DoD awards CACI $22.8M engineering services contract, raising questions about competition and value

Contract Overview

Contract Amount: $22,807,132 ($22.8M)

Contractor: CACI, Inc. - Federal

Awarding Agency: Department of Defense

Start Date: 2023-02-17

End Date: 2026-02-16

Contract Duration: 1,095 days

Daily Burn Rate: $20.8K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: YEAR 1: BASE - LABOR

Place of Performance

Location: CHANTILLY, FAIRFAX County, VIRGINIA, 20151

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $22.8 million to CACI, INC. - FEDERAL for work described as: YEAR 1: BASE - LABOR Key points: 1. Contract awarded on a "not available for competition" basis, limiting price discovery. 2. Significant duration of 1095 days suggests a long-term need for these engineering services. 3. Cost-plus-fixed-fee contract type may incentivize cost overruns if not closely monitored. 4. The base year labor cost of $22.8M warrants scrutiny against similar engineering service contracts. 5. Contractor CACI, Inc. - Federal is a large, established entity in the federal contracting space. 6. The contract falls under Engineering Services (NAICS 541330), a critical sector for defense operations.

Value Assessment

Rating: questionable

The base year labor cost of $22.8M for engineering services requires careful benchmarking. Without specific deliverables or performance metrics, it's difficult to assess value for money. The cost-plus-fixed-fee structure, while common for R&D or uncertain scope, can lead to higher costs if not managed diligently. Comparing this to similar engineering support contracts within the Department of Defense or other agencies for comparable tasks would be essential to determine if the pricing is competitive and reflects fair market value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under a 'not available for competition' justification, indicating that a full and open competition was not pursued. This typically occurs when only one source is capable of meeting the agency's needs. The lack of competition means that potential cost savings that could arise from multiple bidders vying for the contract were not realized, potentially leading to a higher price for the government.

Taxpayer Impact: The absence of competition means taxpayers may not be receiving the best possible price for these engineering services, as there was no market pressure to drive down costs.

Public Impact

The Department of the Navy benefits from specialized engineering services to support its operations. This contract likely supports critical defense infrastructure and technological development. The geographic impact is primarily within Virginia, where the contractor is located, but the services support naval operations nationwide. The contract may indirectly support a workforce of engineers and technical specialists employed by CACI, Inc. - Federal.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competitive bidding may lead to inflated costs for taxpayers.
Cost-plus-fixed-fee structure requires robust oversight to prevent cost overruns.
Limited transparency due to sole-source award hinders public assessment of value.
Contract duration of three years necessitates ongoing performance monitoring.

Positive Signals

CACI, Inc. - Federal is an established contractor with experience in federal defense contracts.
Engineering services are crucial for maintaining and advancing defense capabilities.
The contract is awarded to a specific agency (Department of the Navy) indicating a focused need.

Sector Analysis

Engineering services represent a significant segment of the federal contracting market, particularly within the defense sector. Companies providing these services are essential for designing, developing, and maintaining complex military systems and infrastructure. The Department of Defense is a major consumer of engineering services, often requiring specialized expertise for advanced projects. Benchmarking this contract's value would involve comparing its cost and scope to other engineering support contracts awarded by the DoD or similar agencies for tasks such as systems engineering, technical support, or program management.

Small Business Impact

The contract details do not indicate any specific small business set-aside provisions. Given the sole-source nature of the award, it is unlikely that subcontracting opportunities for small businesses were a primary consideration during the initial award process. However, the prime contractor, CACI, Inc. - Federal, may have its own small business subcontracting goals as part of its broader federal contracting obligations. The impact on the small business ecosystem would depend on whether CACI actively seeks small business partners for this specific contract.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. As a cost-plus-fixed-fee contract, rigorous financial oversight and performance monitoring are crucial to ensure costs remain within acceptable limits and that the contractor meets its obligations. Transparency may be limited due to the sole-source nature of the award, but contract performance reports and financial audits would be key accountability measures. The Inspector General's office for the Department of Defense would have jurisdiction for audits and investigations if any irregularities were suspected.

Related Government Programs

Department of Defense Engineering Services
Naval Systems Engineering Support
Cost-Plus-Fixed-Fee Contracts
Sole-Source Defense Contracts

Risk Flags

Sole-source award limits price competition.
Cost-plus-fixed-fee contract type requires diligent oversight.
Lack of detailed performance metrics hinders value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.8 million to CACI, INC. - FEDERAL. YEAR 1: BASE - LABOR

Who is the contractor on this award?

The obligated recipient is CACI, INC. - FEDERAL.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $22.8 million.

What is the period of performance?

Start: 2023-02-17. End: 2026-02-16.

What is CACI, Inc. - Federal's track record with similar Department of Defense engineering contracts?

CACI, Inc. - Federal is a large government contractor with extensive experience across various defense agencies. They have a history of performing engineering, IT, and professional services for the Department of Defense. Analyzing their past performance on similar cost-plus-fixed-fee contracts, particularly those with the Department of the Navy, would provide insight into their ability to manage costs and deliver on complex engineering requirements. Reviewing past performance evaluations and any contract disputes or awards associated with CACI on similar projects would be crucial for a comprehensive assessment of their track record.

How does the $22.8M base year labor cost compare to market rates for similar engineering services?

Benchmarking the $22.8M base year labor cost against market rates for comparable engineering services is challenging without detailed scope of work and specific labor categories. However, general industry data for engineering services within the defense sector can provide a rough comparison. Factors such as the level of expertise required, security clearances, geographic location, and the complexity of the engineering tasks will influence the market rate. A detailed analysis would involve comparing the estimated labor hours and average hourly rates for specific skill sets against government-wide contract vehicles (like GSA schedules) or publicly available salary data for defense contractors in Virginia. The cost-plus-fixed-fee structure also means this is an estimated cost, subject to adjustments.

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

The primary risk associated with a sole-source award for engineering services is the potential for inflated costs due to the lack of competition. Without competing bids, the government may pay a premium for the services. Another risk is a potential decrease in service quality or innovation, as the contractor faces less pressure to excel compared to a competitive environment. Furthermore, sole-source awards can sometimes indicate a lack of market research or planning by the agency, potentially leading to suboptimal contract structures or pricing. Ensuring robust oversight and performance management becomes even more critical in sole-source situations to mitigate these risks.

What is the expected program effectiveness or outcome of these engineering services for the Department of the Navy?

The expected program effectiveness and outcome of these engineering services are not explicitly detailed in the provided data. However, engineering services for the Department of the Navy typically aim to support the design, development, testing, and maintenance of naval platforms, systems, and infrastructure. This could include anything from naval architecture and marine engineering to systems integration, cybersecurity engineering, or research and development for new technologies. The effectiveness will be measured by the contractor's ability to meet technical specifications, adhere to schedules, and contribute to the overall mission readiness and technological advancement of the Navy.

What are historical spending patterns for engineering services by the Department of the Navy?

Historical spending patterns for engineering services by the Department of the Navy are substantial, reflecting the complexity and scale of naval operations and acquisitions. The Navy consistently procures a wide range of engineering support, from conceptual design and prototyping to lifecycle sustainment and modernization. Annual spending can fluctuate based on major shipbuilding programs, research initiatives, and infrastructure projects. Analyzing historical data from sources like USAspending.gov or agency budget reports would reveal trends in contract types (e.g., cost-plus vs. fixed-price), dominant contractors, and specific engineering disciplines that receive the most funding.

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 AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0002422R4122

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: CACI International Inc

Address: 14370 NEWBROOK DRIVE, CHANTILLY, VA, 20151

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

Financial Breakdown

Contract Ceiling: $91,381,702

Exercised Options: $31,249,993

Current Obligation: $22,807,132

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline