DoD awards $97.2M engineering services contract to Chugach Technical Solutions, with limited competition

Contract Overview

Contract Amount: $97,240,605 ($97.2M)

Contractor: Chugach Technical Solutions LLC

Awarding Agency: Department of Defense

Start Date: 2020-06-30

End Date: 2025-05-28

Contract Duration: 1,793 days

Daily Burn Rate: $54.2K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: USCG ENGINEERING SERVICES

Place of Performance

Location: PORTSMOUTH, PORTSMOUTH CITY County, VIRGINIA, 23709

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $97.2 million to CHUGACH TECHNICAL SOLUTIONS LLC for work described as: USCG ENGINEERING SERVICES Key points: 1. Contract value of $97.2M over nearly 5 years suggests significant scope for engineering support. 2. Limited competition raises questions about potential price overruns and value for taxpayer dollars. 3. The 'Not Available for Competition' status warrants scrutiny of the justification for sole-sourcing. 4. Engineering services are critical for defense infrastructure, but performance metrics are key to assessing value. 5. This contract falls within the broader 'Engineering Services' sector, a vital component of government contracting. 6. The Cost Plus Fixed Fee (CPFF) pricing structure can incentivize cost overruns if not closely monitored.

Value Assessment

Rating: fair

Benchmarking the value of this $97.2M contract is challenging without specific performance data and comparable engineering service contracts. The CPFF structure, while offering flexibility, can lead to higher costs if not managed diligently. The absence of a competitive bidding process means there's no direct market comparison to assess if the pricing is optimal. Further analysis of the contractor's historical performance and the specific services rendered would be needed to provide a more definitive value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a 'Not Available for Competition' basis, indicating a sole-source procurement. This means that only one bidder, Chugach Technical Solutions LLC, was considered. While sole-source awards can be justified under specific circumstances (e.g., urgency, unique capabilities), they inherently limit price discovery and potentially reduce the incentive for the contractor to offer the most competitive pricing.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to drive down prices. This limits the government's ability to secure the best possible value for public funds.

Public Impact

The Department of the Navy benefits from specialized engineering services crucial for its operations and infrastructure. This contract supports the maintenance, repair, and potentially the development of critical defense assets. The geographic impact is likely concentrated around naval facilities where these engineering services are required. The contract supports a workforce of engineers and technical specialists, contributing to employment in the sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated costs.
CPFF contract type can incentivize cost overruns.
Justification for sole-source award needs thorough review.
Performance metrics and oversight are critical for value realization.

Positive Signals

Contract awarded to an established entity (Chugach Technical Solutions LLC).
Long-term contract (nearly 5 years) provides stability for engineering support.
Engineering services are essential for maintaining defense capabilities.

Sector Analysis

The engineering services sector is a critical component of the broader professional services industry, supporting government and private sector needs across various domains. This contract falls under the North American Industry Classification System (NAICS) code 541330 (Engineering Services). The federal government is a significant consumer of these services, particularly for defense, infrastructure, and research projects. Spending in this sector is often driven by national security requirements and the need for specialized technical expertise.

Small Business Impact

The data indicates that this contract was not awarded as a small business set-aside, nor does it appear to have specific subcontracting requirements for small businesses explicitly stated in the provided data. Therefore, the direct impact on the small business ecosystem from this specific award is likely minimal unless Chugach Technical Solutions LLC voluntarily engages small businesses for subcontracting. Further investigation into subcontracting plans would be necessary to fully assess the impact.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and financial management regulations. The contracting officer at the Department of the Navy is responsible for administering the contract and ensuring compliance. Given the CPFF structure and sole-source nature, robust oversight, including regular performance reviews and cost audits, would be essential to ensure accountability and prevent potential cost overruns. Inspector General involvement may be triggered by specific concerns or audits.

Related Government Programs

Department of Defense Engineering Services
Naval Facilities Engineering Command Contracts
Professional Services Contracts
Cost-Plus-Fixed-Fee Contracts
Sole-Source Defense Contracts

Risk Flags

Sole-source award lacks competitive pricing.
CPFF contract type poses risk of cost overruns.
Need for clear performance metrics and oversight.
Justification for 'Not Available for Competition' requires scrutiny.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $97.2 million to CHUGACH TECHNICAL SOLUTIONS LLC. USCG ENGINEERING SERVICES

Who is the contractor on this award?

The obligated recipient is CHUGACH TECHNICAL SOLUTIONS LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $97.2 million.

What is the period of performance?

Start: 2020-06-30. End: 2025-05-28.

What is the specific justification provided for awarding this contract on a sole-source basis?

The provided data states the contract was awarded under 'NOT AVAILABLE FOR COMPETITION,' which is a designation for sole-source procurements. Typically, such justifications are rooted in factors like urgent and compelling needs, the unavailability of other sources, or the existence of unique capabilities possessed by a single contractor. For this specific contract, the Department of Defense would have documented the rationale, likely detailing why competition was not feasible or practical at the time of award. This documentation is crucial for transparency and accountability, allowing for an assessment of whether the sole-source award was truly necessary and in the best interest of the government.

How does the Cost Plus Fixed Fee (CPFF) pricing structure compare to other contract types for similar engineering services?

The Cost Plus Fixed Fee (CPFF) contract type is often used when the scope of work is not precisely defined, or when there is uncertainty about the costs involved. In a CPFF contract, the contractor is reimbursed for allowable costs plus a fixed fee representing profit. This differs from fixed-price contracts, where the price is set regardless of the actual costs incurred, and cost-reimbursement contracts without a fixed fee. While CPFF offers flexibility and can be suitable for research and development or complex engineering projects, it carries a higher risk of cost overruns compared to fixed-price contracts. Effective oversight and cost controls are paramount to ensure value for money under a CPFF arrangement.

What is Chugach Technical Solutions LLC's track record with similar government contracts, particularly sole-source awards?

Assessing Chugach Technical Solutions LLC's track record requires a review of their past performance on government contracts. This would involve examining contract databases for previous awards, performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), and any history of disputes or contract modifications. Understanding their experience with similar engineering services, the types of clients they have served (e.g., other DoD branches), and their history with sole-source procurements would provide insight into their reliability and capability. A positive track record with effective cost management and timely delivery on prior contracts would lend confidence to this current award, while any negative history would warrant closer scrutiny.

What are the key performance indicators (KPIs) or deliverables expected under this contract, and how is performance being measured?

The provided data does not specify the key performance indicators (KPIs) or detailed deliverables for this engineering services contract. However, for a contract of this nature and value, KPIs would typically focus on aspects such as the quality of engineering designs and reports, adherence to project timelines, cost control within the fixed fee, responsiveness to task orders, and overall client satisfaction. Performance measurement would likely involve regular progress reports, technical reviews, and potentially formal evaluations by the government's technical point of contact. The effectiveness of the contract hinges on clearly defined and measurable performance standards.

How does the total contract value of $97.2 million compare to historical spending on engineering services by the Department of the Navy or similar agencies?

The $97.2 million contract value represents a significant investment in engineering services over its nearly five-year duration. To benchmark this, one would compare it against historical spending patterns for engineering services within the Department of the Navy and across the Department of Defense. Analyzing average contract values, total annual spending on engineering services, and the number of contracts awarded in this category would provide context. If this contract's value is substantially higher or lower than typical awards for similar scopes of work, it could indicate unique project requirements, market fluctuations, or potential issues with pricing. Without broader spending data, it's difficult to definitively state if this represents an outlier.

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: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N6523620R0028

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 3800 CENTERPOINT DR STE 1200, ANCHORAGE, AK, 99503

Business Categories: 8(a) Program Participant, Alaskan Native Corporation Owned Firm, Category Business, Limited Liability Corporation, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Tribally Owned Firm, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $99,216,217

Exercised Options: $99,216,217

Current Obligation: $97,240,605

Subaward Activity

Number of Subawards: 34

Total Subaward Amount: $3,449,046

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline