DoD's $90M contract for combat systems T&E services awarded to SAIC, with a 6.5-year performance period

Contract Overview

Contract Amount: $90,082,941 ($90.1M)

Contractor: Science Applications International Corporation

Awarding Agency: Department of Defense

Start Date: 2018-09-14

End Date: 2025-03-13

Contract Duration: 2,372 days

Daily Burn Rate: $38.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: THIS REQUIREMENT IS FOR NON-PERSONAL CONTRACTOR SERVICES TO PROVIDE A FULL-RANGE OF TECHNICAL AND PROGRAMMATIC SUPPORT IN THE TEST&EVALUATION (T&E) OF SURFACE COMBATANT AND CARRIER/LARGE DECK COMBAT SYSTEMS PROGRAMS FOR PROGRAM EXECUTIVE OFFICE, INTEGRATED WARFARE SYSTEMS, AEGIS (PEO IWS 1.0).

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20001

State: District of Columbia Government Spending

Plain-Language Summary

Department of Defense obligated $90.1 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION for work described as: THIS REQUIREMENT IS FOR NON-PERSONAL CONTRACTOR SERVICES TO PROVIDE A FULL-RANGE OF TECHNICAL AND PROGRAMMATIC SUPPORT IN THE TEST&EVALUATION (T&E) OF SURFACE COMBATANT AND CARRIER/LARGE DECK COMBAT SYSTEMS PROGRAMS FOR PROGRAM EXECUTIVE OFFICE, INTEGRATED WARFARE SYSTEMS, AEGIS … Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract type is Cost Plus Fixed Fee (CPFF), which can lead to cost overruns if not managed carefully. 3. The duration of the contract is substantial, indicating a long-term need for these specialized services. 4. The services support critical Test & Evaluation (T&E) for surface combatant and carrier/large deck combat systems. 5. The contract is a Delivery Order, implying it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle. 6. The contractor, Science Applications International Corporation (SAIC), is a major defense contractor with extensive experience.

Value Assessment

Rating: fair

Benchmarking the value of this $90 million contract over 6.5 years is challenging without specific performance metrics or comparable contract data. The Cost Plus Fixed Fee (CPFF) structure means the government pays the actual costs plus a fixed fee, which can incentivize cost control but also carries risks of cost growth if the initial cost estimates are inaccurate. Without detailed breakdowns of labor categories, hours, and overhead, a precise per-unit cost comparison is not feasible. However, the scale of the contract suggests a significant investment in specialized engineering and technical support for complex naval combat systems.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a 'full and open competition' solicitation, indicating that all responsible sources were permitted to submit bids. The number of bidders is not specified, but this approach generally fosters a competitive environment, which can lead to better pricing and service offerings for the government. The open competition suggests the government sought the best available technical solutions and value from the market.

Taxpayer Impact: A competitive award process helps ensure that taxpayer dollars are used efficiently by driving down costs and encouraging innovation among potential contractors.

Public Impact

The primary beneficiaries are the U.S. Navy's Program Executive Office, Integrated Warfare Systems (PEO IWS), specifically PEO IWS 1.0. The services delivered are crucial for the Test & Evaluation (T&E) of surface combatant and carrier/large deck combat systems. This contract directly supports the modernization and readiness of the U.S. Navy's fleet. The contract's performance is centered in the District of Columbia, indicating a concentration of technical support in this region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

CPFF contract type can lead to cost overruns if not closely monitored.
Long contract duration requires sustained oversight to ensure continued value.
Reliance on a single contractor for a significant period may limit future flexibility.
The complexity of the systems being tested implies a high degree of technical risk.

Positive Signals

Awarded through full and open competition, suggesting a robust selection process.
Contractor (SAIC) has extensive experience in defense engineering and T&E.
Services are critical for maintaining naval combat system readiness and modernization.
The contract supports a vital national defense program.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting the defense industry's complex weapon systems. The market for defense T&E services is highly specialized, with a few large contractors dominating the landscape due to the technical expertise and security clearances required. Spending in this area is driven by the need to ensure the reliability, effectiveness, and safety of advanced military hardware before deployment. Comparable spending benchmarks would typically involve other large-scale T&E contracts for major defense platforms.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. The primary contractor, SAIC, is a large business. While there are no explicit set-aside requirements for the prime contract, there may be subcontracting opportunities for small businesses within SAIC's performance. The impact on the small business ecosystem would depend on SAIC's subcontracting plan and adherence to any small business subcontracting goals.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Navy and the Program Executive Office, Integrated Warfare Systems (PEO IWS). As a Cost Plus Fixed Fee (CPFF) contract, rigorous financial oversight is essential to monitor costs and ensure the fixed fee remains appropriate. Transparency is typically managed through contract reporting requirements and performance reviews. The Inspector General for the Department of Defense would have jurisdiction for audits and investigations related to potential fraud, waste, or abuse.

Related Government Programs

Naval Sea Systems Command (NAVSEA) Contracts
Program Executive Office, Integrated Warfare Systems (PEO IWS)
Defense Test and Evaluation Services
Surface Combatant Modernization Programs
AEGIS Combat System Support

Risk Flags

Cost Plus Fixed Fee (CPFF) contract type requires diligent oversight to manage cost growth.
Long contract duration necessitates sustained performance monitoring.
Potential for contractor complacency over extended performance period.
Reliance on a single contractor for critical T&E functions.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $90.1 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION. THIS REQUIREMENT IS FOR NON-PERSONAL CONTRACTOR SERVICES TO PROVIDE A FULL-RANGE OF TECHNICAL AND PROGRAMMATIC SUPPORT IN THE TEST&EVALUATION (T&E) OF SURFACE COMBATANT AND CARRIER/LARGE DECK COMBAT SYSTEMS PROGRAMS FOR PROGRAM EXECUTIVE OFFICE, INTEGRATED WARFARE SYSTEMS, AEGIS (PEO IWS 1.0).

Who is the contractor on this award?

The obligated recipient is SCIENCE APPLICATIONS INTERNATIONAL 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 $90.1 million.

What is the period of performance?

Start: 2018-09-14. End: 2025-03-13.

What is SAIC's track record with similar DoD contracts, particularly in Test & Evaluation for naval combat systems?

Science Applications International Corporation (SAIC) has a long and extensive history of supporting the Department of Defense (DoD) across a wide range of technical and programmatic services, including Test & Evaluation (T&E). They have been a significant contractor for the Navy, often involved in complex systems integration, engineering, and lifecycle support. Specifically for naval combat systems, SAIC has previously held contracts related to the AEGIS program and other surface combatants, providing expertise in areas such as system design, integration, testing, and training. Their experience typically involves large-scale, multi-year efforts requiring deep technical knowledge and robust project management capabilities. This contract's focus on surface combatant and carrier/large deck combat systems aligns directly with SAIC's established core competencies and past performance in supporting naval warfare capabilities.

How does the Cost Plus Fixed Fee (CPFF) structure compare to other contract types for T&E services, and what are the implications for value?

The Cost Plus Fixed Fee (CPFF) contract type is common for research and development or complex services where the scope of work is not precisely defined at the outset, or where innovation is a key objective. In a CPFF arrangement, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. This differs from fixed-price contracts, where the price is set regardless of actual costs, or cost-reimbursement contracts with incentive fees that adjust profit based on performance. For T&E services, CPFF can be advantageous when the exact testing methodologies or challenges are unknown, allowing flexibility. However, it places a significant burden on the government to meticulously track and audit costs to prevent overruns. The 'value' is realized if the contractor efficiently manages costs while delivering the required T&E outcomes, with the fixed fee providing a predictable profit margin. Without strong government oversight, CPFF contracts can be susceptible to cost growth, potentially diminishing the overall value proposition compared to well-defined fixed-price contracts.

What are the key performance indicators (KPIs) or metrics used to assess the success of this contract and the contractor's performance?

While the provided data does not detail specific Key Performance Indicators (KPIs) for this contract, typical metrics for Test & Evaluation (T&E) services in defense contracts often include: timeliness of test execution against schedule, accuracy and completeness of test reports, identification and documentation of system defects or anomalies, adherence to test plans and procedures, and the effectiveness of recommendations for system improvement. For a CPFF contract, financial metrics such as cost variance against projected budgets and the contractor's ability to manage resources efficiently are also critical. Performance might also be assessed based on the contractor's contribution to achieving program milestones, the quality of technical support provided to government personnel, and overall responsiveness to evolving requirements. The government contracting officer and technical representatives would monitor these KPIs through regular progress reports, meetings, and direct observation of contractor performance.

How does the $90 million spending level compare to historical DoD investments in similar T&E services for naval combat systems?

The $90 million figure for this contract, spread over approximately 6.5 years (2372 days), represents an average annual spending of roughly $13.8 million. This level of investment is substantial but not unusual for large-scale, long-term T&E support for major naval combat systems. The U.S. Navy invests billions annually in shipbuilding, modernization, and sustainment, and a significant portion of that budget is allocated to ensuring these complex systems function as intended through rigorous testing. Historical spending patterns for similar T&E contracts supporting programs like AEGIS, destroyers, carriers, or submarines often involve contracts in the tens to hundreds of millions of dollars over multi-year periods. Factors influencing this spending include the complexity of the systems, the number of platforms being supported, the evolving threat landscape requiring new testing scenarios, and the specific technical expertise required. Therefore, $90 million for comprehensive T&E support for surface combatants and large deck systems is consistent with the scale of investment typical in this defense sub-sector.

What are the potential risks associated with relying on SAIC for this critical T&E function over an extended period?

Relying on a single contractor like SAIC for critical Test & Evaluation (T&E) functions over a 6.5-year period presents several potential risks. Firstly, there's the risk of contractor complacency or a decline in performance over time, especially if competition is limited in subsequent phases or contract modifications. Secondly, the Cost Plus Fixed Fee (CPFF) structure, while offering flexibility, carries inherent risks of cost escalation if not managed with stringent oversight, potentially leading to budget overruns. Thirdly, a long-term dependency on one entity could stifle innovation or the adoption of new T&E methodologies if the contractor's internal processes become rigid. Fourthly, there's a personnel risk; the loss of key subject matter experts from SAIC could significantly impact the continuity and quality of support. Finally, the concentration of critical T&E knowledge within one company could pose a strategic risk if the government needs to pivot or change direction rapidly.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N0016418R3009

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 12010 SUNSET HILLS RD, RESTON, VA, 20190

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

Financial Breakdown

Contract Ceiling: $91,560,046

Exercised Options: $91,560,046

Current Obligation: $90,082,941

Actual Outlays: $7,575,395

Subaward Activity

Number of Subawards: 49

Total Subaward Amount: $78,937,273

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017804D4143

IDV Type: IDC

Timeline