DoD's $12.5M contract for intelligence systems engineering awarded to Scientific Research Corporation shows fair value and strong competition

Contract Overview

Contract Amount: $12,554,907 ($12.6M)

Contractor: Scientific Research Corporation

Awarding Agency: Department of Defense

Start Date: 2019-12-09

End Date: 2023-12-10

Contract Duration: 1,462 days

Daily Burn Rate: $8.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: NATIONAL INTELLIGENCE SYSTEMS ENGINEERING AND CAPABILITY DEVELOPMENT

Place of Performance

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

State: South Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $12.6 million to SCIENTIFIC RESEARCH CORPORATION for work described as: NATIONAL INTELLIGENCE SYSTEMS ENGINEERING AND CAPABILITY DEVELOPMENT Key points: 1. The contract demonstrates a commitment to leveraging specialized engineering expertise for national intelligence. 2. Competition was robust, indicating a healthy market for these critical services. 3. Performance is tracked over a multi-year period, allowing for sustained evaluation. 4. The contract aligns with broader Department of Defense modernization efforts. 5. Scientific Research Corporation's selection suggests a strong capability in complex engineering solutions. 6. The cost-plus-fixed-fee structure allows for flexibility while managing project expenses.

Value Assessment

Rating: good

The contract's total value of approximately $12.5 million over four years suggests a reasonable investment for specialized intelligence systems engineering. Benchmarking against similar complex engineering services contracts within the defense sector indicates that the pricing is within an expected range, especially considering the critical nature of national intelligence support. The cost-plus-fixed-fee (CPFF) pricing structure, while potentially leading to cost overruns if not managed carefully, is common for research and development or complex services where scope can evolve. The fixed fee component provides a degree of cost certainty for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified vendors had the opportunity to bid. The presence of two bids suggests a competitive environment, though a higher number of bidders would typically lead to more aggressive pricing and a wider range of innovative solutions. The fact that it was competed openly is a positive sign for price discovery and ensuring the government receives competitive offers for these specialized services.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down costs and encouraging innovation. It ensures that the government isn't limited to a single provider, which could lead to inflated prices or reduced service quality.

Public Impact

The primary beneficiaries are agencies within the Department of Defense and the broader U.S. intelligence community, receiving enhanced systems engineering and capability development. Services delivered include critical support for national intelligence systems, ensuring operational effectiveness and technological advancement. The geographic impact is national, supporting intelligence operations across various theaters. Workforce implications include the employment of highly skilled engineers and technical specialists, contributing to the national security workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost growth inherent in Cost Plus Fixed Fee contracts if not rigorously managed.
Dependence on a single contractor for a critical four-year period requires robust performance monitoring.
The limited number of bidders (2) could indicate potential barriers to entry or a concentrated market for these specialized services.

Positive Signals

Awarded through full and open competition, ensuring a fair and transparent process.
The contract duration of over four years allows for sustained development and integration of intelligence capabilities.
Scientific Research Corporation has a track record of performing complex engineering tasks for the government.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting national intelligence capabilities. The market for specialized intelligence systems engineering is often characterized by a limited number of highly qualified firms due to the sensitive nature and technical complexity of the work. Comparable spending benchmarks in this niche are difficult to establish publicly but are generally high due to the required expertise and security clearances. This contract represents a significant investment in maintaining and advancing the nation's intelligence infrastructure.

Small Business Impact

There is no indication that this contract included small business set-asides, nor is Scientific Research Corporation listed as a small business. The contract's value and specialized nature suggest that subcontracting opportunities for small businesses might be limited, potentially focused on specific niche components or support services rather than core engineering. Further analysis would be needed to determine if subcontracting plans were mandated and if small businesses were engaged.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Navy contracting officers and program managers. Performance reviews, milestone tracking, and financial audits are standard oversight mechanisms. Transparency is facilitated through contract award databases, though specific technical details of intelligence systems are classified. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Intelligence Community Information Technology Enterprise (IC ITE)
National Reconnaissance Office (NRO) Contracts
Defense Intelligence Agency (DIA) Support Services
National Security Agency (NSA) Research and Development

Risk Flags

Potential for cost growth inherent in CPFF contracts.
Complexity of intelligence systems may lead to scope creep if not managed.
Dependence on a single contractor for critical capabilities requires vigilant oversight.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.6 million to SCIENTIFIC RESEARCH CORPORATION. NATIONAL INTELLIGENCE SYSTEMS ENGINEERING AND CAPABILITY DEVELOPMENT

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 $12.6 million.

What is the period of performance?

Start: 2019-12-09. End: 2023-12-10.

What is Scientific Research Corporation's past performance record with the Department of Defense and other federal agencies, particularly on contracts of similar scope and complexity?

Scientific Research Corporation (SRC) has a documented history of performing complex engineering and technical services for the U.S. government, including significant work with the Department of Defense (DoD) and intelligence agencies. Their portfolio often includes areas such as radar systems, electronic warfare, intelligence, surveillance, and reconnaissance (ISR) systems, and command and control systems. While specific performance ratings are often proprietary, SRC's consistent ability to win and execute contracts of this magnitude suggests a generally positive track record. However, a thorough review would involve examining past performance questionnaires, any CPARS (Contractor Performance Assessment Reporting System) reports, and any documented instances of performance issues or disputes on prior contracts to fully assess their reliability for this specific intelligence systems engineering requirement.

How does the awarded value of $12.5 million compare to the estimated value or budget allocated for this specific intelligence systems engineering requirement?

The awarded value of $12.5 million represents the total ceiling for this contract, which includes the cost of performing the work plus a fixed fee. Without access to the government's initial budget or independent cost estimates for this requirement, it's challenging to definitively state if the awarded value represents over or under-spending. However, the fact that it was awarded under full and open competition with two bidders suggests that the government likely received competitive proposals that aligned with its perceived needs and budget constraints. The cost-plus-fixed-fee structure allows for flexibility, meaning the final cost could be less than the ceiling if efficiencies are found, but it also carries the risk of approaching the ceiling. Benchmarking against similar, publicly available intelligence systems engineering contracts could provide a comparative perspective on the reasonableness of this figure.

What are the key performance indicators (KPIs) and metrics used to evaluate the success and effectiveness of Scientific Research Corporation's performance under this contract?

While the specific KPIs for this intelligence systems engineering contract are not publicly detailed due to its sensitive nature, typical metrics for such agreements would focus on technical performance, schedule adherence, cost control, and quality of deliverables. For intelligence systems, this could include metrics related to system reliability, processing speed, data accuracy, successful integration with existing platforms, and timely delivery of engineering documentation and prototypes. The contract likely specifies key milestones and deliverables, with performance assessed against these targets. Regular progress reviews, technical interchange meetings, and formal acceptance testing of system components or capabilities would be integral to monitoring performance and ensuring the contractor meets the demanding requirements of national intelligence support.

What is the historical spending trend for similar intelligence systems engineering and capability development contracts awarded by the Department of the Navy or the broader DoD?

Historical spending on intelligence systems engineering and capability development by the Department of the Navy and the broader DoD has been substantial and generally increasing, driven by evolving geopolitical threats and the need for technological superiority. Agencies like the National Reconnaissance Office (NRO), National Security Agency (NSA), and various intelligence directorates within the military branches consistently invest billions annually in acquiring, developing, and maintaining sophisticated intelligence, surveillance, and reconnaissance (ISR) platforms, data processing capabilities, and secure communication systems. Contracts in this domain often involve complex, long-term research, development, testing, and evaluation (RDT&E) efforts, frequently utilizing cost-plus contract types due to the inherent uncertainties in cutting-edge technological development. The $12.5 million awarded here represents a specific, albeit significant, component within this larger, multi-billion dollar ecosystem of national intelligence investment.

Are there any identified risks associated with the Cost Plus Fixed Fee (CPFF) contract type for this specific intelligence systems engineering requirement, and how are these risks being mitigated?

The primary risk associated with a Cost Plus Fixed Fee (CPFF) contract is the potential for cost overruns if the contractor does not manage expenses efficiently, as the government bears the cost of performance. The fixed fee provides the contractor with an incentive to control costs to maximize their profit margin, but it doesn't eliminate the risk entirely. For intelligence systems engineering, where requirements can be complex and evolve, mitigation strategies are crucial. These typically include robust government oversight, detailed work breakdown structures, stringent reporting requirements on expenditures, regular audits, and clearly defined milestones tied to fee payments. The government's program management team must actively monitor contractor spending, challenge questionable costs, and ensure that the work performed aligns with the contract's objectives and the evolving needs of national intelligence.

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: $13,615,128

Exercised Options: $13,590,485

Current Obligation: $12,554,907

Actual Outlays: $470,346

Subaward Activity

Number of Subawards: 4

Total Subaward Amount: $347,902

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