DoD's $11.7M contract for electromagnetic spectrum services awarded to MAXISIQ, INC. with 1,074 days duration

Contract Overview

Contract Amount: $11,761,536 ($11.8M)

Contractor: Maxisiq, Inc.

Awarding Agency: Department of Defense

Start Date: 2023-12-19

End Date: 2026-12-18

Contract Duration: 1,095 days

Daily Burn Rate: $10.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: ELECTROMAGNETIC SPECTRUM OPERATIONAL ENGINEERING SERVICES

Place of Performance

Location: LORTON, FAIRFAX County, VIRGINIA, 22079

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $11.8 million to MAXISIQ, INC. for work described as: ELECTROMAGNETIC SPECTRUM OPERATIONAL ENGINEERING SERVICES Key points: 1. Value for money appears reasonable given the contract duration and scope of engineering services. 2. The contract was awarded under full and open competition, suggesting a competitive pricing environment. 3. Risk indicators are moderate, with a Cost Plus Fixed Fee pricing structure potentially leading to cost overruns if not managed closely. 4. Performance context is within specialized engineering services for the Department of the Navy. 5. Sector positioning is within the defense engineering services market, a critical area for national security.

Value Assessment

Rating: good

The contract value of $11.7 million over approximately three years for specialized engineering services is within a reasonable range for this type of work. Benchmarking against similar contracts for electromagnetic spectrum operational engineering is challenging without more specific service details. However, the Cost Plus Fixed Fee (CPFF) structure, while offering flexibility, requires diligent oversight to ensure cost control and prevent scope creep. The fixed fee component provides some predictability for the contractor's profit.

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 offers. The presence of a single delivery order suggests that this is one of potentially many under a larger indefinite-delivery/indefinite-quantity (IDIQ) contract, or a standalone award. The level of competition for the underlying IDIQ or this specific order would provide a clearer picture of price discovery. However, full and open competition generally promotes competitive pricing.

Taxpayer Impact: Taxpayers benefit from the potential for competitive pricing inherent in a full and open competition, which aims to secure the best value for the government.

Public Impact

The Department of the Navy benefits from specialized engineering services crucial for electromagnetic spectrum operations. Services delivered likely include analysis, design, testing, and integration related to the electromagnetic spectrum. Geographic impact is primarily within the operational areas of the Department of the Navy, potentially worldwide. Workforce implications include employment for specialized engineers and technical personnel within MAXISIQ, INC. and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) pricing can incentivize cost overruns if not closely monitored.
The duration of the contract (1095 days) requires sustained oversight to ensure continued alignment with evolving needs.
Specialized nature of the services may limit the pool of qualified contractors, potentially impacting future competition.
Dependence on a single contractor for critical spectrum operations could pose a risk if performance issues arise.

Positive Signals

Awarded under full and open competition, suggesting a robust initial vetting of potential providers.
The contractor, MAXISIQ, INC., is likely experienced in providing such specialized engineering services.
A defined period of performance (3 years) allows for focused execution and evaluation.
The contract specifies a clear end date, facilitating planning for future requirements.

Sector Analysis

The defense engineering services sector is characterized by high technical complexity, stringent security requirements, and significant government investment. Contracts in this space often involve specialized knowledge of areas like signal processing, electronic warfare, and spectrum management. The market size is substantial, driven by ongoing modernization efforts and the critical need for maintaining technological superiority. This contract fits within the broader category of defense IT and engineering support services, where companies like MAXISIQ, INC. compete for significant government awards.

Small Business Impact

There is no indication that this contract included a small business set-aside. MAXISIQ, INC. is not explicitly identified as a small business in the provided data. Therefore, the direct impact on small business set-asides is likely minimal. However, the potential for subcontracting opportunities with MAXISIQ, INC. could exist, providing avenues for small businesses to participate in fulfilling the contract requirements, depending on the prime contractor's subcontracting plan.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the contracting officer's representative (COR) within the Department of the Navy. Accountability measures are embedded in the contract terms, including performance standards and payment schedules tied to deliverables. Transparency is facilitated through contract databases like FPDS. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract.

Related Government Programs

Electromagnetic Spectrum Management
Defense Engineering Services
Naval Warfare Systems
Information Technology Support Services
Cost Plus Fixed Fee Contracts

Risk Flags

Cost Plus Fixed Fee (CPFF) pricing structure requires diligent oversight to manage potential cost overruns.
Specialized nature of services may limit the pool of qualified contractors for future procurements.
Performance data for MAXISIQ, INC. on similar contracts is not detailed, impacting a full value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.8 million to MAXISIQ, INC.. ELECTROMAGNETIC SPECTRUM OPERATIONAL ENGINEERING SERVICES

Who is the contractor on this award?

The obligated recipient is MAXISIQ, 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 $11.8 million.

What is the period of performance?

Start: 2023-12-19. End: 2026-12-18.

What is the typical profit margin for Cost Plus Fixed Fee (CPFF) contracts in defense engineering services?

Profit margins for CPFF contracts in defense engineering services can vary significantly based on the complexity of the work, the level of risk involved, and the specific terms negotiated. Generally, the fixed fee component is intended to represent a reasonable profit. For CPFF contracts, the fee is typically negotiated as a fixed dollar amount and is not subject to adjustment based on the actual costs incurred. Industry benchmarks suggest that fixed fees on CPFF contracts can range from 5% to 15% of the estimated cost, but this is highly dependent on the specific contract and negotiation. Factors such as the contractor's historical performance, the uniqueness of the services, and the competitive landscape influence the final negotiated fee. Without specific details on the estimated cost and the negotiated fee for this particular contract, a precise profit margin cannot be determined, but it would fall within the broader industry norms for specialized defense engineering.

How does the duration of this contract (1095 days) compare to similar electromagnetic spectrum operational engineering contracts?

A contract duration of 1095 days, equivalent to three years, is a common and often standard period for complex engineering services contracts within the Department of Defense. Such durations allow for sustained effort, project development, and the potential for follow-on work or phased implementation. Shorter durations might be used for specific, well-defined tasks or studies, while longer durations (often with option periods) are typical for ongoing support, research and development, or system sustainment. For specialized areas like electromagnetic spectrum operations, which involve evolving technologies and strategic importance, a three-year performance period provides a stable foundation for the contractor to deliver critical capabilities and for the government to assess performance and plan future needs. It strikes a balance between providing sufficient time for meaningful work and allowing for flexibility to adapt to changing requirements or technological advancements.

What are the potential risks associated with a Cost Plus Fixed Fee (CPFF) contract structure for specialized engineering services?

The primary risk associated with a Cost Plus Fixed Fee (CPFF) contract structure is the potential for cost overruns if the government does not maintain rigorous oversight. While the contractor's profit (the 'fee') is fixed, the 'cost' portion is reimbursable. If the contractor incurs higher-than-expected costs due to inefficiencies, scope creep, or unforeseen technical challenges, the government bears the financial burden. This can lead to the total contract cost exceeding initial estimates. For specialized engineering services, where technical uncertainties can be high, CPFF contracts require diligent monitoring of expenditures, progress, and adherence to the defined scope. Effective management by the Contracting Officer's Representative (COR) is crucial to identify and mitigate cost-increasing factors promptly. Conversely, CPFF contracts can also incentivize contractors to complete work efficiently to maximize their fee relative to the effort expended, provided the fee is structured appropriately.

How does MAXISIQ, INC.'s track record influence the assessment of this contract's value?

MAXISIQ, INC.'s track record is a critical factor in assessing the value and risk associated with this contract, although specific performance data is not provided here. A history of successful contract performance, timely delivery, adherence to budget, and positive past performance reviews would indicate a lower risk and potentially higher value for money. Conversely, a history of cost overruns, missed deadlines, or quality issues would raise concerns. Assuming MAXISIQ, INC. was awarded this contract through a competitive process, it implies they met the technical qualifications and demonstrated capability. However, a deeper dive into their specific experience with electromagnetic spectrum operations, their financial stability, and their past performance ratings on similar government contracts would provide a more robust basis for evaluating the value proposition. Without this granular data, the assessment relies on the general assumption that the award decision was based on a favorable evaluation of their capabilities.

What are the implications of 'full and open competition' for the Department of the Navy's spending on engineering services?

Awarding contracts under 'full and open competition' signifies that the Department of the Navy sought proposals from all responsible sources capable of meeting the contract requirements. This approach is generally considered the most effective method for achieving best value and competitive pricing. By allowing a broad range of potential bidders, the Navy increases the likelihood of receiving innovative solutions and cost-effective proposals. It fosters a market where contractors are incentivized to offer competitive pricing and superior performance to win awards. For the Department of the Navy, this translates to potentially lower overall spending for equivalent services compared to sole-source or limited competition scenarios. It also enhances transparency and fairness in the procurement process, ensuring that taxpayer funds are utilized efficiently and effectively by leveraging the full spectrum of available market capabilities.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N6893623R3004

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 10505 FURNACE RD STE 101, LORTON, VA, 22079

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

Financial Breakdown

Contract Ceiling: $32,460,224

Exercised Options: $19,025,562

Current Obligation: $11,761,536

Actual Outlays: $430,130

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017819D7885

IDV Type: IDC

Timeline