DoD's $36M contract for software engineering services awarded to Amentum Services, Inc. shows fair value with potential for cost efficiencies

Contract Overview

Contract Amount: $36,001,344 ($36.0M)

Contractor: Amentum Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2019-09-16

End Date: 2027-01-15

Contract Duration: 2,678 days

Daily Burn Rate: $13.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: THE CONTRACTOR SHALL SUPPLY A FULL RANGE OF PROFESSIONAL SOFTWARE ENGINEERING SERVICES ACROSS ALL OF THE NSWCDD ELECTROMAGNETIC AND SENSOR SYSTEMS DEPARTMENT (B DEPARTMENT) PRODUCT LINES.

Place of Performance

Location: DAHLGREN, KING GEORGE County, VIRGINIA, 22448

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $36.0 million to AMENTUM SERVICES, INC. for work described as: THE CONTRACTOR SHALL SUPPLY A FULL RANGE OF PROFESSIONAL SOFTWARE ENGINEERING SERVICES ACROSS ALL OF THE NSWCDD ELECTROMAGNETIC AND SENSOR SYSTEMS DEPARTMENT (B DEPARTMENT) PRODUCT LINES. Key points: 1. The contract's value appears reasonable given the broad scope of professional software engineering services required. 2. Competition was full and open, suggesting a competitive pricing environment and potential for good value. 3. The Cost Plus Fixed Fee (CPFF) pricing structure carries inherent risk, but oversight can mitigate this. 4. Performance is benchmarked against similar engineering services contracts, indicating a fair market price. 5. This contract positions Amentum Services, Inc. as a key provider for the NSWCDD's sensor systems development. 6. The duration of the contract (over 7 years) allows for sustained support and potential for economies of scale.

Value Assessment

Rating: good

The contract's total value of approximately $36 million over nearly 8 years suggests a moderate annual spend. Benchmarking against similar professional engineering services contracts indicates that the pricing is within a competitive range. The CPFF structure, while allowing flexibility, requires diligent oversight to ensure costs remain controlled and aligned with the fixed fee. The value proposition appears sound, providing comprehensive software engineering support for critical sensor systems.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified vendors had the opportunity to bid. The presence of multiple bidders typically fosters a competitive environment, driving down prices and encouraging innovation. The specific number of bidders is not provided, but the 'full and open' designation suggests a robust competition.

Taxpayer Impact: Taxpayers benefit from a competitive award process that likely secured a more favorable price than a sole-source or limited competition scenario.

Public Impact

The primary beneficiaries are the Department of the Navy and the NSWCDD Electromagnetic and Sensor Systems Department, receiving critical software engineering support. Services delivered include a full range of professional software engineering, crucial for the development and maintenance of sensor systems. The geographic impact is centered in Virginia, where the NSWCDD is located, supporting local technical expertise. Workforce implications include the potential for skilled software engineers to be employed by Amentum Services, Inc. to fulfill this contract.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The Cost Plus Fixed Fee (CPFF) contract type can lead to cost overruns if not managed tightly.
The long duration of the contract (over 7 years) may reduce flexibility to adapt to rapidly changing technological needs.
Lack of specific performance metrics in the provided data makes it difficult to assess contractor efficiency beyond cost.

Positive Signals

Awarded under full and open competition, suggesting a competitive pricing environment.
The contractor, Amentum Services, Inc., has a track record in government contracting, implying experience.
The contract provides sustained support, allowing for deep integration and understanding of the NSWCDD's systems.
The broad scope of services ensures comprehensive support for the B Department's product lines.

Sector Analysis

This contract falls within the Engineering Services sector, a critical component of the broader IT and Defense industries. The market for specialized software engineering services supporting defense systems is substantial, driven by continuous modernization efforts. Comparable spending benchmarks in this sector often reflect the complexity and security requirements inherent in defense-related projects. This contract represents a significant investment in maintaining and advancing the Navy's sensor system capabilities.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a set-aside. However, the prime contractor, Amentum Services, Inc., may engage small businesses as subcontractors, depending on their own subcontracting plans and the availability of specialized services.

Oversight & Accountability

Oversight for this contract is likely managed by the Department of the Navy's contracting officers and program managers at NSWCDD. Accountability measures would be embedded within the contract's terms, including reporting requirements and performance standards. Transparency is facilitated by the contract's public award notice. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Naval Sea Systems Command (NAVSEA) Contracts
Department of Defense Software Development Contracts
Professional Services Contracts
Engineering and Technical Services
Electromagnetic and Sensor Systems Development

Risk Flags

Cost Plus Fixed Fee (CPFF) pricing structure carries inherent risk of cost overruns.
Long contract duration may limit adaptability to rapidly evolving technologies.
Lack of specific performance metrics in provided data hinders detailed efficiency assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $36.0 million to AMENTUM SERVICES, INC.. THE CONTRACTOR SHALL SUPPLY A FULL RANGE OF PROFESSIONAL SOFTWARE ENGINEERING SERVICES ACROSS ALL OF THE NSWCDD ELECTROMAGNETIC AND SENSOR SYSTEMS DEPARTMENT (B DEPARTMENT) PRODUCT LINES.

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 $36.0 million.

What is the period of performance?

Start: 2019-09-16. End: 2027-01-15.

What is Amentum Services, Inc.'s track record with similar government contracts, particularly within the Department of Defense?

Amentum Services, Inc. has a significant history of performing contracts for the Department of Defense and other federal agencies. Their portfolio often includes complex engineering, technical, and support services. While specific details for this contract's performance are not fully detailed in the provided data, their general experience suggests a capacity to handle large-scale, long-term projects. Past performance reviews and contract close-out data from other DoD contracts would offer a more granular view of their reliability, efficiency, and adherence to cost and schedule requirements. Their established presence indicates a familiarity with government procurement processes and compliance standards.

How does the total contract value of $36 million compare to the average cost of similar software engineering support contracts for naval systems?

The total contract value of approximately $36 million spread over nearly eight years (September 2019 to January 2027) equates to an average annual value of roughly $4.5 million. This figure appears moderate when compared to the average costs of large-scale, specialized software engineering support contracts within the Department of Defense, especially those involving complex naval systems. Factors such as the scope of services (full range of professional software engineering), the specific technologies involved (electromagnetic and sensor systems), and the required security clearances can significantly influence pricing. Given the 'full and open competition' award, this value likely reflects a competitive market rate for the services rendered.

What are the primary risks associated with the Cost Plus Fixed Fee (CPFF) pricing structure for this contract, and how are they mitigated?

The primary risk with a Cost Plus Fixed Fee (CPFF) contract is that the contractor may incur costs exceeding initial estimates, potentially leading to budget overruns for the government, while the contractor still receives their negotiated fixed fee. This structure can incentivize contractors to spend more, as a larger cost base often leads to a higher fee (though the fee itself is fixed). Mitigation strategies employed by the government typically include robust oversight by contracting officers and technical representatives, detailed cost monitoring and auditing, clear definition of allowable costs, and performance metrics tied to the fixed fee. Regular reviews and negotiations are crucial to ensure the government receives good value and that costs remain reasonable and allocable.

How effective is the current competition level (full and open) in ensuring optimal value for taxpayers on this specific contract?

The 'full and open competition' award for this contract is a strong indicator of optimal value for taxpayers. This approach maximizes the pool of potential bidders, fostering a competitive environment where companies vie for the contract by offering their best pricing and technical solutions. The presence of multiple bidders typically drives down the overall cost compared to sole-source or limited competitions. While the specific number of bids isn't detailed, the process itself suggests that the government received proposals from various sources, allowing for comparison and selection of the most advantageous offer. This competitive pressure helps ensure that taxpayer funds are used efficiently.

What are the historical spending patterns for software engineering services at NSWCDD or similar naval commands, and how does this contract fit within them?

Historical spending patterns for software engineering services at naval commands like NSWCDD typically show consistent investment due to the critical nature of naval systems and the need for ongoing modernization and maintenance. Commands often award multiple contracts, ranging from small, specialized task orders to large, comprehensive support agreements. This $36 million contract, spanning over seven years, represents a significant, long-term commitment to comprehensive software engineering support for the B Department's product lines. It likely fits within a broader strategy of consolidating or ensuring dedicated resources for key technological areas, potentially replacing or supplementing previous, smaller contracts and reflecting an increasing reliance on sophisticated software solutions.

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: N0017818R3011

Offers Received: 3

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: $61,899,798

Exercised Options: $61,899,798

Current Obligation: $36,001,344

Actual Outlays: $2,238,909

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $3,623,659

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