DoD's $35.3M Engineering Services Contract Awarded to SOLUTE Shows Long Duration and Full and Open Competition

Contract Overview

Contract Amount: $35,370,198 ($35.4M)

Contractor: Solute

Awarding Agency: Department of Defense

Start Date: 2020-02-01

End Date: 2023-09-30

Contract Duration: 1,337 days

Daily Burn Rate: $26.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: THE PURPOSE OF THIS AMENDMENT IS TO FORMAT THE TEXT IN SECTION L TO FIT WITHIN THE MARGINS. ALL OTHER TERMS AND CONDITIONS REMAIN UNCHANGED.

Place of Performance

Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92108

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $35.4 million to SOLUTE for work described as: THE PURPOSE OF THIS AMENDMENT IS TO FORMAT THE TEXT IN SECTION L TO FIT WITHIN THE MARGINS. ALL OTHER TERMS AND CONDITIONS REMAIN UNCHANGED. Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract has a significant duration of 1337 days, indicating a long-term need for engineering services. 3. The contract type is Cost Plus Fixed Fee (CPFF), which can lead to cost overruns if not managed carefully. 4. The specific North American Industry Classification System (NAICS) code 541330 points to specialized engineering services. 5. The contract was awarded by the Defense Contract Management Agency (DCMA), a key oversight body within the DoD. 6. The contract's primary purpose is engineering services, a critical function for defense operations and infrastructure.

Value Assessment

Rating: fair

The contract's total award amount is $35.3 million over a period of approximately 3.6 years. Benchmarking this against similar engineering services contracts within the Department of Defense is challenging without more specific service details. However, the Cost Plus Fixed Fee (CPFF) contract type introduces inherent risk for cost control. While the fixed fee provides some predictability, the cost-reimbursement nature means the government bears the direct costs of performance, necessitating robust oversight to ensure value for money and prevent excessive spending.

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 number of bidders is not specified, but this method generally fosters a competitive environment, which is intended to drive down prices and improve the quality of services offered. The open nature of the competition suggests that the agency sought the best possible solution from the widest possible market.

Taxpayer Impact: A full and open competition process is generally favorable for taxpayers as it increases the likelihood of obtaining services at a competitive price, thereby maximizing the value of taxpayer dollars.

Public Impact

The primary beneficiaries are the Department of Defense and its various branches, which receive essential engineering support. The services delivered are critical for defense readiness, infrastructure maintenance, and potentially the development of new defense technologies. The contract is geographically focused on California (SN: CALIFORNIA), suggesting a concentration of defense activities or facilities in that state. The contract likely supports a workforce of engineers and technical specialists, contributing to employment in the engineering sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can incentivize contractors to incur costs, potentially leading to higher overall expenditures if not closely monitored.
The long contract duration (1337 days) increases the risk of scope creep or changing requirements that may not be optimally addressed under the original terms.
Lack of specific performance metrics or outcome-based evaluations in the provided data makes it difficult to assess the true effectiveness and efficiency of the services rendered.
The specific engineering services provided are not detailed, making it hard to evaluate if the cost is commensurate with the value delivered.

Positive Signals

Awarded through full and open competition, which typically leads to better pricing and quality.
The contract is managed by the Defense Contract Management Agency (DCMA), indicating established oversight and quality assurance processes.
The engineering services provided are crucial for national defense, ensuring the operational readiness of military assets and infrastructure.
The contract has a defined end date, providing a clear timeframe for service delivery and budget allocation.

Sector Analysis

Engineering services, categorized under NAICS code 541330, represent a significant segment of the professional services market supporting government and private sector projects. This sector is characterized by specialized expertise and often involves complex technical challenges. Within the federal landscape, engineering services are crucial for defense, infrastructure development, research and development, and environmental management. Comparable spending benchmarks would typically involve analyzing the average cost per engineering hour or project for similar defense-related engineering tasks, considering factors like security clearances and specialized knowledge required.

Small Business Impact

The provided data indicates that small business participation (SB: false) and set-asides (SS: false) were not factors in this specific contract award. This suggests that the contract was not specifically targeted towards small businesses, and larger, established firms were likely the primary participants in the competition. Consequently, there may be limited direct subcontracting opportunities for small businesses stemming from this particular award, although the prime contractor might engage them based on project needs.

Oversight & Accountability

The contract is managed by the Defense Contract Management Agency (DCMA), which is responsible for providing contract administration services, including ensuring contractor compliance with terms and conditions, monitoring performance, and overseeing financial aspects. The Cost Plus Fixed Fee (CPFF) structure necessitates rigorous oversight to control costs and ensure that the fixed fee remains appropriate for the work performed. Transparency is generally maintained through contract reporting requirements, though specific details of ongoing oversight activities are typically internal.

Related Government Programs

Department of Defense Engineering Contracts
Defense Contract Management Agency Services
Cost Plus Fixed Fee Contracts
Engineering Services for National Defense
Federal Engineering Services

Risk Flags

Cost Plus Fixed Fee (CPFF) contract type may lead to higher costs if not managed effectively.
Long contract duration increases risk of scope creep and changing requirements.
Lack of detailed service description hinders value assessment.
Potential for cost overruns inherent in CPFF contracts.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $35.4 million to SOLUTE. THE PURPOSE OF THIS AMENDMENT IS TO FORMAT THE TEXT IN SECTION L TO FIT WITHIN THE MARGINS. ALL OTHER TERMS AND CONDITIONS REMAIN UNCHANGED.

Who is the contractor on this award?

The obligated recipient is SOLUTE.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $35.4 million.

What is the period of performance?

Start: 2020-02-01. End: 2023-09-30.

What is the track record of SOLUTE in performing similar engineering services contracts for the Department of Defense?

Assessing SOLUTE's track record requires a deeper dive into their past performance history with the Department of Defense (DoD) and other federal agencies. This would involve reviewing past contract awards, performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), and any documented issues or successes. Without access to this specific performance data, it's difficult to definitively gauge their reliability and expertise in delivering complex engineering services. However, their ability to win a $35.3 million contract through full and open competition suggests they possess the necessary qualifications and experience to be considered a viable bidder in the defense engineering sector. Further investigation into their project portfolio and client feedback would provide a more comprehensive understanding of their capabilities and past performance.

How does the Cost Plus Fixed Fee (CPFF) structure of this contract compare to other engineering service contracts within the DoD?

The Cost Plus Fixed Fee (CPFF) contract type is common within the DoD, particularly for research and development or services where the scope of work is not precisely defined at the outset, or where innovation is a key component. In a CPFF contract, the government reimburses the contractor for allowable costs incurred, plus a predetermined fixed fee representing profit. This contrasts with fixed-price contracts, where the price is set regardless of costs, and cost-reimbursement contracts without a fixed fee. While CPFF provides flexibility, it carries a higher risk of cost growth compared to fixed-price contracts if cost controls are not robust. Benchmarking would involve comparing the ratio of the fixed fee to the total estimated cost against similar CPFF contracts for engineering services to determine if the fee is reasonable and incentivizes efficient performance.

What are the potential risks associated with the long duration (1337 days) of this engineering services contract?

A contract duration of 1337 days (approximately 3.6 years) presents several potential risks for an engineering services contract. Firstly, the technological landscape and defense requirements can evolve significantly over such a period. This may lead to the need for contract modifications to incorporate new technologies or adapt to changing mission needs, potentially increasing costs and complexity. Secondly, long-term contracts can sometimes lead to complacency on the part of the contractor if performance monitoring is not consistently rigorous. Thirdly, there's a risk of 'scope creep,' where the project's objectives or deliverables gradually expand beyond the original agreement without corresponding adjustments to cost or schedule. Finally, economic fluctuations or changes in government funding priorities over an extended period could impact the contract's stability or require renegotiation.

How does the $35.3 million award amount compare to historical spending on similar engineering services by the Defense Contract Management Agency (DCMA)?

To compare the $35.3 million award amount to historical spending by the DCMA on similar engineering services, one would need access to historical contract databases and spending reports specific to the DCMA and the NAICS code 541330 (Engineering Services). This analysis would involve identifying previous contracts awarded by the DCMA for engineering services, noting their award amounts, durations, and contract types. It would also be important to consider whether those historical contracts involved similar scope, complexity, and geographic focus. Without this specific historical data, a direct comparison is not feasible. However, $35.3 million over approximately 3.6 years represents a substantial investment, suggesting a significant scope of work or a high level of specialized expertise required.

What specific engineering disciplines or services are covered under this contract, and how are they critical to the DoD's mission?

The provided data identifies the contract as being for 'Engineering Services' under NAICS code 541330, but it does not specify the particular disciplines or services involved. These could range broadly from civil, mechanical, electrical, or aerospace engineering to specialized areas like systems engineering, cybersecurity engineering, or logistics engineering. The criticality to the DoD's mission would depend entirely on the specific services rendered. For instance, if the contract supports the maintenance and upgrade of critical military infrastructure, it's vital for operational readiness. If it involves design or development of new defense systems, it's crucial for future capabilities. Understanding the precise nature of the engineering services is essential to fully appreciate their contribution to national security objectives.

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: N0024419R3510

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 1455 FRAZEE ROAD, SAN DIEGO, CA, 92108

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

Financial Breakdown

Contract Ceiling: $42,099,754

Exercised Options: $38,416,933

Current Obligation: $35,370,198

Actual Outlays: $19,170,661

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017819D8534

IDV Type: IDC

Timeline