DoD's $25.3M engineering services contract with Viasat Inc. shows fair value despite limited competition
Contract Overview
Contract Amount: $25,293,774 ($25.3M)
Contractor: Viasat Inc
Awarding Agency: Department of Defense
Start Date: 2018-09-18
End Date: 2022-07-27
Contract Duration: 1,408 days
Daily Burn Rate: $18.0K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: ENGINEERING AND TECHNICAL SERVICES
Place of Performance
Location: CARLSBAD, SAN DIEGO County, CALIFORNIA, 92009
Plain-Language Summary
Department of Defense obligated $25.3 million to VIASAT INC for work described as: ENGINEERING AND TECHNICAL SERVICES Key points: 1. The contract's value appears reasonable when benchmarked against similar engineering and technical services. 2. Limited competition may have influenced pricing, but the fixed-fee structure provides some cost control. 3. The contractor, Viasat Inc., has a substantial track record, suggesting lower performance risk. 4. This contract supports critical Navy operations, aligning with broader defense modernization efforts. 5. The sector for engineering and technical services is highly competitive, but this specific niche may have fewer specialized providers. 6. The absence of small business set-asides is noted, with no explicit subcontracting plan detailed.
Value Assessment
Rating: fair
The total award amount of $25.3 million for engineering and technical services appears within a reasonable range when compared to similar contracts for specialized technical support within the Department of Defense. The Cost Plus Fixed Fee (CPFF) contract type, while allowing for cost flexibility, is balanced by a fixed fee, which provides a degree of cost certainty for the government. Benchmarking against industry standards for similar services suggests that the pricing, considering the specialized nature of the work, is not excessively high, though the limited competition could have impacted the final negotiated price.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
This contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that while initial broad solicitation may have occurred, specific sources were later excluded, leading to a limited pool of bidders. The exact number of bidders is not specified, but the designation suggests that the competition was not entirely open, potentially limiting the number of qualified and responsive proposals received. This type of competition can sometimes result in higher prices compared to a truly open market.
Taxpayer Impact: The limited competition means taxpayers may not have benefited from the lowest possible price that could have been achieved through a wider, more open bidding process. This could translate to a less efficient use of public funds if alternative, more cost-effective solutions were not fully explored.
Public Impact
The primary beneficiaries are the Department of the Navy, receiving specialized engineering and technical services crucial for its operations. The services delivered likely include system design, integration, testing, and technical support for complex defense systems. The geographic impact is primarily within the operational areas of the U.S. Navy, potentially including naval bases and deployed units. Workforce implications include the employment of highly skilled engineers and technical specialists by Viasat Inc.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition may have led to a suboptimal price for taxpayers.
- The 'Cost Plus Fixed Fee' structure, while common, requires diligent oversight to manage costs effectively.
- Lack of explicit small business subcontracting goals could limit opportunities for smaller firms in this contract's ecosystem.
Positive Signals
- Viasat Inc. is an established contractor with significant experience in defense and aerospace, suggesting a lower risk of performance issues.
- The contract duration of over three years indicates a stable, long-term need for these services, suggesting strategic alignment.
- The fixed fee component of the contract provides a degree of cost predictability for the government.
Sector Analysis
The engineering and technical services sector is a critical component of the defense industrial base, encompassing a wide range of specialized expertise from software development to complex systems integration. The market is characterized by high barriers to entry due to the need for specialized knowledge, security clearances, and established relationships with government agencies. Spending in this sector is substantial, driven by the continuous need for technological advancement and maintenance of sophisticated defense platforms. This contract fits within the broader category of professional services supporting defense readiness and modernization.
Small Business Impact
This contract does not appear to have been specifically set aside for small businesses, as indicated by the 'sb': false flag. There is no explicit mention of subcontracting requirements or goals within the provided data. This suggests that opportunities for small businesses to participate in this contract may be limited, potentially through prime contractor subcontracting if Viasat Inc. chooses to engage them, rather than through a direct set-aside mechanism.
Oversight & Accountability
Oversight for this contract would typically be managed by the contracting officer and the contract administration office within the Department of the Navy. Performance monitoring, financial audits, and compliance checks are standard oversight mechanisms. The CPFF contract type necessitates close monitoring of costs incurred by the contractor to ensure they align with the contract's objectives and the fixed fee remains appropriate. Transparency is generally maintained through contract reporting requirements, though specific public access to detailed performance data may vary.
Related Government Programs
- Defense Engineering Services
- Naval Systems Support
- Custom Computer Programming Services
- Information Technology Professional Services
- Aerospace Engineering Support
Risk Flags
- Limited competition may impact price.
- CPFF requires diligent cost oversight.
- No explicit small business subcontracting noted.
Tags
defense, department-of-defense, department-of-the-navy, engineering-services, technical-services, custom-computer-programming, cost-plus-fixed-fee, full-and-open-competition-after-exclusion-of-sources, delivery-order, viasat-inc, california, professional-services
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $25.3 million to VIASAT INC. ENGINEERING AND TECHNICAL SERVICES
Who is the contractor on this award?
The obligated recipient is VIASAT 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 $25.3 million.
What is the period of performance?
Start: 2018-09-18. End: 2022-07-27.
What is Viasat Inc.'s track record with the Department of Defense, particularly in providing engineering and technical services?
Viasat Inc. is a well-established defense contractor with a significant history of providing a wide array of services and products to the Department of Defense and other government agencies. Their expertise spans satellite communications, cybersecurity, and advanced networking solutions, often requiring substantial engineering and technical support. While specific details on past performance for this exact type of 'Custom Computer Programming Services' are not provided in this data snippet, Viasat's overall profile suggests a strong capability and experience base. Their extensive portfolio indicates a capacity to handle complex projects and a familiarity with DoD contracting requirements, which generally implies a lower risk profile for performance compared to newer or less experienced firms.
How does the $25.3 million award compare to similar engineering and technical services contracts awarded by the Navy?
Benchmarking the $25.3 million award requires comparing it against contracts for similar scope, complexity, and duration within the Navy's engineering and technical services portfolio. Without access to a comprehensive database of comparable contracts, a precise comparison is difficult. However, for specialized engineering and technical support, particularly involving custom programming and system integration for defense applications, an award in the tens of millions of dollars over a multi-year period is not uncommon. The value appears reasonable given the specialized nature of the services and the contractor's capabilities. Factors like the specific technologies involved, the level of security required, and the duration of the contract would influence its relative value.
What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for engineering services?
The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for engineering services revolve around cost control and potential for scope creep. For the government, the risk is that the contractor may incur higher costs than anticipated, although the fixed fee provides a ceiling on profit. Diligent oversight is crucial to ensure that all costs claimed are reasonable, allocable, and allowable. For the contractor, the risk is that the fixed fee may not adequately compensate them if costs escalate significantly beyond projections, especially if the scope of work is not clearly defined or expands. Effective management requires clear performance metrics, regular cost reviews, and a well-defined statement of work to mitigate these risks.
What is the typical market size and competitive landscape for custom computer programming services within the defense sector?
The market for custom computer programming services within the defense sector is substantial and dynamic, driven by the continuous need for advanced software solutions to support military operations, intelligence gathering, and command and control systems. The competitive landscape includes a mix of large, established defense contractors (like Viasat Inc.), specialized software development firms, and a growing number of technology companies entering the defense space. While the overall market is large, specific niches requiring deep domain knowledge, high-level security clearances, and integration with legacy systems can be more concentrated. Competition can be intense, but contracts often favor companies with proven track records, specific technological expertise, and existing relationships with defense agencies.
How has spending on engineering and technical services by the Department of the Navy trended over the past five years?
Analyzing the precise spending trends for 'engineering and technical services' by the Department of the Navy over the past five years requires access to detailed historical procurement data. Generally, spending in this category has remained robust, reflecting the ongoing modernization of naval platforms, development of new technologies, and sustainment of existing systems. Factors such as geopolitical developments, budget allocations, and strategic priorities influence year-to-year fluctuations. However, the consistent need for specialized technical expertise suggests a sustained demand, with potential increases during periods of significant technological advancement or heightened national security concerns. This contract, awarded in 2018 and ending in 2022, falls within a period likely characterized by steady or increasing investment in defense capabilities.
What are the implications of the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' contract type for price discovery?
The 'Full and Open Competition After Exclusion of Sources' contract type presents a mixed scenario for price discovery. Initially, the 'full and open' aspect suggests an intent to solicit broadly, which should theoretically lead to competitive pricing. However, the subsequent 'exclusion of sources' implies that certain potential bidders were disqualified or deemed ineligible for reasons specified by the agency (e.g., security concerns, lack of specific qualifications, or prior performance issues). This exclusion narrows the competitive field. While it aims to ensure only qualified vendors participate, it can limit the number of viable offers, potentially reducing the downward pressure on prices that a truly unrestricted competition might generate. The final price is thus influenced by the remaining pool's competitiveness and the specific justifications for exclusions.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Custom Computer Programming Services
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: N0003916R0034
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 6155 EL CAMINO REAL, CARLSBAD, CA, 92009
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $25,321,507
Exercised Options: $25,321,507
Current Obligation: $25,293,774
Actual Outlays: $2,727,784
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0003916D0010
IDV Type: IDC
Timeline
Start Date: 2018-09-18
Current End Date: 2022-07-27
Potential End Date: 2022-07-27 00:00:00
Last Modified: 2022-09-15
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