DoD's $66M engineering support contract for TRIDENT II systems awarded without competition

Contract Overview

Contract Amount: $66,301,234 ($66.3M)

Contractor: Systems Planning and Analysis, Inc.

Awarding Agency: Department of Defense

Start Date: 2015-10-01

End Date: 2020-09-30

Contract Duration: 1,826 days

Daily Burn Rate: $36.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: IGF::CT::IGF TRIDENT II SYSTEMS ENG SUPPORT

Place of Performance

Location: ALEXANDRIA, ALEXANDRIA CITY County, VIRGINIA, 22311

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $66.3 million to SYSTEMS PLANNING AND ANALYSIS, INC. for work described as: IGF::CT::IGF TRIDENT II SYSTEMS ENG SUPPORT Key points: 1. Contract awarded on a sole-source basis, raising questions about potential cost efficiencies and market competition. 2. Significant duration of nearly 5 years suggests a long-term need for specialized engineering services. 3. The Cost Plus Fixed Fee (CPFF) contract type may incentivize cost overruns if not closely monitored. 4. Awarded to Systems Planning and Analysis, Inc., a contractor with a history of supporting defense programs. 5. The contract's value of $66.3 million warrants scrutiny regarding its alignment with performance objectives. 6. Engineering services are critical for maintaining complex defense systems like the TRIDENT II. 7. The absence of competition limits opportunities for innovative solutions and potentially lower pricing.

Value Assessment

Rating: questionable

Benchmarking the value of this $66.3 million contract is challenging due to its sole-source nature and the specialized engineering services provided for the TRIDENT II program. Without competitive bids, it's difficult to ascertain if the pricing reflects fair market value or if alternative, more cost-effective solutions were overlooked. The CPFF structure, while common for R&D and complex services, carries inherent risks of cost escalation if not rigorously managed. A comparison to similar sole-source engineering support contracts for major defense platforms would be necessary for a more robust value assessment.

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 typically occurs when a specific contractor possesses unique capabilities, proprietary information, or is the only source capable of meeting the requirement. The lack of competition means that the government did not benefit from the price discovery mechanisms inherent in a competitive bidding process, potentially leading to higher costs than if multiple firms had vied for the contract.

Taxpayer Impact: Taxpayers may have paid a premium for these services due to the absence of competitive pressure. The government's ability to negotiate the best possible price was limited without alternative offers.

Public Impact

The primary beneficiaries are the Department of the Navy and the broader U.S. strategic deterrence mission, which relies on the operational readiness of the TRIDENT II missile system. The contract delivers essential engineering support, including analysis, design, and technical expertise, crucial for the sustainment and potential upgrades of the TRIDENT II. Geographic impact is likely concentrated around naval bases and defense contractor facilities involved in the TRIDENT program, primarily in Virginia. Workforce implications include the employment of highly skilled engineers and technical specialists within Systems Planning and Analysis, Inc. and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential for cost savings.
Cost Plus Fixed Fee contract type can lead to cost overruns if not managed effectively.
Long contract duration (nearly 5 years) increases exposure to potential performance issues or scope creep.
Lack of transparency in the justification for sole-source award.
Specialized nature of TRIDENT II systems may create high barriers to entry for competitors, perpetuating sole-source awards.

Positive Signals

Contract supports a critical national security asset (TRIDENT II).
Awarded to a contractor with demonstrated experience in defense systems engineering.
Engineering services are essential for maintaining the reliability and effectiveness of strategic weapons.
The fixed fee component of the CPFF contract provides some level of cost predictability.
The contract duration suggests a stable, long-term requirement, allowing for focused expertise development.

Sector Analysis

This contract falls within the Engineering Services sector (NAICS 541330), a critical component of the broader defense industrial base. The market for specialized engineering support for strategic weapon systems is highly concentrated, often dominated by a few firms with the necessary security clearances, technical expertise, and established relationships with agencies like the Department of the Navy. Spending benchmarks for similar sole-source engineering contracts on major defense platforms can vary widely but often represent significant investments due to the complexity and criticality of the systems involved.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the 'ss' (small business subcontracting) flag is also false. This suggests that small businesses are unlikely to be directly involved as prime contractors or through mandated subcontracting opportunities on this specific award. The specialized nature of the work and the sole-source award mechanism may limit opportunities for small business participation.

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 parameters and that the contractor meets all performance objectives. Inspector General reviews may be initiated if specific concerns regarding fraud, waste, or abuse arise. Transparency is limited due to the sole-source nature, but contract modifications and performance reports should be available through official channels.

Related Government Programs

TRIDENT II Submarine Program
Strategic Weapons Systems Support
Naval Sea Systems Command (NAVSEA) Contracts
Department of Defense Engineering Services
Missile Defense Systems Support

Risk Flags

Sole-source award
Cost-reimbursable elements (CPFF)
Lack of small business participation
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $66.3 million to SYSTEMS PLANNING AND ANALYSIS, INC.. IGF::CT::IGF TRIDENT II SYSTEMS ENG SUPPORT

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 $66.3 million.

What is the period of performance?

Start: 2015-10-01. End: 2020-09-30.

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

The provided data does not include the specific justification for the sole-source award. Typically, sole-source contracts are justified under specific circumstances outlined in federal acquisition regulations, such as the existence of only one responsible source, urgent and compelling needs, or when the services require unique capabilities or proprietary data held by a single contractor. For a contract of this magnitude and duration supporting a critical system like the TRIDENT II, the justification would likely involve assertions of unique technical expertise, specialized knowledge of the TRIDENT II system, or potentially proprietary data essential for the required engineering support. A thorough review of the contract file and associated documentation would be necessary to ascertain the precise rationale.

How does the Cost Plus Fixed Fee (CPFF) structure compare to other contract types for similar engineering services, and what are the associated risks?

The Cost Plus Fixed Fee (CPFF) contract type is often used for research and development, complex services, or situations where the scope of work is not precisely defined at the outset. In a CPFF contract, the contractor is reimbursed for allowable costs plus a fixed fee representing profit. Compared to fixed-price contracts, CPFF offers more flexibility for the government when requirements are uncertain, but it shifts more cost risk to the government. The primary risk is that the contractor may have less incentive to control costs, as the fixed fee remains constant regardless of the final cost incurred. Effective oversight, detailed cost tracking, and clear performance metrics are essential to mitigate this risk and ensure value for money. Other contract types like Firm-Fixed-Price (FFP) offer greater cost certainty but are less suitable for undefined scopes.

What is the track record of Systems Planning and Analysis, Inc. in supporting major defense programs, particularly strategic weapons systems?

Systems Planning and Analysis, Inc. (SPA) has a significant track record supporting various defense programs, including those related to naval systems and strategic weapons. While the provided data doesn't detail SPA's specific performance on this TRIDENT II contract (as it covers the period 2015-2020), their history suggests experience in providing complex analytical and engineering services to the Department of Defense. SPA often engages in providing technical support, systems engineering, and program management assistance for major acquisition programs. Their ability to secure sole-source contracts for critical systems like TRIDENT II implies a level of trust and perceived capability by the awarding agency. Further investigation into past performance reviews and contract awards would provide a more comprehensive understanding of their expertise and reliability.

Can the $66.3 million contract value be benchmarked against similar engineering support contracts for other strategic missile systems?

Benchmarking this $66.3 million contract value against similar engineering support contracts for other strategic missile systems is challenging due to several factors. Firstly, the TRIDENT II is a unique and highly specialized system, making direct comparisons difficult. Secondly, the sole-source nature of this award means there was no competitive bidding to establish a market price. Thirdly, contract values are influenced by the specific scope of work, duration, labor mix, and overhead rates, which can vary significantly. To perform a meaningful benchmark, one would need to identify contracts for comparable systems (e.g., Minuteman III, future ICBM programs) that were competed, had clearly defined scopes of work, and were awarded around the same time period. Even then, differences in technical requirements and contractor capabilities would need careful consideration.

What are the potential risks associated with the long duration (nearly 5 years) of this engineering support contract?

The long duration of this contract, spanning 1826 days (nearly 5 years), presents several potential risks. Firstly, it increases the government's exposure to potential cost increases over time, especially if inflation or unforeseen technical challenges arise that necessitate contract modifications. Secondly, a prolonged contract period can lead to complacency or a decline in performance if robust oversight mechanisms are not consistently applied. Thirdly, the longer the contract, the greater the risk that the contractor's technology or methodologies may become outdated, potentially hindering innovation or requiring costly updates. Finally, a long-term sole-source award can entrench the incumbent contractor, making it harder for new entrants to compete for future requirements, potentially reducing long-term competition and innovation within the sector.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: TECHNICAL REPRESENTATIVE SVCS. › TECHNICAL REPRESENTATIVE SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0003016R0019

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: $79,796,076

Exercised Options: $72,241,087

Current Obligation: $66,301,234

Actual Outlays: $10,378,196

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline