DoD's $8.1M Engineering Services Contract Awarded to EMCUBE INC. with No Competition

Contract Overview

Contract Amount: $8,166,054 ($8.2M)

Contractor: Emcube Inc

Awarding Agency: Department of Defense

Start Date: 2022-08-01

End Date: 2026-12-15

Contract Duration: 1,597 days

Daily Burn Rate: $5.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: NWS ACQUISITION AND SYSTEMS ENGINEERING

Place of Performance

Location: WASHINGTON NAVY YARD, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20374

State: District of Columbia Government Spending

Plain-Language Summary

Department of Defense obligated $8.2 million to EMCUBE INC for work described as: NWS ACQUISITION AND SYSTEMS ENGINEERING Key points: 1. Contract awarded on a cost-plus-fixed-fee basis, which can lead to cost overruns if not managed carefully. 2. The lack of competition raises concerns about potential overpayment and the absence of market-driven pricing. 3. The contract duration of over 4 years suggests a long-term need for these engineering services. 4. The primary performance location is Washington D.C., indicating a concentration of federal spending in the capital region. 5. The contract falls under Engineering Services (NAICS 541330), a sector requiring specialized technical expertise.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the lack of competitive bids and the cost-plus-fixed-fee structure. Without comparable contract data or a competitive bidding process, it's difficult to ascertain if the $8.1 million price reflects fair market value. The cost-plus-fixed-fee arrangement necessitates robust oversight to ensure costs remain reasonable and that the fixed fee is appropriate for the services rendered. 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 awarded on a sole-source basis, meaning it was not competed. This significantly limits the opportunity for price discovery and potentially leads to higher costs for the government compared to a fully competed contract. The absence of multiple bidders means the government did not benefit from the competitive pressures that typically drive down prices and encourage innovation.

Taxpayer Impact: Taxpayers may be paying a premium for these services due to the lack of competition. Without a competitive process, there is less assurance that the government secured the best possible price and value for the engineering services provided.

Public Impact

The Department of the Navy benefits from specialized engineering services to support its acquisition and systems engineering needs. The contract supports critical functions within the Department of Defense, likely contributing to national security objectives. The primary geographic impact is within Washington D.C., where the contractor will perform the services. The contract likely supports a workforce of engineers and technical specialists employed by EMCUBE INC.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in inflated costs.
Cost-plus-fixed-fee structure requires stringent oversight to control spending.
Sole-source award limits transparency in pricing.

Positive Signals

Contract awarded to a specific company, potentially indicating specialized capabilities.
Long-term contract suggests a sustained need and potential for stable service delivery.

Sector Analysis

Engineering services, categorized under NAICS code 541330, represent a significant sector within federal contracting. This industry encompasses a wide range of technical expertise crucial for government operations, from infrastructure design to complex system development. The Department of Defense is a major consumer of these services, often requiring highly specialized skills for defense systems and platforms. Benchmarking this $8.1 million contract would involve comparing it to other engineering service contracts awarded by the DoD or other agencies for similar scopes of work, considering factors like duration, complexity, and the specific engineering disciplines involved.

Small Business Impact

This contract was not competed and there is no indication of small business set-aside or subcontracting requirements. Therefore, it is unlikely to have a direct positive impact on the small business ecosystem. The absence of set-asides means that opportunities for small businesses to compete for or participate in this specific contract are limited.

Oversight & Accountability

Oversight for this contract will be managed by the Department of the Navy. Given the cost-plus-fixed-fee structure and sole-source award, robust oversight is critical to ensure that costs are reasonable and that the contractor is delivering services effectively. Transparency regarding cost reporting and performance metrics will be key accountability measures. The Inspector General's office for the Department of Defense may have jurisdiction for audits and investigations if any concerns arise.

Related Government Programs

Department of Defense Engineering Services
Naval Systems Engineering Support
Federal Acquisition and Systems Engineering Contracts

Risk Flags

Lack of Competition
Cost-Plus-Fixed-Fee Structure
Potential for Cost Overruns

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $8.2 million to EMCUBE INC. NWS ACQUISITION AND SYSTEMS ENGINEERING

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 $8.2 million.

What is the period of performance?

Start: 2022-08-01. End: 2026-12-15.

What is EMCUBE INC.'s track record with the federal government, particularly the Department of Defense?

Information regarding EMCUBE INC.'s specific track record with the federal government, especially the Department of Defense, is not detailed in the provided data. A comprehensive analysis would require accessing federal procurement databases like SAM.gov or FPDS-NG to review past contract awards, performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), and any reported issues or successes. Understanding their history of performance, on-time delivery, and adherence to budget on previous contracts would provide crucial context for assessing the current award's risk and value.

How does the $8.1 million value compare to similar engineering services contracts awarded by the Department of the Navy?

Direct comparison of the $8.1 million value is difficult without knowing the specific scope of work and duration. However, engineering services contracts for the Department of the Navy can range from a few hundred thousand dollars for specialized consulting to hundreds of millions for large-scale system development. Given this contract's duration of over 4 years and its sole-source nature, the $8.1 million figure warrants scrutiny. A benchmark analysis would involve identifying comparable contracts for similar engineering disciplines (e.g., systems engineering, acquisition support) awarded competitively over similar timeframes to gauge if this price is within a reasonable market range. The absence of competition makes it harder to establish a definitive value benchmark.

What are the primary risks associated with a sole-source, cost-plus-fixed-fee contract for engineering services?

The primary risks associated with a sole-source, cost-plus-fixed-fee (CPFF) contract are twofold. Firstly, the sole-source nature eliminates competitive pressure, potentially leading to higher prices than if the contract were competed. The government does not benefit from market forces driving cost efficiency. Secondly, the CPFF structure carries inherent risk of cost escalation. While a fixed fee provides some predictability, the government bears the risk of all allowable costs. If the contractor's costs exceed estimates, the government pays more. This structure necessitates rigorous oversight, detailed cost tracking, and clear performance metrics to mitigate the risk of overspending and ensure value for taxpayer money.

What specific engineering services are being provided under this contract, and how do they support the NWS Acquisition and Systems Engineering mission?

The provided data indicates the contract is for 'Engineering Services' under NAICS code 541330, supporting 'NWS ACQUISITION AND SYSTEMS ENGINEERING'. While the specific services are not detailed, this typically encompasses a broad range of activities such as technical analysis, design, development, testing, integration, and lifecycle support for complex systems. For the NWS Acquisition and Systems Engineering mission, these services likely involve supporting the planning, procurement, and management of new naval systems, ensuring they meet technical requirements, performance standards, and operational needs. This could include areas like requirements definition, system architecture, risk management, and program support.

What is the historical spending trend for engineering services by the Department of the Navy in the Washington D.C. area?

Analyzing historical spending trends for engineering services by the Department of the Navy in the Washington D.C. area would require extensive data mining from federal procurement databases. Generally, the D.C. metropolitan area is a significant hub for federal contracting, including engineering services, due to the concentration of government agencies and defense contractors. Spending in this sector is often driven by major acquisition programs and research and development initiatives. Without specific historical data, it's difficult to provide precise figures, but it's reasonable to assume consistent and substantial investment in engineering support services to meet the Navy's complex operational and technological requirements in this region.

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: N0003022R1030

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: $11,433,403

Exercised Options: $9,804,734

Current Obligation: $8,166,054

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline