DoD's $18.5M Engineering Services Contract Awarded to DRS Network & Imaging Systems LLC

Contract Overview

Contract Amount: $18,530,342 ($18.5M)

Contractor: DRS Network & Imaging Systems LLC

Awarding Agency: Department of Defense

Start Date: 2020-07-29

End Date: 2024-07-30

Contract Duration: 1,462 days

Daily Burn Rate: $12.7K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: DSESTS - TAIWAN STS SERVICE CONTRACT

Place of Performance

Location: MELBOURNE, BREVARD County, FLORIDA, 32935

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $18.5 million to DRS NETWORK & IMAGING SYSTEMS LLC for work described as: DSESTS - TAIWAN STS SERVICE CONTRACT Key points: 1. Contract awarded on a cost-plus-fixed-fee basis, which can lead to cost overruns if not managed carefully. 2. The contract was not competed, raising questions about potential price efficiencies and market-driven value. 3. A duration of over four years suggests a significant, ongoing need for these engineering services. 4. The contract's value is substantial, warranting close scrutiny of performance and cost management. 5. The specific engineering services provided are not detailed, making direct performance benchmarking difficult. 6. The absence of small business set-aside indicates a focus on larger, specialized contractors.

Value Assessment

Rating: fair

Benchmarking the value of this $18.5 million contract is challenging without detailed service descriptions. However, the cost-plus-fixed-fee structure inherently carries more risk for the government compared to fixed-price contracts, as costs can escalate. The lack of competition further complicates a direct value assessment, as there's no market-driven price discovery to compare against. While the contractor, DRS Network & Imaging Systems LLC, is a known entity, the absence of competitive bids means we cannot definitively say if this represents excellent value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor possesses the necessary capabilities, or for urgent requirements. The lack of competition limits the government's ability to leverage market forces to achieve the best possible pricing and terms. Without a competitive bidding process, it's difficult to ascertain the full range of potential solutions or cost savings that might have been available.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as there is no competitive pressure to drive down prices. It also limits opportunities for other businesses to compete for government work.

Public Impact

The Department of the Army is the primary beneficiary, receiving specialized engineering services. These services likely support critical defense systems or infrastructure, contributing to national security. The contract's duration suggests a long-term impact on the operational readiness of defense assets. The geographic impact is noted as Florida, indicating a concentration of work or operations in that state.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in suboptimal pricing.
Cost-plus-fixed-fee structure introduces potential for cost escalation.
Limited transparency on specific services provided hinders performance evaluation.
Long contract duration requires sustained oversight to ensure continued value.

Positive Signals

Award to an established contractor, DRS Network & Imaging Systems LLC, suggests a degree of reliability.
The contract's significant value indicates a critical need being addressed by the Department of Defense.
The fixed fee component of the contract provides some cost certainty for the government.

Sector Analysis

Engineering services, particularly those procured by the Department of Defense, represent a significant segment of the professional services market. This contract falls under the Engineering Services NAICS code (541330). The market for defense engineering services is characterized by high barriers to entry, specialized expertise, and often long-term relationships between contractors and government agencies. Comparable spending benchmarks are difficult to establish without more specific service details, but the overall defense engineering sector involves billions of dollars annually.

Small Business Impact

The contract data indicates that this was not set aside for small businesses (ss: false, sb: false). This suggests that the scope and nature of the engineering services required are likely beyond the typical capabilities or capacity of small businesses, or that the contracting agency opted for a different procurement strategy. Consequently, there are no direct subcontracting implications for small businesses stemming from a small business set-aside. The absence of a set-aside means that opportunities for small businesses to participate in this specific contract are limited unless they are part of a larger subcontracting plan initiated by the prime contractor.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. Accountability measures would be tied to the terms and conditions of the Cost Plus Fixed Fee (CPFF) contract, including regular reporting, milestone reviews, and audits. Transparency is moderate; while the award itself is public, the detailed breakdown of costs and specific deliverables under a CPFF contract can be less transparent than fixed-price arrangements. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Department of Defense Engineering Services
Army Professional Services Contracts
Cost-Plus-Fixed-Fee Contracts
Sole-Source Defense Procurements

Risk Flags

Lack of Competition
Cost-Plus-Fixed-Fee Structure
Potential for Cost Overruns
Limited Transparency on Services

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.5 million to DRS NETWORK & IMAGING SYSTEMS LLC. DSESTS - TAIWAN STS SERVICE CONTRACT

Who is the contractor on this award?

The obligated recipient is DRS NETWORK & IMAGING SYSTEMS LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $18.5 million.

What is the period of performance?

Start: 2020-07-29. End: 2024-07-30.

What is the specific nature of the engineering services provided under this contract?

The provided data indicates the contract is for 'DSESTS - TAIWAN STS SERVICE CONTRACT' and falls under the 'Engineering Services' NAICS code (541330). However, the specific technical details, deliverables, and scope of work are not elaborated upon in the summary data. These services likely pertain to specialized engineering support, potentially related to systems, infrastructure, or technology critical to Department of Defense operations, possibly with an international or Taiwan-related focus given the contract name. Further details would be required from the contract's statement of work to understand the precise nature of the engineering tasks performed.

How does the Cost Plus Fixed Fee (CPFF) pricing structure compare to other contract types for similar engineering services?

Cost Plus Fixed Fee (CPFF) contracts are common in research and development or complex service contracts where the scope is not fully defined at the outset, or where innovation is a key component. Unlike fixed-price contracts, CPFF allows the contractor to recover all allowable costs plus a predetermined fixed fee representing profit. This structure shifts more cost risk to the government compared to fixed-price contracts. For engineering services, if the scope is well-defined and predictable, fixed-price or cost-plus-incentive-fee contracts might offer better value by incentivizing efficiency. However, for highly uncertain or exploratory engineering work, CPFF can be appropriate, though it necessitates robust government oversight to manage costs effectively.

What are the potential risks associated with awarding a contract of this magnitude on a sole-source basis?

The primary risk of a sole-source award, especially for a contract valued at $18.5 million, is the potential for inflated pricing due to the lack of competitive pressure. Without competing bids, the government may not achieve the most favorable price or terms available in the market. There's also a risk that the chosen contractor may not be the most innovative or efficient provider. Furthermore, sole-source awards can limit opportunities for other qualified businesses to enter the market or expand their government contracting footprint. Robust justification and negotiation are critical to mitigate these risks when a sole-source award is deemed necessary.

What performance metrics or oversight mechanisms are typically in place for a contract of this duration and type?

For a contract like this, spanning over four years (1462 days), typical oversight mechanisms include regular performance reviews, milestone tracking, and financial audits. The Cost Plus Fixed Fee (CPFF) structure necessitates close monitoring of incurred costs against the estimated cost ceiling and the fixed fee. Performance metrics would be defined in the contract's Statement of Work (SOW) and could include adherence to schedules, quality standards, technical performance benchmarks, and delivery of specific engineering outputs. The contracting officer's representative (COR) plays a crucial role in day-to-day oversight, ensuring the contractor meets contractual obligations and reporting any deviations or issues.

What is the historical spending pattern for engineering services by the Department of the Army in Florida?

Analyzing historical spending patterns for engineering services by the Department of the Army in Florida requires access to comprehensive federal procurement databases. While this specific contract is for $18.5 million and located in Florida, without broader data, it's difficult to establish a trend. Generally, the Department of the Army procures a wide range of engineering services across various locations, including Florida, supporting infrastructure, research, development, and operational needs. Spending can fluctuate based on specific program requirements, infrastructure projects, and national defense priorities. A detailed analysis would involve querying databases like FPDS or USAspending for similar NAICS codes (e.g., 541330) and geographic locations over several fiscal years to identify patterns, average contract values, and dominant contractors.

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: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Leonardo SPA

Address: 100 N BABCOCK ST, MELBOURNE, FL, 32935

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $18,530,342

Exercised Options: $18,530,342

Current Obligation: $18,530,342

Subaward Activity

Number of Subawards: 3

Total Subaward Amount: $113,700

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W56HZV19D0009

IDV Type: IDC

Timeline