DoD awards $14.4M contract for PM support services to Vectrus Systems LLC, raising value-for-money questions

Contract Overview

Contract Amount: $14,416,035 ($14.4M)

Contractor: Vectrus Systems LLC

Awarding Agency: Department of Defense

Start Date: 2023-06-01

End Date: 2026-05-31

Contract Duration: 1,095 days

Daily Burn Rate: $13.2K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: PM SUPPORT SERVICES - BASE YEAR

Place of Performance

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

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $14.4 million to VECTRUS SYSTEMS LLC for work described as: PM SUPPORT SERVICES - BASE YEAR Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Cost-plus-fixed-fee structure may incentivize higher costs. 3. Limited transparency on performance metrics and value achieved. 4. Contract duration of three years suggests a sustained need for services. 5. Geographic location in Maryland may indicate specific operational requirements.

Value Assessment

Rating: questionable

The contract's value of $14.4 million for a three-year period for PM support services warrants scrutiny. Without a competitive bidding process, it is difficult to benchmark the pricing against market rates or similar contracts. The cost-plus-fixed-fee (CPFF) pricing structure, while common for complex services, can lead to higher overall costs if not managed diligently, as it allows the contractor to pass through allowable costs plus a fixed fee. Further analysis of the contractor's performance and the specific services rendered is needed to determine if the government is receiving good value for its investment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not openly competed. This significantly limits the number of potential bidders and the opportunity for market forces to drive down prices. While sole-source awards can be justified under specific circumstances (e.g., unique capabilities, urgent needs), they often result in higher costs for the government compared to competitively awarded contracts. The lack of competition here means taxpayers may not be benefiting from the most cost-effective solution.

Taxpayer Impact: The absence of a competitive bidding process for this $14.4 million contract means taxpayers may be paying a premium. Without multiple offers, there is less pressure on the contractor to offer the lowest possible price for the required services.

Public Impact

The Department of the Navy benefits from essential program management support services. Services are likely to support critical defense initiatives and operations. The contract's performance is based in Maryland, potentially impacting the local economy and workforce. The duration of the contract suggests a long-term need for these specialized support functions within the DoD.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases costs for taxpayers.
Cost-plus-fixed-fee contract structure may not incentivize cost efficiency.
Lack of detailed performance metrics makes value assessment challenging.
Limited public information on the specific nature of 'PM Support Services' hinders understanding of necessity and scope.

Positive Signals

Vectrus Systems LLC is an established government contractor with experience in defense support.
The contract duration indicates a sustained and recognized need for these services.
The fixed fee component of the CPFF contract provides some cost predictability.

Sector Analysis

This contract falls within the Engineering Services sector (NAICS 541330), which encompasses firms providing engineering consulting and services. The federal government is a significant consumer of these services, particularly within the defense sector, for program management, technical support, and systems engineering. The market for such services is competitive, but specialized expertise and existing relationships can influence contract awards. Benchmarking this contract's value is challenging without more specific details on the scope of work and comparable sole-source awards.

Small Business Impact

The contract data indicates that small business participation is not a stated requirement (ss: false, sb: false). This suggests that subcontracting opportunities for small businesses may be limited unless voluntarily pursued by the prime contractor, Vectrus Systems LLC. Without specific set-aside goals or subcontracting plans mandated in the contract, the direct impact on the small business ecosystem is likely minimal, though the prime contractor's own supply chain practices would determine any indirect benefits.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. As a sole-source award, there may be heightened scrutiny to ensure the necessity and justification for non-competitive procurement. Transparency is limited by the nature of the award and the lack of publicly available performance reports. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

Department of Defense Program Management Support
Engineering and Technical Services Contracts
Naval Operations Support Services
Cost-Plus-Fixed-Fee Contracts

Risk Flags

Sole-source award lacks competitive justification.
Cost-plus-fixed-fee structure may lead to cost overruns.
Limited transparency on performance and value.
Potential for reduced price discovery due to lack of competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.4 million to VECTRUS SYSTEMS LLC. PM SUPPORT SERVICES - BASE YEAR

Who is the contractor on this award?

The obligated recipient is VECTRUS SYSTEMS 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 $14.4 million.

What is the period of performance?

Start: 2023-06-01. End: 2026-05-31.

What specific program management support services are being provided under this contract, and how do they align with the Department of the Navy's strategic objectives?

The provided data abbreviates the contract as 'PM SUPPORT SERVICES - BASE YEAR' under the Department of the Navy. While the specific nature of 'PM Support Services' is not detailed, it typically encompasses a range of activities crucial for the successful execution of defense programs. These can include planning, organizing, staffing, directing, coordinating, reporting, and budgeting for projects or programs. Such services are vital for ensuring that naval acquisition programs, operational readiness initiatives, and research and development efforts are managed efficiently and effectively, aligning with the strategic objectives of the Department of the Navy, such as maintaining maritime superiority and ensuring national security.

How was the justification for a sole-source award determined, and what alternatives were considered?

The justification for a sole-source award, indicated by 'CT: NOT AVAILABLE FOR COMPETITION', typically stems from specific circumstances outlined in federal acquisition regulations (FAR). Common reasons include the existence of only one responsible source capable of providing the required services, urgent and compelling needs where competition is not feasible, or when the services are a follow-on to a previously competed contract where only the original contractor possesses the necessary knowledge or proprietary data. Without access to the specific Justification and Approval (J&A) document for this Vectrus Systems LLC contract, the precise rationale remains unknown. However, the Department of the Navy would have had to formally document and approve this justification, detailing why full and open competition was not practicable or not in the government's best interest.

What is the typical cost structure for similar PM support services contracts within the Department of Defense, and how does this contract's pricing compare?

The cost structure for similar PM support services contracts within the Department of Defense can vary significantly based on the scope of work, duration, required expertise, and contract type. This contract utilizes a Cost-Plus-Fixed-Fee (CPFF) structure. CPFF contracts reimburse the contractor for allowable costs incurred plus a predetermined fixed fee representing profit. While this structure offers flexibility for evolving requirements, it can lead to higher overall costs compared to fixed-price contracts if cost controls are not robust. Benchmarking this contract's pricing against similar CPFF contracts for PM support services within the DoD is challenging without access to detailed cost breakdowns and performance data. However, the base year value of approximately $14.4 million suggests a substantial requirement, and the lack of competition raises concerns about potential overpayment.

What are the key performance indicators (KPIs) for this contract, and how is Vectrus Systems LLC's performance being measured?

The provided contract data does not include specific Key Performance Indicators (KPIs) or details on how Vectrus Systems LLC's performance is being measured. For Cost-Plus-Fixed-Fee (CPFF) contracts, performance is typically evaluated based on the contractor's ability to meet defined technical requirements, adhere to schedules, manage costs within approved limits, and comply with contractual terms and conditions. The government contracting officer and relevant program managers are responsible for monitoring performance and ensuring that the services delivered meet the required standards. Without access to the contract's Performance Work Statement (PWS) or any associated performance management plans, a detailed assessment of the KPIs and measurement methods is not possible.

What is the historical spending pattern for PM support services by the Department of the Navy, and does this contract represent an increase or decrease in spending?

Analyzing historical spending patterns for PM support services by the Department of the Navy requires access to comprehensive federal procurement data over multiple fiscal years. This single contract award for $14.4 million in its base year represents a specific investment in program management support. Without a broader dataset, it is impossible to definitively state whether this contract signifies an increase or decrease in overall Navy spending on such services. However, the trend in federal spending on professional services, including program management, has generally been substantial, driven by complex defense acquisition programs and ongoing operational needs. Further analysis of historical obligations for similar service codes (e.g., NAICS 541330) and contract types within the Navy would be necessary to contextualize this award.

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: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0042123R0025

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Vectrus, Inc.

Address: 2424 GARDEN OF THE GODS RD STE 300, COLORADO SPRINGS, CO, 80919

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

Financial Breakdown

Contract Ceiling: $32,989,348

Exercised Options: $19,192,381

Current Obligation: $14,416,035

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline