Department of the Navy awards $66.4M engineering services contract to Scientific Research Corporation, a sole-source delivery order

Contract Overview

Contract Amount: $66,420,364 ($66.4M)

Contractor: Scientific Research Corporation

Awarding Agency: Department of Defense

Start Date: 2018-10-25

End Date: 2022-09-29

Contract Duration: 1,435 days

Daily Burn Rate: $46.3K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: CVN 73 COMPLETION LABOR

Place of Performance

Location: NORTH CHARLESTON, CHARLESTON County, SOUTH CAROLINA, 29406

State: South Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $66.4 million to SCIENTIFIC RESEARCH CORPORATION for work described as: CVN 73 COMPLETION LABOR Key points: 1. Contract awarded on a cost-plus-fixed-fee basis, which can lead to cost overruns if not managed carefully. 2. The contract was not competed, raising questions about potential price efficiencies and market-driven value. 3. A long performance period of 1435 days suggests a complex or ongoing need for engineering services. 4. The contract falls under Engineering Services (NAICS 541330), a sector with significant federal investment. 5. The award is a delivery order under a larger contract, indicating a phased approach to fulfilling requirements. 6. The contractor, Scientific Research Corporation, is based in South Carolina.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without more detailed cost breakdowns and comparison to similar sole-source engineering services. The cost-plus-fixed-fee structure necessitates close oversight to ensure costs remain reasonable and do not escalate beyond initial estimates. Without competitive bidding, it is difficult to ascertain if the fixed fee accurately reflects the market rate for the services provided. Further analysis would require understanding the specific engineering tasks performed and their associated labor hours and rates.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not open to competition from other qualified vendors. This approach is typically used when only one vendor possesses the necessary capabilities, or in urgent situations. The lack of competition limits the government's ability to leverage market forces to achieve the best possible pricing and terms.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as there is no competitive pressure to drive down prices. It also limits opportunities for other businesses to secure government contracts.

Public Impact

The Department of the Navy benefits from specialized engineering services required for its operations. The contract supports the completion of specific tasks related to CVN 73 (USS George H.W. Bush) completion labor. The geographic impact is primarily centered in South Carolina, where the contractor is located. The contract likely supports a workforce of engineers and technical specialists employed by Scientific Research Corporation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potential cost savings.
Cost-plus-fixed-fee contract type requires robust oversight to manage costs effectively.
Lack of competition may reduce opportunities for other firms to participate in this contract.

Positive Signals

Contract awarded to a single, potentially specialized provider for specific engineering needs.
Delivery order structure allows for phased execution and management of complex requirements.
Long performance period indicates a sustained need for the services provided.

Sector Analysis

Engineering services represent a critical sector for federal agencies, particularly in defense and infrastructure. The Department of Defense is a major consumer of these services, utilizing them for design, development, testing, and maintenance of complex systems. The market for engineering services is diverse, with numerous firms ranging from small specialized consultancies to large multinational corporations. This contract, focused on specific completion labor for a naval vessel, fits within the broader category of specialized engineering support for defense assets.

Small Business Impact

There is no indication that this contract included a small business set-aside. The sole-source nature of the award further suggests that opportunities for small businesses to participate as prime contractors were limited. Subcontracting opportunities for small businesses may exist, but are not explicitly detailed in the provided data. The impact on the small business ecosystem is likely minimal unless significant subcontracting occurs.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. The cost-plus-fixed-fee structure necessitates diligent monitoring of incurred costs and the contractor's performance against the fixed fee. Transparency is limited due to the sole-source nature and the lack of public competition details. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Naval Ship Maintenance and Repair Contracts
Defense Engineering Services
Shipbuilding and Conversion Contracts
Department of Defense Acquisition Contracts

Risk Flags

Sole-source award
Cost-plus-fixed-fee contract type
Potential for cost overruns
Lack of competitive pricing benchmark

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $66.4 million to SCIENTIFIC RESEARCH CORPORATION. CVN 73 COMPLETION LABOR

Who is the contractor on this award?

The obligated recipient is SCIENTIFIC RESEARCH CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $66.4 million.

What is the period of performance?

Start: 2018-10-25. End: 2022-09-29.

What specific engineering tasks were performed under this contract for CVN 73 completion labor?

The provided data indicates the contract is for 'CVN 73 COMPLETION LABOR' under the 'Engineering Services' category. While the specific tasks are not detailed, this likely encompasses a range of engineering activities necessary to finalize the construction, outfitting, and testing of the aircraft carrier USS George H.W. Bush (CVN 73). These could include systems integration, technical documentation, quality assurance, final inspections, and support for post-construction trials. The cost-plus-fixed-fee structure suggests that the scope might have involved some level of uncertainty or evolving requirements, necessitating flexibility in task execution while maintaining a defined profit margin for the contractor.

How does the $66.4 million award compare to similar sole-source engineering contracts for naval vessels?

Direct comparison of this $66.4 million sole-source award for engineering services to similar contracts is difficult without more specific data on the scope of work and the vessel's stage of completion. Sole-source contracts inherently lack a competitive benchmark, making value assessment challenging. However, major naval vessel construction and completion phases often involve substantial engineering support, with costs potentially running into tens or hundreds of millions of dollars depending on the complexity and duration. The cost-plus-fixed-fee (CPFF) pricing structure, used here, is common for complex projects where precise cost estimation is difficult upfront. The value proposition of a CPFF contract hinges heavily on effective government oversight to control costs and ensure the fixed fee remains reasonable relative to the effort expended.

What are the primary risks associated with a sole-source, cost-plus-fixed-fee contract of this magnitude?

The primary risks associated with this sole-source, cost-plus-fixed-fee (CPFF) contract are twofold. Firstly, the sole-source nature eliminates competitive pressure, potentially leading to higher prices than might be achieved in an open competition. There's a risk that the government may not be getting the best possible value for its money. Secondly, the CPFF structure, while providing flexibility, carries inherent cost escalation risks. If not rigorously managed and overseen, the contractor could incur higher costs than anticipated, which, while covered by the contract, would increase the total expenditure. The fixed fee component aims to cap the contractor's profit, but the overall cost is variable. Effective government oversight, detailed cost tracking, and strong performance management are crucial to mitigate these risks.

What is the historical spending pattern for engineering services related to CVN 73 or similar naval programs?

Historical spending patterns for engineering services related to CVN 73 or similar naval programs, particularly aircraft carriers, are substantial. The construction and lifecycle support of Nimitz-class and Ford-class carriers involve extensive engineering efforts over many years. While specific figures for CVN 73's engineering support are not publicly itemized in this award, the overall cost of constructing a supercarrier can exceed $10 billion. Engineering services constitute a significant portion of this, encompassing design, integration, testing, and modifications throughout the vessel's life. Federal spending on defense engineering services generally fluctuates based on defense budgets, modernization priorities, and the number of major platforms under construction or in service. Analyzing past contracts for sister ships (e.g., CVN 71, CVN 72, CVN 74) could provide a broader context for engineering service expenditures.

What is Scientific Research Corporation's track record with the Department of the Navy and similar contracts?

Scientific Research Corporation (SRC) has a history of contracting with the Department of Defense, including the Department of the Navy. While the specific details of their past performance on contracts of similar size and scope (sole-source, CPFF, naval vessel completion) are not provided in this data snippet, SRC is generally known for providing engineering, scientific, and technical services. Their contract history would need to be reviewed through federal procurement databases (like FPDS or SAM.gov) to assess their performance ratings, past issues, and experience with complex defense projects. A thorough review would examine on-time delivery, cost control, quality of work, and overall customer satisfaction on previous engagements to gauge their reliability and capability for this specific award.

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: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0003918R1100

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 2300 WINDY RIDGE PKWY STE 400S, ATLANTA, GA, 30339

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $66,420,364

Exercised Options: $66,420,364

Current Obligation: $66,420,364

Actual Outlays: $4,798,649

Subaward Activity

Number of Subawards: 15

Total Subaward Amount: $64,471,028

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0003918D0006

IDV Type: IDC

Timeline