DoD's $37.6M engineering services contract awarded to Engility LLC, with no competition

Contract Overview

Contract Amount: $37,562,869 ($37.6M)

Contractor: Engility LLC

Awarding Agency: Department of Defense

Start Date: 2010-11-01

End Date: 2012-05-31

Contract Duration: 577 days

Daily Burn Rate: $65.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: ENGINEERING AND TECHNCIAL SERVICES

Place of Performance

Location: CHANTILLY, FAIRFAX County, VIRGINIA, 20151

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $37.6 million to ENGILITY LLC for work described as: ENGINEERING AND TECHNCIAL SERVICES Key points: 1. Contract awarded on a sole-source basis, raising questions about potential overpayment and lack of market-driven pricing. 2. The contract's duration of 577 days suggests a significant, ongoing need for engineering services. 3. Awarded to Engility LLC, a contractor with a substantial presence in the federal IT and engineering space. 4. The 'Engineering Services' category (NAICS 541330) is a critical component of defense operations. 5. Lack of competition limits opportunities for other firms and potentially reduces innovation. 6. The 'Cost Plus Fixed Fee' pricing structure can incentivize cost overruns if not closely monitored.

Value Assessment

Rating: questionable

Benchmarking the value of this $37.6 million contract is challenging due to the lack of competitive bids. Sole-source awards often result in higher prices than those achieved through open competition. Without comparable contract data or a competitive bidding process, it's difficult to ascertain if the government received fair market value for the engineering and technical services provided. The 'Cost Plus Fixed Fee' (CPFF) contract type, while offering flexibility, can also lead to increased costs if the contractor's efficiency is not rigorously managed.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. This indicates that the Department of the Navy identified a specific need that they believed only Engility LLC could fulfill, or that circumstances precluded a competitive process. The absence of multiple bidders means there was no direct price comparison or market pressure to drive down costs, potentially leading to a less favorable price for the government.

Taxpayer Impact: Taxpayers may have paid a premium for these services due to the lack of competition. Without a bidding process, there's less assurance that the price reflects the most economical option available in the market.

Public Impact

The Department of the Navy benefits from specialized engineering and technical services crucial for its operations. This contract supports the development, maintenance, or enhancement of defense systems and infrastructure. The services likely impact naval readiness and technological superiority. Workforce implications include employment for engineers and technical specialists at Engility LLC and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potentially leads to higher costs for taxpayers.
Cost Plus Fixed Fee contract type requires diligent oversight to prevent cost overruns.
Lack of competition may stifle innovation and reduce opportunities for other capable firms.
The contract's duration and value suggest a significant reliance on a single provider.

Positive Signals

Award to a known contractor like Engility LLC may ensure continuity of essential services.
The 'Engineering Services' category indicates a focus on critical technical expertise for defense.
The contract supports the Department of the Navy, a key branch of the armed forces.

Sector Analysis

The federal engineering services market is substantial, encompassing a wide range of specialized technical expertise required across various government agencies, particularly in defense, infrastructure, and research. NAICS code 541330, 'Engineering Services,' represents a significant portion of this market. Contracts in this sector often involve complex projects, long durations, and substantial dollar values, reflecting the critical nature of engineering support for national security and public works. Benchmarks for comparable engineering services contracts vary widely based on scope, complexity, and duration, but competitive procurements typically yield prices reflective of market rates.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the data does not specify any subcontracting goals for small businesses. The sole-source nature of the award further limits opportunities for small businesses to participate in this specific contract, either as prime contractors or subcontractors, unless Engility LLC proactively engages them.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. As a Cost Plus Fixed Fee contract, rigorous financial oversight is crucial to monitor expenditures and ensure the fixed fee remains appropriate. Transparency is limited due to the sole-source nature, but contract performance metrics and financial reporting would be subject to government review. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Defense Engineering Services
Naval Technical Support Contracts
Cost Plus Fixed Fee Contracts
Sole Source Defense Procurements
Engility LLC Federal Contracts

Risk Flags

Sole-source award
Cost Plus Fixed Fee contract type
Lack of transparency in pricing
Potential for cost overruns

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $37.6 million to ENGILITY LLC. ENGINEERING AND TECHNCIAL SERVICES

Who is the contractor on this award?

The obligated recipient is ENGILITY 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 $37.6 million.

What is the period of performance?

Start: 2010-11-01. End: 2012-05-31.

What is Engility LLC's track record with the Department of Defense, particularly on similar engineering services contracts?

Engility LLC, prior to its acquisition by SAIC, had a significant history of contracting with the Department of Defense across various service areas, including IT, engineering, and logistics. For engineering services specifically, Engility often secured contracts related to systems engineering, technical support, and program management for complex defense platforms. Their track record generally involved supporting large-scale defense initiatives. However, the specific performance metrics and any past issues on contracts similar to this sole-source award would require a deeper dive into contract performance reports and potentially CPARS (Contractor Performance Assessment Reporting System) data, which is not directly available in the provided snippet. The sole-source nature of this particular contract suggests a specific, perhaps long-standing, relationship or unique capability that the Navy deemed essential.

How does the $37.6 million value compare to other sole-source engineering services contracts awarded by the Navy in the same period?

Comparing the $37.6 million value of this sole-source contract to other similar awards requires access to a broader dataset of federal contracts. However, for engineering services, especially those supporting complex defense systems, contract values in the tens of millions are not uncommon, particularly for sole-source awards where specific expertise or urgency might justify a higher price point. Sole-source contracts inherently lack the price discovery mechanism of competition, meaning their value is harder to benchmark against market rates. If this contract was for a critical, time-sensitive need or involved highly specialized, proprietary technology or knowledge held by Engility, the higher value might be justifiable. Without comparative data on other sole-source awards for similar scope and duration, it's difficult to definitively state if $37.6 million represents a fair market price.

What are the primary risks associated with a sole-source 'Cost Plus Fixed Fee' contract for engineering services?

The primary risks associated with a sole-source 'Cost Plus Fixed Fee' (CPFF) contract for engineering services are twofold. Firstly, the sole-source nature eliminates competitive pressure, potentially leading to inflated costs as the government lacks market-driven price benchmarks. The contractor may not feel compelled to seek the most cost-effective solutions. Secondly, the CPFF structure, while providing flexibility, carries inherent risks. The 'cost-plus' element means the government reimburses the contractor for allowable costs, plus a fixed fee representing profit. This can incentivize the contractor to incur higher costs, as their fee remains constant regardless of the total cost incurred. Effective oversight is critical to scrutinize allowable costs, ensure efficiency, and prevent potential cost overruns that could significantly exceed the initial budget expectations.

What specific engineering services were delivered under this contract, and how did they contribute to the Navy's mission?

The provided data indicates the contract falls under NAICS code 541330, 'Engineering Services,' and was awarded by the Department of the Navy. While the specific services are not detailed, they likely encompassed a range of technical and engineering support critical to naval operations. This could include systems engineering, design, analysis, testing, integration, or technical support for naval platforms, weapons systems, or infrastructure. The contribution to the Navy's mission would be tied to enhancing readiness, maintaining technological superiority, supporting acquisition programs, or ensuring the operational effectiveness of naval assets. The duration of the contract (577 days) suggests a sustained need for these services, implying a significant role in ongoing naval projects or sustainment efforts.

How has federal spending on 'Engineering Services' (NAICS 541330) trended over the years, and where does this contract fit within that trend?

Federal spending on 'Engineering Services' (NAICS 541330) has historically been substantial, driven largely by defense requirements, infrastructure projects, and research and development initiatives. Spending in this category typically fluctuates based on defense budgets, major procurement programs, and government infrastructure investments. Contracts like this $37.6 million award to Engility LLC represent a portion of that overall spending. While this specific contract is for a defined period (2010-2012), it reflects the consistent demand for specialized engineering expertise within the federal government, particularly the Department of Defense. Analyzing broader trends would involve looking at year-over-year spending data for this NAICS code across all agencies to understand if this contract's value is typical, high, or low relative to the overall market and historical spending patterns.

Industry Classification

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

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Science Applications International Corporation

Address: 35 NEW ENGLAND BUSINESS CENTER DR STE 200, ANDOVER, MA, 01810

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

Financial Breakdown

Contract Ceiling: $43,567,117

Exercised Options: $43,567,117

Current Obligation: $37,562,869

Subaward Activity

Number of Subawards: 139

Total Subaward Amount: $17,714,681

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline