DoD's $47.4M Engineering Services Contract Awarded to SPA, Inc. with No Competition

Contract Overview

Contract Amount: $47,432,850 ($47.4M)

Contractor: Systems Planning and Analysis, Inc.

Awarding Agency: Department of Defense

Start Date: 2013-12-16

End Date: 2016-12-15

Contract Duration: 1,095 days

Daily Burn Rate: $43.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: FY14 NWS ACQUISITION AND OPERATIONS

Place of Performance

Location: ALEXANDRIA, ALEXANDRIA CITY County, VIRGINIA, 22311

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $47.4 million to SYSTEMS PLANNING AND ANALYSIS, INC. for work described as: FY14 NWS ACQUISITION AND OPERATIONS Key points: 1. The contract was awarded on a sole-source basis, raising questions about potential cost efficiencies and market competitiveness. 2. The duration of the contract (1095 days) suggests a significant, long-term need for the engineering services provided. 3. The 'Engineering Services' category (NAICS 541330) is broad, making it difficult to assess the specific nature of the work without further detail. 4. The contract type is Cost Plus Fixed Fee (CPFF), which can incentivize cost overruns if not closely monitored. 5. The absence of competition suggests potential risks related to contractor performance and innovation. 6. The total award amount of $47.4M indicates a substantial investment in engineering support for the Department of the Navy.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the lack of competitive bidding and the broad nature of the engineering services. The Cost Plus Fixed Fee (CPFF) contract type, while common for complex projects, carries inherent risks of cost escalation if not managed with rigorous oversight. Without comparable sole-source awards or market data for similar specialized engineering services, it's difficult to definitively assess if the pricing represents fair market value. The fixed fee component provides some cost control, but the overall cost is subject to the actual expenses incurred by the contractor.

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 approach is typically justified when only one vendor possesses the necessary unique capabilities, or in cases of urgent need where competition is impractical. The lack of competition limits the government's ability to leverage market forces to drive down prices and ensure the best possible value. It also means that taxpayers may not benefit from the cost savings that could arise from a competitive bidding process.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as the government does not benefit from competitive price discovery. This contract's value could potentially be higher than if it had been competed.

Public Impact

The Department of the Navy benefits from specialized engineering services crucial for its operations and strategic initiatives. The contract supports the development, maintenance, or enhancement of naval systems and infrastructure. The geographic impact is likely concentrated around naval facilities or project sites where the engineering expertise is applied. The contract may indirectly support a specialized engineering workforce, contributing to the technical expertise within the defense sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Cost Plus Fixed Fee structure requires robust oversight to prevent cost overruns.
Broad 'Engineering Services' category lacks specificity, making performance assessment difficult.
Sole-source award limits opportunities for small businesses to participate.

Positive Signals

Contract awarded to a known entity (SYSTEMS PLANNING AND ANALYSIS, INC.) potentially indicating specialized expertise.
Definitive contract structure provides a clear framework for the engagement.
The contract duration suggests a stable, long-term need being met.

Sector Analysis

This contract falls within the Engineering Services sector (NAICS 541330), a critical component of the broader professional, scientific, and technical services industry. This sector supports a wide range of government and private sector activities, including defense, infrastructure, and technology development. The market for specialized engineering services is often characterized by high barriers to entry due to required expertise and security clearances. The Department of Defense is a significant consumer of these services, often requiring highly specialized technical support for complex weapon systems and platforms. Comparable spending benchmarks are difficult to establish without more specific service details, but the overall federal spending on engineering services is substantial.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. The sole-source nature of the award further limits opportunities for small businesses to participate in this specific contract. This means that the primary contractor, SYSTEMS PLANNING AND ANALYSIS, INC., will likely perform the majority of the work, potentially excluding smaller, specialized firms from contributing to this significant defense expenditure.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program managers within the Department of the Navy. The Cost Plus Fixed Fee (CPFF) structure necessitates diligent monitoring of costs and performance to ensure value for money. Transparency is limited due to the sole-source nature and lack of public detail on specific deliverables. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Research and Development
Naval Systems Engineering Support
Professional, Scientific, and Technical Services Contracts
Defense Acquisition Programs

Risk Flags

Sole-source award lacks competition
Cost Plus Fixed Fee contract type carries risk of cost overruns
Broad service category lacks specificity
Potential for reduced value for taxpayer money due to lack of competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $47.4 million to SYSTEMS PLANNING AND ANALYSIS, INC.. FY14 NWS ACQUISITION AND OPERATIONS

Who is the contractor on this award?

The obligated recipient is SYSTEMS PLANNING AND ANALYSIS, 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 $47.4 million.

What is the period of performance?

Start: 2013-12-16. End: 2016-12-15.

What specific engineering services are being provided under this contract, and how do they align with the Department of the Navy's strategic objectives?

The contract specifies 'Engineering Services' under NAICS code 541330. While the exact nature of these services is not detailed in the provided data, this category typically encompasses a wide range of activities such as design, development, testing, and evaluation of systems and equipment. For the Department of the Navy, these services could relate to naval vessel design, weapons systems development, electronic warfare systems, or infrastructure projects. The alignment with strategic objectives would depend on the specific projects undertaken, which are not publicly disclosed. Without more granular information on the Statement of Work (SOW), it is difficult to ascertain the precise strategic contribution.

How does the Cost Plus Fixed Fee (CPFF) structure of this contract potentially impact cost control and contractor performance?

The CPFF contract type involves the government reimbursing the contractor for all allowable costs incurred, plus a fixed fee representing profit. This structure is often used for research and development or complex projects where the scope is not fully defined at the outset. While the fixed fee provides a degree of predictability for the contractor's profit, it can incentivize cost increases, as the contractor is reimbursed for all legitimate expenses. Effective cost control relies heavily on robust government oversight, including detailed cost audits and performance monitoring to ensure that costs are reasonable and allocable to the contract. Contractor performance is driven by the need to meet contract requirements to receive the fixed fee, but the incentive to minimize costs is less direct than in fixed-price contracts.

What are the potential risks associated with awarding a contract of this magnitude on a sole-source basis?

The primary risk of a sole-source award is the lack of competitive pressure, which can lead to inflated prices and reduced value for the government. Without competing bids, the government may not secure the most cost-effective solution or the vendor with the best overall capabilities. There's also a risk of complacency from the awarded contractor, as they face no direct competition for future work related to this contract. Furthermore, it limits opportunities for innovation that might arise from a competitive environment and can raise concerns about fairness and transparency in the procurement process. For a contract of $47.4 million, these risks are amplified due to the significant taxpayer investment involved.

Can Systems Planning and Analysis, Inc. (SPA, Inc.) demonstrate a strong track record with the Department of the Navy or similar sole-source engineering contracts?

While the provided data confirms SYSTEMS PLANNING AND ANALYSIS, INC. as the contractor, it does not offer details on their specific track record or past performance with the Department of the Navy or on similar sole-source contracts. A comprehensive assessment would require reviewing past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), previous contract awards, and any publicly available information regarding their capabilities and project history. Without this information, it's difficult to definitively assess their suitability and past success in fulfilling such significant engineering service requirements, especially under a sole-source justification.

How does this $47.4 million contract compare to historical spending on engineering services by the Department of the Navy or the Department of Defense?

The $47.4 million award represents a significant but not unprecedented level of spending for engineering services within the Department of Defense. The DoD consistently awards billions of dollars annually for a wide array of engineering, research, development, and technical support services across its various branches, including the Navy. To provide a precise comparison, one would need to analyze historical spending data for NAICS code 541330 (Engineering Services) specifically for the Department of the Navy over several fiscal years. This contract appears to be a substantial, multi-year engagement, indicative of the ongoing need for specialized technical expertise in defense acquisition and sustainment.

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 COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 2001 N BEAUREGARD ST., SUITE 100, ALEXANDRIA, VA, 22311

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

Financial Breakdown

Contract Ceiling: $55,531,063

Exercised Options: $52,188,243

Current Obligation: $47,432,850

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline