DoD's $49.8M Engineering Services Contract Awarded to Systems Planning and Analysis, Inc. with No Competition

Contract Overview

Contract Amount: $49,823,940 ($49.8M)

Contractor: Systems Planning and Analysis, Inc.

Awarding Agency: Department of Defense

Start Date: 2021-11-01

End Date: 2026-10-31

Contract Duration: 1,825 days

Daily Burn Rate: $27.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: CONSOLIDATION AND FOLLOW-ON FOR 17C0004 AND 17C0011 TTP INTEGRATOR. EO14042

Place of Performance

Location: ALEXANDRIA, ALEXANDRIA CITY County, VIRGINIA, 22311

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $49.8 million to SYSTEMS PLANNING AND ANALYSIS, INC. for work described as: CONSOLIDATION AND FOLLOW-ON FOR 17C0004 AND 17C0011 TTP INTEGRATOR. EO14042 Key points: 1. Contract awarded on a sole-source basis, raising questions about potential price overruns and limited market engagement. 2. The contract's duration of 1825 days suggests a long-term need for these engineering services. 3. The use of a Cost Plus Fixed Fee (CPFF) pricing structure can incentivize cost overruns if not closely monitored. 4. The absence of competition limits the government's ability to leverage market forces for better value. 5. This contract falls under Engineering Services, a sector often characterized by specialized expertise and high barriers to entry. 6. The contract is a consolidation of previous efforts (17C0004 and 17C0011), indicating a potential for increased efficiency or a shift in program strategy.

Value Assessment

Rating: questionable

Benchmarking the value of this $49.8 million contract is challenging due to its sole-source nature and lack of publicly available comparable data. The CPFF structure, while allowing for flexibility, carries inherent risks of cost escalation. Without competitive bids, it's difficult to ascertain if the pricing reflects fair market value or if taxpayers are receiving optimal value for the engineering services provided. Further analysis would require access to detailed cost breakdowns and performance metrics.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. The specific justification for this approach is not detailed in the provided data. Sole-source awards bypass the standard competitive bidding process, which can limit the government's ability to explore a wider range of solutions and potentially secure more favorable pricing. The lack of competition means that only one vendor was considered, raising concerns about price discovery and market responsiveness.

Taxpayer Impact: Taxpayers may be paying a premium for these services due to the absence of competitive pressure. Without multiple bids, there is less incentive for the contractor to offer the most cost-effective solution.

Public Impact

The Department of the Navy benefits from specialized engineering services to support its TTP Integrator program. This contract ensures the continuity of critical engineering support, likely impacting naval readiness and technological advancement. The services delivered are expected to be highly technical, contributing to the development and maintenance of defense systems. The primary beneficiaries are likely defense personnel and the broader national security apparatus reliant on advanced naval capabilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential value for money.
Cost Plus Fixed Fee structure can lead to cost overruns if not managed stringently.
Lack of transparency in the justification for sole-source award.
Long contract duration may not adapt well to rapidly changing technological landscapes.
Potential for contractor lock-in due to specialized nature of services.

Positive Signals

Consolidation of previous contracts may lead to administrative efficiencies.
Award to a single, potentially specialized, provider ensures continuity of critical expertise.
The contract addresses a specific need within the Department of Defense, indicating strategic alignment.
The fixed fee component of the CPFF contract provides some level of cost predictability.

Sector Analysis

This contract falls within the Engineering Services sector, which is a critical component of the broader professional, scientific, and technical services industry. This sector is characterized by high demand from government agencies, particularly in defense and infrastructure. The market often involves specialized firms with deep technical expertise. Comparable spending benchmarks are difficult to establish without more specific service details, but government spending on engineering services is substantial, often driven by complex project requirements and national security needs.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (sb: false) and does not explicitly mention subcontracting plans. Therefore, the direct impact on the small business ecosystem is likely minimal unless the prime contractor voluntarily engages small businesses for subcontracting opportunities. Without specific set-aside goals or reporting requirements, it is difficult to assess the extent to which small businesses will participate in fulfilling this contract.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve the Department of Defense's contracting officers and program managers. The CPFF structure necessitates rigorous monitoring of costs and performance to ensure value for money. Transparency is often limited in sole-source procurements, but contract modifications, performance reports, and payment data are usually subject to internal review and potentially Inspector General oversight, especially if concerns arise regarding cost, performance, or compliance.

Related Government Programs

Department of Defense Engineering Services
Naval Systems Engineering Support
TTP Integrator Program Support
Cost Plus Fixed Fee Contracts
Sole-Source Defense Contracts

Risk Flags

Sole-source award
Cost Plus Fixed Fee pricing
Lack of competition
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $49.8 million to SYSTEMS PLANNING AND ANALYSIS, INC.. CONSOLIDATION AND FOLLOW-ON FOR 17C0004 AND 17C0011 TTP INTEGRATOR. EO14042

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 $49.8 million.

What is the period of performance?

Start: 2021-11-01. End: 2026-10-31.

What is the specific justification 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 procurements are justified under circumstances such as urgent and compelling needs, unique capabilities of a single source, or when competition is deemed not feasible or not in the government's best interest. Without the official justification document (e.g., a Justification and Approval - J&A), it is impossible to determine the precise rationale. This lack of transparency is a common concern with sole-source contracts, as it limits public understanding of why competitive processes were bypassed.

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

The CPFF structure is a type of cost-reimbursement contract where the contractor is reimbursed for all allowable costs plus a fixed fee representing profit. This contrasts with fixed-price contracts, where the price is set regardless of actual costs, and other cost-reimbursement types like Cost Plus Incentive Fee (CPIF) or Cost Plus Award Fee (CPAF), which include mechanisms to adjust profit based on performance or cost targets. For complex, high-risk, or R&D-intensive projects where the scope is not well-defined, CPFF can be advantageous as it allows flexibility. However, it places a significant burden on the government to meticulously audit costs and monitor performance to prevent overspending, making it less desirable than fixed-price options when scope is clear and competition is robust.

What is the historical spending pattern for the TTP Integrator program or related contracts?

The data indicates this contract is a consolidation of '17C0004 and 17C0011'. This suggests that prior to this award, there were at least two separate contracts supporting the TTP Integrator. Without access to the details and award amounts of these previous contracts, it's difficult to establish a precise historical spending trend. However, the consolidation implies a potential shift in how the program is managed or funded, possibly aiming for greater efficiency or a more integrated approach. Analyzing the spending on 17C0004 and 17C0011 would provide crucial context on the program's cost evolution and the contractor's past performance.

What are the potential risks associated with the long duration (1825 days) of this contract?

A contract duration of 1825 days (approximately 5 years) for engineering services carries several potential risks. Firstly, technological advancements can rapidly outpace the services defined in the contract, potentially rendering some aspects obsolete or requiring costly modifications. Secondly, market conditions and the availability of specialized skills can change significantly over five years, impacting the contractor's ability to deliver or the cost-effectiveness of the services. Thirdly, long-term sole-source contracts can lead to contractor complacency and reduced innovation. Finally, the government's needs may evolve, and a rigid, long-term contract might hinder its ability to adapt its requirements without incurring significant change order costs or termination penalties.

How does the Engineering Services sector typically perform in terms of cost overruns and schedule delays?

The Engineering Services sector, particularly within defense and complex infrastructure projects, is susceptible to cost overruns and schedule delays. This is often due to the inherent complexity of the work, unforeseen technical challenges, evolving requirements, and the use of cost-reimbursement contract types like CPFF. Factors such as inadequate initial scope definition, poor project management, and external disruptions (e.g., supply chain issues, regulatory changes) can exacerbate these risks. While specialized firms aim for efficiency, the nature of cutting-edge or large-scale engineering often involves a degree of uncertainty that can impact both cost and schedule outcomes.

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

Solicitation ID: N0003022R1015

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: $63,194,727

Exercised Options: $61,082,994

Current Obligation: $49,823,940

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline