DoD awards $18.7M engineering support contract to International Systems Management Corp

Contract Overview

Contract Amount: $18,668,713 ($18.7M)

Contractor: International Systems Management Corp.

Awarding Agency: Department of Defense

Start Date: 2023-04-27

End Date: 2026-04-30

Contract Duration: 1,099 days

Daily Burn Rate: $17.0K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: AUSTRALIA AND CANADIAN ENGINEERING SUPPORT SERVICES

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20003

State: District of Columbia Government Spending

Plain-Language Summary

Department of Defense obligated $18.7 million to INTERNATIONAL SYSTEMS MANAGEMENT CORP. for work described as: AUSTRALIA AND CANADIAN ENGINEERING SUPPORT SERVICES Key points: 1. Contract awarded on a sole-source basis, raising questions about potential cost efficiencies. 2. Duration of nearly three years suggests a need for sustained engineering expertise. 3. Focus on engineering services indicates a critical role in supporting defense operations. 4. Awarded by the Department of the Navy, aligning with naval modernization efforts. 5. Contract type is Cost Plus Fixed Fee, which can incentivize cost overruns if not managed closely. 6. The contract's value is moderate within the broader context of defense procurement.

Value Assessment

Rating: fair

The contract value of $18.7 million for engineering support services over approximately three years appears moderate. Without specific benchmarks for similar engineering support contracts within the Department of Defense, a precise value-for-money assessment is challenging. The Cost Plus Fixed Fee (CPFF) contract type carries inherent risks of cost escalation if not rigorously monitored, potentially impacting the overall value. Further analysis would require comparison with industry standards for similar services and contractor performance on comparable contracts.

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. This approach is typically used when only one contractor is deemed capable of meeting the requirement, or in urgent situations. The lack of competition means there was no opportunity for multiple vendors to bid, which could limit price discovery and potentially lead to higher costs for the government compared to a fully competed contract. The rationale for the sole-source award needs further investigation to ensure it was justified.

Taxpayer Impact: Sole-source awards limit the government's ability to leverage competition to secure the best possible pricing, potentially resulting in less favorable terms for taxpayers.

Public Impact

The Department of the Navy benefits from specialized engineering support services. Services are likely to contribute to the maintenance, development, or modernization of naval systems. The contract's geographic impact is centered in the District of Columbia. Workforce implications include the potential for employment of specialized engineers and technical staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases costs for taxpayers.
Cost Plus Fixed Fee contract type can incentivize cost overruns if not managed effectively.
Lack of transparency regarding the justification for sole-source award.
Limited public information on the specific engineering services to be provided.

Positive Signals

Awarded to a single contractor suggests specialized capabilities meeting a specific need.
Contract duration indicates a sustained requirement for critical engineering support.
Awarded by the Department of the Navy, a key defense agency.

Sector Analysis

This contract falls within the Engineering Services sector, a critical component of the broader professional, scientific, and technical services industry. This sector supports various government functions, including defense, infrastructure, and research. The market for engineering services is competitive, but specific niche capabilities, particularly those required for defense applications, can lead to sole-source awards. Benchmarking this contract's value would require comparing it to similar engineering support contracts awarded by defense agencies for specialized technical services.

Small Business Impact

There is no indication that this contract includes small business set-asides or subcontracting requirements. The sole-source nature of the award further suggests that opportunities for small businesses to participate as prime contractors were not pursued. Further investigation into subcontracting plans would be necessary to determine any indirect impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. Accountability measures would be tied to the terms of the Cost Plus Fixed Fee contract, requiring the contractor to adhere to agreed-upon cost ceilings and performance standards. Transparency is limited due to the sole-source nature and the absence of a competitive bidding process. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense Engineering Services
Naval Systems Engineering Support
Professional, Scientific, and Technical Services Contracts

Risk Flags

Sole-source award may limit competition and potentially increase costs.
Cost Plus Fixed Fee contract type carries inherent risk of cost overruns.
Lack of detailed justification for sole-source award requires further scrutiny.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.7 million to INTERNATIONAL SYSTEMS MANAGEMENT CORP.. AUSTRALIA AND CANADIAN ENGINEERING SUPPORT SERVICES

Who is the contractor on this award?

The obligated recipient is INTERNATIONAL SYSTEMS MANAGEMENT CORP..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $18.7 million.

What is the period of performance?

Start: 2023-04-27. End: 2026-04-30.

What is the specific justification for awarding this engineering support contract on a sole-source basis?

The provided data indicates the contract was awarded on a 'NOT AVAILABLE FOR COMPETITION' basis, which is synonymous with a sole-source award. The specific justification for this sole-source determination is not detailed in the provided data. Typically, sole-source awards are made when only one responsible source is available to satisfy the agency's needs, or in cases of urgent and compelling need. Without further documentation from the Department of the Navy, such as a Justification and Approval (J&A) document, the precise reasons for bypassing the competitive bidding process remain unknown. This lack of transparency can raise concerns about whether the government obtained the best possible value.

How does the Cost Plus Fixed Fee (CPFF) contract type compare to other contract types for similar engineering services?

The Cost Plus Fixed Fee (CPFF) contract type is common for research and development or complex services where the scope of work is not precisely defined at the outset. It reimburses the contractor for allowable costs plus a fixed fee representing profit. While it allows flexibility, it carries a higher risk of cost overruns compared to fixed-price contracts, as the government bears the risk of cost increases. For engineering services, fixed-price contracts might be preferred if the scope is well-defined, potentially offering better cost certainty. However, for highly specialized or evolving engineering needs, CPFF can be appropriate if managed with stringent oversight to control costs and ensure value.

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

Historical spending data for engineering support services by the Department of the Navy is not provided in the current data extract. To assess historical patterns, one would need to analyze procurement databases for similar contracts awarded over several fiscal years. This analysis would involve identifying contracts with similar Product Service Codes (PSCs) or North American Industry Classification System (NAICS) codes (like 541330 for Engineering Services), examining award values, contract types, and durations. Understanding past spending trends would help contextualize the $18.7 million award and identify any significant shifts in procurement strategy or volume for these services.

What are the potential risks associated with International Systems Management Corp. as a contractor for this type of service?

The provided data does not include specific performance history or risk indicators for International Systems Management Corp. on this particular contract. General risks associated with any contractor include potential for schedule delays, cost overruns (especially with CPFF contracts), quality issues, or failure to meet technical requirements. Without access to past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), past issues on similar contracts, or financial stability reports, a specific risk assessment for this contractor is not possible. The sole-source nature of this award means the government has presumably assessed the contractor's capability, but independent verification of potential risks would require more detailed information.

How does the $18.7 million contract value compare to the overall budget for Department of the Navy engineering services?

The provided data does not include the overall budget for the Department of the Navy's engineering services, making a direct comparison impossible. To contextualize the $18.7 million award, one would need to access the Navy's annual budget documents or comprehensive procurement spending reports. These reports would detail the total allocated funds for engineering and related professional services. Without this broader financial picture, it is difficult to determine if this contract represents a significant portion of the Navy's engineering expenditure or if it is a routine award within their overall spending portfolio.

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: N0002423R5156

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 6301 IVY LANE SUITE 601, GREENBELT, MD, 20770

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

Financial Breakdown

Contract Ceiling: $38,323,086

Exercised Options: $22,562,948

Current Obligation: $18,668,713

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline