DoD's $186M R&D contract to MAG DS CORP for program management and engineering support awarded under full and open competition

Contract Overview

Contract Amount: $186,214,989 ($186.2M)

Contractor: MAG DS Corp

Awarding Agency: Department of Defense

Start Date: 2022-06-28

End Date: 2026-06-27

Contract Duration: 1,460 days

Daily Burn Rate: $127.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 7

Pricing Type: FIRM FIXED PRICE

Sector: R&D

Official Description: THIS TASK ORDER IS FOR CONTRACTOR-PROVIDED PROGRAMMATIC/BUSINESS MANAGEMENT SERVICES, ENGINEERING SUPPORT SERVICES, AND ACQUISITION/ADMINISTRATIVE SUPPORT SERVICES.

Place of Performance

Location: TINTON FALLS, MONMOUTH County, NEW JERSEY, 07724

State: New Jersey Government Spending

Plain-Language Summary

Department of Defense obligated $186.2 million to MAG DS CORP for work described as: THIS TASK ORDER IS FOR CONTRACTOR-PROVIDED PROGRAMMATIC/BUSINESS MANAGEMENT SERVICES, ENGINEERING SUPPORT SERVICES, AND ACQUISITION/ADMINISTRATIVE SUPPORT SERVICES. Key points: 1. Contract provides essential programmatic, business, engineering, and administrative support for Department of the Army initiatives. 2. The firm fixed-price contract structure aims to control costs by defining the total price upfront. 3. Awarded under full and open competition, suggesting a robust market for these specialized services. 4. The duration of 1460 days (4 years) indicates a long-term need for sustained support. 5. The contract's focus on R&D aligns with the Army's strategic goals for technological advancement. 6. Performance is in New Jersey, potentially impacting the local economy and workforce.

Value Assessment

Rating: good

The contract value of approximately $186 million over four years averages to about $46.5 million annually. Benchmarking this against similar large-scale R&D support contracts is challenging without more specific service details. However, the firm fixed-price nature suggests that the government has negotiated a set price for the defined scope of work, which can be advantageous if the contractor can deliver efficiently. The contract's value appears substantial, reflecting the complexity and breadth of services required.

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 7 bidders suggests a competitive marketplace for these specialized program management, engineering, and administrative support services. A higher number of bidders generally leads to better price discovery and potentially more favorable terms for the government.

Taxpayer Impact: The full and open competition ensures that taxpayer dollars are likely being used efficiently by fostering a competitive environment that drives down prices and encourages innovation among contractors.

Public Impact

The Department of the Army benefits from critical support services enabling its research and development programs. Services include programmatic, business management, engineering, and acquisition/administrative support. The contract's geographic impact is centered in New Jersey, where the contractor is located. Workforce implications may include employment opportunities for program managers, engineers, and administrative staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the scope of work expands beyond initial estimates, despite the firm fixed-price structure.
Dependence on a single contractor for critical support functions could pose a risk if performance issues arise.
The specific nature of R&D support can be difficult to quantify in terms of direct, measurable outcomes.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Awarded through full and open competition, indicating a healthy market and potential for competitive pricing.
Long contract duration (4 years) suggests a stable, ongoing need and allows for long-term planning and relationship building.
Contractor's ability to secure a large award indicates a level of established capability and trust.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences (excluding biotechnology). This sector is crucial for national defense and technological advancement. Spending in this area often involves significant investment in innovation, requiring specialized expertise in program management, engineering, and acquisition. Comparable spending benchmarks would typically be found within large defense contracts that require similar levels of technical and managerial support for complex R&D initiatives.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). As a large contract awarded under full and open competition, there may be opportunities for small businesses to participate as subcontractors to MAG DS CORP. However, the primary awardee is not a small business, and the contract itself does not have a specific small business set-aside component.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Army contracting officers and program managers responsible for the R&D initiatives being supported. Transparency is facilitated through contract award databases like FPDS. Accountability measures are inherent in the firm fixed-price contract terms, with potential penalties or remedies for non-performance. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Department of Defense Research and Development Programs
Army Program Management Support Contracts
Engineering Services Contracts
Acquisition Support Services

Risk Flags

Potential for scope creep in long-term R&D support contracts.
Contractor performance risk over a 4-year period.
Reliance on fixed-price model for inherently uncertain R&D activities.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $186.2 million to MAG DS CORP. THIS TASK ORDER IS FOR CONTRACTOR-PROVIDED PROGRAMMATIC/BUSINESS MANAGEMENT SERVICES, ENGINEERING SUPPORT SERVICES, AND ACQUISITION/ADMINISTRATIVE SUPPORT SERVICES.

Who is the contractor on this award?

The obligated recipient is MAG DS CORP.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $186.2 million.

What is the period of performance?

Start: 2022-06-28. End: 2026-06-27.

What is the track record of MAG DS CORP in delivering similar program management and engineering support services to the Department of Defense?

MAG DS CORP has a history of providing various support services to government agencies. While specific details on past performance for contracts of this exact scale and scope (programmatic/business management, engineering support, and acquisition/administrative support for R&D) would require a deeper dive into contract databases and performance reviews, their ability to win a $186 million, four-year contract from the Department of the Army suggests they possess the necessary qualifications and experience. Further analysis would involve examining past performance evaluations, any reported disputes or contract terminations, and the types of agencies and programs they have supported previously to assess their reliability and expertise in complex R&D environments.

How does the average annual value of this contract ($46.5 million) compare to other large R&D support contracts within the Department of Defense?

The average annual value of approximately $46.5 million for this contract is substantial and falls within the range of significant support service contracts awarded by the Department of Defense. Large R&D programs often require extensive programmatic, engineering, and administrative oversight, leading to multi-million dollar annual expenditures. To provide a precise comparison, one would need to benchmark against contracts with similar North American Industry Classification System (NAICS) codes (like 541712) and similar service descriptions (program management, engineering support) awarded to prime contractors by the DoD over the past few years. However, this value is indicative of a major, long-term support requirement for a critical defense R&D initiative.

What are the primary risks associated with a firm fixed-price contract of this magnitude and duration for R&D support?

The primary risks with a firm fixed-price contract of this magnitude and duration for R&D support include potential scope creep if requirements are not clearly defined and managed, leading to contractor requests for equitable adjustments or claims. There's also the risk that the contractor may cut corners on quality or service to maintain profitability if their initial cost estimates were too low, especially given the long timeframe. For the government, the risk lies in potentially overpaying if the contractor is highly efficient and the market competition was not fully realized, or conversely, if unforeseen technical challenges arise that significantly increase the contractor's costs beyond what the fixed price can reasonably cover without impacting performance. Ensuring robust oversight and clear performance metrics is crucial to mitigate these risks.

What is the expected effectiveness of the services provided under this contract in advancing the Army's R&D objectives?

The effectiveness of the services provided under this contract is expected to be high, given the contract's focus on essential programmatic, business management, engineering support, and acquisition/administrative services. These functions are critical for the successful execution and management of complex Research and Development initiatives. By ensuring efficient program management, providing expert engineering insights, and handling administrative tasks, the contractor enables the Army's scientific and technical personnel to concentrate on core research activities. The long-term nature of the contract (4 years) suggests a commitment to sustained support, which is vital for the progression of R&D projects that often have lengthy timelines and require consistent oversight and resource allocation to achieve their objectives.

How has federal spending in the 'Research and Development in the Physical, Engineering, and Life Sciences' (NAICS 541712) sector trended in recent years, and how does this contract fit into that trend

Federal spending in the R&D sector, particularly under NAICS code 541712, has historically been robust, driven by national security, technological innovation, and economic competitiveness imperatives. The Department of Defense is consistently one of the largest federal investors in this area. This $186 million contract represents a significant, but not unprecedented, investment within this sector. It aligns with the trend of the DoD outsourcing specialized support services to leverage external expertise and manage complex projects efficiently. Such contracts are crucial for augmenting the government's internal capabilities and accelerating the pace of innovation, fitting into the broader pattern of substantial federal investment aimed at maintaining technological superiority.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)

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

Offers Received: 7

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1 RADAR WAY, TINTON FALLS, NJ, 07724

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

Financial Breakdown

Contract Ceiling: $264,719,152

Exercised Options: $202,936,730

Current Obligation: $186,214,989

Actual Outlays: $6,131,066

Subaward Activity

Number of Subawards: 15

Total Subaward Amount: $119,685,582

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W15P7T17D0100

IDV Type: IDC

Timeline