Navy awards $36.8M engineering services contract to REEFPOINT GROUP LLC for readiness modernization

Contract Overview

Contract Amount: $36,776,151 ($36.8M)

Contractor: Reefpoint Group LLC

Awarding Agency: Department of Defense

Start Date: 2022-07-02

End Date: 2026-07-01

Contract Duration: 1,460 days

Daily Burn Rate: $25.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: BUMED TRANSFORMATIONAL READINESS MODERNIZATION (TRM)

Place of Performance

Location: FALLS CHURCH, FAIRFAX County, VIRGINIA, 22042

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $36.8 million to REEFPOINT GROUP LLC for work described as: BUMED TRANSFORMATIONAL READINESS MODERNIZATION (TRM) Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. 3. The duration of 1460 days (4 years) indicates a long-term need for these engineering services. 4. The contract is for engineering services, a critical component for defense infrastructure modernization. 5. The award amount of over $36 million signifies a substantial investment in readiness. 6. The small business set-aside flag is false, indicating no specific preference for small businesses in this award.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific deliverables or comparable projects. The Cost Plus Fixed Fee (CPFF) contract type introduces inherent risk for cost control, as contractor profit is based on a percentage of the total cost. While the total award is significant, the per-unit cost for specific engineering tasks is not readily available for comparison. Further analysis would require detailed task orders and performance metrics to assess true value for money.

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 a bid. The presence of 4 bidders suggests a moderate level of competition for this specific requirement. While competition is generally positive for price discovery, the specific number of bidders doesn't guarantee the most competitive pricing without further analysis of the bids received.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it aims to secure the best possible pricing through a wide range of potential providers.

Public Impact

The Department of the Navy benefits from enhanced readiness capabilities through infrastructure modernization. Engineering services are delivered to support the BUMED TRANSFORMATIONAL READINESS MODERNIZATION (TRM) program. The geographic impact is likely concentrated within Navy facilities requiring modernization, primarily in Virginia. The contract supports a specialized workforce of engineers and technical personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type can incentivize higher costs if not rigorously managed.
Long contract duration (4 years) may present challenges in adapting to evolving technological needs or market conditions.
Lack of specific performance metrics in the provided data makes it difficult to assess efficiency and effectiveness.
The absence of small business subcontracting requirements could limit opportunities for smaller firms in this contract's execution.

Positive Signals

Awarded through full and open competition, promoting a fair and transparent process.
The contract addresses a critical need for modernization and readiness within the Navy.
The fixed fee component of the CPFF contract provides some level of cost predictability for the government.
The contractor, REEFPOINT GROUP LLC, is selected, implying they met the necessary qualifications.

Sector Analysis

This contract falls within the Engineering Services sector (NAICS 541330), which is a significant part of the broader professional, scientific, and technical services industry. The federal government is a major consumer of these services, particularly for defense infrastructure, research, and development. Spending in this sector is often driven by modernization efforts, new construction, and maintenance of existing assets. Comparable spending benchmarks would involve analyzing other large-scale engineering service contracts awarded by the Department of Defense or other federal agencies for similar modernization initiatives.

Small Business Impact

This contract was not set aside for small businesses, and the data does not indicate any specific subcontracting requirements for small businesses. This means that larger prime contractors are likely to perform the majority of the work, potentially limiting direct opportunities for small businesses to participate in this specific award. However, the prime contractor may still engage small businesses as subcontractors if it aligns with their project execution strategy.

Oversight & Accountability

Oversight for this contract will primarily reside with the Department of the Navy, specifically the contracting officer and their representatives. The Cost Plus Fixed Fee structure necessitates close monitoring of costs and performance to ensure value for money and prevent overruns. Transparency is facilitated through contract award databases, but detailed project-level oversight mechanisms and Inspector General jurisdiction would depend on specific program management protocols and any identified risks.

Related Government Programs

Department of Defense Engineering Services
Navy Infrastructure Modernization Programs
Transformational Readiness Initiatives
Professional, Scientific, and Technical Services Contracts

Risk Flags

Cost Plus Fixed Fee contract type requires diligent oversight to manage costs.
Long contract duration may introduce risks related to scope changes and technological obsolescence.
Potential for contractor performance issues over a multi-year engagement.
Lack of explicit small business subcontracting goals may limit broader economic impact.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $36.8 million to REEFPOINT GROUP LLC. BUMED TRANSFORMATIONAL READINESS MODERNIZATION (TRM)

Who is the contractor on this award?

The obligated recipient is REEFPOINT GROUP LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $36.8 million.

What is the period of performance?

Start: 2022-07-02. End: 2026-07-01.

What is the track record of REEFPOINT GROUP LLC with the Department of Defense?

Reefpoint Group LLC has a history of receiving contracts from the Department of Defense. While this specific award is substantial, a comprehensive review of their past performance, including contract values, types, and successful completion rates, would be necessary to fully assess their track record. Analyzing past performance data, including any reported issues or commendations, provides crucial context for evaluating their capability to execute the BUMED TRM project effectively. Understanding their experience with similar large-scale modernization projects is key to gauging their reliability and expertise in this domain.

How does the Cost Plus Fixed Fee (CPFF) structure compare to other contract types for this type of service?

The Cost Plus Fixed Fee (CPFF) contract type is often used when the scope of work is not precisely defined, or when there is uncertainty about the costs involved, such as in research and development or complex engineering projects. In a CPFF contract, the contractor is reimbursed for allowable costs plus a fixed fee representing profit. This differs from Fixed-Price contracts, where the price is set regardless of the actual costs incurred, offering more cost certainty to the government but potentially shifting more risk to the contractor. Cost-reimbursement contracts, like CPFF, can incentivize contractors to incur costs to increase their profit margin if not carefully monitored. For engineering services like modernization, CPFF can be appropriate if flexibility is needed, but it requires robust government oversight to manage costs effectively and ensure value.

What are the primary risks associated with a 4-year engineering services contract?

A significant risk with a 4-year engineering services contract is the potential for scope creep and cost overruns, especially with a CPFF structure. Market conditions and technological advancements can change rapidly over four years, potentially making the initial scope or chosen solutions outdated or less efficient by the contract's end. There's also a risk of contractor performance degradation over a long period if incentives are not maintained or if key personnel depart. Furthermore, ensuring consistent quality and adherence to evolving regulatory or environmental standards throughout the contract's duration requires ongoing vigilance and effective contract management.

What does the '541330' NAICS code signify in terms of the services provided?

The NAICS code '541330' specifically designates 'Engineering Services.' This classification indicates that the primary services procured under this contract involve the application of engineering principles to design, develop, and manage projects. This can encompass a wide range of activities, including structural, mechanical, electrical, and civil engineering, as well as project management, consulting, and technical analysis related to infrastructure, systems, or equipment. For the BUMED TRM contract, this code suggests the work involves specialized engineering expertise crucial for modernizing naval facilities and readiness capabilities.

How does the award amount of $36.8 million compare to typical spending in this category?

The award amount of $36.8 million for engineering services is substantial and indicates a significant investment in the BUMED Transformational Readiness Modernization program. To benchmark this against typical spending, one would need to analyze historical contract data for similar large-scale infrastructure modernization projects within the Department of the Navy or the broader Department of Defense. Factors such as the scope of work, complexity, duration, and geographic location influence contract values. Without specific comparable projects, it's difficult to definitively state if this amount is high or low, but it signifies a major undertaking requiring considerable resources.

What are the implications of the contract being awarded to REEFPOINT GROUP LLC, a single entity, for the Navy's readiness?

Awarding this contract to a single entity, REEFPOINT GROUP LLC, centralizes the responsibility for delivering the BUMED TRM project. This can streamline communication and project management, potentially leading to more cohesive execution. However, it also concentrates risk with one contractor; if REEFPOINT GROUP LLC faces financial, operational, or performance issues, it could significantly delay or jeopardize the modernization efforts. The Navy's reliance on a single provider necessitates robust oversight to ensure performance standards are met and that the contractor has the capacity and stability to fulfill the 4-year commitment.

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: N0018922R3029

Offers Received: 4

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 612 THIRD ST, ANNAPOLIS, MD, 21403

Business Categories: Category Business, Limited Liability Corporation, Partnership or Limited Liability Partnership, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $47,413,484

Exercised Options: $36,776,151

Current Obligation: $36,776,151

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017819D8405

IDV Type: IDC

Timeline