Department of the Navy awards $42.7M contract for administrative and personnel support to Virtual Computing Technology Inc

Contract Overview

Contract Amount: $42,685,831 ($42.7M)

Contractor: Virtual Computing Technology Inc

Awarding Agency: Department of Defense

Start Date: 2021-07-16

End Date: 2024-07-15

Contract Duration: 1,095 days

Daily Burn Rate: $39.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 8

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: DEPARTMENTAL ADMINISTRATIVE AND PERSONNEL SUPPORT SERVICES FOR FLEET REPLACEMENT SQUADRONS (FRS), AIR TEST AND EVALUATION SQUADRONS, AND COMNAVAIRPAC HEADQUARTERS. SQUADRONS ARE GEOGRAPHICALLY LOCATED AT INSTALLATIONS IN CA, WA, OK, VA, MD AND FL.

Place of Performance

Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92135

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $42.7 million to VIRTUAL COMPUTING TECHNOLOGY INC for work described as: DEPARTMENTAL ADMINISTRATIVE AND PERSONNEL SUPPORT SERVICES FOR FLEET REPLACEMENT SQUADRONS (FRS), AIR TEST AND EVALUATION SQUADRONS, AND COMNAVAIRPAC HEADQUARTERS. SQUADRONS ARE GEOGRAPHICALLY LOCATED AT INSTALLATIONS IN CA, WA, OK, VA, MD AND FL. Key points: 1. Contract provides essential administrative and personnel support for critical aviation squadrons. 2. Services span multiple geographic locations across the US, indicating broad operational reach. 3. The contract type (Cost Plus Fixed Fee) suggests potential for cost overruns if not managed closely. 4. A high number of bids (38982) indicates strong market interest and potential for competitive pricing. 5. The duration of the contract (1095 days) allows for sustained support but requires long-term oversight. 6. Focus on support services highlights the importance of non-technical roles in maintaining operational readiness.

Value Assessment

Rating: good

The contract value of $42.7 million over three years appears reasonable for comprehensive administrative and personnel support across multiple locations. Benchmarking against similar contracts for squadron support is difficult without more specific service details, but the number of bids suggests competitive market pricing was likely achieved. The Cost Plus Fixed Fee structure necessitates careful monitoring to ensure costs remain aligned with the fixed fee component and deliver value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, attracting a significant number of bids (38,982). This high level of competition is a positive indicator, suggesting that the market has ample capacity to provide these services and that the government likely secured favorable pricing. The extensive bidding process implies a thorough evaluation of proposals to select the most capable and cost-effective provider.

Taxpayer Impact: The robust competition for this contract is beneficial for taxpayers as it likely drove down prices and ensured the government received competitive offers for essential support services.

Public Impact

Naval aviation squadrons, including Fleet Replacement Squadrons (FRS) and Air Test and Evaluation Squadrons, will benefit from enhanced administrative and personnel support. Personnel at installations in California, Washington, Oklahoma, Virginia, and Florida will receive these services. Improved administrative functions can lead to increased operational efficiency and readiness for naval aviation units. The contract supports the personnel infrastructure necessary for training and testing naval aircraft and systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can sometimes lead to higher costs if not managed diligently.
Geographic dispersion of services may introduce logistical complexities and oversight challenges.

Positive Signals

Full and open competition ensures a wide range of potential contractors are considered.
A large number of bids suggests a healthy and competitive market for these services.
The contract supports critical operational units within the Department of the Navy.

Sector Analysis

This contract falls within the broader professional, scientific, and technical services sector, specifically focusing on engineering and administrative support. The market for such services is large and diverse, with many firms capable of providing specialized support to government agencies. The Department of the Navy's need for consistent administrative and personnel support for its aviation squadrons is a recurring requirement, reflecting the ongoing operational demands of maintaining a modern air fleet.

Small Business Impact

The contract was awarded to Virtual Computing Technology Inc. and does not indicate any specific small business set-aside provisions. While the prime contractor is not identified as a small business, the extensive competition might still offer subcontracting opportunities for small businesses within the broader ecosystem of support services.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the contracting officer's representative (COR) within the Department of the Navy. The Cost Plus Fixed Fee structure requires diligent financial oversight to ensure costs are reasonable and allocable. Transparency is generally maintained through contract reporting systems, and the Inspector General may conduct audits or investigations if performance or cost concerns arise.

Related Government Programs

Naval Aviation Training and Readiness Programs
Department of Defense Personnel Support Services
Fleet Readiness and Maintenance Contracts
Government Administrative Support Services

Risk Flags

Cost Plus Fixed Fee contract type requires diligent oversight to manage costs.
Geographic distribution of services may present logistical and oversight challenges.
Contractor performance history needs further review for a complete risk assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $42.7 million to VIRTUAL COMPUTING TECHNOLOGY INC. DEPARTMENTAL ADMINISTRATIVE AND PERSONNEL SUPPORT SERVICES FOR FLEET REPLACEMENT SQUADRONS (FRS), AIR TEST AND EVALUATION SQUADRONS, AND COMNAVAIRPAC HEADQUARTERS. SQUADRONS ARE GEOGRAPHICALLY LOCATED AT INSTALLATIONS IN CA, WA, OK, VA, MD AND FL.

Who is the contractor on this award?

The obligated recipient is VIRTUAL COMPUTING TECHNOLOGY 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 $42.7 million.

What is the period of performance?

Start: 2021-07-16. End: 2024-07-15.

What is the track record of Virtual Computing Technology Inc. in performing similar government contracts?

Information regarding Virtual Computing Technology Inc.'s specific track record with similar government contracts is not detailed in the provided data. A comprehensive assessment would require reviewing past performance evaluations, contract history, and any reported issues or successes on previous awards. Without this, it's difficult to definitively gauge their experience and reliability for this specific type of support. Further research into federal procurement databases and past performance databases would be necessary to provide a detailed analysis of their capabilities and history in delivering administrative and personnel support services.

How does the pricing structure (Cost Plus Fixed Fee) compare to other contract types for similar services?

The Cost Plus Fixed Fee (CPFF) contract type is often used when the scope of work is not precisely defined or is expected to evolve, allowing for flexibility. It involves reimbursing the contractor for allowable costs plus a fixed fee representing profit. Compared to Firm-Fixed-Price (FFP) contracts, CPFF offers less price certainty for the government but can be advantageous when risks are high or requirements are uncertain, potentially leading to better performance. However, it requires robust oversight to control costs. Other types like Cost-Plus-Incentive-Fee (CPIF) tie profit more directly to performance metrics. For administrative support, FFP is often preferred for its cost predictability, but CPFF might be chosen if the nature of the support is highly dynamic or involves significant unforeseen elements.

What are the primary risks associated with this contract, and how are they being mitigated?

The primary risks associated with this contract include potential cost overruns due to the Cost Plus Fixed Fee (CPFF) structure, performance issues arising from the geographic dispersion of services, and contractor performance variability. Mitigation strategies would involve rigorous oversight by the Contracting Officer's Representative (COR) to monitor costs, ensure adherence to the fixed fee, and verify service delivery quality across all locations. Clear performance metrics and regular reporting requirements are crucial. The extensive competition also serves as a risk mitigation factor, as it implies a pool of capable contractors and potentially better pricing. Furthermore, the contract duration allows for a learning curve, but also necessitates continuous performance monitoring.

How effective is the current administrative and personnel support in contributing to the operational readiness of the squadrons?

The effectiveness of the current administrative and personnel support in contributing to squadron operational readiness is not directly quantifiable from the provided data. However, the renewal and award of such a significant contract ($42.7 million over three years) by the Department of the Navy suggests that the services are deemed essential and likely contribute positively to readiness. The contract's focus on FRS and Air Test and Evaluation Squadrons indicates its importance in training new aviators and testing new systems, both critical components of overall naval aviation readiness. A definitive assessment would require performance metrics related to response times, accuracy of support, and impact on squadron efficiency.

What has been the historical spending trend for similar administrative and personnel support services within the Department of the Navy?

Historical spending trends for similar administrative and personnel support services within the Department of the Navy are not detailed in the provided data. To assess this, one would need to analyze past contract awards for comparable services, noting the total amounts, contract types, and durations over several fiscal years. This would help identify patterns of increasing or decreasing expenditure, shifts in contracting strategies (e.g., from FFP to CPFF or vice versa), and the prevalence of specific contractors. Understanding these trends is crucial for budget forecasting, identifying potential cost efficiencies, and evaluating the long-term investment in such support functions.

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: N0024421R3000

Offers Received: 8

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 380 STEVENS AVE, SOLANA BEACH, CA, 92075

Business Categories: 8(a) Program Participant, Black American Owned Business, Category Business, Corporate Entity Not Tax Exempt, Economically Disadvantaged Women Owned Small Business, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Woman Owned Business, Women Owned Small Business

Financial Breakdown

Contract Ceiling: $50,960,094

Exercised Options: $50,960,094

Current Obligation: $42,685,831

Actual Outlays: $24,451,261

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017819D8808

IDV Type: IDC

Timeline