DoD Awards CACI $22.9M for Navy Sustainment Support, Facing Potential Cost Overruns

Contract Overview

Contract Amount: $22,938,582 ($22.9M)

Contractor: CACI, Inc. - Federal

Awarding Agency: Department of Defense

Start Date: 2023-02-01

End Date: 2026-02-18

Contract Duration: 1,113 days

Daily Burn Rate: $20.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 7

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: SUSTAINMENT SUPPORT, PROGRAM MANAGEMENT, TECHNICAL SUSTAINMENT SUPPORT, IDENTITY & ACCESS CONTROL, SOFTWARE LOAD, LOGISTICS & TRAINING, SECURITY ENGINEERING, PRODUCTION & INTEGRATION, TEST & EVAL, R&D, & SHIP CONVERSION SUPPORT SERVICES.

Place of Performance

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

State: South Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $22.9 million to CACI, INC. - FEDERAL for work described as: SUSTAINMENT SUPPORT, PROGRAM MANAGEMENT, TECHNICAL SUSTAINMENT SUPPORT, IDENTITY & ACCESS CONTROL, SOFTWARE LOAD, LOGISTICS & TRAINING, SECURITY ENGINEERING, PRODUCTION & INTEGRATION, TEST & EVAL, R&D, & SHIP CONVERSION SUPPORT SERVICES. Key points: 1. Contract awarded to CACI, Inc. - Federal for comprehensive sustainment support services. 2. Significant portion of contract value allocated to program management and technical sustainment. 3. Competition method is 'Full and Open', suggesting a competitive bidding process. 4. Risk of cost overruns exists due to Cost Plus Fixed Fee contract type and duration. 5. Sector is Engineering Services, with a focus on naval applications.

Value Assessment

Rating: fair

The contract is a Cost Plus Fixed Fee type, which can lead to cost overruns if not managed carefully. The awarded amount of $22.9M over approximately 3 years needs to be benchmarked against similar sustainment support contracts for naval systems to assess value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition', indicating a competitive bidding process. This method generally promotes price discovery and can lead to better pricing, but the Cost Plus Fixed Fee structure still introduces cost risk.

Taxpayer Impact: Taxpayer funds are being used for critical sustainment support. While competition is present, the contract type necessitates close oversight to ensure cost efficiency and prevent unnecessary expenditure.

Public Impact

Ensures continued operational readiness for naval assets through essential sustainment services. Supports advanced capabilities in areas like identity and access control, and security engineering. Potential for job creation within the engineering and technical support sectors. Impacts the Department of the Navy's ability to maintain and upgrade its fleet.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type increases risk of cost overruns.
Long contract duration (approx. 3 years) requires sustained oversight.
No specific small business participation noted.

Positive Signals

Awarded under Full and Open Competition, promoting market participation.
Covers a broad range of critical sustainment and technical services.
Supports a key branch of the U.S. military.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting naval operations. Benchmarks for similar sustainment contracts for complex defense systems are crucial for evaluating cost-effectiveness.

Small Business Impact

The data indicates that small business participation was not a stated requirement or outcome for this contract (ss: false, sb: false). Further analysis would be needed to determine if subcontracting opportunities were pursued.

Oversight & Accountability

The Cost Plus Fixed Fee contract type necessitates robust oversight from the Department of the Navy to monitor costs, ensure performance, and prevent potential overruns. Regular audits and performance reviews are critical.

Related Government Programs

Engineering Services
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Cost Plus Fixed Fee contract type.
Long contract duration.
No explicit small business set-aside.
Potential for scope creep.
Reliance on a single awardee for critical sustainment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.9 million to CACI, INC. - FEDERAL. SUSTAINMENT SUPPORT, PROGRAM MANAGEMENT, TECHNICAL SUSTAINMENT SUPPORT, IDENTITY & ACCESS CONTROL, SOFTWARE LOAD, LOGISTICS & TRAINING, SECURITY ENGINEERING, PRODUCTION & INTEGRATION, TEST & EVAL, R&D, & SHIP CONVERSION SUPPORT SERVICES.

Who is the contractor on this award?

The obligated recipient is CACI, INC. - FEDERAL.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $22.9 million.

What is the period of performance?

Start: 2023-02-01. End: 2026-02-18.

What is the expected return on investment for this sustainment support contract, considering the potential for cost overruns?

The return on investment is primarily measured by the sustained operational readiness and effectiveness of naval assets. While the $22.9M cost is significant, the value lies in preventing costly downtime and ensuring mission capability. However, the Cost Plus Fixed Fee structure introduces a risk of exceeding the initial estimate, which could diminish the ROI if not tightly managed through rigorous oversight and performance metrics.

What are the primary risks associated with CACI's performance on this contract, and how can they be mitigated?

Key risks include potential cost overruns due to the Cost Plus Fixed Fee structure, scope creep, and challenges in delivering complex technical sustainment. Mitigation strategies involve stringent contract management, clear performance metrics, regular progress reviews, and proactive risk identification by the Department of the Navy. CACI must also maintain strong project management and technical expertise.

How effectively does this contract leverage competition to ensure optimal value for taxpayer dollars?

The contract was awarded under 'Full and Open Competition', which is a positive indicator for achieving competitive pricing. However, the Cost Plus Fixed Fee contract type inherently carries a risk of cost escalation. The effectiveness in ensuring optimal value will depend heavily on the Department of the Navy's oversight capabilities in managing the contractor's costs and performance throughout the contract's lifecycle.

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: N6523622R3045

Offers Received: 7

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: CACI International Inc

Address: 14370 NEWBROOK DRIVE, CHANTILLY, VA, 20151

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

Financial Breakdown

Contract Ceiling: $39,951,265

Exercised Options: $24,561,589

Current Obligation: $22,938,582

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017819D7295

IDV Type: IDC

Timeline