DoD's $26.9M Engineering Support Contract Awarded to Science Applications International Corporation

Contract Overview

Contract Amount: $26,869,878 ($26.9M)

Contractor: Science Applications International Corporation

Awarding Agency: Department of Defense

Start Date: 2018-01-15

End Date: 2023-01-14

Contract Duration: 1,825 days

Daily Burn Rate: $14.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: MODULAR INTEGRATION PROGRAM AND APPLIED ENGINEERING SUPPORT

Place of Performance

Location: PANAMA CITY BEACH, BAY County, FLORIDA, 32407

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $26.9 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION for work described as: MODULAR INTEGRATION PROGRAM AND APPLIED ENGINEERING SUPPORT Key points: 1. Contract provides critical engineering and integration support for naval systems. 2. Awarded through full and open competition, suggesting a competitive bidding process. 3. The contract duration of 5 years indicates a long-term need for these services. 4. The cost-plus-fixed-fee pricing structure allows for flexibility but requires careful oversight. 5. The contract is for modular integration and applied engineering, a specialized field. 6. The award value of approximately $26.9 million over five years warrants performance monitoring.

Value Assessment

Rating: good

The contract value of $26.9 million over five years for engineering services appears reasonable given the specialized nature of modular integration and applied engineering support. Benchmarking against similar large-scale engineering support contracts within the Department of Defense would provide a more precise value-for-money assessment. The cost-plus-fixed-fee (CPFF) structure, while common for complex projects, necessitates robust oversight to ensure costs remain controlled and the fixed fee is justified by the services rendered. Without specific performance metrics or comparison data, a definitive value assessment is challenging, but the award seems aligned with the scope of work.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of two bids suggests a moderate level of competition for this specialized engineering service. While two bidders is not extensive, it does provide a basis for price discovery and ensures that the government is not solely reliant on a single provider. The competitive process likely contributed to achieving a fair market price for the services required.

Taxpayer Impact: A competitive award process helps ensure that taxpayer dollars are used efficiently by driving down costs through bidding. This approach maximizes the potential for obtaining the best value for the government.

Public Impact

The Department of the Navy benefits from advanced engineering and integration support for its modular systems. This contract supports the development and sustainment of critical naval technologies. The services provided are essential for maintaining the operational readiness and technological edge of naval assets. The contract likely supports a specialized engineering workforce, contributing to high-skill job opportunities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contracts can lead to cost overruns if not managed diligently.
The limited number of bidders (two) may indicate potential barriers to entry or a niche market.
Long-term contracts require ongoing performance monitoring to ensure continued value.

Positive Signals

Awarded through full and open competition, promoting fairness and potential cost savings.
The contractor, Science Applications International Corporation, is a well-established entity in defense contracting.
The contract addresses a critical need for specialized engineering support within the Navy.

Sector Analysis

The engineering services sector within the federal government is substantial, supporting a wide array of defense, civilian, and research initiatives. This contract falls within the broader engineering services category (NAICS 541330), which encompasses firms providing specialized engineering expertise. The market for defense engineering support is characterized by high technical barriers to entry and significant demand from agencies like the Department of Defense. Spending in this sector is often driven by modernization efforts, system upgrades, and research and development, making it a critical component of national security infrastructure.

Small Business Impact

This contract does not appear to have a small business set-aside. Given the specialized nature of modular integration and applied engineering support, it is unlikely that significant subcontracting opportunities for small businesses would be mandated unless specifically included in the contract terms. The primary contractor is a large business, suggesting that the direct impact on the small business ecosystem may be limited unless they actively pursue small business subcontractors for specific components or services.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting officers and program managers. The cost-plus-fixed-fee structure necessitates rigorous financial oversight to monitor expenditures against the fixed fee and ensure that costs are reasonable and allocable. Transparency is generally maintained through contract reporting mechanisms, and the Inspector General's office for the Department of Defense would have jurisdiction to investigate any potential fraud, waste, or abuse.

Related Government Programs

Naval Sea Systems Command (NAVSEA) Contracts
Department of Defense Engineering Services
Modular Systems Integration
Applied Engineering Support Services
Defense Advanced Research Projects Agency (DARPA) Contracts

Risk Flags

Potential for cost overruns due to CPFF structure.
Limited competition (two bidders) may impact price discovery.
Long contract duration requires sustained performance monitoring.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.9 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION. MODULAR INTEGRATION PROGRAM AND APPLIED ENGINEERING SUPPORT

Who is the contractor on this award?

The obligated recipient is SCIENCE APPLICATIONS INTERNATIONAL CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $26.9 million.

What is the period of performance?

Start: 2018-01-15. End: 2023-01-14.

What is the track record of Science Applications International Corporation (SAIC) in delivering similar engineering support services to the Department of Defense?

Science Applications International Corporation (SAIC) has a long and extensive history of providing a wide range of technical, engineering, and IT services to the Department of Defense (DoD) and other federal agencies. They are a major defense contractor with significant experience in areas such as systems engineering, integration, cybersecurity, and logistics support. SAIC has been involved in numerous large-scale programs across various military branches, including the Navy, Army, and Air Force. Their track record generally indicates a capacity to handle complex, long-term contracts requiring specialized expertise. Performance reviews and past performance information within DoD databases would offer more granular insights into their specific success rates and any past issues on similar contracts. However, as a prime contractor on this $26.9 million award, their established presence and prior experience suggest a strong capability to fulfill the contract requirements.

How does the awarded value of $26.9 million over five years compare to similar engineering support contracts for naval systems?

The awarded value of approximately $26.9 million over five years translates to an average annual value of roughly $5.4 million. This figure needs to be contextualized within the specific scope of 'modular integration and applied engineering support.' For highly specialized engineering services supporting complex naval systems, this annual value can be considered moderate. Larger, more comprehensive system development or sustainment contracts can easily reach tens or hundreds of millions annually. Conversely, smaller, more focused engineering tasks might fall below $1 million per year. Without detailed knowledge of the specific modular systems and the complexity of the applied engineering required, a precise comparison is difficult. However, compared to broad system integration contracts, this appears to be for a defined set of specialized services rather than end-to-end system development, making the $5.4 million annual average a plausible figure for its niche.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for engineering services, and how are they mitigated in this case?

The primary risk with a Cost Plus Fixed Fee (CPFF) contract is the potential for cost overruns, as the contractor is reimbursed for all allowable costs plus a fixed fee. This can incentivize less cost-conscious behavior if not properly managed. For the government, the risk is paying more than anticipated if costs escalate. Mitigation strategies typically involve robust government oversight, including detailed audits of contractor expenditures, strict adherence to the contract's Statement of Work (SOW), and clear performance metrics. The fixed fee itself acts as a ceiling on the contractor's profit, providing some incentive for efficiency. In this case, the Department of the Navy's contracting officers and program managers are responsible for monitoring costs, ensuring all expenses are allowable and reasonable, and verifying that the fixed fee is commensurate with the services delivered. Regular progress reviews and milestone tracking are crucial for managing this risk.

Given the 'full and open competition' and two bidders, what does this imply about the market for specialized modular integration and applied engineering support?

The fact that this contract was awarded under 'full and open competition' with two bidders suggests a moderately competitive niche market for specialized modular integration and applied engineering support. 'Full and open competition' means the opportunity was broadly advertised, and any qualified firm could bid. Having two bidders indicates that while the services are specialized, there are at least a couple of capable companies in the market. This level of competition is generally sufficient to achieve fair pricing and avoid sole-source issues. However, it also implies that the market might not be saturated with providers, potentially due to high technical expertise requirements, specific security clearances, or the need for established relationships with the Navy. This could mean higher prices than in a market with numerous bidders, but it ensures the government has options and can select a qualified provider.

What is the historical spending pattern for engineering services like this within the Department of the Navy, and how does this award fit in?

The Department of the Navy historically spends billions of dollars annually on a wide array of engineering services, encompassing everything from basic research and development to complex systems integration, sustainment, and modernization. This specific contract, valued at $26.9 million over five years for modular integration and applied engineering support, represents a relatively small portion of the Navy's overall engineering services budget. It fits within the category of specialized technical support contracts that are crucial for maintaining and advancing the technological capabilities of naval platforms. Historical spending patterns show a consistent demand for such services, driven by the continuous need to upgrade existing systems, develop new technologies, and ensure the operational readiness of the fleet. This award aligns with that ongoing requirement for expert engineering support in niche areas.

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: N6133117R3029

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 12010 SUNSET HILLS RD, RESTON, VA, 20190

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

Financial Breakdown

Contract Ceiling: $44,655,471

Exercised Options: $44,655,471

Current Obligation: $26,869,878

Actual Outlays: $2,416,451

Subaward Activity

Number of Subawards: 24

Total Subaward Amount: $25,720,853

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017804D4119

IDV Type: IDC

Timeline