DoD's $56M Engineering Support Contract Awarded to Amentum Services, Inc. Shows Fair Competition

Contract Overview

Contract Amount: $56,187,344 ($56.2M)

Contractor: Amentum Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2017-07-13

End Date: 2022-06-13

Contract Duration: 1,796 days

Daily Burn Rate: $31.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: IGF::OT::IGF ENGINEERING, TECHNICAL, LOGISTIC, CONFIGURATION MANAGEMENT, DATA MANAGEMENT AND PROGRAM MANAGEMENT SUPPORT SERVICES FOR THE PLATFORM AND LAUNCH SYSTEMS DIVISION, GXP

Place of Performance

Location: CRANE, MARTIN County, INDIANA, 47522

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $56.2 million to AMENTUM SERVICES, INC. for work described as: IGF::OT::IGF ENGINEERING, TECHNICAL, LOGISTIC, CONFIGURATION MANAGEMENT, DATA MANAGEMENT AND PROGRAM MANAGEMENT SUPPORT SERVICES FOR THE PLATFORM AND LAUNCH SYSTEMS DIVISION, GXP Key points: 1. Contract provides critical engineering and technical support for platform and launch systems. 2. Full and open competition indicates a healthy market for these specialized services. 3. The contract duration of nearly five years suggests a stable, long-term need. 4. The cost-plus-fixed-fee pricing structure requires careful monitoring of costs and fee. 5. Amentum Services, Inc. is a significant player in the government contracting space. 6. The contract's value is substantial, reflecting the complexity of the supported systems.

Value Assessment

Rating: good

The contract's value of $56.2 million over five years for engineering and technical support appears reasonable given the specialized nature of platform and launch systems. Benchmarking against similar contracts for complex engineering services suggests that the overall award value is within expected ranges. The cost-plus-fixed-fee (CPFF) structure, while common for R&D and complex services, necessitates diligent oversight to ensure costs remain controlled and the fixed fee is justified by the value delivered.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple capable vendors were likely solicited and submitted proposals. The presence of two bidders suggests a competitive environment, which generally leads to better pricing and service offerings for the government. The full and open nature of the competition is a positive indicator for price discovery and ensures that the government has access to the best available solutions.

Taxpayer Impact: Taxpayers benefit from full and open competition as it drives down costs through market forces and ensures that the government is not overpaying for essential services. This process increases the likelihood of receiving high-quality support at a competitive price.

Public Impact

The Department of the Navy benefits from enhanced engineering and technical support for its critical platform and launch systems. This contract ensures the continued operational readiness and development of advanced defense systems. The services provided are essential for maintaining and improving the capabilities of naval platforms. The contract supports a workforce of engineers, technicians, and program managers, contributing to specialized job creation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contracts can incentivize contractors to increase costs to maximize their fee if not properly managed.
The long duration of the contract could lead to scope creep if not actively managed.
Reliance on a single contractor for critical support services may pose a risk if performance issues arise.

Positive Signals

Awarded under full and open competition, indicating a robust bidding process.
The contractor, Amentum Services, Inc., has a significant presence and experience in government contracting.
The contract addresses essential engineering and technical support for vital defense systems.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting defense-related platform and launch systems. The market for such specialized engineering support is characterized by high barriers to entry due to the technical expertise and security clearances required. Comparable spending in this sector often involves significant investments in research, development, and sustainment of complex military hardware. The value of this contract is consistent with the scale of support typically required for major defense programs.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (sb: false) and there is no explicit mention of subcontracting goals for small businesses (ss: false). This suggests that the primary award went to a large business, and opportunities for small business participation may be limited unless Amentum Services, Inc. voluntarily includes them in their subcontracting efforts. Further investigation into Amentum's subcontracting plans would be necessary to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting officers and program managers. The cost-plus-fixed-fee structure necessitates rigorous financial oversight to ensure that costs are reasonable and allocable, and that the fixed fee is earned. Transparency is generally maintained through contract reporting requirements and performance reviews. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Naval Sea Systems Command (NAVSEA) Contracts
Platform and Launch Systems Development
Defense Engineering Services
Cost-Plus-Fixed-Fee Contracts
Department of Defense IT and Engineering Support

Risk Flags

Cost-Plus-Fixed-Fee contract requires diligent oversight to manage costs and ensure fair profit.
Long contract duration may increase risks of scope creep and personnel turnover.
Limited number of bidders (2) may reduce competitive pressure on pricing.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $56.2 million to AMENTUM SERVICES, INC.. IGF::OT::IGF ENGINEERING, TECHNICAL, LOGISTIC, CONFIGURATION MANAGEMENT, DATA MANAGEMENT AND PROGRAM MANAGEMENT SUPPORT SERVICES FOR THE PLATFORM AND LAUNCH SYSTEMS DIVISION, GXP

Who is the contractor on this award?

The obligated recipient is AMENTUM SERVICES, 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 $56.2 million.

What is the period of performance?

Start: 2017-07-13. End: 2022-06-13.

What is the historical spending pattern for engineering and technical support services for platform and launch divisions within the Department of Defense?

Historical spending on engineering and technical support for platform and launch divisions within the Department of Defense has been substantial and consistent, reflecting the ongoing need to maintain and modernize complex defense systems. Agencies like the Department of the Navy and the Air Force regularly award multi-year contracts for these services, often in the tens to hundreds of millions of dollars annually. Spending is driven by factors such as the lifecycle of weapon systems, technological advancements, and geopolitical requirements. Analysis of past contracts reveals a trend towards awarding these services through full and open competition, though sole-source or limited competition awards occur for highly specialized or urgent needs. The use of various contract types, including cost-plus and fixed-price, also varies depending on the nature of the work, with cost-reimbursement types more common for research and development or services with uncertain cost outcomes.

How does the pricing structure (Cost Plus Fixed Fee) of this contract compare to industry benchmarks for similar engineering services?

The Cost Plus Fixed Fee (CPFF) pricing structure is common for contracts involving research, development, complex services, or situations where cost estimation is difficult. For engineering services, CPFF allows the contractor to recover allowable costs plus a predetermined fixed fee representing profit. Benchmarking CPFF contracts requires comparing the fixed fee percentage against the total estimated cost. Industry benchmarks for the fixed fee in CPFF contracts for complex engineering services typically range from 7% to 15% of the estimated cost. Without the specific fee percentage awarded to Amentum Services, Inc., a direct comparison is difficult. However, the overall contract value of $56.2 million over nearly five years suggests a substantial scope of work. The government's oversight is crucial to ensure that the fixed fee remains reasonable and that costs incurred are necessary and reasonable for the services provided.

What is Amentum Services, Inc.'s track record with similar Department of Defense contracts, particularly in platform and launch systems?

Amentum Services, Inc. has a significant track record with the Department of Defense, often inheriting and continuing services from legacy companies like AECOM's Management Services business. They have extensive experience providing a wide range of technical, engineering, logistics, and program management support across various defense platforms. While specific details on their performance on platform and launch systems contracts would require a deeper dive into contract performance reports and award histories, their broad portfolio suggests capability in managing complex, high-value defense contracts. Their history includes work on naval systems, aerospace, and other critical infrastructure, indicating a strong foundation for supporting the Platform and Launch Systems Division. Past performance reviews and any past performance issues would be key indicators of their reliability for this specific contract.

What are the potential risks associated with a nearly five-year contract duration for engineering support services?

A nearly five-year contract duration for engineering support services presents several potential risks. Firstly, there's the risk of scope creep, where the requirements may expand beyond the original intent without adequate adjustments to cost and schedule, especially if contract modifications are frequent. Secondly, long-term reliance on a single contractor can lead to complacency or a decline in service quality if performance is not continuously monitored and enforced. Thirdly, technological advancements or changes in strategic priorities could render the contracted services less relevant or require significant adaptation, potentially leading to inefficiencies or the need for costly contract restructuring. Finally, the contractor's key personnel might change over such a long period, potentially impacting institutional knowledge and performance continuity. Robust contract management and performance metrics are essential to mitigate these risks.

How does the competition level (2 bidders) for this contract potentially impact value for taxpayers compared to a higher number of bidders?

A competition level with two bidders, while indicating some level of market interest, is less robust than a competition with numerous bidders. With only two bidders, the government has limited options, which can reduce the downward pressure on pricing. If the two bidders are closely aligned in their offerings and pricing strategies, there's a risk that the government may not achieve the most competitive price possible. In contrast, a larger pool of bidders typically fosters more aggressive pricing and innovation as companies vie for the contract. Therefore, while two bidders are better than one, it suggests a potentially missed opportunity to maximize cost savings and value for taxpayers compared to a scenario with, for example, five or more competitive proposals.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N0002416R3107

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: PAE Government Services Inc.

Address: 4800 WESTFIELDS BLVD STE 400, CHANTILLY, VA, 20151

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

Financial Breakdown

Contract Ceiling: $63,138,657

Exercised Options: $62,102,851

Current Obligation: $56,187,344

Actual Outlays: $4,781,122

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $1,281,419

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017804D4042

IDV Type: IDC

Timeline