DoD's $17.7M engineering services contract with MIKEL INC shows fair value despite limited competition

Contract Overview

Contract Amount: $17,756,961 ($17.8M)

Contractor: Mikel Inc

Awarding Agency: Department of Defense

Start Date: 2015-07-27

End Date: 2026-09-16

Contract Duration: 4,069 days

Daily Burn Rate: $4.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: IGF::CT::IGF SUPPORT PROFESSIAL/ENGINEERING SERVICES

Place of Performance

Location: MIDDLETOWN, NEWPORT County, RHODE ISLAND, 02842

State: Rhode Island Government Spending

Plain-Language Summary

Department of Defense obligated $17.8 million to MIKEL INC for work described as: IGF::CT::IGF SUPPORT PROFESSIAL/ENGINEERING SERVICES Key points: 1. Contract awarded via full and open competition, indicating a broad search for qualified vendors. 2. The contract duration of over 11 years suggests a long-term need for these specialized services. 3. The cost-plus-fixed-fee structure allows for flexibility but requires careful oversight to manage costs. 4. Performance is managed by the Defense Contract Management Agency, a key oversight body. 5. The contract is a delivery order under a larger contract vehicle, common for ongoing support. 6. No small business set-aside was utilized, potentially limiting opportunities for smaller firms.

Value Assessment

Rating: fair

Benchmarking the value of this $17.7 million contract is challenging without specific performance metrics and detailed cost breakdowns. However, the contract's duration of over 11 years suggests a sustained need for engineering services. The cost-plus-fixed-fee (CPFF) pricing structure, while common for complex projects, can lead to higher overall costs if not managed diligently. Compared to similar long-term engineering support contracts, the pricing appears within a reasonable range, but a deeper dive into the fixed fee and indirect cost rates would be necessary for a definitive value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple vendors were solicited and had the opportunity to bid. The data indicates there were 6 bidders, which is a healthy level of competition for specialized engineering services. This level of competition generally helps to drive down prices and ensure that the government receives competitive offers. The fact that it was competed broadly is a positive sign for price discovery and value for taxpayers.

Taxpayer Impact: The full and open competition process for this contract likely resulted in a more competitive pricing structure, benefiting taxpayers by ensuring they are not overpaying for essential engineering services.

Public Impact

The Department of Defense benefits from specialized engineering and professional services crucial for its operations. This contract supports the maintenance and enhancement of defense systems and infrastructure. Services are likely delivered in Rhode Island, given the contract's state indicator. The contract supports a workforce skilled in engineering and related professional fields.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contracts can incentivize cost overruns if not closely monitored.
The long contract duration may present risks if technology or requirements change significantly.
Limited information on specific performance metrics makes it difficult to fully assess value.
Lack of small business participation could be a missed opportunity for economic inclusion.

Positive Signals

Awarded through full and open competition, ensuring a broad base of potential bidders.
The Defense Contract Management Agency's involvement suggests robust oversight is in place.
The contract addresses a clear and ongoing need for engineering services within the DoD.
A significant number of bidders (6) indicates market interest and potential for competitive pricing.

Sector Analysis

Engineering services represent a critical sector supporting various government functions, particularly in defense, infrastructure, and technology. The market for these services is substantial, with government contracts forming a significant portion. This specific contract for engineering services fits within the broader category of professional and technical support services procured by the Department of Defense. Comparable spending benchmarks would typically involve analyzing other large, long-term engineering support contracts awarded by the DoD or other federal agencies for similar types of services.

Small Business Impact

This contract was not awarded as a small business set-aside, nor does it appear to have specific subcontracting goals for small businesses indicated in the provided data. This means that opportunities for small businesses to directly participate in this contract are limited. While MIKEL INC may engage small businesses as subcontractors, the absence of explicit set-aside or subcontracting requirements suggests that the primary focus was on securing the best overall offer from the competitive field, potentially overlooking opportunities to foster small business growth within this specific procurement.

Oversight & Accountability

Oversight for this contract is primarily managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The contract's cost-plus-fixed-fee structure necessitates diligent financial oversight to control costs and ensure the fixed fee remains reasonable. Transparency is facilitated through contract award databases, but detailed cost breakdowns and performance reports are typically internal to the agency and contractor. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense Engineering Support Services
Professional and Technical Services Contracts
Department of Defense Major Contracts
Cost-Plus-Fixed-Fee Contracts

Risk Flags

Cost-plus-fixed-fee contract type requires diligent oversight to prevent cost overruns.
Long contract duration (over 11 years) increases risk of scope creep or technological obsolescence.
Limited public data on specific performance metrics makes value assessment challenging.
Lack of explicit small business subcontracting goals may limit broader economic impact.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.8 million to MIKEL INC. IGF::CT::IGF SUPPORT PROFESSIAL/ENGINEERING SERVICES

Who is the contractor on this award?

The obligated recipient is MIKEL INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $17.8 million.

What is the period of performance?

Start: 2015-07-27. End: 2026-09-16.

What is MIKEL INC's track record with the federal government, particularly in delivering engineering services?

MIKEL INC has a history of federal contracting, primarily with the Department of Defense. While specific details on past performance quality are not provided in this data snippet, the award of a significant, long-term contract like this suggests a level of capability and reliability recognized by the contracting agency. Further investigation into past performance reviews, contract termination history, and any documented disputes or awards would provide a more comprehensive understanding of their track record. Analyzing their performance on previous DoD contracts, especially those with similar scope or complexity, would be crucial for a complete assessment.

How does the pricing structure (Cost Plus Fixed Fee) compare to other engineering service contracts of similar scope and duration?

The Cost Plus Fixed Fee (CPFF) structure is common for complex projects where the final cost is difficult to estimate precisely at the outset. It allows the contractor to recover all allowable costs plus a predetermined fixed fee representing profit. Compared to fixed-price contracts, CPFF can be more expensive for the government if costs escalate significantly. However, it offers flexibility and ensures the contractor is incentivized to complete the work. For long-duration engineering services, CPFF is often preferred over firm-fixed-price to accommodate evolving technical requirements and unforeseen challenges. Benchmarking requires comparing the fixed fee percentage and indirect cost rates against industry standards and similar government contracts.

What are the key performance indicators (KPIs) used to measure the success of this contract, and how has MIKEL INC performed against them?

The provided data does not specify the Key Performance Indicators (KPIs) for this contract. Typically, for engineering services, KPIs might include adherence to project timelines, quality of deliverables (e.g., design accuracy, technical reports), cost control within the estimated range, and responsiveness to agency requests. Performance against these KPIs would be documented in performance reports, contractor evaluation questionnaires (like CPARS), and potentially through regular progress meetings. Without access to these specific performance metrics and evaluations, it is impossible to definitively assess MIKEL INC's performance beyond the fact that the contract has continued and is being managed.

What is the historical spending pattern for engineering services by the Defense Contract Management Agency (DCMA) or the specific branch of the DoD this contract supports?

Historical spending on engineering services by the DCMA or its supported branches is substantial, reflecting the ongoing need for technical expertise in defense acquisition and sustainment. While this specific contract represents $17.7 million over its lifespan, broader spending trends would encompass numerous similar contracts. Analyzing historical data would reveal fluctuations based on defense budgets, specific program requirements, and shifts in procurement strategies. Understanding these patterns helps contextualize the current contract's size and duration, indicating whether it aligns with or deviates from established spending norms for such services within the DoD.

Are there any identified risks associated with MIKEL INC's performance or the nature of the engineering services provided under this contract?

Potential risks associated with this contract include cost overruns inherent in the CPFF structure, potential schedule delays if unforeseen technical challenges arise, and the risk of technological obsolescence over the contract's long duration. Contractor performance risks, such as quality issues or failure to meet deadlines, are always present but are mitigated by contract oversight. The specific nature of engineering services can also introduce risks related to design flaws, safety concerns, or integration issues with existing systems. The DCMA's role is to actively monitor and mitigate these risks throughout the contract lifecycle.

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: N0002414R3025

Offers Received: 6

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 2 CORPORATE PL STE 103, MIDDLETOWN, RI, 02842

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

Financial Breakdown

Contract Ceiling: $18,131,896

Exercised Options: $18,131,896

Current Obligation: $17,756,961

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017814D7834

IDV Type: IDC

Timeline