DoD's $235M engineering contract for Increment 2.1, 3.0, and FMS awarded to Scientific Research Corporation

Contract Overview

Contract Amount: $234,752,259 ($234.8M)

Contractor: Scientific Research Corporation

Awarding Agency: Department of Defense

Start Date: 2019-11-15

End Date: 2025-11-14

Contract Duration: 2,191 days

Daily Burn Rate: $107.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: THE SCOPE OF THIS TASK ORDER COVERS THE EFFORTS REQUIRED FOR ENGINEERING, DEVELOPMENT, AND INTEGRATION, OF THE EXISTING AND FUTURE BASELINES (I.E., INCREMENT 2.1, INCREMENT 3.0 AND FOREIGN MILITARY SALES (FMS)).

Place of Performance

Location: NORTH CHARLESTON, CHARLESTON County, SOUTH CAROLINA, 29419

State: South Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $234.8 million to SCIENTIFIC RESEARCH CORPORATION for work described as: THE SCOPE OF THIS TASK ORDER COVERS THE EFFORTS REQUIRED FOR ENGINEERING, DEVELOPMENT, AND INTEGRATION, OF THE EXISTING AND FUTURE BASELINES (I.E., INCREMENT 2.1, INCREMENT 3.0 AND FOREIGN MILITARY SALES (FMS)). Key points: 1. Contract focuses on engineering, development, and integration for current and future system baselines. 2. The contract value of $235M over approximately 6 years indicates significant investment in defense system modernization. 3. Awarded under full and open competition, suggesting a robust market for these specialized engineering services. 4. The cost-plus-fixed-fee (CPFF) structure may incentivize contractor efficiency while managing risk. 5. Performance period extends to November 2025, allowing for long-term development and integration. 6. The contract is a delivery order, implying it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle.

Value Assessment

Rating: good

The contract value of $235M for engineering, development, and integration services over approximately six years appears reasonable given the scope. Benchmarking against similar large-scale defense system development contracts would provide further context. The CPFF pricing structure is common for complex R&D efforts where cost estimation is challenging, but requires careful oversight to ensure value for money.

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. This competitive process is expected to drive better pricing and service quality. The presence of two bidders suggests a moderately competitive environment for this specialized engineering service.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a market that can lead to more cost-effective solutions and prevent price gouging.

Public Impact

The Department of the Navy benefits from advanced engineering and integration services for its critical defense systems. The contract supports the development and integration of Increment 2.1, Increment 3.0, and Foreign Military Sales (FMS) requirements. This work is crucial for maintaining and enhancing the technological superiority of naval assets. The contract likely supports a specialized engineering workforce, potentially in South Carolina where the contractor is based.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in CPFF contracts if not closely monitored.
Complexity of integrating multiple system increments and FMS requirements could lead to schedule delays.
Reliance on a single contractor for critical engineering and integration tasks.

Positive Signals

Awarded through full and open competition, indicating a healthy market.
Long performance period allows for sustained development and integration efforts.
Contractor's base in South Carolina may provide regional economic benefits.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting defense systems. The market for defense engineering and integration is substantial, driven by continuous modernization needs and evolving threats. This contract represents a significant investment in a specific program's lifecycle, contributing to the broader defense industrial base.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a large prime contract, it may offer subcontracting opportunities for small businesses, but this is not explicitly detailed. The primary focus appears to be on large prime contractors capable of handling complex engineering and integration efforts.

Oversight & Accountability

Oversight would typically be managed by the Department of the Navy contracting officers and program managers. The CPFF structure necessitates rigorous financial and performance oversight to ensure costs are reasonable and allocable. Transparency is generally maintained through contract reporting mechanisms, though specific IG involvement would depend on identified risks or issues.

Related Government Programs

Naval Systems Engineering
Defense Software Development
Foreign Military Sales Support
System Integration Services
Aerospace Engineering

Risk Flags

Cost Overrun Risk (CPFF)
Schedule Delay Risk
Integration Complexity
Long-Term Dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $234.8 million to SCIENTIFIC RESEARCH CORPORATION. THE SCOPE OF THIS TASK ORDER COVERS THE EFFORTS REQUIRED FOR ENGINEERING, DEVELOPMENT, AND INTEGRATION, OF THE EXISTING AND FUTURE BASELINES (I.E., INCREMENT 2.1, INCREMENT 3.0 AND FOREIGN MILITARY SALES (FMS)).

Who is the contractor on this award?

The obligated recipient is SCIENTIFIC RESEARCH 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 $234.8 million.

What is the period of performance?

Start: 2019-11-15. End: 2025-11-14.

What is the track record of Scientific Research Corporation in delivering similar large-scale defense engineering contracts?

Scientific Research Corporation (SRC) has a history of working on complex defense programs. While specific details on past performance for contracts of this exact scope and value are not provided in the summary data, SRC is known for its work in areas such as command and control, electronic warfare, and intelligence, surveillance, and reconnaissance (ISR) systems. Their experience in systems engineering, integration, and development for the Department of Defense is generally well-established. A deeper dive into their contract history, past performance reviews, and any reported issues on similar projects would be necessary for a comprehensive assessment of their track record for this specific task order.

How does the $235M value compare to similar engineering and integration contracts for naval systems?

The $235 million value for this six-year engineering, development, and integration contract is substantial, reflecting the complexity and long-term nature of modern defense system upgrades. To benchmark this value effectively, comparisons should be made with other contracts awarded by the Department of Defense, particularly the Navy, for similar services such as system modernization, software development, and integration of new baselines (e.g., Increment 2.1, 3.0). Factors like the specific technologies involved, the number of bidders, and the contract type (CPFF in this case) influence pricing. Without direct comparable contract data, it's difficult to definitively state if $235M represents high or low value, but it aligns with the significant investments required for advanced naval capabilities.

What are the primary risks associated with this Cost Plus Fixed Fee (CPFF) contract structure?

The primary risk with a Cost Plus Fixed Fee (CPFF) contract is the potential for cost overruns. While the contractor is incentivized to control costs to maximize their fixed fee, the government bears the risk of actual costs exceeding estimates. This necessitates robust government oversight to scrutinize incurred costs, ensure they are reasonable, allocable, and allowable, and prevent scope creep that could inflate expenses. For the contractor, the risk lies in underestimating costs, which could reduce their profit margin. Effective management and clear definition of work are crucial to mitigate these risks for both parties.

How does the 'full and open competition' impact price discovery and potential savings for taxpayers?

Full and open competition is designed to maximize price discovery and achieve the best value for taxpayers. By allowing all responsible sources to submit offers, the government creates a competitive environment where multiple companies vie for the contract. This competition typically drives down prices as bidders seek to offer the most attractive terms. Furthermore, it encourages innovation and efficiency as contractors strive to differentiate themselves. The presence of two bidders in this specific case suggests a moderately competitive landscape, which is generally favorable for price discovery compared to sole-source or limited competition scenarios.

What are the implications of this contract for the specific defense system's future development and sustainment?

This contract is critical for the future development and sustainment of the targeted naval system. By covering engineering, development, and integration for current and future baselines (Increment 2.1, 3.0, and FMS), it ensures the system remains technologically relevant and capable. The long performance period allows for iterative improvements, incorporation of new technologies, and adaptation to evolving operational requirements. Successful execution of this contract will directly impact the system's lifecycle sustainment, ensuring it can meet mission needs throughout its operational life and support allied forces through FMS.

What is the significance of this contract being a 'Delivery Order' within a larger IDIQ structure?

This contract being a 'Delivery Order' signifies that it is a specific task or order placed against a pre-existing Indefinite Delivery/Indefinite Quantity (IDIQ) contract. IDIQs provide a flexible framework for acquiring services over a period, allowing agencies to issue multiple delivery or task orders as needed. As a delivery order, this contract represents a defined scope of work, a specific price (or pricing structure like CPFF), and a delivery schedule for a particular set of requirements (engineering, development, integration for specific increments). This structure allows the Navy to procure these services efficiently as needs arise, leveraging a pre-competed IDIQ vehicle.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 2300 WINDY RIDGE PKWY STE 400S, ATLANTA, GA, 30339

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

Financial Breakdown

Contract Ceiling: $244,347,092

Exercised Options: $244,199,205

Current Obligation: $234,752,259

Actual Outlays: $10,543,112

Subaward Activity

Number of Subawards: 268

Total Subaward Amount: $149,029,368

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N6523619D4809

IDV Type: IDC

Timeline