DoD's $3.7M contract for autonomous engineering support awarded to SEEBYTE LIMITED raises questions on competition and value

Contract Overview

Contract Amount: $3,667,442 ($3.7M)

Contractor: Seebyte Limited

Awarding Agency: Department of Defense

Start Date: 2023-07-10

End Date: 2026-03-21

Contract Duration: 985 days

Daily Burn Rate: $3.7K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: LABOR - AUTONOMOUS ENG SUPPORT

Plain-Language Summary

Department of Defense obligated $3.7 million to SEEBYTE LIMITED for work described as: LABOR - AUTONOMOUS ENG SUPPORT Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. The contract type (Cost Plus Fixed Fee) can incentivize cost overruns. 3. Limited public information available on the specific services rendered and their necessity. 4. The duration of the contract (over 2.5 years) suggests a significant, ongoing need. 5. No small business set-aside, indicating potential missed opportunities for smaller firms. 6. The agency's rationale for sole-source award needs further scrutiny to ensure fair market access.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and the specialized 'Autonomous Eng Support' service. Without competitive bids, it's difficult to ascertain if the $3.7M price reflects fair market value. The Cost Plus Fixed Fee structure, while offering flexibility, carries inherent risks of cost escalation. Comparing this to similar, competitively bid contracts for autonomous systems engineering support would be crucial for a robust value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, SEEBYTE LIMITED, was solicited. This approach bypasses the competitive bidding process, which typically involves multiple vendors vying for the contract. While sole-source awards can be justified in specific circumstances (e.g., unique capabilities), they limit the government's ability to explore a wider range of solutions and potentially secure more favorable pricing through competition.

Taxpayer Impact: Sole-source awards mean taxpayers may not benefit from the cost savings typically achieved through a competitive bidding process. This can lead to higher overall spending for the same or similar services.

Public Impact

The Department of Defense benefits from specialized autonomous engineering support services. Services are likely to enhance the capabilities of autonomous systems within the Navy. The contract supports advanced technological development within the defense sector. Workforce implications are likely concentrated within SEEBYTE LIMITED's specialized engineering teams.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated pricing.
Cost Plus Fixed Fee contract type introduces risk of cost overruns.
Limited transparency regarding the specific deliverables and performance metrics.
Sole-source award raises concerns about fair opportunity for other qualified vendors.

Positive Signals

Award to a single vendor suggests specialized expertise required for the task.
Contract duration indicates a sustained need for these critical support services.
The Department of Defense is investing in advanced autonomous technologies.

Sector Analysis

This contract falls within the Computer Systems Design Services sector, specifically focusing on advanced autonomous engineering support. This is a rapidly growing area within the defense industry, driven by the increasing reliance on AI and automation for military applications. The market for such specialized services is competitive, but often dominated by firms with niche expertise. Benchmarking against other DoD contracts for similar autonomous system development or support would provide context, though direct comparisons are difficult due to the specialized nature of the work.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. This suggests that the specialized nature of the autonomous engineering support required was likely met by a larger, established firm. Opportunities for small businesses in this specific niche may be limited unless they possess highly specialized, unique capabilities that align with the government's requirements.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. Accountability measures would be defined by the Cost Plus Fixed Fee contract terms, including reporting requirements and performance reviews. Transparency is limited due to the sole-source nature and the specialized, potentially sensitive, technical details involved. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Defense Advanced Research Projects Agency (DARPA) projects
Naval Sea Systems Command (NAVSEA) contracts
Autonomous Systems Development
Artificial Intelligence in Defense

Risk Flags

Sole-source award lacks competitive justification.
Cost Plus Fixed Fee contract type increases risk of cost overruns.
Limited transparency on specific services and performance metrics.
No small business participation identified.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $3.7 million to SEEBYTE LIMITED. LABOR - AUTONOMOUS ENG SUPPORT

Who is the contractor on this award?

The obligated recipient is SEEBYTE LIMITED.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $3.7 million.

What is the period of performance?

Start: 2023-07-10. End: 2026-03-21.

What specific autonomous engineering support services are being provided under this contract?

The contract data indicates 'LABOR - AUTONOMOUS ENG SUPPORT' as the service. While the specific deliverables are not detailed in the provided data, this typically encompasses a range of activities related to the design, development, integration, testing, and maintenance of autonomous systems. This could include software development for AI algorithms, hardware integration for sensors and actuators, system architecture design, simulation and modeling, and performance analysis for unmanned vehicles or other automated platforms. The 'Computer Systems Design Services' NAICS code (541512) further suggests a focus on the design and development of computer systems and related hardware/software.

Why was this contract awarded on a sole-source basis instead of through full and open competition?

The provided data states the contract was 'NOT COMPETED,' implying a sole-source award. Agencies typically justify sole-source awards when only one responsible source is available or capable of meeting the requirement. This could be due to unique technical expertise, proprietary technology, or urgent needs where competition is not feasible. Without further documentation from the Department of the Navy, the specific rationale for deeming SEEBYTE LIMITED as the sole source remains unclear. A thorough review of justification documents (e.g., a Justification and Approval for Other Than Full and Open Competition) would be necessary to understand the agency's reasoning and assess its validity.

How does the Cost Plus Fixed Fee (CPFF) contract type potentially impact the final cost and contractor incentives?

The Cost Plus Fixed Fee (CPFF) contract type means the contractor (SEEBYTE LIMITED) is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. While this structure can be useful for research and development or services where costs are difficult to estimate upfront, it carries a risk of cost overruns. The contractor has less incentive to control costs compared to fixed-price contracts because their profit (the fixed fee) is not directly tied to cost savings. The government bears the risk of cost increases, making robust oversight and cost monitoring crucial to manage expenditures effectively.

What is the historical spending pattern for 'Autonomous Eng Support' by the Department of the Navy?

The provided data only includes a single contract award for 'LABOR - AUTONOMOUS ENG SUPPORT' valued at approximately $3.7 million. To establish a historical spending pattern, a broader search across federal procurement databases (like USASpending.gov or FPDS) would be required. This would involve looking for contracts with similar service descriptions, NAICS codes (541512), and agencies (Department of the Navy, Department of Defense) over several fiscal years. Analyzing this broader dataset would reveal trends in spending, identify other key contractors in this space, and provide a more comprehensive understanding of the Navy's investment in autonomous engineering support.

What are the potential risks associated with awarding a contract of this duration (over 2.5 years) on a sole-source basis?

Awarding a contract for nearly three years on a sole-source basis presents several risks. Firstly, it locks the government into a single provider without the opportunity to re-evaluate market conditions or seek better pricing through competition during the contract's life. Secondly, it can stifle innovation by limiting exposure to alternative solutions or technological advancements that other companies might offer. Thirdly, if the initial justification for sole-source was flawed or circumstances change, the government may be contractually obligated to continue with a vendor that is no longer the best value. This extended sole-source commitment necessitates strong performance monitoring and a clear understanding of the long-term strategic necessity.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N6600122R0043

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: ORCHARD BRAE HOUSE, EDINBURGH

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $8,426,228

Exercised Options: $6,182,081

Current Obligation: $3,667,442

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N6600122D0043

IDV Type: IDC

Timeline