DoD's $34M contract for manufacturing engineering systems saw limited competition, raising value concerns
Contract Overview
Contract Amount: $34,034,474 ($34.0M)
Contractor: Manufacturing Engineering Systems, LLC
Awarding Agency: Department of Defense
Start Date: 2013-09-26
End Date: 2017-03-29
Contract Duration: 1,280 days
Daily Burn Rate: $26.6K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 15
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: TESTING SERVICES
Place of Performance
Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20850
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $34.0 million to MANUFACTURING ENGINEERING SYSTEMS, LLC for work described as: TESTING SERVICES Key points: 1. The contract's value proposition is unclear due to a lack of robust competition. 2. Competition dynamics were limited, suggesting potential for suboptimal pricing. 3. Risk indicators are present due to the nature of the competition and contract type. 4. Performance context is difficult to assess without clear benchmarks. 5. This contract falls within the broader 'Educational Support Services' sector, but its specific application is in manufacturing engineering. 6. The firm-fixed-price structure aims to control costs, but this is undermined by limited competition.
Value Assessment
Rating: questionable
Benchmarking this $34 million contract for manufacturing engineering systems against similar DoD procurements is challenging due to the limited competition. The firm-fixed-price structure is a positive sign for cost control, but the lack of bidders prevents a thorough assessment of whether the pricing reflects fair market value. Without more comparable contracts or a competitive bidding process, it's difficult to ascertain if the government received optimal value for its investment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
This contract was awarded under 'Full and Open Competition After Exclusion of Sources,' which implies that while open to all, certain sources were initially excluded, and then it was opened. However, the low number of bidders (10) suggests that the competition was not robust. This limited engagement could mean that potential competitors were deterred by the solicitation's requirements or that the market for these specialized services is inherently small. The limited competition raises questions about price discovery and whether the government secured the most advantageous terms.
Taxpayer Impact: Limited competition means taxpayers may have paid more than necessary, as the government had fewer options to drive down prices through a competitive bidding process.
Public Impact
The primary beneficiaries are likely the Department of Defense, specifically the Army, through enhanced manufacturing engineering capabilities. The services delivered are related to manufacturing engineering systems, crucial for defense production and readiness. The geographic impact is centered around the contract's performance location, likely within military facilities in Maryland (ST). Workforce implications include the potential for specialized engineering roles and support staff, both within the contractor and potentially within the government agency.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition may lead to higher costs for taxpayers.
- Lack of transparency in the 'exclusion of sources' process could hide potential issues.
- The contract duration (1280 days) is substantial, increasing the risk associated with any unforeseen issues.
- The specific nature of 'manufacturing engineering systems' could be a niche market, limiting future competition.
Positive Signals
- The firm-fixed-price contract type provides cost certainty for the government.
- The contract was awarded by the Department of the Army, a major DoD component, indicating strategic importance.
- The contract falls under a broad NAICS code (611710), suggesting it could be part of a larger support ecosystem.
Sector Analysis
The manufacturing engineering systems sector is critical for defense industrial base readiness and technological advancement. This contract, valued at approximately $34 million, fits within the broader landscape of government support services for complex industrial operations. Comparable spending in this niche can vary widely depending on the specific technologies and services required. The market is often characterized by specialized firms capable of meeting stringent defense requirements, which can sometimes lead to concentrated competition.
Small Business Impact
The data indicates that small business participation was not a primary focus for this contract, as the 'sb' field is false. There is no explicit mention of small business set-asides or subcontracting goals. This suggests that the prime contractor, MANUFACTURING ENGINEERING SYSTEMS, LLC, is likely a larger entity, and the contract's value and specialized nature may not have been conducive to significant small business involvement.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. Accountability measures are inherent in the firm-fixed-price structure, which obligates the contractor to deliver specified services within the agreed-upon price. Transparency is somewhat limited by the 'exclusion of sources' aspect of the competition. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.
Related Government Programs
- Defense Manufacturing Support Services
- Engineering and Technical Services Contracts
- Department of Defense Educational Support Services
- Army Systems Engineering Contracts
Risk Flags
- Limited competition
- Potential for suboptimal pricing
- Lack of clear value-for-money assessment
Tags
defense, department-of-defense, department-of-the-army, definitive-contract, firm-fixed-price, full-and-open-competition-after-exclusion-of-sources, manufacturing-engineering-systems, educational-support-services, maryland, large-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $34.0 million to MANUFACTURING ENGINEERING SYSTEMS, LLC. TESTING SERVICES
Who is the contractor on this award?
The obligated recipient is MANUFACTURING ENGINEERING 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 $34.0 million.
What is the period of performance?
Start: 2013-09-26. End: 2017-03-29.
What is the track record of MANUFACTURING ENGINEERING SYSTEMS, LLC with the Department of Defense?
Information on the specific track record of MANUFACTURING ENGINEERING SYSTEMS, LLC with the Department of Defense is not detailed in the provided data snippet. However, the award of a $34 million definitive contract suggests a level of established capability and past performance that met the Army's requirements. To fully assess their track record, one would need to examine their contract history, including past performance reviews, any disputes or terminations, and the successful completion of previous projects. This would provide insight into their reliability, quality of service, and ability to manage complex engineering projects within budget and schedule.
How does the $34 million contract value compare to similar manufacturing engineering system contracts within the DoD?
Direct comparison of the $34 million contract value to similar manufacturing engineering system contracts within the DoD is difficult without access to a broader database of comparable procurements. The value of such contracts can fluctuate significantly based on the scope of work, duration, specific technologies involved, and the level of specialization required. Given that this was a definitive contract awarded by the Department of the Army, it suggests a substantial requirement. However, without benchmarks for similar services, it's hard to definitively state if $34 million represents a high, low, or average expenditure for this type of support.
What are the primary risks associated with a 'Full and Open Competition After Exclusion of Sources' award?
The primary risks associated with 'Full and Open Competition After Exclusion of Sources' stem from the potential for reduced competition and transparency. While intended to be open, the initial exclusion of sources might limit the pool of qualified bidders, potentially leading to higher prices or less innovative solutions. If the exclusion criteria are not clearly justified or are perceived as overly restrictive, it can raise concerns about fairness and market distortion. Taxpayers risk not getting the best value if the most capable or cost-effective providers were excluded without a valid reason. This process requires careful justification to ensure it serves the government's best interest.
How effective is the firm-fixed-price (FFP) contract type in managing costs for specialized engineering services?
The firm-fixed-price (FFP) contract type is generally considered effective for managing costs when the scope of work is well-defined and the risks are understood. For specialized engineering services like manufacturing systems, FFP provides cost certainty to the government, as the contractor assumes most of the risk for cost overruns. This incentivizes the contractor to be efficient and control their expenses. However, if the scope is not perfectly defined upfront, or if unforeseen technical challenges arise, the contractor might be disincentivized from addressing them if it increases their costs, potentially impacting the quality or completeness of the delivered service. In such cases, a cost-plus contract might be more appropriate.
What are the implications of the contract's duration (1280 days) on its overall value and risk?
A contract duration of 1280 days (approximately 3.5 years) is substantial and has significant implications for both value and risk. On the value side, a longer duration can allow for greater economies of scale, deeper integration of services, and more consistent application of expertise, potentially leading to better long-term outcomes and cost efficiencies if managed well. However, it also increases the risk. Over such a long period, requirements can change, technology can evolve, and the initial assumptions underpinning the contract might become outdated. This extended timeline also means that any performance issues or cost overruns, though mitigated by FFP, could have a larger cumulative impact. Furthermore, market conditions and contractor capabilities can change, potentially making the initial pricing less competitive over time.
What does the NAICS code 611710 (Educational Support Services) signify in the context of manufacturing engineering systems?
The assignment of NAICS code 611710, 'Educational Support Services,' to a contract for manufacturing engineering systems might seem unusual at first glance. However, it likely reflects the nature of the services provided, which could include training, technical assistance, curriculum development, or specialized instruction related to the operation, maintenance, or design of manufacturing engineering systems. Government contracts often use broad NAICS codes to categorize support functions. In this context, the 'educational' aspect likely pertains to enabling military personnel or civilian staff to effectively utilize or manage these complex engineering systems, rather than direct manufacturing or R&D.
Industry Classification
NAICS: Educational Services › Educational Support Services › Educational Support Services
Product/Service Code: EDUCATION AND TRAINING › EDUCATION AND TRAINING SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: W9124J13R0003
Offers Received: 15
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 4 CHOKE CHERRY RD STE 100, ROCKVILLE, MD, 20850
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, U.S.-Owned Business, Woman Owned Business, Women Owned Small Business
Financial Breakdown
Contract Ceiling: $34,893,571
Exercised Options: $34,893,571
Current Obligation: $34,034,474
Contract Characteristics
Commercial Item: COMMERCIAL ITEM
Cost or Pricing Data: NO
Timeline
Start Date: 2013-09-26
Current End Date: 2017-03-29
Potential End Date: 2017-03-29 00:00:00
Last Modified: 2019-09-30
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