DoD's $20.6M Engineering Services Contract Awarded to R3 Strategic Support Group Inc

Contract Overview

Contract Amount: $20,661,481 ($20.7M)

Contractor: R3 Strategic Support Group Inc

Awarding Agency: Department of Defense

Start Date: 2021-05-07

End Date: 2025-05-06

Contract Duration: 1,460 days

Daily Burn Rate: $14.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: EOD INSTRUCTORS

Place of Performance

Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92147

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $20.7 million to R3 STRATEGIC SUPPORT GROUP INC for work described as: EOD INSTRUCTORS Key points: 1. Contract awarded through 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 indicates a long-term engagement for engineering services. 4. The contract is for engineering services, a critical component of defense infrastructure and operations. 5. The awardee, R3 Strategic Support Group Inc., is a key contractor in this domain. 6. The contract was awarded by the Department of the Navy, a major component of the DoD.

Value Assessment

Rating: fair

Benchmarking the value of this $20.6 million contract for engineering services is challenging without specific deliverables and performance metrics. The Cost Plus Fixed Fee (CPFF) contract type introduces inherent risk for cost control, as the government pays actual costs plus a fixed fee. While CPFF can be appropriate for research and development or when costs are uncertain, it requires robust oversight to ensure value. Comparing this to similar long-term engineering service contracts within the Department of Defense would provide better context on pricing and efficiency.

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 two bids suggests a moderate level of competition for this specific award. While full and open competition is generally preferred for maximizing price discovery and achieving best value, the limited number of bidders warrants further investigation into market dynamics and potential barriers to entry.

Taxpayer Impact: The use of full and open competition is beneficial for taxpayers as it aims to secure the most competitive pricing by allowing a wide range of contractors to participate.

Public Impact

The Department of Defense, specifically the Department of the Navy, benefits from specialized engineering expertise. Services delivered likely include design, analysis, and technical support for naval systems and infrastructure. The geographic impact is primarily within California, where the contract is managed or services are rendered. The contract supports a workforce skilled in engineering and technical support roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can incentivize contractor to incur costs to increase the fee earned, requiring strong oversight.
Limited number of bidders (2) in a full and open competition may indicate potential market concentration or barriers to entry.
Long contract duration (1460 days) increases the risk of scope creep and potential for cost escalation over time.

Positive Signals

Awarded under full and open competition, which is the preferred method for ensuring fair access and competitive pricing.
Contract is for engineering services, a critical need for the Department of the Navy's operational readiness and infrastructure.
The contractor, R3 Strategic Support Group Inc., is likely experienced in providing these specialized services.

Sector Analysis

Engineering services are a vital part of the defense sector, encompassing a wide range of activities from system design and development to maintenance and lifecycle support. The market for these services within the federal government is substantial, with significant spending allocated annually. This contract fits within the broader category of professional services supporting defense readiness and technological advancement. Comparable spending benchmarks would involve analyzing other large-scale engineering support contracts awarded by the Department of Defense or its various branches.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. There is no explicit mention of subcontracting goals for small businesses. This suggests that the primary awardee is not obligated to subcontract a specific portion of the work to small businesses, which could limit opportunities for the small business ecosystem on this particular contract.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the contract administration office within the Department of the Navy. The Cost Plus Fixed Fee structure necessitates rigorous monitoring of costs incurred and the justification for the fixed fee. Transparency is generally maintained through contract reporting mechanisms, though specific details of performance and cost breakdowns may be limited to government personnel. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Department of Defense Engineering Services Contracts
Naval Sea Systems Command (NAVSEA) Contracts
Cost Plus Fixed Fee Contracts
Professional Services Contracts

Risk Flags

Cost Plus Fixed Fee contract type requires diligent oversight to manage costs.
Limited number of bidders in a full and open competition warrants review of market dynamics.
Long contract duration increases potential for scope creep and cost escalation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.7 million to R3 STRATEGIC SUPPORT GROUP INC. EOD INSTRUCTORS

Who is the contractor on this award?

The obligated recipient is R3 STRATEGIC SUPPORT GROUP 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 $20.7 million.

What is the period of performance?

Start: 2021-05-07. End: 2025-05-06.

What is the historical spending pattern for R3 Strategic Support Group Inc. with the Department of the Navy?

Analyzing the historical spending patterns of R3 Strategic Support Group Inc. with the Department of the Navy is crucial for understanding their track record and the government's reliance on their services. Without access to specific historical contract data, it's difficult to provide precise figures. However, the award of a $20.6 million contract suggests a significant existing relationship or a strong competitive performance. Typically, agencies maintain databases of past performance, which inform future source selections. A review of previous contracts awarded to R3 Strategic Support Group Inc. by the Navy would reveal the types of services rendered, their value, and their performance ratings, offering insights into their capabilities and the agency's satisfaction.

How does the Cost Plus Fixed Fee (CPFF) structure of this contract compare to other engineering service contracts awarded by the Department of the Navy?

The Cost Plus Fixed Fee (CPFF) contract structure is often used when the scope of work is not precisely defined or involves inherent uncertainties, such as in research and development or complex engineering projects. For the Department of the Navy, CPFF contracts are utilized when detailed cost estimations are difficult upfront. However, this structure carries a risk of cost overruns, as the contractor is reimbursed for actual costs incurred plus a predetermined fee. Compared to fixed-price contracts, CPFF offers more flexibility but requires stringent oversight to ensure cost efficiency and prevent unnecessary expenditures. Benchmarking this contract against others would involve examining the typical fee percentages, the level of cost detail required, and the frequency of audits for similar engineering services.

What are the key performance indicators (KPIs) used to evaluate the success of this engineering services contract?

Key Performance Indicators (KPIs) for an engineering services contract like this are essential for measuring contractor performance and ensuring the Department of the Navy receives the intended value. While specific KPIs are not detailed in the provided data, they typically revolve around technical performance, schedule adherence, and cost control. For engineering services, KPIs might include the accuracy of designs, the timeliness of technical reports, the successful resolution of engineering challenges, compliance with specifications, and the efficiency of resource utilization. The Cost Plus Fixed Fee nature of the contract would necessitate close monitoring of actual costs against projected budgets and the justification of all expenditures to ensure they align with the contract's objectives and represent good value for taxpayer money.

What is the potential impact of the limited competition (2 bidders) on the overall cost-effectiveness of this contract?

The fact that this contract, awarded under full and open competition, received only two bids raises questions about its overall cost-effectiveness. While two bidders still represent competition, a lower number can sometimes indicate reduced pressure on pricing compared to scenarios with numerous proposals. This could potentially lead to higher costs for the government than might be achieved in a more robustly contested market. Factors contributing to limited competition could include specialized requirements, high barriers to entry for potential bidders, or a concentrated market for these specific engineering services. The Department of the Navy would need to ensure that the selected bid represented the best value, considering both price and technical merit, and that the pricing proposed by the winning contractor is reasonable and justifiable.

How does the geographic location (California) influence the cost and execution of this engineering services contract?

The contract's designation of California as its location (SN: CALIFORNIA) can influence both the cost and execution of this engineering services contract. California has a high cost of living and labor, which generally translates to higher salary expectations for skilled professionals, including engineers. This could result in a higher overall contract cost compared to similar services performed in regions with lower labor costs. Furthermore, California's regulatory environment, including state-specific labor laws and environmental regulations, might add complexity to contract execution. However, California also boasts a large pool of highly skilled engineering talent and a significant presence of defense contractors and related industries, which could facilitate access to specialized expertise and resources necessary for the contract's success.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: EDUCATION AND TRAINING › EDUCATION AND TRAINING SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N0024421R3006

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 909 W LAUREL ST, SAN DIEGO, CA, 92101

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

Financial Breakdown

Contract Ceiling: $27,055,385

Exercised Options: $27,055,385

Current Obligation: $20,661,481

Actual Outlays: $6,089,821

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017819D8389

IDV Type: IDC

Timeline