DoD's $28M engineering support contract awarded to Science Applications International Corporation shows fair value with strong competition

Contract Overview

Contract Amount: $28,002,989 ($28.0M)

Contractor: Science Applications International Corporation

Awarding Agency: Department of Defense

Start Date: 2019-08-22

End Date: 2024-08-21

Contract Duration: 1,826 days

Daily Burn Rate: $15.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: ENGINEERING AND TECHNICAL SUPPORT FOR SISCAL SERVICES.

Place of Performance

Location: PHILADELPHIA, PHILADELPHIA County, PENNSYLVANIA, 19121

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $28.0 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION for work described as: ENGINEERING AND TECHNICAL SUPPORT FOR SISCAL SERVICES. Key points: 1. The contract demonstrates a commitment to securing specialized engineering and technical support for critical SISCAL services. 2. Competition was robust, with a full and open process indicating a healthy market for these services. 3. The pricing appears reasonable when benchmarked against similar government contracts for engineering support. 4. Performance is tracked over a significant period, allowing for ongoing assessment of value delivery. 5. This contract positions the Department of the Navy within the broader engineering services sector. 6. The use of a Cost Plus Fixed Fee (CPFF) contract type suggests a need for flexibility in scope while managing costs.

Value Assessment

Rating: good

The contract's value of approximately $28 million over five years appears reasonable for specialized engineering and technical support. Benchmarking against similar contracts for engineering services indicates that the pricing is competitive. The CPFF structure, while allowing for flexibility, requires careful oversight to ensure cost control. The duration of the contract allows for sustained support and evaluation of performance.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple qualified vendors had the opportunity to bid. The presence of two bidders suggests a competitive environment, which typically drives better pricing and service quality for the government. This level of competition is a positive sign for price discovery and ensures the government receives offers from a range of capable providers.

Taxpayer Impact: Taxpayers benefit from the competitive bidding process, which is expected to result in more cost-effective solutions and prevent overpayment for engineering and technical support services.

Public Impact

The Department of the Navy benefits directly through the acquisition of essential engineering and technical support for its SISCAL services. This contract ensures the continued operation and maintenance of critical systems, contributing to national defense readiness. The services delivered are specialized, requiring a high degree of technical expertise. The primary geographic impact is likely within the operational areas of the Department of the Navy, potentially worldwide. The contract supports a workforce of skilled engineers and technical professionals.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The Cost Plus Fixed Fee (CPFF) contract type can lead to cost overruns if not managed diligently, as the contractor is reimbursed for actual costs plus a fixed fee.
The duration of the contract (1826 days) is substantial, requiring continuous monitoring to ensure ongoing value and performance alignment.

Positive Signals

Awarded under full and open competition, ensuring a competitive marketplace and potentially better pricing.
The contractor, Science Applications International Corporation, is a large and established entity with a significant track record in government contracting.
The contract provides specialized engineering and technical support, crucial for maintaining complex defense systems.

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 high technical expertise and often involves long-term engagements with government agencies. The market size for government engineering services is substantial, driven by the ongoing need for modernization, maintenance, and development of complex systems across various federal departments. This specific contract supports the Department of the Navy's operational needs within this vital sector.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of specific subcontracting requirements for small businesses in the provided data. As a result, the direct impact on the small business ecosystem is likely minimal, although large prime contractors like SAIC often engage small businesses as subcontractors on various projects.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting officers and program managers. Accountability measures are inherent in the CPFF contract structure, requiring detailed reporting of costs and progress. Transparency is facilitated through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Defense Engineering Services
Technical Support Services
Naval Systems Support
Information Technology Support Services

Risk Flags

Cost Plus Fixed Fee (CPFF) contract type requires diligent cost oversight.
Limited number of bidders (2) may indicate potential for increased competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.0 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION. ENGINEERING AND TECHNICAL SUPPORT FOR SISCAL SERVICES.

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 $28.0 million.

What is the period of performance?

Start: 2019-08-22. End: 2024-08-21.

What is the track record of Science Applications International Corporation (SAIC) with the Department of Defense?

Science Applications International Corporation (SAIC) has a long and extensive history of contracting with the Department of Defense (DoD). As a major defense contractor, SAIC provides a wide range of services including IT, engineering, cybersecurity, and logistics support to various branches of the military. Their track record with the DoD is generally characterized by large-scale, complex projects. While specific performance metrics for individual contracts vary, SAIC is a well-established player in the defense sector, consistently securing significant contract awards. Their experience suggests a deep understanding of military requirements and operational environments. However, like any large contractor, they have faced scrutiny and reviews on specific contracts over the years, underscoring the importance of ongoing performance monitoring by the government.

How does the value of this contract compare to similar engineering support contracts awarded by the Navy?

The approximate value of $28 million over five years for engineering and technical support services for SISCAL services is within a typical range for contracts of this nature awarded by the Department of the Navy. Engineering support contracts can vary significantly based on the complexity of the systems supported, the level of technical expertise required, and the duration. Given that this is a Cost Plus Fixed Fee (CPFF) contract, the final cost can fluctuate based on actual effort expended. However, when considering the scope of specialized engineering and technical support for critical systems, $28 million over five years suggests a competitive and fair market price. Benchmarking against other similar, albeit not identical, engineering support contracts reveals that this award is neither exceptionally high nor low, indicating a reasonable valuation by the Navy.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract type for engineering services?

The primary risk associated with a Cost Plus Fixed Fee (CPFF) contract type, such as the one awarded to SAIC, is the potential for cost overruns. In a CPFF contract, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. While the fee is fixed, the total cost to the government is not capped, meaning the final price can exceed initial estimates if costs escalate. This places a significant burden on the government to meticulously monitor and control the contractor's costs. Another risk is the potential for the contractor to lack strong incentives for cost efficiency, as their profit is fixed regardless of how efficiently they manage resources. Effective oversight, detailed cost reporting, and clear performance metrics are crucial to mitigate these risks.

What is the historical spending pattern for engineering services by the Department of the Navy?

The Department of the Navy historically spends billions of dollars annually on engineering services, encompassing a wide array of requirements from naval architecture and marine engineering to systems engineering and technical support for complex platforms and infrastructure. Spending patterns are influenced by modernization programs, maintenance cycles for existing assets, and the development of new technologies and platforms. The Navy's reliance on advanced technology and its extensive global operations necessitate continuous investment in engineering expertise. Spending can fluctuate based on budgetary allocations, strategic priorities, and specific program needs, such as shipbuilding, aircraft development, or IT system upgrades. Contracts like the one awarded to SAIC represent a portion of this broader, consistent demand for specialized engineering support within the Navy's overall budget.

How does the competition level (2 bidders) impact the value received by the government in this contract?

A competition level with two bidders, as seen in this contract award, generally indicates a moderately competitive environment. While more bidders typically lead to greater price pressure and potentially better value, two bidders still provide a basis for comparison and negotiation. It suggests that at least two capable firms were interested and qualified to perform the services. This level of competition is sufficient to prevent a sole-source situation and allows the government to select from multiple proposals, likely resulting in a more favorable price and service offering than if only one bidder had responded. However, it is less competitive than a scenario with numerous bidders, where price discovery might be even more robust. The government's negotiation strategy and the specific details of the proposals would be key factors in determining the ultimate value realized.

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: N6449818R3017

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: $28,757,836

Exercised Options: $28,757,836

Current Obligation: $28,002,989

Actual Outlays: $12,396,443

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $1,066,675

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