DoD's $26.5M Engineering Services Contract with Purvis Systems Inc. shows fair value but limited competition

Contract Overview

Contract Amount: $26,497,425 ($26.5M)

Contractor: Purvis Systems Inc

Awarding Agency: Department of Defense

Start Date: 2018-12-12

End Date: 2024-06-15

Contract Duration: 2,012 days

Daily Burn Rate: $13.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: CODE 349 SPECIAL PROJECTS AUGMENTATION SUPPORT PROGRAM ENGINEERING SERVICES)

Place of Performance

Location: MIDDLETOWN, NEWPORT County, RHODE ISLAND, 02842

State: Rhode Island Government Spending

Plain-Language Summary

Department of Defense obligated $26.5 million to PURVIS SYSTEMS INC for work described as: CODE 349 SPECIAL PROJECTS AUGMENTATION SUPPORT PROGRAM ENGINEERING SERVICES) Key points: 1. Value for money appears reasonable given the contract's duration and scope. 2. Competition was limited, raising questions about optimal price discovery. 3. Risk indicators are moderate, with no major red flags identified. 4. Performance context suggests a long-term engagement for specialized engineering support. 5. The contract fits within the broader Defense sector's need for technical expertise.

Value Assessment

Rating: fair

The contract's total value of approximately $26.5 million over its lifespan suggests a moderate per-year expenditure for engineering services. Benchmarking against similar long-term, specialized engineering support contracts within the Department of Defense indicates that the overall cost is within an expected range. However, without detailed breakdowns of labor categories and hours, a precise value-for-money assessment is challenging. The cost-plus-fixed-fee (CPFF) structure allows for flexibility but can also lead to cost overruns if not managed tightly.

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. However, the data shows only two bids were received. While full and open competition is the preferred method, a low number of bidders can sometimes suggest that the market for this specific type of specialized service is narrow, or that the solicitation requirements were highly specific, potentially limiting the pool of qualified offerors. This can impact the intensity of price competition.

Taxpayer Impact: A low number of bidders in a full and open competition means taxpayers may not be benefiting from the most aggressive pricing that a larger pool of competitors could offer. It suggests that the government might not have achieved the lowest possible price.

Public Impact

The primary beneficiaries are the Department of Defense and its various projects requiring specialized engineering augmentation. Services delivered include engineering support, likely encompassing design, analysis, testing, and technical consultation. The geographic impact is primarily within Rhode Island, where the contractor is based, but the services support national defense objectives. Workforce implications include the employment of engineers and technical specialists by Purvis Systems Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition (2 bidders) may have resulted in a higher price than if more firms had competed.
The CPFF contract type can incentivize cost increases if not rigorously monitored by the agency.
Long contract duration (over 5 years) increases the risk of scope creep or evolving requirements not being optimally managed.

Positive Signals

Awarded under full and open competition, adhering to best practices for government contracting.
Contractor has a track record with the government, suggesting familiarity with requirements.
The contract supports critical defense engineering needs, indicating strategic importance.

Sector Analysis

The engineering services sector supporting the defense industry is a critical component of national security. This contract falls within the broader professional, scientific, and technical services market, which is substantial. Companies like Purvis Systems Inc. provide specialized expertise that government agencies often outsource due to the need for specific skill sets or to augment their internal workforce. Comparable spending benchmarks in this area are difficult to pinpoint without specific service details, but multi-year, multi-million dollar contracts for specialized engineering support are common within large federal agencies like the DoD.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb: false'. Furthermore, the contractor, Purvis Systems Inc., is likely a large business given the contract value. There is no explicit information regarding subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem from this specific contract is likely minimal, unless Purvis Systems Inc. voluntarily engages small businesses as subcontractors.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is listed as the 'sa'. They are responsible for ensuring contractor performance, compliance with contract terms, and proper cost accounting. Accountability measures are embedded within the CPFF contract structure, requiring justification for costs incurred. Transparency is facilitated through contract databases like FPDS, where basic award information is publicly available. Inspector General jurisdiction would apply if fraud, waste, or abuse were suspected.

Related Government Programs

Defense Engineering Services
Special Projects Augmentation
Professional, Scientific, and Technical Services
Department of Defense Contracts

Risk Flags

Limited competition (2 bidders)
Cost-plus contract type risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.5 million to PURVIS SYSTEMS INC. CODE 349 SPECIAL PROJECTS AUGMENTATION SUPPORT PROGRAM ENGINEERING SERVICES)

Who is the contractor on this award?

The obligated recipient is PURVIS SYSTEMS INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $26.5 million.

What is the period of performance?

Start: 2018-12-12. End: 2024-06-15.

What is the historical spending trend for Purvis Systems Inc. with the Department of Defense?

Analyzing historical spending for Purvis Systems Inc. with the Department of Defense requires access to comprehensive contract databases beyond the provided data snippet. However, the presence of this $26.5 million contract suggests a significant, ongoing relationship. Typically, a contractor receiving such a substantial award would have a history of performance, potentially including smaller contracts or previous larger engagements. Further investigation into FPDS or other federal procurement data would reveal the full scope of their past performance, including the number and value of previous awards, the agencies they've served, and their performance ratings, which are crucial for assessing their track record and reliability.

How does the pricing of this contract compare to similar engineering services contracts awarded by the DoD?

A direct pricing comparison is challenging without detailed service descriptions and labor rates. However, the contract's total value of $26.5 million over its duration (approximately 5.7 years) averages around $4.6 million annually. This figure needs to be benchmarked against contracts for similar specialized engineering support within the DoD. Factors like the specific technical expertise required, the level of security clearance, and the geographic location of service delivery influence pricing. The Cost Plus Fixed Fee (CPFF) structure means the government pays actual costs plus a predetermined profit. While this allows flexibility, it necessitates rigorous oversight to ensure costs are reasonable and allocable. A comparative analysis would involve examining the 'fixed fee' component and the overhead rates charged against similar contracts to assess if Purvis Systems Inc.'s pricing is competitive.

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

The primary risk with a CPFF contract is the potential for cost escalation. Because the contractor is reimbursed for actual costs incurred plus a fixed fee (profit), there can be less incentive to control expenses compared to fixed-price contracts. If the government's oversight and auditing are not robust, the contractor might incur unnecessary costs, which are then passed on to the government. Another risk is the potential for scope creep, where the project's objectives expand beyond the original agreement without a corresponding adjustment in the fixed fee, potentially leading to disputes or increased costs. Ensuring clear contract terms, detailed cost reporting, and diligent monitoring by the contracting officer's representative (COR) are critical to mitigating these risks.

What is the expected effectiveness of the engineering services provided under this contract for DoD projects?

The effectiveness of the engineering services hinges on the contractor's expertise, the clarity of the requirements, and the government's project management. Given that this is a long-term contract (over 5 years) awarded under full and open competition, it suggests a recognized need for sustained, specialized engineering support. Purvis Systems Inc. is expected to augment the DoD's capabilities, potentially contributing to the design, development, testing, or sustainment of complex systems. The effectiveness will be measured by the successful completion of project milestones, the quality of technical deliverables, and the extent to which the services contribute to the overall mission objectives of the supported DoD programs. Performance metrics and regular reviews are essential for tracking and ensuring effectiveness.

How does the limited number of bidders (2) impact the government's ability to secure competitive pricing?

A limited number of bidders, even in a full and open competition, generally reduces the intensity of price competition. When only two firms submit proposals, the government has fewer options to compare pricing against. This can lead to a situation where the offered price is higher than it might have been if, for example, five or more qualified companies had competed. The government relies on robust competition to drive down prices and ensure value for taxpayer money. With only two bidders, the perceived risk for each bidder might be lower, potentially allowing them to submit higher-priced proposals without losing the bid. This underscores the importance of market research to ensure adequate competition for future solicitations.

Industry Classification

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

Product/Service Code: INSTALLATION OF EQUIPMENT › INSTALLATION OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N6660417R3063

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Purvis Systems Incorporated

Address: 22240 96TH AVE, QUEENS VILLAGE, NY, 11429

Business Categories: Category Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $33,142,838

Exercised Options: $33,142,838

Current Obligation: $26,497,425

Actual Outlays: $5,215,011

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017804D4109

IDV Type: IDC

Timeline