DoD's $26.3M contract for engineering services awarded to Miltec Corporation shows potential value concerns

Contract Overview

Contract Amount: $26,339,502 ($26.3M)

Contractor: Miltec Corporation

Awarding Agency: Department of Defense

Start Date: 2004-05-24

End Date: 2008-03-31

Contract Duration: 1,407 days

Daily Burn Rate: $18.7K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200408!003678!2100!W31P4Q!USA AVIATION AND MISSILE COMMAND!GS23F0020K !C!N! !Y!W31P4Q04FR019! !20040524!20050930!009757360!009757360!009757360!N!MILTEC CORPORATION !678 DISCOVERY DRIVE !HUNTSVILLE !AL!35806!37000!089!01!HUNTSVILLE !MADISON !ALABAMA !+000004000000!N!N!000000000000!R425!ENGINEERING TECHNICAL SERVICES !A2 !MISSILE AND SPACE SYSTEMS !000 !* !541330!E! !6! ! ! ! ! !99990909!B! ! ! ! !A! ! ! !000! ! ! ! ! ! ! !Y!B!N!N! ! ! ! ! ! !00 ! ! ! ! ! ! ! ! ! !0001! !

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35806

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $26.3 million to MILTEC CORPORATION for work described as: 200408!003678!2100!W31P4Q!USA AVIATION AND MISSILE COMMAND!GS23F0020K !C!N! !Y!W31P4Q04FR019! !20040524!20050930!009757360!009757360!009757360!N!MILTEC CORPORATION !678 DISCOVERY DRIVE !HUNTSVILLE !AL!35806!37000!089!01!HUNTSVILLE !MADI… Key points: 1. The contract's value appears high relative to its duration and scope. 2. Limited public data makes a comprehensive value-for-money assessment challenging. 3. The contract was awarded under full and open competition, suggesting a competitive process. 4. Performance context is minimal, hindering an understanding of service delivery effectiveness. 5. The contract falls within the Engineering Services sector, a broad category. 6. No small business set-aside was utilized, indicating potential missed opportunities for smaller firms.

Value Assessment

Rating: questionable

The total award amount of $26.3 million over approximately 3.8 years (1407 days) suggests a daily rate of roughly $18,720. Without specific details on the services rendered, it is difficult to benchmark this against similar contracts. However, given the broad nature of 'Engineering Technical Services,' this rate could be on the higher end, especially if the services are not highly specialized or if the contract duration is extended. Further analysis of the specific tasks and deliverables would be necessary for a definitive value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition,' indicating that all responsible sources were permitted to submit a bid. This suggests a robust competitive environment. However, the number of bidders is not specified in the provided data. A high level of competition typically drives down prices and encourages innovation, but without knowing the number of bids received, it's hard to definitively say how effectively this contract leveraged competition to secure the best value.

Taxpayer Impact: Taxpayers benefit from the potential for competitive pricing inherent in a full and open competition. However, the ultimate value realized depends on the number of bids and the specific terms negotiated.

Public Impact

The primary beneficiaries are likely the Department of Defense and its aviation and missile command, receiving engineering technical services. The services delivered are broadly categorized as 'Engineering Technical Services' within the 'Missile and Space Systems' domain. The geographic impact is centered around Huntsville, Alabama, where the contractor is located. Workforce implications include employment opportunities for engineers and technical staff at Miltec Corporation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of detailed performance metrics makes it difficult to assess contractor effectiveness.
The high daily rate, if not justified by specialized services, could indicate potential overspending.
Limited transparency on the specific nature of 'Engineering Technical Services' hinders a full understanding of the contract's value.

Positive Signals

Awarded under full and open competition, suggesting a fair and accessible bidding process.
The contract is firm fixed-price, providing cost certainty for the government.
The contractor, Miltec Corporation, is located in a hub for aerospace and defense activities.

Sector Analysis

This contract falls under the Engineering Services sector (NAICS code 541330), which encompasses firms providing specialized engineering services. The market for defense engineering services is substantial, driven by the government's continuous need for research, development, and sustainment of complex military systems. Comparable spending benchmarks are difficult to establish without more granular data on the specific engineering disciplines involved. However, the Department of Defense is a major consumer of such services, with significant annual outlays.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, nor does it explicitly mention subcontracting plans for small businesses. This suggests that the competition was open to all eligible firms, regardless of size. While this ensures a broad pool of potential contractors, it may mean that opportunities for small businesses to participate in this specific contract were limited unless they were prime contractors or chose to subcontract with the awardee.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve the Department of the Army and the U.S. Aviation and Missile Command. Accountability measures are usually embedded in the contract's terms and conditions, including performance standards and payment schedules. Transparency is often limited for defense contracts due to security and proprietary concerns, but contract awards and basic details are generally made public through federal procurement databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Missile Systems Support Contracts
Aerospace Engineering Services
Defense Technical Services
Army Aviation and Missile Command Contracts
Engineering Consulting Services

Risk Flags

Potential for high unit cost
Lack of detailed performance data
Limited transparency on specific services

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.3 million to MILTEC CORPORATION. 200408!003678!2100!W31P4Q!USA AVIATION AND MISSILE COMMAND!GS23F0020K !C!N! !Y!W31P4Q04FR019! !20040524!20050930!009757360!009757360!009757360!N!MILTEC CORPORATION !678 DISCOVERY DRIVE !HUNTSVILLE !AL!35806!37000!089!01!HUNTSVILLE !MADISON !ALABAMA !+000004000000!N!N!000000000000!R425!ENGINEERING TECHNICAL SERVICES !A2 !MISSILE AND SPACE SYSTEMS !000 !* !541330!E! !6! ! ! ! ! !999

Who is the contractor on this award?

The obligated recipient is MILTEC CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $26.3 million.

What is the period of performance?

Start: 2004-05-24. End: 2008-03-31.

What specific engineering technical services were provided under this contract, and how do they align with the Missile and Space Systems domain?

The provided data categorizes the service under 'ENGINEERING TECHNICAL SERVICES' and the product/service code as 'MISSILE AND SPACE SYSTEMS'. However, it does not detail the specific tasks performed. These services could range from design and development, testing and evaluation, systems integration, technical support, or program management related to missile and space systems. Without further documentation, such as the Statement of Work (SOW), it is impossible to ascertain the precise nature of the engineering support provided. This lack of specificity makes it challenging to assess the appropriateness of the contract's value and the contractor's performance.

How does the daily rate of approximately $18,720 compare to industry benchmarks for similar engineering technical services in the defense sector?

Benchmarking the daily rate of approximately $18,720 is challenging without knowing the specific skill sets, experience levels, and security clearances required for the engineers and technical staff. For highly specialized roles in missile and space systems, particularly those requiring top-secret clearances and extensive experience, such rates might be within the acceptable range for defense contractors. However, for more general engineering support, this rate could be considered high. Industry averages for engineering consulting can vary widely, from a few hundred dollars per day for junior engineers to several thousand for highly specialized experts. Given the 'Missile and Space Systems' focus, it's plausible that specialized expertise was required, but a definitive comparison requires access to detailed labor categories and market data specific to this niche.

What was the total number of bids received for this 'Full and Open Competition' contract, and how did this influence the final award price?

The provided data confirms that the contract was awarded under 'Full and Open Competition,' which theoretically maximizes the number of potential bidders. However, the specific number of bids received is not included in the dataset. A high number of bids (e.g., five or more) typically indicates robust competition and can lead to more favorable pricing for the government. Conversely, if only a few bids were submitted, the competitive pressure might have been less intense, potentially resulting in a higher award price than could have been achieved in a more crowded field. Without this crucial piece of information, it's difficult to fully assess the impact of competition on the $26.3 million award.

What is Miltec Corporation's track record with government contracts, particularly within the Department of Defense and for similar engineering services?

Miltec Corporation has a history of receiving government contracts, as indicated by this award. To assess their track record, one would need to examine their past performance on other federal contracts, looking at factors such as on-time delivery, quality of work, and any past performance issues or awards. Information on their specific experience within the 'Missile and Space Systems' domain and their success in providing 'Engineering Technical Services' would be particularly relevant. A review of contract databases and performance evaluations (if publicly available) would provide a clearer picture of their reliability and expertise as a government contractor.

Are there any indications of potential cost overruns or budget issues associated with this contract, either historically or projected?

The provided data does not contain specific information regarding cost overruns or budget issues for this contract. The contract was awarded as 'Firm Fixed Price' (FFP), which generally shifts the cost risk to the contractor and provides budget certainty for the government, assuming the scope of work remains stable. However, FFP contracts can still experience cost growth if the scope of work is significantly modified through change orders, or if the initial pricing was not adequately competitive. Without access to contract modifications or detailed financial reporting, it is impossible to determine if there have been or are projected to be any budget issues.

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: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Ducommun Incorporated (UEI: 006907042)

Address: 678 DISCOVERY DR NW, HUNTSVILLE, AL, 05

Business Categories: Category Business, Small Business, Veteran Owned Business

Parent Contract

Parent Award PIID: GS23F0020K

IDV Type: FSS

Timeline