DoD's $11M sensor contract with Engility LLC lacked competition, raising value concerns

Contract Overview

Contract Amount: $11,079,256 ($11.1M)

Contractor: Engility LLC

Awarding Agency: Department of Defense

Start Date: 2007-08-13

End Date: 2010-02-26

Contract Duration: 928 days

Daily Burn Rate: $11.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: SENSORS

Place of Performance

Location: CHANTILLY, FAIRFAX County, VIRGINIA, 20151

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $11.1 million to ENGILITY LLC for work described as: SENSORS Key points: 1. The contract was awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. The duration of the contract (928 days) suggests a significant need for the sensor services. 3. The Cost Plus Fixed Fee (CPFF) contract type can incentivize cost overruns if not closely monitored. 4. The lack of competition is a key risk indicator for potential overpayment. 5. The contract falls under the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' NAICS code, indicating specialized components. 6. The award was managed by the Defense Contract Management Agency, suggesting a focus on defense applications.

Value Assessment

Rating: questionable

Benchmarking the value of this $11.1 million contract is challenging due to its sole-source nature and the specific nature of 'sensors' without further detail. However, the absence of competition inherently raises questions about whether the government achieved the best possible price. CPFF contracts, while useful for R&D or uncertain scopes, carry a higher risk of cost escalation compared to fixed-price contracts. Without comparable sole-source awards for similar sensor systems, a definitive value assessment is difficult, but the lack of competitive pressure suggests a potential for suboptimal pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a 'NOT COMPETED' basis, indicating that a full and open competition was not conducted. This typically occurs when only one source is capable of meeting the requirement, or in cases of urgent need or specific circumstances. The lack of multiple bidders means there was no direct price comparison or negotiation leverage derived from a competitive bidding process, which can impact the final price paid by the government.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. Without competing the requirement, the government missed an opportunity to solicit lower bids and potentially secure a more cost-effective solution.

Public Impact

The primary beneficiaries are likely entities within the Department of Defense requiring advanced sensor technology for operational purposes. The services delivered involve the provision and potentially integration of sensor systems, crucial for intelligence, surveillance, and reconnaissance. The geographic impact is likely concentrated within defense installations or operational theaters where these sensors are deployed. Workforce implications could include specialized technical roles for installation, maintenance, and operation of the sensor systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition.
CPFF contract type can lead to cost overruns if not managed tightly.
Lack of transparency in the procurement process due to sole-sourcing.
Specific sensor technology details are not publicly available, hindering detailed analysis.

Positive Signals

Contract awarded to Engility LLC, a known defense contractor.
Contract managed by Defense Contract Management Agency, indicating oversight.
The contract addresses a specific need for sensor technology within the DoD.

Sector Analysis

The defense sector, particularly the segment focused on aerospace and electronic systems manufacturing, is characterized by high R&D investment and specialized technological requirements. Contracts for components like sensors are critical for maintaining military readiness and technological superiority. Spending in this area is often driven by evolving threats and the need for advanced capabilities. Comparable spending benchmarks would typically be found within the broader category of aircraft parts and auxiliary equipment, but specific sensor systems can command significant premiums based on their sophistication and application.

Small Business Impact

There is no indication from the provided data that this contract involved small business set-asides or subcontracting goals. As a sole-source award, the focus was likely on securing the required technology from a specific provider rather than distributing work among smaller businesses. This contract does not appear to have a direct positive impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would have been primarily managed by the Defense Contract Management Agency (DCMA), responsible for ensuring contractor performance and compliance. Accountability measures would be tied to the terms of the Cost Plus Fixed Fee contract, requiring detailed reporting and justification of costs. Transparency is limited due to the sole-source nature of the award, with specific details of the sensor technology and pricing structure not publicly disclosed.

Related Government Programs

Department of Defense Procurement
Aircraft Parts and Auxiliary Equipment
Sensor Technology Procurement
Sole-Source Defense Contracts

Risk Flags

Lack of Competition
Cost Type Contract Risk
Limited Transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.1 million to ENGILITY LLC. SENSORS

Who is the contractor on this award?

The obligated recipient is ENGILITY LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $11.1 million.

What is the period of performance?

Start: 2007-08-13. End: 2010-02-26.

What is Engility LLC's track record with the Department of Defense, particularly on sole-source contracts?

Engility LLC, prior to its acquisition by SAIC, had a significant history of contracting with the Department of Defense across various service and technology areas. While specific data on their sole-source contract performance for sensors is not detailed here, their general profile suggests experience in complex defense programs. Sole-source contracts, by nature, often involve established relationships or unique capabilities. A deeper dive into Engility's portfolio would reveal the extent of their sole-source awards and their performance metrics on those contracts, including any past issues related to cost or delivery. However, the lack of competition inherently makes performance assessment more reliant on the government's internal oversight rather than market validation.

How does the $11.1 million value compare to similar sensor procurements by the DoD?

Direct comparison of this $11.1 million contract value is difficult without knowing the specific type and capabilities of the 'sensors' procured. The defense sector procures a vast array of sensor technologies, ranging from basic components to highly sophisticated intelligence, surveillance, and reconnaissance (ISR) systems, each with vastly different cost structures. Given this was a sole-source award on a Cost Plus Fixed Fee basis, it is plausible that the price may be higher than if it had been competitively procured. Benchmarking would require identifying contracts for sensors with comparable technical specifications, quantities, and contract types, which are not readily available in this summary data. The lack of competition inherently limits the ability to establish a clear market value.

What are the primary risks associated with a sole-source, Cost Plus Fixed Fee contract for sensor technology?

The primary risks associated with this contract structure are twofold. Firstly, the sole-source nature eliminates competitive pressure, potentially leading to inflated pricing as the contractor faces no direct market comparison. The government loses the opportunity to benefit from bidding wars that drive down costs. Secondly, the Cost Plus Fixed Fee (CPFF) structure, while providing flexibility for evolving requirements or R&D, can incentivize the contractor to incur higher costs to increase the fixed fee, which is a percentage of the actual costs. Effective oversight is crucial to mitigate these risks, ensuring that costs are reasonable and allocable, and that the fixed fee adequately compensates the contractor for the effort without excessive profit.

What was the specific need or justification for awarding this contract without competition?

The provided data indicates the contract was 'NOT COMPETED,' but does not specify the justification. Common reasons for sole-source awards in defense include: a critical, urgent need where only one contractor can meet the timeline; the existence of unique capabilities or proprietary technology possessed by only one firm; or situations where transitioning to a new contractor would be prohibitively expensive or technically infeasible. Without further documentation (e.g., Justification for Other Than Full and Open Competition - JOFOC), the precise reason remains unknown. This lack of transparency is a common concern with sole-source procurements.

How has spending on 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' evolved over time, and where does this contract fit?

Spending within the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' (NAICS 336413) category is substantial within the defense budget, reflecting the continuous need for maintenance, upgrades, and new components for military aircraft fleets. This $11.1 million contract represents a relatively small portion of the overall annual spending in this broad category. Its significance lies in its specific focus on sensors, which are increasingly critical for modern aviation capabilities, including ISR, targeting, and navigation. Historical spending trends in this sector are influenced by geopolitical factors, technological advancements, and defense modernization priorities. This contract fits within the ongoing investment in advanced components for military aviation platforms.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N6833507R0131

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Science Applications International Corporation (UEI: 078745061)

Address: 4803 STONECROFT BLVD, CHANTILLY, VA, 20151

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

Financial Breakdown

Contract Ceiling: $11,380,963

Exercised Options: $11,380,963

Current Obligation: $11,079,256

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline