DoD awards $7.5M engineering services contract to SOLUTE, with a 1,154-day duration
Contract Overview
Contract Amount: $7,523,774 ($7.5M)
Contractor: Solute
Awarding Agency: Department of Defense
Start Date: 2023-02-03
End Date: 2026-04-02
Contract Duration: 1,154 days
Daily Burn Rate: $6.5K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: ENGINEERING SERVICES
Place of Performance
Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92152
Plain-Language Summary
Department of Defense obligated $7.5 million to SOLUTE for work described as: ENGINEERING SERVICES Key points: 1. Contract value appears moderate for engineering services, requiring benchmarking against similar DoD contracts. 2. Full and open competition after exclusion of sources suggests a potentially limited but justified bidding process. 3. Risk indicators include the cost-plus-fixed-fee pricing structure, which can incentivize cost overruns. 4. Performance context is defined by the 1,154-day duration, indicating a long-term engagement for engineering services. 5. This contract positions SOLUTE as a provider of specialized engineering services within the defense sector. 6. The contract's focus on engineering services aligns with broader DoD needs for technical expertise.
Value Assessment
Rating: fair
The contract value of $7.5 million for engineering services over approximately three years is within a typical range for specialized technical support. However, without specific details on the scope of work, direct comparison to similar contracts is challenging. The cost-plus-fixed-fee (CPFF) structure warrants scrutiny to ensure efficient cost management and prevent potential overruns, as it offers less incentive for cost savings compared to fixed-price contracts. Benchmarking against industry standards for similar engineering tasks would provide a clearer picture of value for money.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This indicates that while the competition was intended to be open, certain sources were excluded, suggesting a potentially limited pool of bidders. The rationale for exclusion would be critical to understanding the extent of competition and its impact on price discovery. A limited competition might lead to higher prices if the excluded sources represented significant competitive alternatives.
Taxpayer Impact: Taxpayers may face higher costs due to a potentially restricted bidding environment. The exclusion of sources needs clear justification to ensure fair pricing and prevent the appearance of favoritism.
Public Impact
The Department of Defense benefits from specialized engineering expertise to support its operations. Services delivered likely include design, analysis, and technical consultation related to defense systems or infrastructure. The geographic impact is centered in California, where the contractor is based and services may be performed. Workforce implications include employment opportunities for engineers and technical staff within SOLUTE.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost-plus-fixed-fee structure may lead to higher costs if not managed tightly.
- Limited competition due to exclusion of sources could impact price competitiveness.
- Long contract duration (1,154 days) increases exposure to potential scope creep or changing requirements.
Positive Signals
- Award to a single contractor (SOLUTE) suggests a focused relationship for specific engineering needs.
- The contract is for engineering services, a critical function for the Department of Defense.
- The contract is awarded by the Department of the Navy, indicating a specific service requirement.
Sector Analysis
The engineering services sector is a vital component of the broader professional, scientific, and technical services industry. This contract falls within the defense sub-sector, which consistently represents a significant portion of federal spending on specialized technical expertise. Market size for defense engineering services is substantial, driven by the need for advanced technological solutions and infrastructure support. Comparable spending benchmarks would involve analyzing other contracts for similar engineering disciplines awarded by the Department of Defense or other federal agencies.
Small Business Impact
There is no indication of a small business set-aside for this contract, as the 'ss' field is false. Furthermore, the 'sb' field is also false, suggesting no specific subcontracting plan targeting small businesses was mandated. This means small businesses are unlikely to be direct beneficiaries of this contract, and their involvement would depend on SOLUTE's independent subcontracting decisions. The impact on the small business ecosystem is minimal unless SOLUTE actively seeks small business partners.
Oversight & Accountability
Oversight for this contract would typically be managed by the contracting officer and the relevant program office within the Department of the Navy. Accountability measures are embedded in the contract terms, including performance standards and payment schedules tied to deliverables. Transparency is facilitated through contract databases like FPDS, which record award details. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.
Related Government Programs
- Defense Engineering Services
- Professional, Scientific, and Technical Services
- Department of Defense Contracts
- Naval Support Services
Risk Flags
- Potential for cost overruns due to CPFF structure.
- Limited competition due to source exclusion.
- Risk of scope creep over the long contract duration.
- Need for robust government oversight of performance and costs.
Tags
engineering-services, department-of-defense, department-of-the-navy, solute, cost-plus-fixed-fee, limited-competition, california, delivery-order, professional-scientific-and-technical-services, defense-sector
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $7.5 million to SOLUTE. ENGINEERING SERVICES
Who is the contractor on this award?
The obligated recipient is SOLUTE.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Navy).
What is the total obligated amount?
The obligated amount is $7.5 million.
What is the period of performance?
Start: 2023-02-03. End: 2026-04-02.
What is the specific scope of engineering services to be provided under this contract?
The provided data indicates the contract is for 'Engineering Services' (NAICS code 541330) awarded to SOLUTE by the Department of the Navy. However, the specific scope of work is not detailed. Typically, engineering services in this context could encompass a wide range of activities, including but not limited to, systems engineering, design, analysis, testing, research and development support, technical consulting, and project management for naval platforms, infrastructure, or related defense systems. The cost-plus-fixed-fee (CPFF) contract type suggests that the exact costs are not precisely known upfront, and the contractor is reimbursed for allowable costs plus a fixed fee representing profit. This implies a need for detailed technical specifications and performance metrics to manage the project effectively.
How does the $7.5 million contract value compare to similar engineering services contracts awarded by the Department of Defense?
The $7.5 million contract value for engineering services awarded to SOLUTE is a moderate amount within the context of the Department of Defense (DoD). The DoD procures a vast array of engineering services, ranging from small, specialized task orders to multi-billion dollar programs. Contracts of this value are common for specific project phases, specialized technical support, or defined engineering studies. To provide a precise benchmark, one would need to compare this contract against others with similar scopes of work, durations (1,154 days), and specific engineering disciplines (e.g., naval architecture, systems engineering, mechanical engineering) awarded by the DoD or its various branches over a comparable timeframe. Without such granular data, it's difficult to definitively state if $7.5 million represents exceptional value, a fair price, or an overpayment.
What are the potential risks associated with the 'Cost Plus Fixed Fee' (CPFF) contract type for this engineering service?
The Cost Plus Fixed Fee (CPFF) contract type, used for this $7.5 million engineering services award, presents specific risks. The primary risk is that the contractor has less incentive to control costs compared to fixed-price contracts, as they are reimbursed for all allowable costs incurred. While the 'fixed fee' component provides a defined profit margin, it doesn't directly reward cost savings. This can potentially lead to cost overruns if not managed diligently by the government. Effective oversight, robust cost accounting standards, and clear performance metrics are crucial to mitigate these risks. The government must actively monitor expenditures and ensure that all costs claimed by SOLUTE are reasonable, allocable, and allowable according to the contract terms.
What does 'Full and Open Competition After Exclusion of Sources' imply about the bidding process and potential pricing?
'Full and Open Competition After Exclusion of Sources' implies a nuanced approach to competition. Initially, the requirement was intended for full and open competition, meaning all responsible sources were permitted to submit offers. However, specific sources were subsequently excluded. The justification for this exclusion is critical. If the exclusion was based on legitimate technical qualifications, security requirements, or prior performance issues with specific vendors, it might be justifiable. However, if the exclusion was arbitrary or overly restrictive, it could limit competition, potentially leading to higher prices and reduced innovation. The number of bids received after exclusions would be a key indicator of the actual level of competition achieved.
What is SOLUTE's track record with federal contracts, particularly within the Department of Defense?
Information regarding SOLUTE's specific track record with federal contracts, especially within the Department of Defense, is not detailed in the provided data. A comprehensive assessment would require accessing federal procurement databases (like FPDS or SAM.gov) to review SOLUTE's past contract awards, performance ratings, and any history of disputes or contract modifications. Understanding their past performance, particularly on similar engineering services contracts, is crucial for evaluating the risk associated with this new $7.5 million award. A history of successful, on-time, and within-budget project completion would be a positive indicator, while a pattern of issues could raise concerns about the current contract's execution.
How does the 1,154-day duration of this contract impact its overall risk profile?
The 1,154-day duration (approximately 3 years and 2 months) for this engineering services contract significantly impacts its risk profile. Longer contract durations increase the potential for scope creep, where the project's requirements expand beyond the original agreement. It also heightens the risk of technological obsolescence if the services are related to rapidly evolving fields. Furthermore, extended periods increase the likelihood of personnel turnover within the contractor's team, potentially leading to knowledge loss. For the government, managing a long-term CPFF contract requires sustained oversight and adaptability to changing requirements or budget constraints. Conversely, a longer duration can also indicate a stable, long-term need for the services, allowing for deeper expertise development by the contractor.
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 AFTER EXCLUSION OF SOURCES
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: N6600119R0035
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 1455 FRAZEE RD STE 900, SAN DIEGO, CA, 92108
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $17,882,269
Exercised Options: $9,281,444
Current Obligation: $7,523,774
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N6600121D0010
IDV Type: IDC
Timeline
Start Date: 2023-02-03
Current End Date: 2026-04-02
Potential End Date: 2028-04-02 00:00:00
Last Modified: 2026-02-19
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