DoD's $44.3M Engineering Services Contract Awarded to Systems Planning and Analysis, Inc. with No Competition

Contract Overview

Contract Amount: $44,306,819 ($44.3M)

Contractor: Systems Planning and Analysis, Inc.

Awarding Agency: Department of Defense

Start Date: 2023-10-01

End Date: 2029-04-15

Contract Duration: 2,023 days

Daily Burn Rate: $21.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: FY24 ODC & TRAVEL IN SUPPORT OF CLIN0001

Place of Performance

Location: ALEXANDRIA, ALEXANDRIA CITY County, VIRGINIA, 22311

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $44.3 million to SYSTEMS PLANNING AND ANALYSIS, INC. for work described as: FY24 ODC & TRAVEL IN SUPPORT OF CLIN0001 Key points: 1. The contract's value of $44.3 million over its period of performance raises questions about potential cost efficiencies. 2. The sole-source award indicates a lack of competitive pressure, which could impact pricing and innovation. 3. The 'Cost Plus Fixed Fee' contract type carries inherent risks of cost overruns if not closely managed. 4. This contract supports CLIN0001, suggesting it's part of a larger, ongoing effort within the Department of the Navy. 5. The engineering services sector is highly specialized, but the absence of competition warrants scrutiny. 6. The contract duration extends to April 2029, requiring sustained oversight for value realization.

Value Assessment

Rating: questionable

Benchmarking the value of this $44.3 million contract is challenging without specific deliverables or comparable sole-source awards in the engineering services domain. The 'Cost Plus Fixed Fee' structure, while common for complex projects, can lead to higher costs compared to fixed-price contracts if not managed diligently. The absence of competition means there's no direct price comparison to assess if the fixed fee is reasonable or if the government is receiving optimal value for the services rendered. Further analysis would require understanding the scope of work and the contractor's historical performance on similar engagements.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Systems Planning and Analysis, Inc., was solicited. The justification for this approach is not provided in the data, but sole-source awards typically occur when a unique capability is required, or for urgent needs where competition is not feasible. The lack of multiple bidders means there was no opportunity for price discovery through a competitive bidding process, potentially leading to a higher price than if multiple firms had vied for the contract.

Taxpayer Impact: Taxpayers may be paying a premium for this contract due to the absence of competitive bidding. Without competing the requirement, the government cannot be assured it secured the most cost-effective solution available in the market.

Public Impact

The Department of the Navy benefits from specialized engineering services to support its operations and potentially specific programs like CLIN0001. The contract delivers essential engineering expertise, likely contributing to the design, development, or sustainment of defense systems. The geographic impact is primarily within Virginia, where the contractor is located, but the services support national defense objectives. The contract supports a specialized workforce within the engineering services sector, contributing to the expertise pool for defense-related projects.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially inflating costs.
Cost-plus contract type introduces risk of cost overruns.
Lack of transparency on the justification for sole-sourcing.
Extended contract duration requires ongoing vigilance for performance and cost control.
No clear indication of small business subcontracting goals or achievements.

Positive Signals

Contract awarded to a known entity, Systems Planning and Analysis, Inc., suggesting potential familiarity and established working relationship.
Engineering services are critical for defense capabilities, indicating a necessary procurement.
The contract is for a defined period, allowing for reassessment at its conclusion.
The fixed fee component provides some level of cost predictability for the government.

Sector Analysis

The engineering services sector is a critical component of the broader professional, scientific, and technical services industry, encompassing a wide range of activities from conceptual design to detailed engineering and project management. Within the defense sector, these services are indispensable for the development, acquisition, and sustainment of complex military systems. The market is characterized by specialized firms, many of whom hold security clearances and possess unique technical expertise. Comparable spending benchmarks for sole-source engineering services contracts within the Department of Defense can vary significantly based on the specific technical requirements and the criticality of the systems involved.

Small Business Impact

This contract does not appear to have a small business set-aside designation (ss: false, sb: false). As a sole-source award, it is unlikely that subcontracting opportunities for small businesses were explicitly mandated through a competitive set-aside process. While the prime contractor may engage small businesses as subcontractors, the absence of a set-aside suggests that opportunities may be limited or not proactively pursued. This could potentially reduce the flow of federal dollars into the small business ecosystem for this specific procurement.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. Accountability measures would be tied to the performance metrics defined within the contract and the 'Cost Plus Fixed Fee' structure, requiring diligent monitoring of costs and progress. Transparency is limited due to the sole-source nature and the lack of publicly available justification. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Department of Defense Engineering Services
Department of the Navy Research and Development
Systems Engineering Support Contracts
Defense Acquisition Support Services
Specialized Technical Services

Risk Flags

Sole-source award without clear justification.
Cost-plus contract type carries inherent cost overrun risk.
Lack of competitive bidding may lead to suboptimal pricing.
No explicit small business set-aside or subcontracting goals mentioned.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $44.3 million to SYSTEMS PLANNING AND ANALYSIS, INC.. FY24 ODC & TRAVEL IN SUPPORT OF CLIN0001

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 $44.3 million.

What is the period of performance?

Start: 2023-10-01. End: 2029-04-15.

What is the specific nature of the engineering services provided under CLIN0001, and why was Systems Planning and Analysis, Inc. uniquely qualified for this sole-source award?

The provided data does not detail the specific engineering services under CLIN0001, nor does it offer the justification for the sole-source award to Systems Planning and Analysis, Inc. Typically, sole-source justifications cite unique capabilities, proprietary technology, urgent needs, or lack of market availability. Without this information, it's impossible to assess if the contractor's qualifications were truly unique or if alternative solutions were adequately explored. Further investigation into the contract's justification documentation would be necessary to understand the rationale and evaluate its validity. This is crucial for ensuring taxpayer funds are used efficiently and competitively whenever possible.

How does the 'Cost Plus Fixed Fee' (CPFF) structure of this contract compare to other engineering services contracts awarded by the Department of the Navy, and what are the associated risks?

The CPFF contract type allows the contractor to recover all allowable costs plus a predetermined fixed fee representing profit. This structure is often used for research and development or complex services where the scope is not well-defined, making fixed-price contracts difficult. Compared to fixed-price contracts, CPFF carries a higher risk of cost overruns for the government, as the contractor is incentivized to incur costs to achieve the fixed fee. However, it can be beneficial when innovation and flexibility are paramount. Benchmarking this against other Navy engineering contracts would require analyzing the proportion of CPFF awards versus fixed-price awards and their respective cost performance. Close monitoring of allowable costs and the contractor's efficiency is critical to mitigate risks.

What is the historical spending pattern for Systems Planning and Analysis, Inc. with the Department of Defense, and does this contract represent a significant increase or deviation?

The provided data only includes details for this specific contract award. To assess historical spending patterns, a broader search of federal procurement databases (like FPDS or USASpending) for Systems Planning and Analysis, Inc. would be necessary. This would reveal the total value of contracts awarded to the company over time, the agencies they've served, and the types of services rendered. Without this historical context, it's difficult to determine if this $44.3 million award is typical, an outlier, or indicative of a growing reliance on this contractor by the Department of the Navy. Analyzing past performance and spending trends is essential for understanding contractor value and potential over-reliance.

Given the sole-source nature, what mechanisms are in place to ensure the quality and effectiveness of the engineering services provided by Systems Planning and Analysis, Inc.?

While the sole-source award bypasses competitive quality assessments, the government typically employs several mechanisms to ensure service quality and effectiveness. These include detailed performance work statements (PWS) outlining specific requirements and deliverables, key performance indicators (KPIs) to measure success, and regular progress reviews. Contract officers and technical representatives monitor contractor performance against these metrics. For CPFF contracts, oversight also extends to auditing costs to ensure they are allowable and reasonable. The Department of the Navy would assign personnel to manage the contract, track progress, and ensure the services meet the intended objectives and standards, despite the lack of initial competition.

What is the potential impact of this sole-source contract on the broader market for engineering services within the defense sector, particularly for small and medium-sized businesses?

Sole-source awards, by definition, do not directly stimulate competition. This can have a dampening effect on the market, especially for small and medium-sized businesses (SMBs) that might have been capable of performing the work if the opportunity had been competed. When a large contract is awarded non-competitively, it removes a potential revenue stream that could have been distributed among multiple firms, including SMBs. While the prime contractor might subcontract, the lack of a set-aside or competitive solicitation means SMBs have less direct opportunity to engage. This can lead to market concentration and reduced opportunities for new entrants or smaller players to gain a foothold or expand their defense contracting business.

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: N0003024R6032

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 2001 N BEAUREGARD ST, 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: $91,625,324

Exercised Options: $53,632,143

Current Obligation: $44,306,819

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $1,500,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline