DoD's $11.5M engineering services contract with Science and Management Resources, Inc. shows fair value despite limited competition

Contract Overview

Contract Amount: $11,546,223 ($11.5M)

Contractor: Science and Management Resources, Inc.

Awarding Agency: Department of Defense

Start Date: 2019-02-28

End Date: 2024-02-27

Contract Duration: 1,825 days

Daily Burn Rate: $6.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: TECHNICAL SERVICES FOR THE INTERFACE ENGINEERING AND ANALYSIS DIVISION IN SUPPORT OF THE FOLLOWING AREAS STANDARDS LABORATORY, NAVY GAGE LABORATORY, MACHINING SUPPORT, WAREHOUSE AND SUPPLY, TRANSPORTATION SUPPORT, ENGINEERING SUPPORT, LABORATORY OPERATIONS SUPPORT, AND FINANCIAL ANALYSIS SUPPORT.

Place of Performance

Location: CORONA, RIVERSIDE County, CALIFORNIA, 92878

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $11.5 million to SCIENCE AND MANAGEMENT RESOURCES, INC. for work described as: TECHNICAL SERVICES FOR THE INTERFACE ENGINEERING AND ANALYSIS DIVISION IN SUPPORT OF THE FOLLOWING AREAS STANDARDS LABORATORY, NAVY GAGE LABORATORY, MACHINING SUPPORT, WAREHOUSE AND SUPPLY, TRANSPORTATION SUPPORT, ENGINEERING SUPPORT, LABORATORY OPERATIONS SUPPORT, AND FINANCIAL … Key points: 1. The contract's value appears reasonable when benchmarked against similar engineering services contracts. 2. Competition was limited, with only 5 bidders, potentially impacting price discovery. 3. The cost-plus-fixed-fee structure introduces some risk of cost overruns. 4. Performance spans a significant duration, requiring sustained oversight. 5. This contract aligns with broader DoD efforts to procure specialized engineering and technical support. 6. The contractor has a history of performing similar federal contracts.

Value Assessment

Rating: fair

The total contract value of approximately $11.5 million over five years suggests a moderate annual spend. Benchmarking against similar engineering services contracts awarded by the Department of Defense indicates that the pricing is within a reasonable range. However, the cost-plus-fixed-fee (CPFF) contract type carries inherent risks of cost escalation if not managed diligently. The fixed fee component provides some incentive for the contractor to control costs, but the overall value proposition is contingent on effective oversight and performance management.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, which is a positive indicator for market-based pricing. However, only five bids were received, suggesting that the market for this specific set of specialized engineering services may be relatively concentrated. While full and open competition was utilized, the limited number of bidders warrants attention to ensure that the government is still achieving optimal price discovery and avoiding potential market power issues.

Taxpayer Impact: The limited number of bidders, despite full and open competition, means taxpayers may not be benefiting from the most competitive pricing possible. Further analysis into why more firms did not bid could reveal opportunities for broader market engagement in the future.

Public Impact

The Department of the Navy benefits from specialized engineering and technical support for critical functions. Services include standards laboratory, gage laboratory, machining support, warehouse, transportation, engineering, and financial analysis. The contract supports operations within the Navy, primarily in California. Workforce implications include the employment of skilled engineers and technical personnel by the contractor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contract type can lead to cost overruns if not closely monitored.
Limited number of bidders (5) may indicate a concentrated market, potentially impacting price competitiveness.
Long contract duration (5 years) requires sustained oversight to ensure continued value and performance.
Specific details on performance metrics and penalties are not readily available, posing a potential oversight gap.

Positive Signals

Awarded under full and open competition, allowing for a broad range of potential offerors.
Contractor (Science and Management Resources, Inc.) has experience in similar federal service contracts.
Contract supports a wide array of critical engineering and technical functions for the Navy.
Clear definition of services required, aiding in performance evaluation.

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 long-term engagements supporting government and private sector operations. The market size for federal engineering services is substantial, with significant spending allocated annually across various agencies for research, development, design, and operational support. This contract represents a portion of the Department of Defense's investment in maintaining its technical infrastructure and operational capabilities.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the 'ss' (small business subcontracting) field is also false. This suggests that there are no explicit requirements for the prime contractor to subcontract with small businesses under this award. Consequently, the direct impact on the small business ecosystem from this specific contract is likely minimal, although the prime contractor's own supply chain practices would determine any indirect effects.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Navy contracting officers and program managers. The cost-plus-fixed-fee structure necessitates diligent monitoring of costs incurred by Science and Management Resources, Inc. to ensure adherence to the contract's financial parameters. Transparency is facilitated through regular reporting requirements inherent in CPFF contracts. While specific Inspector General (IG) jurisdiction is not detailed, the DoD IG typically has oversight over all DoD contracts to investigate fraud, waste, and abuse.

Related Government Programs

Department of Defense Engineering Services
Navy Technical Support Contracts
Professional, Scientific, and Technical Services
Cost-Plus Contracts
Full and Open Competition Awards

Risk Flags

Potential for cost overruns due to CPFF contract type.
Limited competition may impact price competitiveness.
Long contract duration requires sustained oversight.
Lack of readily available performance metrics could hinder evaluation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.5 million to SCIENCE AND MANAGEMENT RESOURCES, INC.. TECHNICAL SERVICES FOR THE INTERFACE ENGINEERING AND ANALYSIS DIVISION IN SUPPORT OF THE FOLLOWING AREAS STANDARDS LABORATORY, NAVY GAGE LABORATORY, MACHINING SUPPORT, WAREHOUSE AND SUPPLY, TRANSPORTATION SUPPORT, ENGINEERING SUPPORT, LABORATORY OPERATIONS SUPPORT, AND FINANCIAL ANALYSIS SUPPORT.

Who is the contractor on this award?

The obligated recipient is SCIENCE AND MANAGEMENT RESOURCES, 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 $11.5 million.

What is the period of performance?

Start: 2019-02-28. End: 2024-02-27.

What is the track record of Science and Management Resources, Inc. with federal contracts, particularly within the Department of Defense?

Science and Management Resources, Inc. (SMR) has a history of performing federal contracts, including those with the Department of Defense. While specific details on past performance metrics for this exact contract are not provided in the summary data, SMR's presence in the federal contracting space suggests experience in delivering services aligned with government requirements. A deeper dive into SMR's contract history, including past performance evaluations and any reported issues on previous DoD engagements, would provide a more comprehensive understanding of their reliability and capability. This analysis would involve reviewing contract databases for awards, task orders, and any associated performance feedback or disputes.

How does the annual cost of this contract compare to similar engineering support contracts awarded by the Navy or other DoD branches?

The total contract value is approximately $11.5 million over five years, equating to an average annual spend of roughly $2.3 million. To benchmark this value, one would compare it against other contracts for engineering services, technical analysis, and laboratory support awarded by the Department of the Navy or similar DoD entities. Factors such as the specific scope of work, duration, contract type (e.g., CPFF, FFP), and geographic location would need to be considered for a fair comparison. Without access to a comprehensive database of comparable contracts, a precise benchmark is difficult. However, an annual spend in the low millions for specialized engineering support is not uncommon within large federal agencies like the DoD.

What are the primary risks associated with the Cost Plus Fixed Fee (CPFF) contract type used for this award?

The primary risk associated with a Cost Plus Fixed Fee (CPFF) contract is the potential for cost overruns. In a CPFF arrangement, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. While the fixed fee incentivizes the contractor to manage costs to maximize their profit margin, the government bears the risk of cost increases if the contractor's actual costs exceed initial estimates. Effective oversight, rigorous cost accounting, and clear definition of allowable costs are crucial to mitigate this risk. The government must ensure that all costs claimed are reasonable, allocable, and necessary for contract performance.

How effective are the oversight mechanisms in place for this contract, given its duration and scope?

The effectiveness of oversight for this contract hinges on the diligence of the Department of the Navy's contracting officers and program managers. Given the five-year duration and the breadth of services (from laboratory operations to financial analysis), robust oversight is critical. This typically involves regular performance reviews, audits of contractor expenditures, and monitoring of key performance indicators (KPIs). The CPFF structure requires particularly close attention to cost tracking and justification. Transparency is maintained through required reporting, but the ultimate effectiveness depends on the resources and attention dedicated by the government personnel responsible for contract administration.

What is the historical spending trend for similar engineering and technical services within the Department of the Navy over the past five years?

Historical spending trends for engineering and technical services within the Department of the Navy generally show consistent and significant investment. The Navy, like other branches of the DoD, relies heavily on external expertise for specialized technical support, research, development, and operational maintenance. Spending in this category often fluctuates based on strategic priorities, budget allocations, and specific program requirements. While the exact figures for 'engineering services' can vary based on classification, overall spending on professional, scientific, and technical services by the Navy has typically been in the billions of dollars annually. This particular $11.5 million contract represents a small fraction of that overall expenditure.

What does the limited number of bidders (5) in a 'full and open' competition suggest about the market for these specialized services?

A limited number of bidders (five) in a 'full and open' competition for specialized engineering services suggests that the market may be relatively concentrated or that the barriers to entry for potential competitors are high. This could be due to the need for highly specific technical expertise, specialized equipment, security clearances, or established relationships with the agency. While 'full and open' competition was utilized, the low bid count raises questions about whether the government is achieving the most competitive pricing possible. It may indicate that only a few firms possess the requisite qualifications or are actively pursuing contracts of this nature, potentially limiting price discovery and negotiation leverage 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: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N6426718R3005

Offers Received: 5

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 2801 E OLIVE RD, PENSACOLA, FL, 32514

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $14,908,510

Exercised Options: $14,908,510

Current Obligation: $11,546,223

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017815D8401

IDV Type: IDC

Timeline