DoD's $19.8M contract for engineering services awarded to MIKEL INC, with 2 years remaining

Contract Overview

Contract Amount: $19,768,219 ($19.8M)

Contractor: Mikel Inc

Awarding Agency: Department of Defense

Start Date: 2024-07-03

End Date: 2026-07-10

Contract Duration: 737 days

Daily Burn Rate: $26.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: CONFIGURATION MANAGEMENT, INTEGRATED LOGISTICS SUPPORT, IN-SERVICE ENGINEERING SUPPORT, DATA AND PROJECT MANAGEMENT, AND REPAIR SERVICES FOR FAILED PARTS AND UNITS.

Place of Performance

Location: NEWPORT, NEWPORT County, RHODE ISLAND, 02841

State: Rhode Island Government Spending

Plain-Language Summary

Department of Defense obligated $19.8 million to MIKEL INC for work described as: CONFIGURATION MANAGEMENT, INTEGRATED LOGISTICS SUPPORT, IN-SERVICE ENGINEERING SUPPORT, DATA AND PROJECT MANAGEMENT, AND REPAIR SERVICES FOR FAILED PARTS AND UNITS. Key points: 1. Contract provides essential configuration management, logistics, and engineering support. 2. Awarded via full and open competition, suggesting a competitive bidding process. 3. Risk indicators include cost-plus fixed fee pricing, which can incentivize contractor spending. 4. Performance context is critical for ensuring the Navy's operational readiness. 5. This contract falls within the Engineering Services sector, supporting defense readiness. 6. The contract value is substantial, requiring careful oversight of expenditures.

Value Assessment

Rating: fair

The contract's value of approximately $19.8 million over its duration appears reasonable for the scope of integrated logistics and engineering support required by the Department of the Navy. Benchmarking against similar contracts for comprehensive support services is necessary to fully assess value for money. The cost-plus-fixed-fee (CPFF) pricing structure, while common for complex services, warrants scrutiny to ensure cost efficiencies and prevent potential overruns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. The presence of two bids suggests a moderate level of competition. While full and open competition is generally preferred for price discovery, the specific number of bidders can influence the final price and the government's leverage.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically drives down costs through competitive bidding, ensuring the government receives the best possible value for its investment.

Public Impact

The Department of the Navy benefits from continuous engineering and logistics support, ensuring the readiness of its assets. Services include critical functions like configuration management, integrated logistics, and in-service engineering. The contract's geographic impact is primarily within the operational areas of the Navy, with potential implications for personnel in Rhode Island. Workforce implications include the potential for skilled engineering and logistics professionals to be engaged through MIKEL INC.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus fixed fee (CPFF) contract type can lead to higher costs if not managed diligently.
Limited number of bidders (2) may indicate potential barriers to entry or a niche market.
The duration of the contract (over 2 years) requires sustained oversight to ensure performance and cost control.

Positive Signals

Awarded through full and open competition, maximizing potential for competitive pricing.
Contract provides essential services for maintaining operational readiness.
Clear statement of work and defined deliverables are expected for effective management.

Sector Analysis

The Engineering Services sector (NAICS 541330) is a significant component of federal contracting, particularly within the Department of Defense. This contract for integrated logistics and engineering support aligns with the broader market for defense-related technical services. Spending in this sector often reflects the need for specialized expertise to maintain complex military systems and ensure operational effectiveness. Comparable spending benchmarks would involve analyzing other large-scale engineering support contracts awarded to defense contractors.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. There is no explicit mention of subcontracting goals for small businesses. This suggests that the primary contractor, MIKEL INC, will likely perform the majority of the work, with potential implications for the broader small business ecosystem if subcontracting opportunities are limited.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy's contracting and program management offices. Accountability measures will be tied to the performance metrics outlined in the contract. Transparency is expected through contract reporting mechanisms. While not explicitly stated, an Inspector General may have jurisdiction depending on the nature of any potential issues or audits.

Related Government Programs

Naval Sea Systems Command (NAVSEA) Support Contracts
Defense Logistics Agency (DLA) Support Services
Engineering and Technical Services for Military Platforms
Integrated Logistics Support (ILS) Contracts
Configuration Management Services

Risk Flags

Cost-plus contract type
Potential for cost overruns
Limited number of bidders

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.8 million to MIKEL INC. CONFIGURATION MANAGEMENT, INTEGRATED LOGISTICS SUPPORT, IN-SERVICE ENGINEERING SUPPORT, DATA AND PROJECT MANAGEMENT, AND REPAIR SERVICES FOR FAILED PARTS AND UNITS.

Who is the contractor on this award?

The obligated recipient is MIKEL 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 $19.8 million.

What is the period of performance?

Start: 2024-07-03. End: 2026-07-10.

What is MIKEL INC's track record with the Department of Defense for similar engineering and logistics support services?

MIKEL INC has a history of performing contracts with the Department of Defense, including services related to engineering, logistics, and technical support. Analyzing their past performance ratings, any contract disputes, and the value and duration of previous awards would provide a clearer picture of their capabilities and reliability. Specific details on their performance on similar contracts, such as the successful delivery of configuration management, integrated logistics, and in-service engineering support, are crucial for assessing their suitability for this current award. A review of their contract history would reveal their experience in managing cost-plus fixed-fee contracts and their ability to meet performance requirements within budget and schedule.

How does the pricing structure (Cost Plus Fixed Fee) compare to industry standards for similar services, and what are the potential value-for-money implications?

The Cost Plus Fixed Fee (CPFF) pricing structure is common for complex services where the scope of work may evolve or is difficult to define precisely upfront, such as advanced engineering and integrated logistics support. For taxpayers, CPFF contracts carry inherent risks of cost overruns, as the contractor is reimbursed for all allowable costs plus a fixed fee. This can incentivize higher spending if not rigorously managed. Value for money is achieved when the government obtains the required services at a reasonable cost, which necessitates strong oversight, detailed cost analysis, and robust negotiation. Benchmarking the fixed fee against the estimated cost and comparing the total contract value to similar services procured under different pricing models (e.g., Firm-Fixed-Price) is essential for a comprehensive value assessment.

What are the primary risks associated with this contract, and what mitigation strategies are in place?

Primary risks for this contract include potential cost overruns due to the CPFF structure, performance deficiencies in delivering critical engineering and logistics support, and schedule delays impacting operational readiness. Mitigation strategies typically involve stringent contract oversight by the Department of the Navy, including regular performance reviews, detailed cost tracking, and audits. Clear performance metrics and deliverables, coupled with defined remedies for non-performance, are crucial. The government's ability to manage the contractor's incurred costs and ensure that the fixed fee remains appropriate for the effort expended are key risk mitigation elements. Proactive communication channels with the contractor are also vital for early identification and resolution of issues.

How effective has MIKEL INC been in delivering configuration management and integrated logistics support in past contracts?

Assessing MIKEL INC's effectiveness in delivering configuration management and integrated logistics support requires a detailed review of their past performance data. This includes examining past performance evaluations, customer satisfaction surveys, and any documented instances of success or failure in managing complex systems. Specifically, their ability to maintain accurate configuration data, ensure timely availability of parts and units, and provide seamless in-service engineering support are key indicators. Analyzing the scope and complexity of their previous ILS and CM contracts, as well as the outcomes achieved, will provide insight into their capabilities and potential effectiveness in fulfilling the current contract's requirements.

What are the historical spending patterns for similar engineering and logistics support services within the Department of the Navy?

Historical spending patterns for similar engineering and logistics support services within the Department of the Navy reveal a consistent and significant investment in maintaining operational readiness. These patterns often show a trend of increasing contract values over time, driven by the complexity of naval platforms and evolving technological requirements. Analysis of past contracts for ILS, configuration management, and in-service engineering support can highlight average contract durations, typical award values, and the prevalence of different contract types (e.g., CPFF, FFP). Understanding these historical trends allows for better benchmarking of the current contract's value and provides context for future budget planning and cost-effectiveness assessments.

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: N6660424R3004

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 2 CORPORATE PL STE 103, MIDDLETOWN, RI, 02842

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

Financial Breakdown

Contract Ceiling: $47,231,748

Exercised Options: $20,657,094

Current Obligation: $19,768,219

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017819D8122

IDV Type: IDC

Timeline