DoD's $34.7M Engineering Services Contract with SPA Inc. Awarded via Full and Open Competition

Contract Overview

Contract Amount: $34,686,502 ($34.7M)

Contractor: Systems Planning and Analysis, Inc.

Awarding Agency: Department of Defense

Start Date: 2016-11-01

End Date: 2021-10-31

Contract Duration: 1,825 days

Daily Burn Rate: $19.0K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: IGF::OT::IGF FOR OTHER FUNCTIONS FY17 NWS ACQ&OPERATION SUPPORT

Place of Performance

Location: ALEXANDRIA, ALEXANDRIA CITY County, VIRGINIA, 22311

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $34.7 million to SYSTEMS PLANNING AND ANALYSIS, INC. for work described as: IGF::OT::IGF FOR OTHER FUNCTIONS FY17 NWS ACQ&OPERATION SUPPORT Key points: 1. Contract awarded to a single, established firm with a history of government service. 2. Pricing structure (Cost Plus Fixed Fee) may lead to cost overruns if not closely managed. 3. Long contract duration (5 years) presents potential for scope creep and evolving requirements. 4. Engineering services are critical for defense operations, indicating a high-demand sector. 5. The contract's value is moderate within the broader context of defense spending. 6. Performance metrics and oversight will be crucial for ensuring value for taxpayer money.

Value Assessment

Rating: fair

The contract's value of approximately $34.7 million over five years, averaging $6.9 million annually, needs to be benchmarked against similar engineering services contracts. The Cost Plus Fixed Fee (CPFF) pricing structure, while common for complex services, carries inherent risks of cost escalation if not rigorously managed. Without specific performance data or comparison to industry benchmarks for similar engineering tasks, it is difficult to definitively assess value for money. However, the long duration and CPFF nature suggest a need for strong oversight to ensure efficiency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' which suggests that while competition was initially sought, specific circumstances led to the exclusion of certain potential bidders. The exact reasons for this exclusion are not detailed, but it implies a potentially narrower field of competition than a truly unrestricted full and open process. This could impact price discovery and potentially lead to higher costs compared to a scenario with more active bidders.

Taxpayer Impact: The limited competition may mean taxpayers did not benefit from the lowest possible price that could have been achieved through broader bidding. This approach warrants scrutiny to ensure it was justified and did not unduly limit cost-saving opportunities.

Public Impact

The Department of Defense benefits from specialized engineering expertise to support its acquisition and operational needs. Services delivered likely include technical analysis, system design, and engineering support for defense platforms. The geographic impact is primarily within the defense sector's operational areas, potentially worldwide. Workforce implications include the employment of engineers and technical specialists by the contractor, SYSTEMS PLANNING AND ANALYSIS, INC.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee structure can incentivize higher spending if not managed.
Limited competition after exclusion of sources may reduce price competitiveness.
Long contract duration increases risk of scope creep and cost overruns.
Lack of specific performance metrics in the provided data makes value assessment challenging.

Positive Signals

Awarded to a single, established contractor (SYSTEMS PLANNING AND ANALYSIS, INC.) suggesting reliability.
Contract falls under engineering services, a critical area for defense operations.
The contract was competed, indicating an effort towards market-based procurement.

Sector Analysis

This contract falls within the Engineering Services sector, a critical component of the broader Defense industry. The Defense sector is characterized by high technological complexity, significant government investment, and long procurement cycles. Spending in this area is driven by national security requirements and the need for advanced technological solutions. Comparable spending benchmarks would involve analyzing other large-scale engineering support contracts awarded by the DoD and other federal agencies for similar technical capabilities.

Small Business Impact

The provided data indicates that small business participation (ss: false, sb: false) was not a primary focus for this specific contract, as it was not set aside for small businesses and there's no explicit mention of subcontracting goals. This suggests that the primary contractor, SYSTEMS PLANNING AND ANALYSIS, INC., likely possesses the scale and capabilities to handle the contract requirements independently. The impact on the small business ecosystem is minimal for this particular award, as it does not appear to leverage small business set-aside provisions or mandate significant subcontracting.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting and program management offices. Accountability measures would be embedded in the contract's terms, including performance standards, reporting requirements, and payment schedules tied to deliverables. Transparency is facilitated through contract databases like FPDS, though detailed performance reports are often internal. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense Engineering Services
Naval Acquisition Support
Systems Engineering Contracts
Cost Plus Fixed Fee Contracts
Federal IT and Engineering Services

Risk Flags

Potential for cost overruns due to CPFF structure.
Limited competition may impact price competitiveness.
Long contract duration increases risk of scope creep and requirement changes.
Lack of detailed performance metrics in provided data hinders value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $34.7 million to SYSTEMS PLANNING AND ANALYSIS, INC.. IGF::OT::IGF FOR OTHER FUNCTIONS FY17 NWS ACQ&OPERATION 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 $34.7 million.

What is the period of performance?

Start: 2016-11-01. End: 2021-10-31.

What is the track record of SYSTEMS PLANNING AND ANALYSIS, INC. with the Department of Defense?

SYSTEMS PLANNING AND ANALYSIS, INC. (SPA) has a significant history of contracting with the Department of Defense (DoD). While the provided data only shows one contract, SPA is a well-established government contractor specializing in systems engineering, technical support, and analytical services. They have secured numerous contracts across various DoD branches, including the Navy, Air Force, and Army, often in support of complex weapon systems, C4ISR, and strategic planning. Their extensive experience suggests a deep understanding of DoD requirements and processes. However, a comprehensive review would involve analyzing past performance evaluations, any past disputes or contract terminations, and the overall value and scope of their previous work with the DoD to fully assess their track record.

How does the annual value of this contract compare to similar engineering services contracts within the DoD?

The annual value of this contract averages approximately $6.94 million ($34.7M / 5 years). To benchmark this, one would need to analyze the average annual value of definitive contracts awarded by the DoD for engineering services (NAICS code 541330) over a similar period. Data from FPDS or other federal procurement databases would be consulted. Factors like contract type (e.g., CPFF vs. FFP), duration, specific services required (e.g., naval engineering vs. aerospace), and the specific agency or service awarding the contract are crucial for a meaningful comparison. Without this comparative data, it's difficult to definitively state if $6.94 million annually is high, low, or average for this type of service within the DoD.

What are the primary risks associated with the Cost Plus Fixed Fee (CPFF) contract type used here?

The primary risk associated with a Cost Plus Fixed Fee (CPFF) contract, like the one awarded to SYSTEMS PLANNING AND ANALYSIS, INC., is the potential for cost overruns. In a CPFF structure, the contractor is reimbursed for allowable costs plus a fixed fee representing profit. While the fee is fixed, the total cost is not. This can incentivize contractors to incur higher costs, as their profit margin (the fixed fee) remains constant regardless of the actual expenses. Effective management requires rigorous oversight of contractor expenditures, detailed audits, and clear definition of allowable costs to prevent unnecessary spending and ensure the government receives good value. The government bears the risk of cost increases, while the contractor is motivated to control costs to maximize their fee relative to their effort.

What does 'Full and Open Competition After Exclusion of Sources' imply for the procurement process and potential savings?

The 'Full and Open Competition After Exclusion of Sources' designation suggests that the initial solicitation was intended for all responsible sources. However, specific sources were later excluded from consideration. The reasons for exclusion are critical; if based on legitimate technical requirements or security concerns that only a limited number of firms could meet, the competition might have been appropriately narrowed. If the exclusions were arbitrary or based on less stringent criteria, it could have artificially limited competition. This limited competition potentially reduces the pressure on bidders to offer the most competitive pricing, meaning taxpayers might not have achieved the lowest possible price compared to a scenario where all initially interested parties could bid freely. It necessitates a review of the justification for excluding sources.

How does the 5-year duration of this contract impact its overall risk profile?

A 5-year duration (1825 days) for this engineering services contract significantly impacts its risk profile. Longer contract durations increase the likelihood of requirement changes, technological obsolescence, and potential scope creep. It also means that the initial cost and performance estimates are subject to greater uncertainty over time. Managing such a long-term contract requires robust contract administration, regular reviews of performance and evolving needs, and potentially contract modifications. The fixed fee in a CPFF contract might not adequately account for unforeseen cost increases over five years, placing more risk on the government if not managed proactively. Conversely, a longer duration can provide contractor stability and reduce the frequency of costly re-procurement actions.

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: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0003016R0233

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: $41,018,572

Exercised Options: $37,123,701

Current Obligation: $34,686,502

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline