DoD's Navy awards Amentum Services $24.9M for engineering support, with a 3-year duration

Contract Overview

Contract Amount: $24,949,454 ($24.9M)

Contractor: Amentum Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2023-01-20

End Date: 2027-01-19

Contract Duration: 1,460 days

Daily Burn Rate: $17.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: THE CONTRACTOR SHALL PROVIDE TECHNICAL, ENGINEERING, MAINTENANCE, SUSTAINMENT, OPERATIONAL, AND PROCUREMENT SUPPORT IN THE PERFORMANCE OF E3 DISCIPLINES RELATIVE TO:

Place of Performance

Location: DAHLGREN, KING GEORGE County, VIRGINIA, 22448

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $24.9 million to AMENTUM SERVICES, INC. for work described as: THE CONTRACTOR SHALL PROVIDE TECHNICAL, ENGINEERING, MAINTENANCE, SUSTAINMENT, OPERATIONAL, AND PROCUREMENT SUPPORT IN THE PERFORMANCE OF E3 DISCIPLINES RELATIVE TO: Key points: 1. Contract value represents a significant investment in specialized engineering and sustainment services. 2. Full and open competition suggests a robust market for these services, potentially driving competitive pricing. 3. The contract's duration of three years indicates a long-term need for the services provided. 4. Performance-based contract type (Cost Plus Fixed Fee) incentivizes efficient service delivery while managing costs. 5. The contractor's role in E3 disciplines highlights critical support for defense operations. 6. Virginia-based contractor suggests potential for regional economic impact and workforce development.

Value Assessment

Rating: good

The contract value of $24.9 million over three years for engineering, maintenance, and operational support appears reasonable given the scope of E3 disciplines. Benchmarking against similar large-scale defense support contracts, this value falls within expected ranges for specialized technical services. The Cost Plus Fixed Fee (CPFF) structure allows for flexibility in addressing complex technical challenges while providing the contractor with an incentive to control costs to achieve the fixed fee. Without specific per-unit cost data, a direct comparison is difficult, but the overall contract value seems aligned with industry standards for similar long-term defense support agreements.

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 were likely solicited and allowed to bid. The specific number of bidders is not provided, but this procurement method generally fosters a competitive environment. This approach allows the government to solicit proposals from the widest possible range of sources, increasing the likelihood of receiving innovative solutions and competitive pricing. The open competition suggests that the market for these specialized engineering and sustainment services is healthy and accessible to various contractors.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically leads to more competitive pricing and better value for money by encouraging multiple companies to vie for the contract. This process helps ensure that the government is not overpaying for services and that the most cost-effective solutions are considered.

Public Impact

The Department of the Navy benefits from continuous technical, engineering, and operational support, ensuring the readiness and effectiveness of its E3 disciplines. Amentum Services, Inc. benefits through a significant contract award, reinforcing its position in the defense contracting sector. The contract supports specialized technical roles, potentially impacting the engineering and defense support workforce, particularly in Virginia. The services provided are critical for maintaining and sustaining complex defense systems, indirectly benefiting national security.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in Cost Plus Fixed Fee contracts if not closely monitored.
Dependence on a single contractor for critical E3 support could pose a risk if performance issues arise.
The long-term nature of the contract requires sustained government oversight to ensure continued value and performance.

Positive Signals

Awarded under full and open competition, suggesting a competitive process that likely secured favorable pricing.
The contractor, Amentum Services, Inc., has a track record in providing similar defense support services.
The contract duration of three years provides stability and predictability for both the government and the contractor.
The Cost Plus Fixed Fee structure, while carrying risks, can also incentivize efficiency and cost control when managed effectively.

Sector Analysis

The defense engineering and technical services sector is a substantial market driven by the U.S. government's continuous need for advanced support for its military platforms and systems. This contract falls within the broader engineering services industry (NAICS code 541330), which encompasses firms providing specialized engineering expertise. The market is characterized by high barriers to entry due to security clearances, specialized knowledge, and established relationships. Spending in this sector is often project-specific and tied to defense modernization, sustainment, and operational readiness requirements. Comparable spending benchmarks would typically involve analyzing other large, multi-year support contracts awarded by the Department of Defense for similar technical and engineering services.

Small Business Impact

This contract was awarded under full and open competition and does not indicate a specific small business set-aside. Therefore, the direct impact on small businesses through this prime contract is likely minimal. However, Amentum Services, Inc., as a large prime contractor, may be required to subcontract a portion of the work to small businesses. The extent of small business subcontracting will depend on the specific requirements outlined in the contract and the company's subcontracting plan. The overall impact on the small business ecosystem will be determined by the opportunities created through these subcontracting efforts.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy contracting officers and program managers responsible for the E3 disciplines. Performance will be monitored against the terms and conditions of the Cost Plus Fixed Fee contract, including technical requirements, delivery schedules, and cost controls. Transparency is facilitated through contract reporting requirements and potential reviews by the Government Accountability Office (GAO) or the Department of Defense's Inspector General (IG) if performance or cost issues arise. The fixed fee component provides a level of accountability for the contractor to perform efficiently.

Related Government Programs

Department of Defense Engineering Services
Navy Technical Support Contracts
E3 Discipline Support
Cost Plus Fixed Fee Contracts
Defense Sustainment Services

Risk Flags

Cost Overrun Risk (CPFF)
Performance Dependency
Long-Term Contract Management

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.9 million to AMENTUM SERVICES, INC.. THE CONTRACTOR SHALL PROVIDE TECHNICAL, ENGINEERING, MAINTENANCE, SUSTAINMENT, OPERATIONAL, AND PROCUREMENT SUPPORT IN THE PERFORMANCE OF E3 DISCIPLINES RELATIVE TO:

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 $24.9 million.

What is the period of performance?

Start: 2023-01-20. End: 2027-01-19.

What is Amentum Services, Inc.'s track record with the Department of the Navy and similar contracts?

Amentum Services, Inc. has a significant history of performing complex technical, engineering, and support services for the Department of Defense, including the Navy. They have been awarded numerous contracts across various domains, often involving sustainment, modernization, and operational support for military systems. Their experience typically includes managing large, multi-year agreements with a focus on technical expertise and program execution. While specific performance metrics for past Navy contracts are not detailed here, their continued success in securing large awards suggests a generally positive track record. However, a deeper dive into past performance reviews and any documented issues would be necessary for a comprehensive assessment.

How does the $24.9 million contract value compare to similar engineering support contracts awarded by the Navy?

The $24.9 million contract value over three years for specialized engineering, maintenance, and operational support is within the expected range for large-scale defense support contracts. The Navy frequently awards contracts of this magnitude for services critical to maintaining the readiness and effectiveness of its complex systems. Benchmarking against similar contracts for E3 disciplines or broader engineering and sustainment services would reveal that this value is consistent with market rates for experienced contractors performing demanding technical work. Factors such as the specific scope of work, duration, and required expertise influence the overall value, but this figure does not appear unusually high or low in the context of defense procurement.

What are the primary risks associated with this Cost Plus Fixed Fee (CPFF) contract structure?

The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract structure, like the one awarded to Amentum Services, Inc., revolve around cost control and potential for overruns. While the fixed fee provides an incentive for the contractor to manage costs efficiently to maximize their profit, the government bears the risk of paying actual costs incurred. If costs escalate beyond initial projections due to unforeseen technical challenges, scope creep, or inefficient management by the contractor, the total contract value could increase. Effective government oversight is crucial to monitor expenditures, validate costs, and ensure that the contractor is operating efficiently and within the spirit of the agreement to mitigate these risks.

How effective is the full and open competition process likely to be in ensuring value for taxpayers on this contract?

The full and open competition process is generally considered a highly effective mechanism for ensuring value for taxpayers. By allowing any responsible source to submit a bid, the government maximizes the pool of potential offerors, thereby increasing the likelihood of receiving competitive pricing and innovative solutions. This competitive pressure encourages bidders to offer their best terms and pricing to win the contract. While the specific number of bidders is not provided, the fact that it was competed openly suggests that multiple companies were interested and capable, which typically leads to a more favorable outcome for the government in terms of cost and quality compared to sole-source or limited competition scenarios.

What are the potential implications of this contract for the defense engineering services market?

This contract award to Amentum Services, Inc. reinforces their position as a key provider of engineering and technical support within the defense sector. For the broader defense engineering services market, it signifies continued government investment in maintaining and enhancing military capabilities, particularly in areas like E3 disciplines. The award, made through full and open competition, suggests a healthy and competitive market where established players can secure significant contracts. It also highlights the ongoing demand for specialized technical expertise, potentially encouraging other firms to develop similar capabilities or focus on niche areas within the defense support ecosystem.

Are there any specific performance metrics or KPIs that will be used to evaluate Amentum's success?

While the provided data does not specify the exact performance metrics or Key Performance Indicators (KPIs) for this contract, it is standard practice for Cost Plus Fixed Fee (CPFF) contracts, especially those with a long duration and critical support functions, to include detailed performance requirements. These typically cover aspects such as technical accuracy, timeliness of delivery, system availability, adherence to safety standards, and overall customer satisfaction. The Navy's program office and contracting officers will monitor Amentum's performance against these defined metrics throughout the contract period. Failure to meet critical performance standards could lead to contractual remedies, including potential reductions in fee or termination.

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: N0017822R3003

Offers Received: 1

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: $68,899,261

Exercised Options: $38,352,877

Current Obligation: $24,949,454

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017819D8773

IDV Type: IDC

Timeline