DoD's $22.7M Engineering Services Contract with EMCUBE INC: A Deep Dive into Value and Competition

Contract Overview

Contract Amount: $22,706,737 ($22.7M)

Contractor: Emcube Inc

Awarding Agency: Department of Defense

Start Date: 2014-10-01

End Date: 2019-11-30

Contract Duration: 1,886 days

Daily Burn Rate: $12.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: IGT:: OT:: IGF SYSTEMS ENGINEERING SUPPORT AND TRAINING

Place of Performance

Location: ALEXANDRIA, ALEXANDRIA CITY County, VIRGINIA, 22311

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $22.7 million to EMCUBE INC for work described as: IGT:: OT:: IGF SYSTEMS ENGINEERING SUPPORT AND TRAINING Key points: 1. Analysis reveals potential for improved value through competitive bidding. 2. Contract awarded via sole-source procurement, limiting price discovery. 3. Performance duration of nearly 5 years suggests a long-term need. 4. Engineering services sector is characterized by specialized expertise and high barriers to entry. 5. Contract value falls within a typical range for complex engineering support. 6. Oversight mechanisms are crucial given the sole-source nature of the award.

Value Assessment

Rating: fair

The contract's value of $22.7 million over approximately five years for engineering services is difficult to benchmark without more specific service details. However, the absence of competition suggests that taxpayers may not have received the most advantageous pricing. Comparing this to similar sole-source engineering contracts within the Department of Defense could provide further insight, but generally, competitive processes drive better value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, EMCUBE INC, was solicited. This approach bypasses the competitive process, which typically involves multiple bidders vying for the contract. While sole-source awards can be justified in specific circumstances (e.g., unique capabilities), they generally lead to less robust price discovery and potentially higher costs for the government.

Taxpayer Impact: The lack of competition means taxpayers likely paid a premium compared to what might have been achieved through a bidding process. This highlights the importance of ensuring sole-source justifications are rigorous and that competition is pursued whenever feasible.

Public Impact

The Department of Defense benefits from specialized engineering support and training. Services provided likely contribute to the operational readiness and technical capabilities of naval forces. The contract's geographic impact is centered in Virginia, supporting the defense industrial base in that region. Workforce implications include the employment of skilled engineers and technical personnel by EMCUBE INC.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Lack of detailed performance metrics makes value assessment challenging.
Contract duration could lead to vendor lock-in if not managed carefully.

Positive Signals

Contractor has secured a significant award, indicating perceived capability by the agency.
Long contract duration suggests a stable, ongoing requirement met by the contractor.
Focus on engineering support and training is critical for defense operations.

Sector Analysis

Engineering services represent a significant segment of the federal contracting market, particularly within the defense sector. This contract falls under the 'Engineering Services' NAICS code (541330). The market is characterized by firms possessing specialized technical expertise, often requiring advanced degrees and security clearances. Comparable spending benchmarks for similar engineering support contracts within the DoD can vary widely based on scope, complexity, and duration, but this $22.7 million award over nearly five years is a substantial commitment.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements mentioned in the provided data. The sole-source nature further reduces the likelihood of small business participation through subcontracting opportunities. This contract primarily benefits the prime contractor, EMCUBE INC, and its direct employees, with limited direct implications for the broader small business ecosystem unless EMCUBE INC voluntarily engages small businesses as subcontractors.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Given it's a sole-source award, there may be heightened scrutiny from agency oversight bodies and potentially the Government Accountability Office (GAO) if protests were filed. Transparency is limited by the non-competitive nature, but contract performance reviews and financial audits would be standard oversight mechanisms. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse.

Related Government Programs

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

Risk Flags

Sole-source award may result in suboptimal pricing.
Lack of competition limits transparency and potential for innovation.
Contract performance details are not publicly available for robust assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.7 million to EMCUBE INC. IGT:: OT:: IGF SYSTEMS ENGINEERING SUPPORT AND TRAINING

Who is the contractor on this award?

The obligated recipient is EMCUBE 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 $22.7 million.

What is the period of performance?

Start: 2014-10-01. End: 2019-11-30.

What specific engineering services were provided under this contract, and how did they contribute to the Department of the Navy's mission?

The provided data indicates the contract was for 'IGT:: OT:: IGF SYSTEMS ENGINEERING SUPPORT AND TRAINING'. While the acronyms are not fully defined, 'Systems Engineering Support and Training' suggests services related to the design, development, integration, testing, and maintenance of complex systems, likely for naval platforms or related technologies. This support is crucial for ensuring the operational effectiveness, reliability, and technological advancement of military assets. The training component would ensure personnel are proficient in operating and maintaining these systems. Without more granular details on the specific systems or projects, a precise mission contribution is hard to quantify, but it undoubtedly supports the Navy's overall readiness and capability objectives.

How does the $22.7 million contract value compare to similar sole-source engineering support contracts awarded by the Department of Defense?

Benchmarking this $22.7 million contract value against similar sole-source engineering support contracts within the DoD is challenging without access to a comprehensive database of comparable awards with detailed service scopes. However, for a contract spanning nearly five years (1886 days) and involving specialized engineering expertise, this value is not inherently excessive, but the lack of competition prevents a definitive value-for-money assessment. Sole-source contracts often carry a premium. To provide a robust comparison, one would need to identify contracts with similar durations, service types (e.g., systems engineering, software development, technical consulting), and agency components (e.g., other Navy commands, Air Force, Army) awarded under sole-source justifications. The absence of competition means this figure represents EMCUBE INC's proposed price rather than a market-tested price.

What are the potential risks associated with awarding a nearly $23 million contract on a sole-source basis for engineering services?

The primary risk of a sole-source award is the lack of competitive pressure, which can lead to inflated pricing and reduced innovation. Taxpayers may not receive the best possible value for their money. Another risk is vendor lock-in, where the government becomes overly reliant on a single provider, making it difficult to switch or negotiate favorable terms in the future. There's also a risk that the justification for the sole-source award might be flawed or that alternative solutions or contractors were overlooked. Furthermore, without competition, the agency has less leverage to drive performance improvements or cost efficiencies throughout the contract's lifecycle. Ensuring robust contract management and performance monitoring becomes even more critical in sole-source situations.

What was the justification for awarding this contract as sole-source, and were alternative procurement methods considered?

The provided data states the contract was 'NOT COMPETED,' which is synonymous with a sole-source award. Specific justifications for why this contract was not competed are not included in the data. Typically, sole-source awards require a formal justification and approval (J&A) process, often citing reasons such as unique capabilities possessed by only one contractor, urgent and compelling needs where competition is impractical, or specific follow-on work to a previously awarded contract where only the original contractor can perform. Without the J&A document, it's impossible to know the exact rationale or if alternative procurement methods were formally considered and rejected. The Department of the Navy would have had to document why full and open competition was not feasible or not in the government's best interest.

What is EMCUBE INC's track record with the federal government, particularly in delivering engineering services?

EMCUBE INC has secured this $22.7 million contract with the Department of the Navy, indicating a level of trust and capability recognized by the agency. While this specific contract spans nearly five years, suggesting a significant engagement, a comprehensive assessment of their track record would require examining their past performance on other federal contracts. This includes looking at contract values, types of services rendered, past performance reviews (if publicly available), any history of contract disputes or terminations, and their overall success in meeting government requirements. A deeper dive into federal procurement databases like SAM.gov or FPDS could reveal more about their history, including awards from other agencies and their performance ratings on those contracts.

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: 1900 N BEAUREGARD ST STE 105, ALEXANDRIA, VA, 22311

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

Financial Breakdown

Contract Ceiling: $22,785,019

Exercised Options: $22,785,019

Current Obligation: $22,706,737

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline