DoD's $17.75M Navy engineering services contract awarded to SCITECH SERVICES INC shows fair value

Contract Overview

Contract Amount: $17,753,902 ($17.8M)

Contractor: Scitech Services Inc

Awarding Agency: Department of Defense

Start Date: 2020-07-31

End Date: 2025-08-09

Contract Duration: 1,835 days

Daily Burn Rate: $9.7K/day

Competition Type: COMPETED UNDER SAP

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: NAVSEA SBIR PROGRAM MANAGEMENT OFFICE SUPPORT

Place of Performance

Location: PATUXENT RIVER, SAINT MARYS County, MARYLAND, 20670

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $17.8 million to SCITECH SERVICES INC for work described as: NAVSEA SBIR PROGRAM MANAGEMENT OFFICE SUPPORT Key points: 1. Contract awarded under Simplified Acquisition Procedures (SAP) suggests a focus on smaller procurements. 2. The Cost Plus Fixed Fee (CPFF) contract type allows for flexibility but requires careful oversight of costs. 3. A duration of 1835 days indicates a long-term need for these engineering services. 4. The contract is for SBIR Program Management Office Support, aligning with innovation and research initiatives. 5. Geographic location in Maryland may indicate a concentration of defense-related contractors in the region. 6. The absence of small business set-aside flags suggests this was not specifically targeted for small business participation.

Value Assessment

Rating: good

The contract's value of $17.75 million over approximately five years appears reasonable for specialized engineering support services within the Department of Defense. Benchmarking against similar contracts for SBIR program management is challenging without more specific service details, but the CPFF structure suggests a negotiated rate that should be competitive. The fixed fee component provides a degree of cost control for the government, indicating a focus on achieving value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was competed under Simplified Acquisition Procedures (SAP), which typically allows for a broader range of competition than micro-purchases but is generally for procurements below the full and open threshold. While the specific number of bidders is not provided, SAP competition aims to ensure fair pricing. The fact that it was competed suggests that multiple vendors were considered, contributing to price discovery.

Taxpayer Impact: Competition under SAP generally leads to better pricing for taxpayers compared to sole-source awards, as it encourages vendors to offer competitive proposals.

Public Impact

The primary beneficiaries are the Navy's Small Business Innovation Research (SBIR) program, which receives essential management support. Services delivered include program management, technical assistance, and administrative support crucial for the SBIR initiative. The geographic impact is primarily within the Department of the Navy's operational sphere, likely supporting research and development efforts. Workforce implications include the potential for skilled engineers and program managers to be employed by SCITECH SERVICES INC to fulfill this contract.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can incentivize contractors to increase costs to maximize their fee if not properly managed.
Reliance on SAP competition, while beneficial, may not always yield the same level of aggressive pricing as full and open competition for larger contracts.
The long contract duration requires sustained oversight to ensure continued performance and value.

Positive Signals

The contract was competed, indicating an effort to achieve fair market value.
The fixed fee component in the CPFF structure provides a defined profit margin, aiding in cost predictability.
The contract supports the SBIR program, which is vital for fostering technological innovation within the defense sector.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting the Department of Defense's research and development initiatives through the SBIR program. The market for defense-related engineering and program management services is substantial, with numerous firms capable of providing specialized support. This contract represents a portion of the broader government spending on R&D and program support, aiming to leverage private sector expertise for public benefit.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). While SCITECH SERVICES INC may be a small business itself, the contract terms did not mandate subcontracting opportunities specifically for small businesses. This means that the primary contractor has discretion in how it utilizes its supply chain, and there is no explicit requirement to engage small businesses for subcontracting work on this particular award.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting officers and program managers. Accountability measures are embedded within the Cost Plus Fixed Fee structure, requiring detailed reporting and justification of costs. Transparency is facilitated through contract award databases, though specific performance metrics and detailed cost breakdowns may be internal. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Department of Defense SBIR Program
Navy Research and Development Contracts
Engineering Services Contracts
Cost Plus Fixed Fee Contracts

Risk Flags

Contract awarded under Simplified Acquisition Procedures (SAP) may limit the extent of competition compared to full and open.
Cost Plus Fixed Fee (CPFF) contract type requires diligent oversight to manage costs and ensure value.
Lack of specific small business set-aside or subcontracting requirements could limit opportunities for small businesses.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.8 million to SCITECH SERVICES INC. NAVSEA SBIR PROGRAM MANAGEMENT OFFICE SUPPORT

Who is the contractor on this award?

The obligated recipient is SCITECH SERVICES 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 $17.8 million.

What is the period of performance?

Start: 2020-07-31. End: 2025-08-09.

What is the historical spending pattern for SCITECH SERVICES INC with the Department of Defense?

Analyzing SCITECH SERVICES INC's historical spending with the Department of Defense requires access to a broader dataset than provided. However, this specific contract valued at $17.75 million over approximately five years represents a significant award. To understand the full pattern, one would need to examine previous awards, contract types, and the duration of their engagements with DoD entities. A trend of consistent, substantial awards could indicate a strong, established relationship and proven performance, while sporadic or declining awards might suggest otherwise. Without more data, it's difficult to definitively characterize their historical spending pattern beyond this single, notable contract.

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

The Cost Plus Fixed Fee (CPFF) contract type is common for R&D and services where the scope of work is not precisely defined at the outset, allowing for flexibility. In a CPFF contract, the contractor is reimbursed for all allowable costs plus a fixed fee representing profit. This contrasts with Firm-Fixed-Price (FFP) contracts, where the price is set regardless of actual costs, offering greater cost certainty to the government but potentially higher risk for the contractor if costs escalate. Cost-Plus-Incentive-Fee (CPIF) contracts also share costs and profits but include incentives for meeting or exceeding performance targets. For specialized engineering and program management support like this, CPFF offers a balance, enabling adaptation to evolving project needs while providing a defined profit margin for the contractor.

What are the key performance indicators (KPIs) typically used to evaluate the success of SBIR program management contracts?

Key Performance Indicators (KPIs) for SBIR program management contracts often focus on the efficiency and effectiveness of the support provided to the SBIR program itself. These can include metrics such as the timeliness of proposal reviews, the quality of technical assessments, the effectiveness of outreach to potential applicants, and the successful management of awarded grants or contracts. Other KPIs might relate to budget adherence, administrative efficiency, and the overall satisfaction of the SBIR program office with the support services. For SCITECH SERVICES INC, demonstrating success would involve meeting or exceeding targets in these areas, ensuring the SBIR program operates smoothly and achieves its objectives of fostering technological innovation.

What is the typical profit margin for engineering services contractors in the federal sector?

Profit margins for federal engineering services contractors can vary significantly based on contract type, complexity, competition, and the specific services offered. For Cost Plus Fixed Fee (CPFF) contracts, the 'fixed fee' component represents the contractor's profit. While not explicitly stated in the provided data, typical fixed fees in CPFF contracts for professional services often range from 7% to 15% of the estimated cost. This percentage is negotiated and can be influenced by factors such as the perceived risk, the uniqueness of the services, and the competitive landscape. It's important to note that this fee is subject to the contractor managing its costs effectively.

How does competition under Simplified Acquisition Procedures (SAP) impact pricing compared to full and open competition?

Competition under Simplified Acquisition Procedures (SAP) generally involves procurements valued between $2,500 and $250,000 (though thresholds can be higher for certain categories). While SAP aims for fair and reasonable pricing through methods like requesting quotes from multiple sources, it typically involves fewer bidders and less formal solicitation processes than full and open competition. Full and open competition, used for larger contracts, involves extensive public advertising and a more rigorous evaluation process, often leading to more aggressive pricing due to a wider pool of potential bidders. Therefore, while SAP competition is beneficial, full and open competition for larger contracts may yield greater cost savings for the government.

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: COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: N0042119R0015

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 2129 PULASKI HWY STE 100, HAVRE DE GRACE, MD, 21078

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Indian (Subcontinent) American Owned Business, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $17,773,164

Exercised Options: $17,773,164

Current Obligation: $17,753,902

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0042120D0006

IDV Type: IDC

Timeline