DoD's $14M engineering services contract with MIKEL, INC. awarded via non-competitive process

Contract Overview

Contract Amount: $13,955,398 ($14.0M)

Contractor: Mikel, Inc.

Awarding Agency: Department of Defense

Start Date: 2011-01-01

End Date: 2016-12-31

Contract Duration: 2,191 days

Daily Burn Rate: $6.4K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: ENGINEERING SERVICES

Place of Performance

Location: FALL RIVER, BRISTOL County, MASSACHUSETTS, 02723

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $14.0 million to MIKEL, INC. for work described as: ENGINEERING SERVICES Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. The contract duration of 5 years suggests a long-term need for these engineering services. 3. Cost-plus-fixed-fee structure may incentivize higher costs if not closely monitored. 4. The absence of small business set-aside indicates a focus on larger, specialized firms. 5. Performance period spans from 2011 to 2016, providing historical data for analysis. 6. The contract's value of approximately $14 million warrants scrutiny for value for money.

Value Assessment

Rating: fair

The total contract value of $13,955,397.65 over five years averages to roughly $2.8 million annually. Without comparable contracts or detailed cost breakdowns, it's difficult to definitively assess value for money. The cost-plus-fixed-fee (CPFF) pricing structure, while common for complex services, can lead to higher costs if the fixed fee is not adequately justified or if cost overruns are not managed stringently. Benchmarking against similar engineering services contracts awarded by the DoD during the same period would be necessary for a more robust assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This typically occurs when only one vendor possesses the unique capabilities or proprietary technology required for the service. The lack of competition means that the government did not benefit from the price reductions and innovation that can arise from a competitive bidding process. The decision to award sole-source requires justification and is subject to review.

Taxpayer Impact: Sole-source awards can lead to higher prices for taxpayers as there is no competitive pressure to drive down costs. It also limits opportunities for other qualified businesses to secure government contracts.

Public Impact

The primary beneficiaries are likely the Department of Defense, receiving specialized engineering support. The services delivered are engineering support, crucial for defense projects and operations. The geographic impact is primarily within the operational areas of the Department of Defense, likely domestic. Workforce implications include employment for engineers and technical staff at MIKEL, INC.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and potentially increases costs for taxpayers.
Cost-plus-fixed-fee contract type can incentivize higher spending if not managed effectively.
Lack of transparency in the sole-source justification process could hide inefficiencies.
Limited data available on specific performance metrics makes it hard to gauge effectiveness.
No indication of small business participation or subcontracting opportunities.

Positive Signals

Contract awarded to a single entity suggests specialized expertise was required.
Long contract duration implies a sustained need and potentially stable support.
Fixed fee component provides some cost certainty compared to pure cost-plus contracts.
The contract was awarded by the Defense Contract Management Agency, suggesting oversight.

Sector Analysis

Engineering services are a critical component of the defense sector, encompassing design, development, testing, and maintenance of military systems and infrastructure. The market for defense engineering services is substantial, driven by the continuous need for technological advancement and platform sustainment. This contract fits within the broader category of professional services supporting defense acquisition and operations. Comparable spending benchmarks would involve analyzing other large, sole-source engineering contracts within the DoD for similar types of support.

Small Business Impact

This contract does not appear to have included a small business set-aside, nor is there information indicating subcontracting goals for small businesses. The sole-source nature of the award further suggests that opportunities for small businesses to participate directly were likely limited. This could mean that the primary benefits of this contract flowed to a larger, established firm, with minimal direct impact on the small business ecosystem for this specific award.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the awarding agency, the Department of Defense, and specifically the Defense Contract Management Agency (DCMA). As a sole-source award, the justification and negotiation process would be critical areas of oversight. Transparency regarding the rationale for the sole-source award and the negotiation of the fixed fee are key accountability measures. Inspector General (IG) jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Defense Engineering Services
Professional Services Contracts
Sole-Source Acquisitions
Cost-Plus-Fixed-Fee Contracts

Risk Flags

Sole-source award
Cost-plus-fixed-fee pricing
Lack of competition
Limited transparency on justification

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.0 million to MIKEL, INC.. ENGINEERING SERVICES

Who is the contractor on this award?

The obligated recipient is MIKEL, 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 $14.0 million.

What is the period of performance?

Start: 2011-01-01. End: 2016-12-31.

What was the specific justification for awarding this engineering services contract on a sole-source basis to MIKEL, INC.?

The provided data does not include the specific justification for the sole-source award. Typically, sole-source contracts are awarded when only one responsible source is available or capable of providing the required services. This could be due to unique capabilities, proprietary technology, or urgent needs where competition is not feasible. A thorough review of the contract file and associated documentation within the Department of Defense would be necessary to ascertain the precise reasons. Without this information, it's difficult to assess if the sole-source determination was appropriate and if it resulted in fair pricing for the government.

How does the average annual cost of this contract compare to similar engineering services contracts awarded by the DoD during the 2011-2016 period?

The contract's total value of approximately $14 million over five years equates to an average annual expenditure of about $2.8 million. To benchmark this effectively, one would need to analyze a dataset of comparable engineering services contracts awarded by the Department of Defense between 2011 and 2016. Key comparison points would include the scope of services, contract type (e.g., CPFF, FFP), duration, and the specific engineering disciplines involved. Without access to such a comparative dataset, it is challenging to definitively state whether $2.8 million annually represents a competitive or inflated price for the services rendered.

What are the potential risks associated with the Cost Plus Fixed Fee (CPFF) contract type for this engineering services engagement?

The Cost Plus Fixed Fee (CPFF) contract type carries inherent risks for the government. While the fixed fee provides some cost ceiling for the contractor's profit, the 'cost' portion is reimbursable. This means the contractor is incentivized to incur costs, as their fee is fixed regardless of the total cost. If not managed rigorously, this can lead to cost overruns and reduced value for money. Effective oversight, detailed cost accounting, and stringent review of allowable costs are crucial to mitigate these risks and ensure the government pays a fair price for the services.

What was the historical spending pattern for engineering services by the Department of Defense in the years preceding this contract?

The provided data focuses solely on this specific contract (2011-2016) and does not offer insight into the Department of Defense's historical spending patterns for engineering services prior to this period. To analyze historical trends, one would need access to broader federal procurement data, looking at aggregate spending on NAICS code 541330 (Engineering Services) or similar categories by the DoD over several fiscal years. This would help contextualize the $14 million award within the DoD's overall budget allocation for such services and identify any significant shifts or increases in spending.

What specific engineering disciplines or areas of expertise did MIKEL, INC. provide under this contract?

The data indicates that the contract was for 'Engineering Services' under NAICS code 541330. However, it does not specify the particular engineering disciplines or areas of expertise MIKEL, INC. provided. Engineering Services is a broad category that can encompass civil, mechanical, electrical, aerospace, systems, and many other specialized fields. To understand the precise nature of the services, further details from the contract's statement of work (SOW) or performance reports would be required. This information is crucial for assessing the criticality of the services and the appropriateness of a sole-source award.

Industry Classification

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

Product/Service Code: SHIPS, SMALL CRAFT, PONTOON, DOCKS

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0002410R6284

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 275 MARTINE ST SUITE 108, FALL RIVER, MA, 02723

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

Financial Breakdown

Contract Ceiling: $43,437,750

Exercised Options: $43,437,750

Current Obligation: $13,955,398

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline