DoD's $431M Engineering Services Contract with Southwest Range Services Faces Scrutiny Over Value and Competition
Contract Overview
Contract Amount: $431,207,609 ($431.2M)
Contractor: Southwest Range Services LLC
Awarding Agency: Department of Defense
Start Date: 2019-09-01
End Date: 2026-02-28
Contract Duration: 2,372 days
Daily Burn Rate: $181.8K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 6
Pricing Type: COST PLUS FIXED FEE
Sector: Other
Official Description: ATEC SERVICES
Place of Performance
Location: WHITE SANDS MISSILE RANGE, DONA ANA County, NEW MEXICO, 88002
Plain-Language Summary
Department of Defense obligated $431.2 million to SOUTHWEST RANGE SERVICES LLC for work described as: ATEC SERVICES Key points: 1. The contract's significant value of $431M raises questions about cost-effectiveness for engineering services. 2. Full and open competition was utilized, but the specific pricing mechanisms and outcomes require deeper analysis. 3. Potential risks include cost overruns given the Cost Plus Fixed Fee structure and long duration. 4. The IT sector is not directly applicable, but engineering services are crucial for defense modernization.
Value Assessment
Rating: questionable
The Cost Plus Fixed Fee structure, while allowing flexibility, can lead to higher costs if not tightly managed. Benchmarking against similar engineering service contracts is essential to determine if the $431M award represents fair value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a broad search for qualified bidders. However, the impact of this competition on price discovery and the final negotiated price needs further examination to ensure optimal taxpayer value.
Taxpayer Impact: The large contract value necessitates robust oversight to ensure taxpayer funds are used efficiently and effectively for critical engineering services.
Public Impact
Taxpayers are funding significant engineering services for the Department of the Army. The long contract duration (2019-2026) means sustained financial commitment. The contract supports operations in New Mexico, potentially impacting the local economy. The nature of engineering services suggests a role in infrastructure or technological development for the military.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee structure can incentivize higher spending.
- Long contract duration increases exposure to potential cost escalations.
- Lack of specific per-unit cost benchmark makes value assessment difficult.
Positive Signals
- Awarded under full and open competition.
- Contract supports critical Department of the Army needs.
Sector Analysis
Engineering services are vital for defense infrastructure and technological advancement. Benchmarking spending in this category requires comparison with similar large-scale defense engineering projects, considering the specific technical requirements and duration.
Small Business Impact
The data does not indicate whether small businesses were involved as subcontractors or prime contractors. Further analysis is needed to determine the extent of small business participation in this significant contract.
Oversight & Accountability
The contract's long duration and cost-plus structure warrant close oversight to ensure adherence to scope, budget, and performance standards. Regular audits and performance reviews are crucial for accountability.
Related Government Programs
- Engineering Services
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Potential for cost overruns due to CPFF structure.
- Long contract duration (2372 days) increases risk.
- Lack of specific performance metrics in provided data.
- Absence of clear ROI or outcome metrics.
- Need for detailed review of fixed fee justification.
Tags
engineering-services, department-of-defense, nm, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $431.2 million to SOUTHWEST RANGE SERVICES LLC. ATEC SERVICES
Who is the contractor on this award?
The obligated recipient is SOUTHWEST RANGE SERVICES 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 $431.2 million.
What is the period of performance?
Start: 2019-09-01. End: 2026-02-28.
What specific engineering services are being procured, and how do they align with current Army modernization priorities?
The contract is for engineering services under NAICS code 541330. While the specific services aren't detailed, this code typically covers design, consulting, and project management for engineering projects. Understanding the exact nature of these services is key to assessing their alignment with the Army's strategic goals and modernization efforts, ensuring the significant investment contributes directly to operational readiness and future capabilities.
How was the fixed fee determined in this Cost Plus Fixed Fee contract, and what mechanisms are in place to control cost overruns?
The determination of the fixed fee in a Cost Plus Fixed Fee (CPFF) contract is typically based on negotiation, considering factors like complexity, risk, and anticipated profit. To control cost overruns, the government relies on detailed contract clauses, performance metrics, and regular reviews of incurred costs against the estimated cost. Robust oversight is essential to ensure the contractor operates efficiently and within the spirit of the agreement.
What is the projected return on investment or measurable outcome expected from this $431M engineering services contract?
The projected return on investment or measurable outcome for this contract is not explicitly stated in the provided data. Typically, for engineering services, outcomes would be defined by the successful completion of projects, infrastructure improvements, or technological advancements that enhance military capabilities. Quantifying the ROI would require specific performance metrics and post-completion evaluations tied to the project's objectives.
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
Solicitation ID: W9115118R0005
Offers Received: 6
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 201 N CHURCH ST STE 300, LAS CRUCES, NM, 88001
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $550,931,980
Exercised Options: $517,850,866
Current Obligation: $431,207,609
Actual Outlays: $2,159,668
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2019-09-01
Current End Date: 2026-02-28
Potential End Date: 2026-08-31 00:00:00
Last Modified: 2026-01-12
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