DoD's $30.3M Medal Enterprise Architecture contract awarded to SAIC, raising questions on competition and value

Contract Overview

Contract Amount: $30,330,539 ($30.3M)

Contractor: Science Applications International Corporation

Awarding Agency: Department of Defense

Start Date: 2014-09-30

End Date: 2019-09-30

Contract Duration: 1,826 days

Daily Burn Rate: $16.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: MEDAL ENTERPRISE ARCHITECTURE (EA)

Place of Performance

Location: MCLEAN, FAIRFAX County, VIRGINIA, 22102

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $30.3 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION for work described as: MEDAL ENTERPRISE ARCHITECTURE (EA) Key points: 1. The contract's value of $30.3 million over five years suggests a significant investment in enterprise architecture services. 2. Awarded to Science Applications International Corporation (SAIC), the contract's sole-source nature warrants scrutiny regarding potential cost efficiencies. 3. The 'Computer Systems Design Services' category indicates a focus on IT infrastructure and strategic planning. 4. The contract duration of 1826 days (5 years) points to a long-term need for these specialized services. 5. The absence of small business set-aside flags suggests the primary contractor is likely a large business, with limited direct benefit to smaller enterprises. 6. The 'Cost Plus Fixed Fee' pricing structure requires careful monitoring to ensure costs remain within reasonable bounds.

Value Assessment

Rating: questionable

The contract's total value of $30.3 million over five years averages to approximately $6 million annually. Without specific benchmarks for similar Enterprise Architecture (EA) services within the Department of Defense (DoD) or comparable agencies, it is difficult to definitively assess value for money. However, the 'Cost Plus Fixed Fee' (CPFF) contract type can sometimes lead to higher costs if not managed diligently, as the contractor is reimbursed for allowable costs plus a fixed fee. Further analysis would require comparing SAIC's proposed labor rates and overhead to industry standards for EA services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning it was not openly competed. This approach is typically used when only one responsible source is available or when a compelling reason exists to bypass full and open competition. The lack of competition means that potential alternative solutions or more cost-effective providers were not considered, which can limit price discovery and potentially lead to higher costs for the government.

Taxpayer Impact: The sole-source award means taxpayers did not benefit from the competitive bidding process, which typically drives down prices and encourages innovation. This could result in a higher overall expenditure for the government compared to a competitively awarded contract.

Public Impact

The primary beneficiary of this contract is the Department of the Navy, which receives support for its enterprise architecture initiatives. The services delivered are expected to enhance the Navy's IT infrastructure, strategic planning, and system integration capabilities. The geographic impact is primarily within the operational areas of the Department of the Navy, likely supporting various naval commands and facilities. The contract supports a workforce of IT professionals and architects employed by SAIC, contributing to specialized skill development within the defense IT sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially increasing costs.
Cost Plus Fixed Fee structure requires rigorous oversight to prevent cost overruns.
Lack of transparency in the sole-source justification process.
Potential for vendor lock-in due to long-term sole-source relationship.

Positive Signals

Award to a large, established contractor (SAIC) suggests a degree of confidence in their capabilities.
Long contract duration indicates a sustained need and potential for stable support.
Focus on Enterprise Architecture is critical for modernizing defense IT systems.

Sector Analysis

The contract falls within the Computer Systems Design Services sector, a critical component of the broader Information Technology (IT) industry. This sector is characterized by high demand for specialized expertise in areas like system integration, IT strategy, and architectural design. The global IT services market is valued in the hundreds of billions of dollars, with government contracts forming a significant portion. This specific contract for Enterprise Architecture (EA) services is crucial for organizations like the Department of Defense to manage complex IT environments, ensure interoperability, and align technology investments with strategic goals. Comparable spending benchmarks for EA services can vary widely based on scope, complexity, and agency, but large-scale federal EA contracts often run into tens of millions of dollars.

Small Business Impact

The contract was not set aside for small businesses, and the 'sb' field is false, indicating no specific small business subcontracting goals were mandated in the provided data. This suggests that the primary awardee, SAIC, is likely a large business. Consequently, the direct economic impact on the small business ecosystem through this specific contract may be limited, unless SAIC voluntarily engages small businesses as subcontractors. Without explicit subcontracting plans, opportunities for small businesses to participate in this significant IT services contract are not guaranteed.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. As a sole-source award, the justification for bypassing competition would be subject to review. The 'Cost Plus Fixed Fee' (CPFF) structure necessitates robust financial oversight to ensure that all reimbursed costs are allowable, allocable, and reasonable, and that the fixed fee is earned appropriately. Transparency regarding the specific justification for the sole-source award and the detailed cost elements of the CPFF structure would be key areas for public accountability.

Related Government Programs

Department of Defense IT Modernization Programs
Navy Enterprise Architecture Initiatives
Computer Systems Design Services Contracts
Cost Plus Fixed Fee Contracts
Sole-Source IT Procurement

Risk Flags

Sole-source award raises concerns about competition and potential cost inefficiencies.
Cost Plus Fixed Fee contract type requires diligent oversight to manage costs.
Lack of small business participation noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $30.3 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION. MEDAL ENTERPRISE ARCHITECTURE (EA)

Who is the contractor on this award?

The obligated recipient is SCIENCE APPLICATIONS INTERNATIONAL CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $30.3 million.

What is the period of performance?

Start: 2014-09-30. End: 2019-09-30.

What is the specific justification provided by the Department of the Navy for awarding this contract on a sole-source basis to SAIC?

The provided data indicates the contract was 'NOT COMPETED' and is a 'SOLE SOURCE' award. A formal justification for other than full and open competition (JOFOC) would typically be required by federal acquisition regulations. Common reasons for sole-source awards include unique capabilities possessed by only one contractor, urgent and compelling needs where competition is impractical, or when the government has already made substantial investments in a particular system or service that only one contractor can support. Without access to the specific JOFOC document for this contract, the precise rationale remains undisclosed in the provided data. This lack of transparency is a common concern with sole-source awards, as it limits public understanding of why competitive processes were bypassed.

How does the annual cost of this contract compare to similar Enterprise Architecture (EA) services procured by other federal agencies?

The contract's total value is $30.3 million over 1826 days (approximately 5 years), averaging about $6.06 million per year. Benchmarking this against similar EA services across federal agencies is challenging without specific details on the scope, complexity, and deliverables. However, EA services can range significantly in cost. Large-scale EA programs for major departments like the DoD can easily reach millions annually due to the complexity of their systems and strategic requirements. To provide a precise comparison, one would need to identify contracts with comparable objectives (e.g., developing and maintaining enterprise-wide IT blueprints, defining standards, ensuring interoperability) and similar contract types (e.g., CPFF, FFP) awarded to similarly sized entities. Publicly available contract databases and reports from agencies like the Government Accountability Office (GAO) could offer some comparative insights, but direct apples-to-apples comparisons are often difficult.

What are the potential risks associated with the 'Cost Plus Fixed Fee' (CPFF) contract type for this Enterprise Architecture project?

The Cost Plus Fixed Fee (CPFF) contract type carries inherent risks for the government. While the contractor is reimbursed for allowable costs, the fixed fee provides them with a guaranteed profit margin regardless of cost efficiency. This can reduce the contractor's incentive to control costs aggressively, as higher costs (within allowable limits) do not reduce their fee. The primary risk for the government is potential cost overruns if the contractor's actual costs exceed initial estimates significantly, leading to a higher total contract price than anticipated. Effective oversight is crucial to scrutinize allowable costs, ensure they are reasonable and allocable to the contract, and verify that the contractor is performing efficiently to earn their fixed fee. Without stringent oversight, CPFF contracts can become more expensive than fixed-price alternatives.

What is SAIC's track record in delivering Enterprise Architecture services to the Department of Defense or similar large federal agencies?

Science Applications International Corporation (SAIC) is a major government contractor with extensive experience in IT services, including enterprise architecture, for the Department of Defense (DoD) and other federal agencies. They have a long history of supporting complex defense programs. SAIC has been involved in various EA initiatives, focusing on areas like cloud migration, data management, cybersecurity architecture, and IT modernization strategies for military branches and defense agencies. Their track record generally includes large-scale system integration, software development, and technical consulting. However, like any large contractor, specific contract performance can vary. Evaluating SAIC's performance on this particular contract would require examining past performance reviews, any contract disputes, and the successful achievement of EA milestones within the DoD.

How has federal spending on Computer Systems Design Services, particularly within the Department of Defense, trended over the past five years?

Federal spending on Computer Systems Design Services (NAICS code 541512) has generally seen a consistent increase over the past five years, driven by the ongoing digital transformation initiatives across government agencies, particularly within the Department of Defense (DoD). The DoD, facing evolving threats and the need for technological superiority, invests heavily in modernizing its IT infrastructure, developing new systems, and integrating complex networks. This includes significant spending on services related to system design, architecture development, cybersecurity integration, and cloud computing. While specific figures fluctuate annually based on budget allocations and program priorities, the overall trend indicates sustained or growing demand for these specialized IT services as agencies strive to enhance efficiency, security, and operational capabilities through advanced technology solutions.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services

Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0002414R6301

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 12010 SUNSET HILLS RD, RESTON, VA, 20190

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

Financial Breakdown

Contract Ceiling: $49,051,804

Exercised Options: $48,794,404

Current Obligation: $30,330,539

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline