Orion Project's $20M IT R&D contract awarded to SAIC for decision support solutions

Contract Overview

Contract Amount: $20,025,022 ($20.0M)

Contractor: Science Applications International Corporation

Awarding Agency: Department of Defense

Start Date: 2020-04-17

End Date: 2022-10-16

Contract Duration: 912 days

Daily Burn Rate: $22.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: THE PURPOSE OF THE ORION PROJECT IS TO DESIGN, DEVELOP, AND BUILD PROTOTYPE AND FIELDED ADVANCED INFORMATION TECHNOLOGY TO IMPLEMENT VARIOUS HARDWARE AND SOFTWARE DECISION SUPPORT SOLUTIONS FOR SENIOR DECISION-MAKERS.

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35801

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $20.0 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION for work described as: THE PURPOSE OF THE ORION PROJECT IS TO DESIGN, DEVELOP, AND BUILD PROTOTYPE AND FIELDED ADVANCED INFORMATION TECHNOLOGY TO IMPLEMENT VARIOUS HARDWARE AND SOFTWARE DECISION SUPPORT SOLUTIONS FOR SENIOR DECISION-MAKERS. Key points: 1. Contract focuses on advanced IT for decision support, indicating a need for sophisticated analytical capabilities. 2. The use of a Cost Plus Fixed Fee (CPFF) pricing structure may lead to cost overruns if not managed carefully. 3. Awarded under full and open competition, suggesting a robust market for these specialized IT services. 4. The contract duration of 912 days allows for significant development and implementation of IT solutions. 5. This contract falls under R&D in Physical, Engineering, and Life Sciences, highlighting its innovative nature. 6. The primary contractor, SAIC, is a major player in government IT services, suggesting established expertise.

Value Assessment

Rating: fair

The contract value of approximately $20 million for advanced IT R&D over two years appears within a reasonable range for complex projects of this nature. However, without specific benchmarks for similar decision support system development, a precise value-for-money assessment is challenging. The CPFF structure introduces inherent risk to cost control, as the contractor is reimbursed for allowable costs plus a fixed fee, which could inflate the final price if not closely monitored. Further analysis of the contractor's historical performance on similar CPFF contracts would be beneficial.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. This competitive process is generally expected to yield better pricing and innovation. The number of bidders is not specified, but the 'full and open' designation suggests a healthy level of market interest. This approach allows the government to select the best technical solution at a competitive price.

Taxpayer Impact: Taxpayers benefit from the competitive nature of this award, as it drives down costs and encourages the selection of the most efficient and effective IT solutions for decision support.

Public Impact

Senior decision-makers within the Department of Defense will benefit from enhanced information technology for improved decision-making. The contract will deliver advanced hardware and software solutions tailored for decision support. The contract is being performed in Alabama, suggesting a localized economic impact and potential for workforce development in that state. The development of advanced IT solutions could lead to improved operational efficiency and effectiveness for the Army.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The Cost Plus Fixed Fee (CPFF) contract type can incentivize contractors to incur costs, potentially leading to budget overruns if not rigorously managed.
Lack of specific performance metrics or clear deliverables in the provided data makes it difficult to assess the project's success criteria.
The broad scope of 'advanced information technology' could lead to scope creep if not precisely defined and managed throughout the contract lifecycle.

Positive Signals

Awarded under full and open competition, indicating a competitive environment that should drive value.
The contractor, Science Applications International Corporation (SAIC), has a significant presence and experience in government IT and defense contracts.
The contract duration of over two years allows for thorough development and implementation of complex IT solutions.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on advanced information technology. The market for IT R&D services for defense applications is substantial, driven by the continuous need for technological superiority. Comparable spending benchmarks would typically involve other large-scale IT development contracts for government agencies, particularly within the Department of Defense, focusing on areas like data analytics, AI, and decision support systems.

Small Business Impact

The contract data indicates that small business participation was not a specific set-aside (ss: false, sb: false). This suggests that the primary award was made to a large business, Science Applications International Corporation. While there is no explicit subcontracting requirement mentioned, large prime contractors are often encouraged or required to subcontract portions of their work to small businesses. The impact on the small business ecosystem would depend on whether SAIC actively pursues small business partners for specialized IT components or services.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army, a component of the Department of Defense. Mechanisms likely include contract performance reviews, financial audits, and program management oversight by government contracting officers and technical representatives. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense IT Modernization Programs
Advanced Decision Support Systems Development
Information Technology Research and Development Contracts
Science Applications International Corporation (SAIC) Government Contracts

Risk Flags

Cost Plus Fixed Fee (CPFF) contract type carries inherent risk of cost overruns.
Scope definition for 'advanced information technology' needs careful management to prevent creep.
Performance metrics and success criteria are not explicitly detailed, making outcome assessment challenging.
Potential for contractor to prioritize cost incurrence over efficiency due to CPFF structure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.0 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION. THE PURPOSE OF THE ORION PROJECT IS TO DESIGN, DEVELOP, AND BUILD PROTOTYPE AND FIELDED ADVANCED INFORMATION TECHNOLOGY TO IMPLEMENT VARIOUS HARDWARE AND SOFTWARE DECISION SUPPORT SOLUTIONS FOR SENIOR DECISION-MAKERS.

Who is the contractor on this award?

The obligated recipient is SCIENCE APPLICATIONS INTERNATIONAL CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $20.0 million.

What is the period of performance?

Start: 2020-04-17. End: 2022-10-16.

What is the track record of Science Applications International Corporation (SAIC) on similar Cost Plus Fixed Fee (CPFF) contracts with the Department of Defense?

Science Applications International Corporation (SAIC) has a extensive history of performing on Cost Plus Fixed Fee (CPFF) contracts with the Department of Defense and other federal agencies. CPFF contracts are common for research and development efforts where the final scope and costs are not fully defined at the outset. SAIC's performance on these contracts typically involves managing complex technical projects, adhering to budget constraints, and delivering specified outcomes. While specific performance metrics for past CPFF contracts are not detailed here, SAIC's longevity and continued awards suggest a generally satisfactory performance record. However, the inherent nature of CPFF contracts requires diligent oversight from the government to ensure cost control and prevent potential overruns, regardless of the contractor's experience.

How does the $20 million contract value compare to other advanced IT R&D contracts for decision support systems?

The $20 million contract value for the Orion Project is a significant but not extraordinary amount for advanced IT R&D focused on decision support systems. Large-scale defense IT projects, especially those involving cutting-edge research and development, can range from tens of millions to hundreds of millions of dollars. Contracts for developing sophisticated analytical tools, AI-driven insights, and integrated hardware/software solutions for senior decision-makers often require substantial investment. When compared to similar initiatives within the Department of Defense or other intelligence agencies, this value appears to be in the mid-range for a project of this scope and duration (approximately two years). The specific technological advancements and the complexity of the integration required would be key factors in determining if this represents excellent or fair value.

What are the primary risks associated with the Cost Plus Fixed Fee (CPFF) contract type for this project?

The primary risk associated with the Cost Plus Fixed Fee (CPFF) contract type for the Orion Project is the potential for cost overruns. In a CPFF contract, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. If the contractor's costs exceed initial estimates, the government bears the financial burden. This structure can incentivize contractors to incur higher costs, as their profit (the fixed fee) remains constant regardless of the actual expenses. Effective risk mitigation requires robust government oversight, including detailed cost tracking, auditing of expenses, and strict adherence to the contract's scope of work to prevent scope creep. Without diligent management, the final cost of the project could significantly exceed the initial projections.

What does 'Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)' (NAICS 541712) entail in the context of this contract?

NAICS code 541712, 'Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology),' covers establishments primarily engaged in conducting research and development in these fields. For the Orion Project, this means the contract is focused on the scientific and technical investigation and experimentation to create new or significantly improved hardware and software decision support solutions. This could involve areas like advanced algorithms, data processing techniques, simulation modeling, human-computer interaction design, and the integration of various technological components. The 'except Biotechnology' clause clarifies that the R&D is not focused on biological sciences. The emphasis is on innovation and the creation of novel technological capabilities rather than routine IT services or product manufacturing.

How might the 'full and open competition' award impact the long-term cost-effectiveness of the decision support solutions?

Awarding the Orion Project under 'full and open competition' is generally expected to enhance long-term cost-effectiveness. This procurement method allows any qualified vendor to submit a bid, fostering a competitive environment that typically drives down prices and encourages innovation. By selecting from a broad pool of potential contractors, the Department of the Army likely secured the most technically capable solution at a competitive price point. This competitive pressure can also incentivize the winning contractor, SAIC, to deliver high-quality, efficient solutions to maintain its reputation and secure future contracts. Furthermore, the open competition may lead to the adoption of more standardized or widely supported technologies, potentially reducing long-term maintenance and upgrade costs compared to a sole-source or limited-competition award.

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: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: W9113M13R0010

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 1710 SAIC DR, MCLEAN, VA, 22102

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

Financial Breakdown

Contract Ceiling: $41,906,723

Exercised Options: $41,906,723

Current Obligation: $20,025,022

Subaward Activity

Number of Subawards: 15

Total Subaward Amount: $2,967,315

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W9113M17D0007

IDV Type: IDC

Timeline