DoD's $30.8M Engineering Services Contract Awarded to American Technical Services, Inc

Contract Overview

Contract Amount: $30,842,273 ($30.8M)

Contractor: American Technical Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2018-05-14

End Date: 2023-05-13

Contract Duration: 1,825 days

Daily Burn Rate: $16.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: IGF::OT::IGF ENGINEERING AND TECHNICAL SUPPORT SERVICES

Place of Performance

Location: NORCO, RIVERSIDE County, CALIFORNIA, 92860

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $30.8 million to AMERICAN TECHNICAL SERVICES, INC. for work described as: IGF::OT::IGF ENGINEERING AND TECHNICAL SUPPORT SERVICES Key points: 1. Contract provides essential engineering and technical support services. 2. Awarded under full and open competition, suggesting broad market engagement. 3. Duration of 5 years indicates a long-term need for these services. 4. The contract type (Cost Plus Fixed Fee) can lead to cost overruns if not managed carefully. 5. Geographic focus on California highlights regional operational needs. 6. The award value is substantial, requiring diligent oversight.

Value Assessment

Rating: good

The contract value of $30.8 million over five years for engineering services appears reasonable given the scope and duration. Benchmarking against similar large-scale engineering support contracts within the Department of Defense suggests this award falls within expected ranges. The Cost Plus Fixed Fee (CPFF) structure, while common for complex services, necessitates careful monitoring to ensure costs remain aligned with the fixed fee and the overall value delivered. Without specific per-unit cost data, a precise value-for-money assessment is challenging, but the competitive nature of the award provides some assurance of fair pricing.

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 3 bidders suggests a moderate level of competition for this significant engineering services requirement. While more bidders could potentially drive prices lower, a competitive process was indeed followed, allowing for price discovery and selection of the most advantageous offer. The specific details of the bidding process and the evaluation criteria would provide further insight into the effectiveness of the competition.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure the best value for the government. Full and open competition increases the likelihood of fair pricing and prevents potential overcharges associated with less competitive or sole-source awards.

Public Impact

The Department of the Navy benefits from specialized engineering and technical support, crucial for its operations. Services delivered likely encompass design, analysis, testing, and technical consultation for naval systems and infrastructure. The geographic impact is concentrated in California, supporting regional naval facilities and projects. Workforce implications include the potential for skilled engineering jobs within the contractor's organization and potentially for subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contracts can incentivize contractors to incur higher costs, as the fee is fixed regardless of the actual expenses.
The long duration of the contract (5 years) increases the risk of scope creep or changing requirements that may not be adequately addressed by the initial contract terms.
Lack of specific performance metrics or deliverables in the provided data makes it difficult to assess the contractor's performance trajectory.
The contract value is substantial, requiring robust oversight to prevent waste, fraud, and abuse.

Positive Signals

Awarded through full and open competition, indicating a robust bidding process and potential for competitive pricing.
The contractor, American Technical Services, Inc., has secured a significant contract, suggesting a level of capability and trust from the awarding agency.
The contract duration of 5 years provides stability and allows for the development of deep expertise in supporting the Navy's needs.
The contract supports critical engineering and technical functions for the Department of Defense.

Sector Analysis

This contract falls within the Engineering Services sector, a critical component of the broader professional, scientific, and technical services industry. This sector is characterized by specialized expertise and often involves complex projects requiring deep technical knowledge. The market size for engineering services supporting the federal government is substantial, with agencies like the Department of Defense being major consumers. This specific contract likely supports naval infrastructure, systems development, or operational readiness, fitting within the government's ongoing need for advanced technical support.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses arising from a set-aside provision. However, the prime contractor, American Technical Services, Inc., may still choose to subcontract portions of this work to small businesses as part of its overall business strategy or to meet broader socioeconomic goals, though this is not mandated by a set-aside. The absence of a small business set-aside means the primary competition was open to all business sizes.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Navy contracting officers and program managers. They are responsible for monitoring performance, approving invoices, and ensuring compliance with contract terms. The Cost Plus Fixed Fee (CPFF) structure necessitates particularly close financial oversight to scrutinize costs incurred by the contractor. While specific Inspector General (IG) jurisdiction is not detailed, the DoD IG typically has oversight over defense spending, including contracts of this magnitude, to identify and prevent fraud, waste, and abuse.

Related Government Programs

Naval Sea Systems Command (NAVSEA) Contracts
Department of Defense Engineering Support Services
Professional, Scientific, and Technical Services Contracts
Cost Plus Fixed Fee Contracts
California Defense Contracts

Risk Flags

Cost Plus Fixed Fee (CPFF) contract type requires diligent cost monitoring.
Long contract duration (5 years) increases risk of scope misalignment.
Potential for contractor complacency over extended periods.
Geographic concentration may limit broader competitive dynamics.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $30.8 million to AMERICAN TECHNICAL SERVICES, INC.. IGF::OT::IGF ENGINEERING AND TECHNICAL SUPPORT SERVICES

Who is the contractor on this award?

The obligated recipient is AMERICAN TECHNICAL 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 $30.8 million.

What is the period of performance?

Start: 2018-05-14. End: 2023-05-13.

What is the track record of American Technical Services, Inc. with federal contracts, particularly within the Department of Defense?

American Technical Services, Inc. has a history of securing federal contracts, including those with the Department of Defense. While the provided data highlights a significant award for engineering services, a comprehensive review of their contract history would reveal the types of services they have provided, their performance ratings on past contracts, and their overall experience with government clients. Examining past performance evaluations and any documented issues or successes would offer a clearer picture of their reliability and capability in fulfilling complex engineering requirements. Their ability to win a 5-year, $30.8M contract suggests a demonstrated capacity and a positive relationship with the awarding agency, but further due diligence on their broader federal contracting portfolio is warranted.

How does the Cost Plus Fixed Fee (CPFF) structure of this contract compare to other engineering service contracts awarded by the Navy?

The Cost Plus Fixed Fee (CPFF) contract type is common for services where the scope of work is not precisely defined at the outset or involves significant uncertainty, such as complex engineering projects. Compared to other Navy engineering service contracts, CPFF awards often represent a higher risk for the government in terms of potential cost overruns, as the contractor is reimbursed for actual costs incurred plus a fixed fee. However, it also allows for flexibility in adapting to evolving technical requirements. Other Navy contracts might utilize Firm-Fixed-Price (FFP) for well-defined scopes or Time and Materials (T&M) for less predictable labor efforts. The choice of CPFF here suggests the Navy anticipated a need for adaptability and was willing to accept a degree of cost risk in exchange for technical flexibility and contractor engagement.

What are the potential risks associated with the 5-year duration of this engineering services contract?

A 5-year duration for an engineering services contract presents several potential risks. Firstly, the technological landscape and the specific needs of the Department of the Navy could evolve significantly over this period. If the contract's scope is not sufficiently flexible or updated, it may become misaligned with current requirements, leading to inefficiencies or the need for costly modifications. Secondly, long-term contracts can sometimes lead to complacency on the part of the contractor, potentially impacting the quality or innovation of services delivered. Lastly, extended durations increase the government's exposure to potential cost increases due to inflation or unforeseen market shifts, especially with a CPFF structure. Robust contract management and regular performance reviews are crucial to mitigate these risks.

What specific types of engineering services are typically included under a contract like this for the Department of the Navy?

Contracts for engineering and technical support services for the Department of the Navy, like this one, typically encompass a wide range of specialized activities. These can include systems engineering, design and development support for naval platforms (ships, submarines, aircraft), integration of new technologies, lifecycle support, maintenance planning, technical documentation, and testing and evaluation. Services might also involve cybersecurity engineering, software development support, acquisition support, and specialized analysis related to naval operations and readiness. The specific nature of the services would depend on the precise requirements outlined in the contract's Statement of Work (SOW), which details the expected deliverables and performance standards.

How does the geographic concentration in California impact the overall value and oversight of this contract?

The concentration of this contract's performance in California means that oversight efforts can be more focused, potentially allowing contracting officers and program managers to have closer proximity to the contractor's operations and key stakeholders within the Navy's California-based facilities. This geographic focus can facilitate more direct communication and site visits, aiding in performance monitoring and issue resolution. However, it also means that the value derived from competition might be more specific to the regional market for engineering services. If the regional market has fewer specialized providers, the competitive pressure might be less intense than in a broader national competition. The value is tied to supporting specific naval installations or projects located within California.

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: N6426717R3015

Offers Received: 3

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 20384 VIA MANTUA, PORTER RANCH, CA, 91326

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

Financial Breakdown

Contract Ceiling: $36,898,074

Exercised Options: $36,898,074

Current Obligation: $30,842,273

Actual Outlays: $582,419

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017814D7604

IDV Type: IDC

Timeline