DoD's $20.15M contract for engineering and logistics support awarded to Purvis Systems Inc

Contract Overview

Contract Amount: $20,149,066 ($20.1M)

Contractor: Purvis Systems Inc

Awarding Agency: Department of Defense

Start Date: 2023-02-24

End Date: 2026-02-23

Contract Duration: 1,095 days

Daily Burn Rate: $18.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: LIFE CYCLE SERVICES SUPPORT INCLUDING ENGINEERING ANALYSIS, TEST VERIFICATION, IMPLEMENTATION OF CONFIGURATION MANAGEMENT, PRODUCT ENGINEERING, QUALITY ASSURANCE / RELIABILITY, ACQUISITION LOGISTICS, SOFTWARE DEVELOPMENT, AND LEAN PROCESS ANALYSIS

Place of Performance

Location: NEWPORT, NEWPORT County, RHODE ISLAND, 02841

State: Rhode Island Government Spending

Plain-Language Summary

Department of Defense obligated $20.1 million to PURVIS SYSTEMS INC for work described as: LIFE CYCLE SERVICES SUPPORT INCLUDING ENGINEERING ANALYSIS, TEST VERIFICATION, IMPLEMENTATION OF CONFIGURATION MANAGEMENT, PRODUCT ENGINEERING, QUALITY ASSURANCE / RELIABILITY, ACQUISITION LOGISTICS, SOFTWARE DEVELOPMENT, AND LEAN PROCESS ANALYSIS Key points: 1. Contract provides comprehensive engineering, logistics, and software development services. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. Contract duration of 1095 days indicates a medium-term commitment. 4. Cost Plus Fixed Fee pricing structure may incentivize cost overruns. 5. The contract is managed by the Department of the Navy. 6. Services are critical for maintaining and improving defense systems. 7. Small business participation is not explicitly detailed but is not a set-aside. 8. The contract is categorized under Engineering Services.

Value Assessment

Rating: fair

The contract's value of $20.15 million over three years for comprehensive engineering and logistics support appears to be within a reasonable range for the scope of services. However, without specific benchmarks for similar, highly specialized defense engineering contracts, a precise value-for-money assessment is challenging. The Cost Plus Fixed Fee (CPFF) pricing structure, while common in complex defense procurements, carries inherent risks of cost escalation compared to fixed-price contracts. Further analysis would require benchmarking against comparable contracts for similar services and contractor performance history.

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 specialized engineering and logistics support requirement. While competition is present, the specific number of bidders is relatively low for a contract of this potential value, which could impact price discovery and potentially lead to less aggressive pricing than if more bidders had participated.

Taxpayer Impact: Taxpayers benefit from the potential for competitive pricing due to the full and open competition. However, the limited number of bidders may mean that the most cost-effective solutions were not fully explored.

Public Impact

The Department of the Navy benefits from enhanced engineering, logistics, and software development capabilities. Services delivered include configuration management, product engineering, quality assurance, acquisition logistics, and software development. The geographic impact is primarily within the operational areas of the Department of the Navy, with potential implications for personnel in Rhode Island. Workforce implications include the potential for skilled engineering and technical roles to be supported by this contract.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can lead to cost overruns if not managed diligently.
Limited number of bidders (3) may indicate a niche market or high barriers to entry, potentially impacting competitive pricing.
The broad scope of services could lead to challenges in performance monitoring and ensuring consistent quality across all areas.
Reliance on a single contractor for such a wide array of critical support functions could pose a risk if performance degrades.

Positive Signals

Awarded under full and open competition, maximizing the pool of potential offerors.
Contractor (Purvis Systems Inc.) has a track record in providing defense-related services.
The contract duration of three years provides stability for both the government and the contractor.
The specific services outlined are essential for the operational readiness and modernization of naval systems.

Sector Analysis

The engineering services sector within the defense industry is highly specialized and competitive, with significant barriers to entry due to security clearances, technical expertise, and established relationships. This contract fits within the broader category of professional, scientific, and technical services, which is a substantial segment of federal spending. Comparable spending benchmarks are difficult to ascertain without more granular data on specific service lines and contract types, but the $20.15 million lifecycle cost places it as a significant, though not massive, award within the defense engineering domain.

Small Business Impact

This contract was not awarded as a small business set-aside, and there is no explicit indication of subcontracting requirements for small businesses within the provided data. Therefore, the direct impact on the small business ecosystem is likely minimal unless Purvis Systems Inc. voluntarily engages small businesses as subcontractors. Further investigation into subcontracting plans would be necessary to fully assess the impact on small businesses.

Oversight & Accountability

Oversight for this contract is likely managed by the Department of the Navy's contracting and program management offices. Accountability measures would be embedded in the contract's performance work statement, requiring adherence to defined deliverables and quality standards. Transparency is facilitated by the contract award being publicly available, but detailed performance metrics and financial reporting are typically internal. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense Engineering Services
Acquisition Logistics Support
Software Development Contracts
Configuration Management Services
Naval Systems Support
Test and Verification Services

Risk Flags

Cost Plus Fixed Fee (CPFF) pricing structure carries inherent risk of cost overruns.
Limited number of bidders (3) may indicate reduced competitive pressure on pricing.
Broad scope of services requires diligent oversight to ensure consistent quality and performance.
Potential for contractor performance issues impacting critical defense systems.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.1 million to PURVIS SYSTEMS INC. LIFE CYCLE SERVICES SUPPORT INCLUDING ENGINEERING ANALYSIS, TEST VERIFICATION, IMPLEMENTATION OF CONFIGURATION MANAGEMENT, PRODUCT ENGINEERING, QUALITY ASSURANCE / RELIABILITY, ACQUISITION LOGISTICS, SOFTWARE DEVELOPMENT, AND LEAN PROCESS ANALYSIS

Who is the contractor on this award?

The obligated recipient is PURVIS SYSTEMS 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 $20.1 million.

What is the period of performance?

Start: 2023-02-24. End: 2026-02-23.

What is Purvis Systems Inc.'s past performance record with the Department of Defense and other federal agencies, particularly on similar Cost Plus Fixed Fee contracts?

Assessing Purvis Systems Inc.'s past performance is crucial for understanding their reliability and capability in delivering complex engineering and logistics support. A review of their contract history would reveal their track record on similar Cost Plus Fixed Fee (CPFF) contracts, which are known for their potential to exceed initial cost estimates if not managed effectively. Data on contract awards, modifications, terminations for default, and any past performance evaluations (e.g., CPARS reports) would provide insights into their ability to meet cost, schedule, and performance requirements. Specifically, examining their history with the Department of the Navy and other defense agencies for services like engineering analysis, configuration management, and software development would offer a relevant benchmark. A history of successful, on-time, and within-budget performance on comparable contracts would increase confidence in their ability to execute this current $20.15 million award effectively. Conversely, a pattern of cost overruns, schedule delays, or quality issues on past CPFF contracts would raise significant concerns.

How does the estimated cost of $20.15 million for three years of comprehensive support compare to industry benchmarks for similar defense engineering and logistics services?

Benchmarking the $20.15 million cost against industry standards for similar defense engineering and logistics services is essential for evaluating value for money. This contract encompasses a broad range of services, including engineering analysis, test verification, configuration management, product engineering, quality assurance, acquisition logistics, and software development. To perform a robust comparison, one would need to identify comparable contracts awarded by the Department of Defense or other federal agencies for similar scopes of work, duration, and complexity. Key metrics for comparison would include the average cost per labor hour, the total contract value relative to the number of full-time equivalents (FTEs) supported, and the cost of specific service components (e.g., software development vs. logistics support). Given the specialized nature of defense contracting, direct comparisons can be challenging. However, analyzing the pricing structures and overall value of awarded contracts within the same North American Industry Classification System (NAICS) code (541330 - Engineering Services) and for similar agencies can provide a reasonable estimate of market rates. Without access to detailed pricing data from competing bids or specific market research reports, it is difficult to definitively state whether $20.15 million represents excellent, fair, or questionable value.

What are the primary risks associated with the Cost Plus Fixed Fee (CPFF) pricing structure for this contract, and what mitigation strategies are in place?

The primary risk associated with a Cost Plus Fixed Fee (CPFF) contract is the potential for cost overruns. In a CPFF structure, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing their profit. This can incentivize contractors to incur higher costs, as their profit margin remains constant regardless of the total expenditure. For this $20.15 million contract, this means the government could end up paying significantly more than initially anticipated if costs escalate. Mitigation strategies typically involve robust government oversight, stringent auditing of contractor expenses, clearly defined allowable costs, and performance incentives that may be tied to cost control. The Department of the Navy's contracting officers and program managers are responsible for closely monitoring expenditures, ensuring that all costs claimed by Purvis Systems Inc. are reasonable, allocable, and necessary for contract performance. Furthermore, the fixed fee itself acts as a ceiling on the contractor's profit, providing some level of cost control, although it does not cap the total contract cost.

Given the 'full and open competition' award, how does the number of bidders (3) impact the government's ability to secure competitive pricing and innovative solutions?

While 'full and open competition' theoretically allows all responsible sources to bid, the fact that only three bids were received for this $20.15 million contract suggests a potentially limited competitive landscape. A higher number of bidders typically fosters greater price competition, driving down costs as companies vie for the award. With only three bidders, there is a reduced pressure on each company to offer the absolute lowest price or the most innovative solution, as their chances of winning are proportionally higher. This situation could mean that the government may not have achieved the best possible price discovery. Furthermore, a limited number of bidders might indicate a niche market where only a few companies possess the specialized expertise required, or it could suggest that the solicitation requirements were structured in a way that inadvertently limited the pool of potential offerors. To ensure optimal value, the government relies on thorough market research prior to solicitation and effective evaluation criteria to identify both the best price and the most capable offeror among the limited pool.

What are the potential long-term implications for the Department of the Navy if Purvis Systems Inc. successfully delivers on all aspects of this contract over the next three years?

If Purvis Systems Inc. successfully delivers on this $20.15 million contract, the long-term implications for the Department of the Navy could be significant and positive. Successful execution would mean enhanced capabilities in critical areas such as engineering analysis, test verification, configuration management, product engineering, quality assurance, acquisition logistics, and software development. This could lead to improved operational readiness of naval systems, more efficient acquisition processes, and the successful implementation of new technologies or system upgrades. Furthermore, a positive performance record by Purvis Systems Inc. could establish them as a trusted partner for future, potentially larger or more complex, defense contracts. This could streamline future procurement processes, as the Navy would have a known, reliable contractor with a proven track record. Conversely, if the contract is poorly executed, it could lead to delays in system modernization, increased costs due to rework or contract modifications, and a potential need to re-compete services, causing disruption and potentially impacting mission effectiveness.

Industry Classification

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

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N6660422R3012

Offers Received: 3

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Purvis Systems Incorporated

Address: 88 SILVA LN STE 2, MIDDLETOWN, RI, 02842

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

Financial Breakdown

Contract Ceiling: $48,808,684

Exercised Options: $31,069,982

Current Obligation: $20,149,066

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017819D8361

IDV Type: IDC

Timeline