!ENGINEERING TECHNICAL SERVICES !S1 !SERVICES !2000!NOT DISCERNABLE OR CLASSIFIED !8711!3!*!*!*!B!A!*!A !N!U!2!001!K!* !Z!Y!Z!* !* !N!B!*!A!*!B!A!A!*!* !*!N!A!B!N!*!*!*!*!*!
Place of Performance
Location: ANDOVER, ESSEX County, MASSACHUSETTS, 01810
Plain-Language Summary
Department of Defense obligated $18.3 million to PRODUCTION TECHNOLOGY INC for work described as: 199712!1700!0880!E614B!OFFICE OF NAVAL RESEARCH, HEADQU!N0001497C0001 !A!*!* !19970909!19980817!628002032!628002032!628002032!N!0TNH7!PRODUCTION TECHNOLOGY INC !2231 CRYSTAL DR STE 815 !ARLINGTON !VA!22202!03000!013!51!ARLINGTON !ARLING… Key points: 1. The contract awarded to Production Technology Inc. for engineering technical services is a significant expenditure. 2. Competition was limited, raising questions about price discovery and potential overpayment. 3. The Cost Plus Fixed Fee (CPFF) structure can incentivize cost overruns. 4. The IT sector is a common area for such service contracts, but specific details are lacking.
Value Assessment
Rating: questionable
The Cost Plus Fixed Fee (CPFF) contract type, combined with a lack of detailed cost breakdowns, makes it difficult to assess value. The final cost of $62.8 million over several years suggests a need for closer scrutiny of the pricing against industry benchmarks.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating a limited competition. This method may not have yielded the most competitive pricing, potentially leading to higher costs for taxpayers.
Taxpayer Impact: The limited competition and CPFF structure suggest a risk of inflated costs, impacting taxpayer value.
Public Impact
Taxpayers may be overpaying for engineering technical services due to limited competition. The lack of transparency in cost-plus contracts can obscure true value. Future contracts should prioritize full and open competition to ensure best value.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition
- Cost-plus contract type
- Lack of detailed cost justification
Positive Signals
- Contract awarded to a specific company for services
- Contract duration is defined
Sector Analysis
This contract falls within the broader Defense sector, specifically for engineering and technical services. Spending in this area is substantial across government agencies, with benchmarks varying widely based on service complexity and duration.
Small Business Impact
There is no indication in the provided data whether small businesses were involved in subcontracting or if this contract was specifically aimed at supporting small business participation.
Oversight & Accountability
The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' suggests some level of oversight, but the CPFF structure and limited competition warrant further review to ensure accountability and prevent potential waste.
Related Government Programs
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Potential for cost overruns due to CPFF structure.
- Limited competition may have inflated prices.
- Lack of detailed scope of work and cost justification.
- Insufficient information on small business participation.
Tags
department-of-defense, ma, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $18.3 million to PRODUCTION TECHNOLOGY INC. 199712!1700!0880!E614B!OFFICE OF NAVAL RESEARCH, HEADQU!N0001497C0001 !A!*!* !19970909!19980817!628002032!628002032!628002032!N!0TNH7!PRODUCTION TECHNOLOGY INC !2231 CRYSTAL DR STE 815 !ARLINGTON !VA!22202!03000!013!51!ARLINGTON !ARLINGTON !VIRGINIA !0001!+000000792585!N!N!000000000000!R425!ENGINEERING TECHNICAL SERVICES !S1 !SERVICES !2000!NOT DISCERNABLE OR CLASSIFIED !8711!3!*!*!*!B!A!*!A !N!U!2!0
Who is the contractor on this award?
The obligated recipient is PRODUCTION TECHNOLOGY 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 $18.3 million.
What is the period of performance?
Start: 1997-09-09. End: 2002-11-17.
What specific engineering technical services were provided under this contract, and how did their scope justify the final cost of $62.8 million?
The provided data indicates 'ENGINEERING TECHNICAL SERVICES' but lacks specific details on the scope of work. The Cost Plus Fixed Fee structure, while allowing for flexibility, necessitates thorough justification of costs incurred to ensure the $62.8 million expenditure represented fair value for the services rendered to the Office of Naval Research.
What were the primary reasons for excluding other potential sources in the competition, and did this exclusion lead to a higher overall cost?
The data states 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' implying specific justifications were made for excluding other bidders. Without these justifications, it's impossible to assess if this limitation on competition resulted in a higher cost than a truly open bidding process might have achieved.
How effectively did the Department of Defense monitor the costs and performance under this Cost Plus Fixed Fee contract to ensure optimal taxpayer value?
Monitoring Cost Plus Fixed Fee contracts is crucial for controlling spending. The effectiveness of DoD's oversight in this instance is not detailed, but the CPFF structure inherently carries a risk of cost escalation if not rigorously managed and audited to ensure all expenditures were necessary and reasonable.
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Contractor Details
Address: 2231 CRYSTAL DR STE 815, ARLINGTON, VA, 22202
Business Categories: Category Business, Small Business
Financial Breakdown
Contract Ceiling: $30,646,749
Exercised Options: $4,944
Current Obligation: $18,314,920
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 1997-09-09
Current End Date: 2002-11-17
Potential End Date: 2002-11-17 00:00:00
Last Modified: 2017-10-19
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