Department of Defense awarded $661M for administrative support services over 7 years

Contract Overview

Contract Amount: $661,135,500 ($661.1M)

Contractor: Institute for Defense Analyses

Awarding Agency: Department of Defense

Start Date: 2007-04-13

End Date: 2014-03-31

Contract Duration: 2,544 days

Daily Burn Rate: $259.9K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: ADMINSTRATIVE CONTRACT

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20310

State: District of Columbia Government Spending

Plain-Language Summary

Department of Defense obligated $661.1 million to INSTITUTE FOR DEFENSE ANALYSES for work described as: ADMINSTRATIVE CONTRACT Key points: 1. Contract value represents significant investment in administrative functions. 2. Long contract duration suggests a need for sustained support. 3. Sole-source award raises questions about competition and potential cost efficiencies. 4. Services provided are broad, encompassing 'All Other Professional, Scientific, and Technical Services'. 5. Contractor has a long-standing relationship with the Department of Defense. 6. Geographic concentration in Washington D.C. may indicate specific operational needs.

Value Assessment

Rating: fair

The total award of $661 million over approximately seven years averages to about $94 million annually. Benchmarking this against similar administrative support contracts is challenging due to the broad scope and long duration. The cost-plus-fixed-fee (CPFF) structure means costs are reimbursed plus a fixed fee, which can incentivize cost control but also carries risks if initial cost estimates are inaccurate. Without more granular data on the specific services rendered and their unit costs, a definitive value-for-money assessment is difficult.

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 a specific contractor possesses unique capabilities, proprietary information, or when urgency dictates a direct award. The lack of competition means that the government did not benefit from the price discovery mechanisms inherent in a competitive bidding process, potentially leading to higher costs than if multiple firms had vied for the contract.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure to lower prices. The sole-source nature limits opportunities for new entrants and potentially reduces innovation driven by competition.

Public Impact

The primary beneficiaries are likely Department of Defense administrative units requiring extensive support services. Services delivered encompass a wide range of professional, scientific, and technical support functions. The contract's geographic impact is concentrated in the Washington D.C. area. Workforce implications include the potential for significant employment opportunities for the contractor's staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential cost savings for taxpayers.
Long contract duration (7 years) may reduce flexibility to adapt to changing needs or market conditions.
Broad service category ('All Other Professional, Scientific, and Technical Services') can obscure specific performance metrics and value.
Cost-plus-fixed-fee contract type can lead to cost overruns if not managed diligently.

Positive Signals

Long-standing relationship with the Institute for Defense Analyses suggests a proven track record and institutional knowledge.
Definitive contract award indicates a commitment to a specific provider for a defined period.
The contract's substantial value suggests a critical need for the services provided.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, a broad category encompassing a wide array of support functions for government agencies. The market for these services is highly competitive, with numerous firms offering specialized expertise. However, specific niches, particularly those requiring deep institutional knowledge or security clearances within defense, can be dominated by a few established players. The $661 million awarded represents a significant portion of spending within this sub-sector for administrative support, highlighting the scale of the Department of Defense's requirements.

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 requirements. This suggests that the prime contractor, Institute for Defense Analyses, likely performed the majority of the work directly or with larger subcontractors, potentially limiting opportunities for small businesses to engage in this significant federal spending.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and their representatives within the Department of the Army. The cost-plus-fixed-fee structure necessitates rigorous financial oversight to ensure costs are reasonable and allocable. Transparency is moderate, as contract awards are public, but detailed performance metrics and cost breakdowns may not be readily available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Administrative Support Contracts
Professional, Scientific, and Technical Services
Cost-Plus-Fixed-Fee Contracts
Sole-Source Federal Contracts

Risk Flags

Sole-source award may result in higher costs.
Broad service category lacks specificity for performance evaluation.
Cost-plus-fixed-fee structure requires diligent cost oversight.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $661.1 million to INSTITUTE FOR DEFENSE ANALYSES. ADMINSTRATIVE CONTRACT

Who is the contractor on this award?

The obligated recipient is INSTITUTE FOR DEFENSE ANALYSES.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $661.1 million.

What is the period of performance?

Start: 2007-04-13. End: 2014-03-31.

What is the Institute for Defense Analyses' track record with the Department of Defense?

The Institute for Defense Analyses (IDA) has a long-standing and extensive track record with the Department of Defense (DoD). As a federally funded research and development center (FFRDC), IDA is specifically chartered to provide objective analyses and research to the DoD and other government agencies. Their work often involves complex, high-level strategic issues, policy development, and technical assessments. The substantial value and duration of this administrative support contract suggest a deep, established relationship built on trust and demonstrated capability. IDA's history with the DoD is characterized by providing critical, non-partisan advice and support across various defense domains, contributing to national security decision-making.

How does the value of this contract compare to similar administrative support contracts within the DoD?

Comparing the $661 million value of this administrative support contract to similar ones within the DoD is challenging without more specific service details. However, given its seven-year duration and sole-source nature, it represents a significant investment. Large, long-term contracts for comprehensive administrative and technical support are common within the DoD due to the scale and complexity of its operations. Annual spending averages around $94 million, which, while substantial, needs to be contextualized against the vastness of the DoD's overall budget and its diverse support needs. Contracts for specialized R&D or major weapon system development often dwarf this figure, but for administrative functions, this is a considerable award.

What are the primary risks associated with a sole-source, cost-plus-fixed-fee contract of this magnitude?

The primary risks associated with this sole-source, cost-plus-fixed-fee (CPFF) contract are twofold. Firstly, the sole-source nature eliminates competitive pressure, potentially leading to inflated costs and reduced incentive for the contractor to optimize efficiency. The government foregoes the benefits of price discovery through bidding. Secondly, the CPFF structure, while reimbursing costs and providing a fixed profit, can incentivize cost accumulation if not rigorously managed. If the initial cost estimates are inaccurate or if scope creep occurs without proper adjustments, the total cost to the government could exceed initial projections. Effective oversight and robust cost accounting are critical to mitigate these risks.

How effective is the 'All Other Professional, Scientific, and Technical Services' category in measuring contract performance?

The 'All Other Professional, Scientific, and Technical Services' (NAICS code 541990) category is inherently broad, making it difficult to measure contract performance effectively based solely on this classification. This category encompasses a wide array of disparate services, from research and development to consulting and administrative support. While it provides flexibility for agencies to procure diverse services, it can obscure specific performance metrics and value delivered. To truly assess effectiveness, one would need to delve into the specific deliverables, key performance indicators (KPIs), and quality assurance surveillance plans (QASPs) associated with the individual task orders issued under this contract, rather than relying on the broad NAICS code alone.

What are the historical spending patterns for administrative support services by the Department of the Army?

Historical spending patterns for administrative support services by the Department of the Army (a component of the DoD) are substantial and reflect the extensive operational requirements of the service branch. While specific figures for 'administrative support' can vary based on how services are categorized (e.g., professional services, IT support, logistics management), the Army consistently awards billions of dollars annually across these domains. Contracts like this one, awarded to entities like the Institute for Defense Analyses, are part of a larger ecosystem of support services designed to enable military readiness and operational effectiveness. Spending trends often reflect evolving strategic priorities, technological advancements, and the need for specialized expertise.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Other Professional, Scientific, and Technical Services › All Other Professional, Scientific, and Technical Services

Product/Service Code: SPECIAL STUDIES/ANALYSIS, NOT R&D › SPECIAL STUDIES - NOT R and D

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 4850 MARK CENTER DR, ALEXANDRIA, VA, 22311

Business Categories: Category Business, Nonprofit Organization, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $1,562,307,192

Exercised Options: $661,175,088

Current Obligation: $661,135,500

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline