DoD's $72.5M contract for engineering and technical support awarded to Science Applications International Corporation

Contract Overview

Contract Amount: $72,520,086 ($72.5M)

Contractor: Science Applications International Corporation

Awarding Agency: Department of Defense

Start Date: 2021-03-30

End Date: 2026-03-29

Contract Duration: 1,825 days

Daily Burn Rate: $39.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: NON-PERSONAL ENGINEERING, TECHNICAL, LOGISTICS, CONFIGURATION MANAGEMENT, DATA MANAGEMENT, AND PROGRAM MANAGEMENT SUPPORT SERVICES FOR THE STRATEGIC SYSTEMS HARDWARE DIVISION (GXW).

Place of Performance

Location: CRANE, MARTIN County, INDIANA, 47522

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $72.5 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION for work described as: NON-PERSONAL ENGINEERING, TECHNICAL, LOGISTICS, CONFIGURATION MANAGEMENT, DATA MANAGEMENT, AND PROGRAM MANAGEMENT SUPPORT SERVICES FOR THE STRATEGIC SYSTEMS HARDWARE DIVISION (GXW). Key points: 1. Contract provides essential engineering, technical, and program management support for strategic systems hardware. 2. Awarded via full and open competition, suggesting a robust market for these specialized services. 3. The contract duration of five years indicates a long-term need for these capabilities. 4. The Cost Plus Fixed Fee (CPFF) pricing structure may require close monitoring to ensure cost control. 5. The contract is a delivery order under a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle. 6. The small business subcontracting plan is not applicable as the awardee is a large business and the contract is not set-aside.

Value Assessment

Rating: good

The contract value of $72.5 million over five years averages to approximately $14.5 million annually. Benchmarking this against similar large-scale engineering and technical support contracts within the Department of Defense is challenging without more specific service details. However, the pricing structure (Cost Plus Fixed Fee) suggests a negotiated rate for services where costs are less predictable. The value appears reasonable for specialized, long-term support of strategic systems hardware, but detailed cost breakdowns would be needed for a definitive assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. The data shows two bids were received, which is a moderate level of competition for a contract of this nature. While two bidders suggest some market interest, a higher number of bids could potentially lead to more competitive pricing and a wider range of technical solutions. The agency's approach to full and open competition is generally favorable for price discovery.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it encourages multiple companies to bid, potentially driving down costs and ensuring the government receives the best value. The presence of two bidders suggests a competitive environment that likely prevented excessive pricing.

Public Impact

The Department of the Navy benefits from continuous engineering, technical, and program management support for its strategic systems hardware. This contract ensures the operational readiness and modernization of critical defense systems. The services delivered are vital for maintaining the technological edge of the U.S. Navy's strategic assets. The contract is managed by the Department of Defense, specifically the Department of the Navy, indicating a focus on national security.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The Cost Plus Fixed Fee (CPFF) contract type can incentivize cost overruns if not managed diligently, as the contractor is reimbursed for allowable costs plus a fixed fee.
With only two bids received, there's a potential risk that the government did not explore the full spectrum of available competitive pricing.
The specialized nature of strategic systems hardware support means that a limited pool of qualified contractors might exist, potentially reducing future competition.

Positive Signals

Awarded through full and open competition, which is a positive signal for market engagement and potential value.
The contract's five-year duration suggests a stable and predictable need for these critical services, allowing for long-term planning and expertise development.
The contractor, Science Applications International Corporation, is a large and established entity with significant experience in defense contracting, implying a lower risk of performance failure.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting defense-related hardware. The market for specialized engineering and technical support for strategic defense systems is typically dominated by large, experienced government contractors. Spending in this niche is driven by national security priorities and the lifecycle management of complex weapon systems. Comparable spending benchmarks would involve analyzing other large-scale engineering support contracts for major defense platforms within the DoD.

Small Business Impact

This contract was not set aside for small businesses, and the awardee is a large business. Therefore, there are no direct subcontracting implications or impacts on the small business ecosystem stemming from a set-aside requirement. The prime contractor is responsible for its own subcontracting, which may or may not involve small businesses depending on their capabilities and the nature of the work.

Oversight & Accountability

Oversight for this contract will be primarily managed by the Department of the Navy's contracting and program management offices. Accountability measures are embedded within the Cost Plus Fixed Fee structure, requiring detailed cost reporting and justification. Transparency is facilitated through contract awards databases and reporting requirements. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Strategic Systems Programs (SSP)
Naval Sea Systems Command (NAVSEA)
Defense Contract Management Agency (DCMA)
Engineering and Technical Support Services

Risk Flags

Cost Plus Fixed Fee (CPFF) pricing structure requires diligent oversight to manage potential cost escalations.
Limited number of bids (2) may indicate a less competitive environment than ideal for price discovery.
Specialized nature of strategic systems hardware support could limit future competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $72.5 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION. NON-PERSONAL ENGINEERING, TECHNICAL, LOGISTICS, CONFIGURATION MANAGEMENT, DATA MANAGEMENT, AND PROGRAM MANAGEMENT SUPPORT SERVICES FOR THE STRATEGIC SYSTEMS HARDWARE DIVISION (GXW).

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 $72.5 million.

What is the period of performance?

Start: 2021-03-30. End: 2026-03-29.

What is the track record of Science Applications International Corporation (SAIC) in delivering similar engineering and technical support services to the Department of Defense?

Science Applications International Corporation (SAIC) has a long and extensive track record of providing a wide array of engineering, technical, and program management support services to the Department of Defense and other federal agencies. They are a major defense contractor with significant experience in areas such as systems engineering, logistics, cybersecurity, and information technology. SAIC has supported numerous complex defense programs, including those related to naval systems, aviation, and ground vehicles. Their past performance is generally well-documented through contract awards and performance reviews, though specific details for individual contracts are often proprietary. The company's size and market presence suggest a robust capability to handle large, complex contracts like the one awarded by the Department of the Navy.

How does the $72.5 million contract value compare to other similar engineering support contracts for strategic systems hardware?

The $72.5 million contract value over five years, averaging approximately $14.5 million annually, is substantial but not exceptionally large within the context of major defense procurements for strategic systems hardware. Large-scale engineering and technical support contracts for complex defense platforms can range from tens of millions to billions of dollars. This particular contract appears to be for specialized support within a specific division (Strategic Systems Hardware Division). To provide a precise comparison, one would need to identify contracts with identical service scopes, system types, and agency levels. However, the value is consistent with significant, long-term support requirements for critical defense assets.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for engineering services?

The primary risk associated with a Cost Plus Fixed Fee (CPFF) contract is the potential for cost overruns. In a CPFF arrangement, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. While the fixed fee provides some incentive for the contractor to control costs (as they don't earn more profit by spending more), the contractor is generally protected from cost overruns beyond the 'cost' portion. This can lead to less cost-consciousness compared to fixed-price contracts. For the government, effective oversight, rigorous auditing of costs, and clear definition of allowable expenses are crucial to mitigate the risk of the contractor incurring excessive costs. The fixed fee itself is negotiated, so the initial fee negotiation is also a critical risk point.

What is the expected effectiveness of the services provided under this contract for the Department of the Navy's strategic systems hardware?

The expected effectiveness of the services provided under this contract is high, given the nature of the support required for strategic systems hardware. These services, including engineering, technical, logistics, configuration management, data management, and program management, are critical for ensuring the operational readiness, maintenance, and modernization of complex defense systems. By securing specialized support from a contractor like SAIC, the Department of the Navy aims to maintain the performance, reliability, and technological relevance of its strategic assets. The five-year duration suggests a commitment to sustained effectiveness, allowing for deep integration of support capabilities and long-term program objectives.

How has federal spending in engineering services for defense hardware evolved over the past five years?

Federal spending in engineering services for defense hardware has remained a significant and relatively stable component of the Department of Defense's budget over the past five years. While specific figures fluctuate based on geopolitical events, modernization priorities, and budget allocations, there has been a consistent demand for specialized engineering expertise to support the development, sustainment, and upgrade of advanced weapon systems. Factors such as the need to counter evolving threats, replace aging platforms, and integrate new technologies (like AI, cyber capabilities, and advanced materials) have driven sustained or increased investment in these services. The trend generally reflects a commitment to maintaining technological superiority and operational readiness across all military branches.

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: N0016420R3024

Offers Received: 2

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: $79,832,489

Exercised Options: $78,327,849

Current Obligation: $72,520,086

Actual Outlays: $269,314

Subaward Activity

Number of Subawards: 36

Total Subaward Amount: $52,990,911

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017819D8470

IDV Type: IDC

Timeline