King Technologies awarded $25.5M for Navy's DICE support, facing competition and cost-plus pricing

Contract Overview

Contract Amount: $25,548,194 ($25.5M)

Contractor: King Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2022-05-26

End Date: 2026-05-25

Contract Duration: 1,460 days

Daily Burn Rate: $17.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: DEVELOPMENT, INTEGRATION, AND CERTIFICATION ENVIRONMENT (DICE) SERVICE CENTER

Place of Performance

Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92110

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $25.5 million to KING TECHNOLOGIES, INC. for work described as: DEVELOPMENT, INTEGRATION, AND CERTIFICATION ENVIRONMENT (DICE) SERVICE CENTER Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. Cost-plus fixed fee pricing structure may present cost control challenges. 3. Delivery order under an existing contract indicates a need for ongoing services. 4. Contract duration of 1460 days (4 years) suggests a significant, long-term requirement. 5. The contract falls under engineering services, a critical support function for defense agencies. 6. The award value is substantial, requiring careful monitoring of performance and costs.

Value Assessment

Rating: fair

The contract's cost-plus fixed fee (CPFF) pricing structure warrants scrutiny, as it can incentivize higher costs compared to fixed-price contracts. Benchmarking this award against similar engineering services contracts for the Department of the Navy is crucial to assess value for money. Without specific performance metrics or detailed cost breakdowns, a definitive value assessment is challenging, but the CPFF structure suggests a higher risk of cost overruns if not meticulously managed.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 3 bidders suggests a moderate level of competition for this requirement. While competition is generally positive, the specific number of bidders can influence price discovery. A higher number of bidders typically leads to more competitive pricing.

Taxpayer Impact: The full and open competition is beneficial for taxpayers as it increases the likelihood of receiving a fair market price for the services rendered.

Public Impact

The Department of the Navy benefits from continued support for its Development, Integration, and Certification Environment (DICE) Service Center. This contract ensures the availability of critical engineering services for naval systems. Services are delivered within California, potentially impacting the local workforce in the engineering sector. The contract supports the operational readiness and technological advancement of naval platforms.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus fixed fee pricing can lead to cost overruns if not closely monitored.
The duration of the contract (4 years) necessitates sustained oversight to ensure continued value.
Reliance on a single delivery order under a larger contract structure might obscure the full scope of work and associated risks.

Positive Signals

Awarded through full and open competition, indicating a robust bidding process.
The contract supports a critical function (DICE Service Center) for the Department of the Navy.
The contractor, King Technologies, Inc., is established, suggesting a degree of reliability.

Sector Analysis

This contract falls within the Engineering Services sector (NAICS 541330), a vital component of the defense industrial base. The market for defense engineering services is substantial, driven by the continuous need for modernization, maintenance, and development of complex military systems. Comparable spending benchmarks for similar engineering support contracts within the Department of Defense can range widely based on scope and complexity, but awards in the tens of millions are common for specialized support.

Small Business Impact

The contract data indicates that small business participation was not a specific set-aside requirement (ss: false, sb: false). Therefore, there are no direct subcontracting implications mandated by this award for small businesses. However, the prime contractor, King Technologies, Inc., may choose to engage small businesses as subcontractors, which would contribute to the small business ecosystem.

Oversight & Accountability

Oversight for this contract will likely be managed by the contracting officer and the relevant program office within the Department of the Navy. Performance monitoring, cost tracking, and adherence to contract terms are standard oversight mechanisms. Transparency is facilitated through contract award databases, though detailed cost breakdowns and performance reports may not be publicly available. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Department of Defense Engineering Services
Naval Systems Development and Support
IT Infrastructure Support Contracts
Defense Acquisition Programs

Risk Flags

Cost-plus pricing risk
Long-term contract duration requires sustained oversight
Potential for cost escalation due to CPFF structure

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $25.5 million to KING TECHNOLOGIES, INC.. DEVELOPMENT, INTEGRATION, AND CERTIFICATION ENVIRONMENT (DICE) SERVICE CENTER

Who is the contractor on this award?

The obligated recipient is KING TECHNOLOGIES, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $25.5 million.

What is the period of performance?

Start: 2022-05-26. End: 2026-05-25.

What is the track record of King Technologies, Inc. with the Department of the Navy and similar contracts?

King Technologies, Inc. has a history of contracts with the federal government, including the Department of the Navy. Analyzing their past performance on similar engineering services or IT support contracts is crucial. Key indicators include on-time delivery, adherence to budget, quality of work, and any past performance issues or awards. A review of their contract history would reveal their experience level and reliability in fulfilling complex defense requirements. Without specific data on past performance ratings for this contractor on comparable projects, it's difficult to definitively assess their track record beyond their existence as a government contractor.

How does the $25.5 million award value compare to similar engineering support contracts for the Navy?

The $25.5 million award value for the DICE Service Center support is a significant sum, typical for multi-year engineering services contracts within the Department of the Navy. To benchmark this value, one would compare it against contracts for similar services, such as IT infrastructure management, systems integration, or specialized engineering support, awarded over comparable durations (e.g., 3-5 years). Factors like the specific technical requirements, the level of security clearance needed, and the geographic location can influence pricing. A preliminary assessment suggests this award is within a reasonable range for substantial, long-term support, but a detailed comparison with contracts for analogous services would provide a more precise value-for-money evaluation.

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

The primary risk associated with the Cost Plus Fixed Fee (CPFF) pricing structure 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. This structure can reduce the contractor's incentive to control costs, as they are guaranteed their costs will be covered. The government bears the risk of cost increases. Effective oversight, stringent cost accounting standards, and clear definition of allowable costs are critical to mitigate these risks and ensure the government does not pay more than necessary. The fixed fee itself is not subject to increase, providing some cost certainty on the profit margin.

How effective is the DICE Service Center in supporting the Navy's overall mission readiness?

The effectiveness of the DICE Service Center in supporting the Navy's overall mission readiness is directly tied to the quality and continuity of the engineering services provided under this contract. The DICE environment is crucial for the development, integration, and certification of various naval systems and software. If the services are performed efficiently and effectively, it ensures that new technologies can be properly tested and deployed, and existing systems remain operational and secure. Conversely, any disruptions or deficiencies in service could lead to delays in system upgrades, integration issues, or security vulnerabilities, thereby impacting mission readiness. Performance metrics within the contract, if available, would offer direct insights into its effectiveness.

What are the historical spending patterns for engineering services by the Department of the Navy?

Historical spending patterns for engineering services by the Department of the Navy are substantial and consistent, reflecting the complexity and ongoing needs of naval operations and modernization. The Navy consistently allocates significant portions of its budget to acquire engineering expertise for a wide array of requirements, including platform design, systems integration, cybersecurity, research and development, and lifecycle support. Spending can fluctuate year-to-year based on major acquisition programs, fleet modernization initiatives, and specific technological advancements. Analyzing historical data reveals trends in contract types (e.g., fixed-price vs. cost-reimbursable), competition levels, and the distribution of funds across various engineering disciplines and contractors.

What is the potential impact of this contract on the broader defense IT and engineering services market?

This contract, valued at $25.5 million and awarded to King Technologies, Inc., contributes to the ongoing demand within the defense IT and engineering services market. Such awards signal continued government investment in critical support functions like system development, integration, and certification. It reinforces the market position of contractors capable of delivering specialized engineering expertise to defense agencies. The competition level (3 bidders) suggests a moderately competitive environment for this specific requirement, potentially influencing pricing strategies for similar future solicitations. The duration of the contract also provides a degree of market stability for the awarded vendor and any subcontractors involved.

Industry Classification

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

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N6600121R3506

Offers Received: 3

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 3760 SPORTS ARENA BLVD, SAN DIEGO, CA, 92110

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

Financial Breakdown

Contract Ceiling: $32,221,056

Exercised Options: $25,548,194

Current Obligation: $25,548,194

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017819D7972

IDV Type: IDC

Timeline