DoD's $39.5M CACI contract for life cycle operations and support shows fair value with 2 bids

Contract Overview

Contract Amount: $39,515,280 ($39.5M)

Contractor: CACI, Inc. - Federal

Awarding Agency: Department of Defense

Start Date: 2011-04-01

End Date: 2016-09-30

Contract Duration: 2,009 days

Daily Burn Rate: $19.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: SYUN AN EXTENSION - LIFE CYCLE OPERATIONS AND SUPPORT

Place of Performance

Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92110

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $39.5 million to CACI, INC. - FEDERAL for work described as: SYUN AN EXTENSION - LIFE CYCLE OPERATIONS AND SUPPORT Key points: 1. The contract's value appears reasonable given the scope of life cycle operations and support services. 2. Competition was robust, with two bidders vying for the contract, suggesting a healthy market. 3. The cost-plus award fee structure allows for performance incentives, potentially driving efficiency. 4. This contract falls within the engineering services sector, supporting naval operations. 5. The duration of the contract (over 5 years) indicates a long-term need for these services. 6. The contractor, CACI, Inc. - Federal, has a significant presence in government contracting.

Value Assessment

Rating: good

The contract's total value of approximately $39.5 million over its life cycle suggests a moderate investment for comprehensive life cycle operations and support. Benchmarking against similar large-scale engineering and support contracts for naval systems indicates that this pricing is within a competitive range. The cost-plus award fee (CPAF) structure, while potentially leading to higher costs than fixed-price contracts, allows for flexibility and incentivizes contractor performance, which can be valuable for complex, long-term support operations. The final cost is likely influenced by performance metrics and potential award fees.

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 two bidders suggests a competitive environment, though the exact number of interested parties and the rigor of the competition could be further analyzed. A limited number of bidders, even in a full and open process, might suggest specific technical requirements or market concentration. However, having at least two bids generally provides a basis for price discovery and ensures the government receives proposals from multiple qualified entities.

Taxpayer Impact: The full and open competition with multiple bidders is beneficial for taxpayers as it fosters a competitive environment, driving down prices and encouraging innovation. This process helps ensure the government is not overpaying for essential services and receives the best value proposition.

Public Impact

The Department of the Navy benefits from sustained life cycle operations and support for its assets. This contract ensures the readiness and operational effectiveness of naval systems. The services provided likely support a range of naval platforms and infrastructure. The contract supports jobs within the engineering and technical services sector, primarily in California where the contractor is based.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The cost-plus award fee structure can lead to cost overruns if not closely monitored.
The long duration of the contract may reduce flexibility to adapt to changing technological needs.
Reliance on a single prime contractor for extensive support could pose risks if performance degrades.

Positive Signals

The full and open competition indicates a robust bidding process, likely yielding competitive pricing.
The award fee mechanism incentivizes high performance and successful delivery of services.
CACI, Inc. - Federal is an established contractor with experience in defense support services.

Sector Analysis

This contract falls within the Engineering Services (NAICS 541330) sector, a critical component of the defense industrial base. The market for defense engineering and support services is substantial, driven by the continuous need to maintain, upgrade, and operate complex military systems. Spending in this sector is characterized by long-term contracts, specialized expertise, and significant government oversight. Comparable spending benchmarks would involve analyzing other large-scale support contracts awarded by the Department of Defense to various prime contractors for similar operational and life cycle management services.

Small Business Impact

The data indicates that this contract was not specifically set aside for small businesses (ss: false, sb: false). While the prime contractor, CACI, Inc. - Federal, is a large business, there may be opportunities for small businesses to participate as subcontractors. The extent of small business subcontracting would depend on CACI's subcontracting plan and the specific technical requirements of the contract. Without explicit set-aside provisions, the direct impact on the small business ecosystem is likely limited to subcontracting opportunities.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Navy contracting officers and program managers. They are responsible for monitoring contractor performance, ensuring compliance with contract terms, and approving payments, including award fees. Transparency is facilitated through contract award databases and reporting requirements. While specific Inspector General (IG) jurisdiction is not detailed, the DoD IG typically oversees contracts to prevent fraud, waste, and abuse, and could investigate this contract if warranted.

Related Government Programs

Naval Sea Systems Command (NAVSEA) Contracts
Defense Logistics Agency (DLA) Support Contracts
Department of Defense Information Technology Support Services
Aerospace Engineering and Support Services

Risk Flags

Potential for cost growth due to CPAF structure
Risk of technological obsolescence over contract duration
Dependence on contractor performance for critical support functions

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $39.5 million to CACI, INC. - FEDERAL. SYUN AN EXTENSION - LIFE CYCLE OPERATIONS AND SUPPORT

Who is the contractor on this award?

The obligated recipient is CACI, INC. - FEDERAL.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $39.5 million.

What is the period of performance?

Start: 2011-04-01. End: 2016-09-30.

What is the historical spending trend for life cycle operations and support contracts awarded by the Department of the Navy to CACI, Inc. - Federal?

Analyzing historical spending for similar contracts awarded by the Department of the Navy to CACI, Inc. - Federal would provide context on the scale and frequency of their engagements. This specific contract, valued at approximately $39.5 million, represents a significant, multi-year commitment. Without access to a comprehensive database of all past contracts, it's challenging to provide exact historical figures. However, CACI is a large defense contractor with a broad portfolio, suggesting they likely have secured numerous contracts of varying sizes and durations with the Navy and other DoD components over the years. Understanding their past performance and contract values in this specific service area would help assess if this current award is consistent with their established relationship and capabilities with the Navy.

How does the cost-plus award fee (CPAF) structure of this contract compare to industry standards for similar defense support services?

The Cost-Plus Award Fee (CPAF) structure is common in defense contracting, particularly for complex services where performance outcomes are difficult to define precisely upfront or where innovation and flexibility are paramount. For life cycle operations and support, CPAF allows the government to reimburse the contractor for allowable costs while providing an incentive fee based on achieving specific performance objectives. Compared to fixed-price contracts, CPAF offers more flexibility but requires robust government oversight to manage costs effectively. Industry standards often see a mix of contract types, with CPAF being favored for services requiring high levels of technical expertise and adaptability, such as long-term system support. The 'award' portion is crucial, as it directly links contractor profit to performance metrics, encouraging efficiency and quality delivery.

What specific performance metrics or criteria were used to determine the award fee for CACI, Inc. - Federal under this contract?

The specific performance metrics and criteria used to determine the award fee for CACI, Inc. - Federal are typically detailed within the contract's Performance Work Statement (PWS) and the associated Award Fee Plan. These metrics are designed to align the contractor's efforts with the government's objectives for life cycle operations and support. Common criteria in such contracts include factors like system availability and reliability, response times for maintenance and repairs, successful implementation of upgrades or modifications, adherence to safety standards, cost control efficiency, and overall customer satisfaction. The government's evaluation team would assess CACI's performance against these predefined metrics throughout the contract period, assigning a score that translates into a specific award fee amount, up to the maximum allowable.

What is the potential risk associated with the long contract duration (2011-2016) for life cycle operations and support?

The duration of this contract, spanning from 2011 to 2016 (approximately five years), presents several potential risks. Firstly, technology evolves rapidly, especially in defense systems. A long-term contract might lock the government into using specific support methodologies or technologies that could become outdated, reducing operational effectiveness or increasing long-term sustainment costs. Secondly, the contractor's organizational stability, key personnel, and strategic focus can change over such a period, potentially impacting service delivery. Thirdly, market conditions and the competitive landscape for support services can shift, meaning the government might miss opportunities to secure better terms or more innovative solutions through re-competition earlier. Finally, long durations can sometimes lead to complacency if oversight is not consistently rigorous.

How does the engineering services sector (NAICS 541330) typically perform in terms of contract value and competition for Department of Defense contracts?

The engineering services sector, particularly under NAICS code 541330 (Engineering Services), is a significant segment of the Department of Defense's (DoD) contracting landscape. Contracts in this sector often involve highly specialized technical expertise, research and development, system design, integration, testing, and lifecycle support for complex military platforms and equipment. Consequently, these contracts tend to have substantial values, often running into millions or even billions of dollars, reflecting the complexity and criticality of the services provided. Competition within this sector can vary. While many large, established engineering firms compete for major DoD contracts, the specialized nature of certain requirements can sometimes lead to limited competition or sole-source awards. However, for broad categories like general engineering support or life cycle operations, full and open competition is often pursued to maximize value for the taxpayer.

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: N0002411R3020

Offers Received: 2

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: CACI International Inc

Address: 14370 NEWBROOK DRIVE, 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: $41,744,609

Exercised Options: $40,570,666

Current Obligation: $39,515,280

Subaward Activity

Number of Subawards: 22

Total Subaward Amount: $38,580,756

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017804D4030

IDV Type: IDC

Timeline