DoD's $24.8M engineering services contract awarded to Insitu, Inc. lacked competition, raising value concerns

Contract Overview

Contract Amount: $24,831,983 ($24.8M)

Contractor: Insitu, Inc.

Awarding Agency: Department of Defense

Start Date: 2016-02-16

End Date: 2018-09-14

Contract Duration: 941 days

Daily Burn Rate: $26.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: IGF::CL,CT::IGF

Place of Performance

Location: BINGEN, KLICKITAT County, WASHINGTON, 98605

State: Washington Government Spending

Plain-Language Summary

Department of Defense obligated $24.8 million to INSITU, INC. for work described as: IGF::CL,CT::IGF Key points: 1. The contract's value for money is questionable due to the absence of a competitive bidding process. 2. Limited competition dynamics suggest potential for inflated pricing and reduced innovation. 3. Risk indicators include the sole-source award and the lack of performance benchmarks. 4. The contract's performance context is defined by engineering services for an unspecified project. 5. This contract falls within the professional, scientific, and technical services sector.

Value Assessment

Rating: questionable

The contract's value is difficult to assess without a competitive baseline. Awarded at a firm fixed price, the lack of multiple bids prevents a robust comparison to market rates or similar services. The absence of competition raises concerns about whether the government secured the most cost-effective solution. Benchmarking against other engineering service contracts of similar scope and duration would be necessary for a more definitive value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Insitu, Inc., was solicited. The absence of a full and open competition or even limited competition among multiple bidders means that the government did not explore alternative solutions or leverage competitive pressures to drive down costs. This approach limits price discovery and may not yield the best value for taxpayer dollars.

Taxpayer Impact: Sole-source awards mean taxpayers may not benefit from the cost savings typically achieved through competitive bidding. The government may have paid a premium for these engineering services.

Public Impact

The primary beneficiary is the Department of the Navy, receiving engineering services. The services delivered are classified under engineering, supporting unspecified defense initiatives. The geographic impact is likely concentrated within areas relevant to the Department of Defense's operations. Workforce implications are tied to the specialized engineering talent required for the contract.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Sole-source award limits transparency and potential for better value.
Unspecified nature of services makes performance assessment challenging.

Positive Signals

Contract awarded to a single, potentially specialized provider.
Firm fixed-price contract provides cost certainty once awarded.

Sector Analysis

The professional, scientific, and technical services sector is a significant component of federal contracting. Engineering services, specifically, are crucial for defense, infrastructure, and research initiatives. This contract, valued at approximately $24.8 million, represents a moderate investment within this sector. Comparable spending benchmarks for similar engineering support contracts within the Department of Defense can vary widely based on scope and duration, but the lack of competition here makes direct comparison difficult.

Small Business Impact

This contract does not appear to have a small business set-aside. The award to Insitu, Inc., a single entity, does not indicate any specific subcontracting opportunities for small businesses were mandated or explored as part of a competitive strategy. The impact on the small business ecosystem is neutral to negative, as opportunities were not proactively created through a competitive solicitation process.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Accountability measures are primarily driven by the terms of the firm fixed-price contract. Transparency is limited due to the sole-source nature of the award, making it difficult for external parties to scrutinize the pricing and selection process. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Engineering Services
Naval Engineering Support Contracts
Sole-Source Professional Services Awards

Risk Flags

Lack of Competition
Sole-Source Award Justification Unclear
Potential for Overpricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.8 million to INSITU, INC.. IGF::CL,CT::IGF

Who is the contractor on this award?

The obligated recipient is INSITU, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $24.8 million.

What is the period of performance?

Start: 2016-02-16. End: 2018-09-14.

What is the track record of Insitu, Inc. in performing similar engineering services for the federal government?

Insitu, Inc. has a history of contracts with the federal government, primarily related to unmanned aerial systems (UAS) and associated services. While their expertise in UAS technology is well-established, the specific nature of the engineering services provided under this $24.8 million contract is not detailed in the provided data. A deeper dive into their past performance reports and contract history would be necessary to fully assess their capabilities and reliability for this particular type of engineering support. The data indicates this contract was awarded in 2016 and completed in 2018, suggesting a completed performance period that could be evaluated.

How does the awarded price compare to market rates for similar engineering services?

Without a competitive bidding process, it is challenging to definitively state how the awarded price compares to market rates. The contract was awarded on a sole-source basis, meaning Insitu, Inc. was the only vendor solicited. This lack of competition prevents a direct comparison with bids from other qualified firms. To assess value for money, one would need to benchmark this contract against similar engineering services procured through competitive means by the Department of Defense or other federal agencies during the same period. The firm fixed-price nature provides cost certainty for the government but does not inherently guarantee the lowest possible price.

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

The primary risks associated with a sole-source award for engineering services include a lack of price competition, potentially leading to higher costs for the government. There's also a reduced incentive for the contractor to innovate or provide exceptional value, as there are no competing firms to outperform. Furthermore, sole-source awards can limit the government's access to a broader range of technical solutions and expertise that might be available in the market. Transparency is diminished, making it harder to justify the expenditure and ensure accountability. Finally, it can create a perception of favoritism or missed opportunities to engage with a wider pool of qualified vendors.

What was the justification for awarding this contract on a sole-source basis?

The provided data indicates the contract type was 'NOT COMPETED' and the award was 'SOLE SOURCE'. However, the specific justification for this determination is not included. Federal procurement regulations typically require agencies to justify sole-source awards based on specific criteria, such as the existence of only one responsible source, urgent and compelling needs, or specific national security requirements. Without the official justification document (e.g., a Justification and Approval - J&A), it is impossible to ascertain the rationale behind awarding this contract without competition.

What is the historical spending pattern for engineering services by the Department of the Navy?

The Department of the Navy historically spends billions of dollars annually on a wide array of services, including engineering. This spending supports various platforms, systems, and infrastructure projects. The specific category 'Engineering Services' (NAICS code 541330) is a significant part of this expenditure. Analyzing historical spending patterns would reveal trends in contract values, types of services procured, and the prevalence of competitive versus sole-source awards within the Navy's engineering procurements. This particular $24.8 million contract represents one data point within a much larger and complex spending landscape.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: TECHNICAL REPRESENTATIVE SVCS. › TECHNICAL REPRESENTATIVE SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0001915R0103

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: THE Boeing Company

Address: 118 E COLUMBIA RIVER WAY, BINGEN, WA, 98605

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

Financial Breakdown

Contract Ceiling: $25,725,504

Exercised Options: $24,831,983

Current Obligation: $24,831,983

Actual Outlays: $-1,017

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline