DoD's $70M IT contract awarded to Jacobs Technology Inc. for custom programming services

Contract Overview

Contract Amount: $69,880,847 ($69.9M)

Contractor: Jacobs Technology Inc.

Awarding Agency: Department of Defense

Start Date: 2005-04-14

End Date: 2007-09-30

Contract Duration: 899 days

Daily Burn Rate: $77.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35806

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $69.9 million to JACOBS TECHNOLOGY INC. for work described as: Key points: 1. The contract's value of approximately $70 million over its period of performance suggests a significant investment in IT services. 2. Awarded under full and open competition, this contract likely benefited from a competitive bidding process. 3. The Cost Plus Fixed Fee (CPFF) contract type introduces potential for cost overruns if not managed carefully. 4. The duration of 899 days indicates a substantial, long-term project requiring sustained effort. 5. The contract's focus on custom computer programming services points to a need for specialized IT solutions. 6. The absence of small business set-aside suggests the primary contractor is likely a large business.

Value Assessment

Rating: fair

Benchmarking the value of this $70 million contract is challenging without specific deliverables or performance metrics. The CPFF structure, while allowing flexibility, can lead to higher costs compared to fixed-price contracts if not rigorously managed. Comparing it to similar custom programming contracts would require detailed analysis of scope, complexity, and duration. The provided data does not offer enough detail to definitively assess value for money.

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 bids. The presence of 4 bids suggests a moderate level of competition for this requirement. While more than a sole-source award, a higher number of bidders would typically lead to more robust price discovery and potentially better value for the government.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages a wider range of offers, potentially driving down costs and improving service quality through market forces.

Public Impact

The Department of Defense benefits from specialized custom computer programming services to support its IT infrastructure and operations. The contract likely supports various military branches or units requiring tailored software solutions. The geographic impact is primarily within Alabama, where the contract was administered. The workforce implications include employment opportunities for programmers, developers, and IT specialists working for Jacobs Technology Inc. and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can incentivize contractor to increase costs to reach higher fee.
Long contract duration (899 days) increases risk of scope creep and potential for cost escalation.
Lack of specific performance metrics in the provided data makes it difficult to assess contractor performance and value.
Custom programming can be complex and prone to unforeseen challenges, potentially impacting timelines and costs.

Positive Signals

Awarded under full and open competition, suggesting a competitive process that should yield reasonable pricing.
The contractor, Jacobs Technology Inc., has a track record with government contracts, implying some level of established capability.
The contract is administered in Alabama, potentially supporting local IT workforce development.

Sector Analysis

This contract falls within the Information Technology sector, specifically custom computer programming services. The IT services market is vast and highly competitive, with significant government spending allocated to software development, system integration, and IT support. Comparable spending benchmarks would depend on the specific nature of the custom programming, but government IT contracts often range from millions to billions of dollars.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the primary award went to a large business, Jacobs Technology Inc. There is no explicit information on subcontracting plans for small businesses. Without this information, it's difficult to assess the direct impact on the small business ecosystem, though large prime contracts often have subcontracting goals.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program office within the Department of the Army. Accountability measures would be defined in the contract's terms and conditions, including performance standards and reporting requirements. Transparency is generally facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense IT Services Contracts
Custom Software Development Contracts
IT Professional Services
Cost-Plus Contracts
Federal IT Procurement

Risk Flags

Cost Plus Fixed Fee contract type
Long contract duration
Potential for scope creep
Limited competition (4 bidders)

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $69.9 million to JACOBS TECHNOLOGY INC.. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is JACOBS TECHNOLOGY INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $69.9 million.

What is the period of performance?

Start: 2005-04-14. End: 2007-09-30.

What is the track record of Jacobs Technology Inc. with the Department of Defense?

Jacobs Technology Inc. has a significant history of contracting with the Department of Defense and other federal agencies. While this specific contract was awarded in 2005, the company has consistently secured various IT and engineering services contracts over the years. Their experience often spans complex projects requiring specialized technical expertise. A deeper dive into their contract history would reveal the types of services provided, their performance ratings on past contracts, and the total value of awards received from the DoD. This historical data is crucial for assessing their reliability and capability in executing large-scale IT projects.

How does the Cost Plus Fixed Fee (CPFF) structure compare to other contract types in terms of value for money?

The Cost Plus Fixed Fee (CPFF) contract type is often used when the scope of work is not precisely defined or is expected to evolve. It reimburses the contractor for allowable costs plus a fixed fee representing profit. While it offers flexibility, it can be less cost-effective for the government compared to fixed-price contracts, as the contractor has less incentive to control costs once the fixed fee is established. Value for money under CPFF heavily relies on robust government oversight to monitor costs and ensure efficiency. Fixed-price contracts, conversely, shift cost risk to the contractor but may require more detailed upfront scope definition and can lead to disputes if scope changes.

What are the potential risks associated with a 899-day contract duration for custom programming?

A contract duration of 899 days (approximately 2.5 years) for custom programming presents several risks. Firstly, technology evolves rapidly; by the end of the contract, the developed software might be based on outdated technologies or require significant updates. Secondly, the extended timeline increases the likelihood of scope creep, where requirements change or expand beyond the original agreement, potentially leading to cost overruns and delays. Thirdly, maintaining team morale and consistent performance over such a long period can be challenging. Finally, the longer the contract, the greater the potential for unforeseen issues, such as key personnel turnover or changes in government priorities, to impact the project's success.

How does the number of bidders (4) impact price discovery for this contract?

With four bidders, the contract likely experienced a moderate level of price discovery. Full and open competition aims to maximize this by encouraging as many qualified vendors as possible to submit proposals. While four bidders suggest that the market had sufficient interest, a higher number of competitors (e.g., 7-10 or more) would typically exert greater downward pressure on prices and potentially lead to more innovative solutions. The government's ability to negotiate favorable terms also increases with a larger pool of interested parties. Therefore, while four bidders are better than a sole-source situation, it may not represent the most competitive scenario achievable.

What is the significance of the 'Custom Computer Programming Services' (NAICS 541511) classification for this contract?

The NAICS code 541511, 'Custom Computer Programming Services,' signifies that the core purpose of this contract was to design, develop, and implement specialized software tailored to the unique needs of the Department of Defense. This is distinct from off-the-shelf software purchases or general IT support. It implies a high degree of technical expertise required from the contractor, involving activities like software analysis, design, development, testing, and potentially integration. Contracts under this code often involve significant intellectual property creation and require close collaboration between the government and the contractor to ensure the final product meets specific operational requirements.

Are there any indicators of potential cost overruns given the contract type and duration?

Yes, the Cost Plus Fixed Fee (CPFF) contract type, combined with a long duration of 899 days, presents inherent risks for cost overruns. Under CPFF, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee. This structure provides less incentive for the contractor to control costs compared to fixed-price contracts, as their profit (the fee) is fixed regardless of the final cost. The extended duration increases the window for unexpected costs to arise due to technological changes, evolving requirements, or project complexities. Effective government oversight, rigorous cost monitoring, and clear contract management are essential to mitigate these risks.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Custom Computer Programming Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 4

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Jacobs Engineering Group Inc (UEI: 074103508)

Address: 6703 ODYSSEY DR NW STE 303, HUNTSVILLE, AL, 05

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

Contract Characteristics

Cost or Pricing Data: YES

Timeline