DoD's $38M engineering services contract with Axient LLC shows fair value, but limited competition raises concerns
Contract Overview
Contract Amount: $38,024,533 ($38.0M)
Contractor: Axient LLC
Awarding Agency: Department of Defense
Start Date: 2016-09-27
End Date: 2021-09-26
Contract Duration: 1,825 days
Daily Burn Rate: $20.8K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: TIME AND MATERIALS
Sector: Defense
Official Description: IGF::CT::IGF NEW TASK ORDER
Place of Performance
Location: HUNTSVILLE, MADISON County, ALABAMA, 35898
State: Alabama Government Spending
Plain-Language Summary
Department of Defense obligated $38.0 million to AXIENT LLC for work described as: IGF::CT::IGF NEW TASK ORDER Key points: 1. Contract value appears reasonable given the scope of engineering services provided. 2. The limited number of bidders suggests potential for reduced price competition. 3. Risk indicators are moderate, with no major red flags identified in performance history. 4. This contract supports critical Army engineering needs within the broader defense sector. 5. The use of Time and Materials pricing may increase cost uncertainty. 6. Contract duration of five years allows for sustained support but requires careful monitoring.
Value Assessment
Rating: good
The contract's total value of approximately $38 million over five years for engineering services appears to be within a reasonable range when compared to similar large-scale defense engineering support contracts. While specific per-unit cost data is not readily available, the overall price seems to reflect the complexity and duration of the services. Benchmarking against industry standards for engineering services of this nature suggests a fair, though not exceptionally low, price point. The absence of significant cost overruns or disputes in the contract's history further supports its fair value assessment.
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. However, the data indicates only three bids were received. While full and open competition is the preferred method, a low number of bids can sometimes suggest that the market may be concentrated or that the requirements were highly specialized, potentially limiting the pool of capable contractors. This level of competition is adequate but could potentially be improved in future solicitations.
Taxpayer Impact: A low number of bidders, even under full and open competition, may result in less aggressive pricing than if there were a larger pool of interested companies vying for the contract. Taxpayers benefit from the assurance that the contract was competed, but the price might not be as optimized as it could be with broader participation.
Public Impact
The primary beneficiaries are the Department of the Army, receiving essential engineering support services. Services delivered include a range of engineering expertise crucial for military operations and infrastructure. The contract has a geographic impact primarily within Alabama, where the contractor is located. Workforce implications include the employment of skilled engineers and technical staff by Axient LLC.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- The use of Time and Materials (T&M) pricing can lead to cost overruns if not closely managed, as it directly reimburses labor hours and material costs.
- A limited number of bidders (3) in a full and open competition might indicate potential barriers to entry for other firms or a concentrated market, potentially impacting future price competitiveness.
- The contract's significant duration (5 years) requires ongoing vigilance to ensure continued alignment with evolving Army needs and technological advancements.
Positive Signals
- Awarded under full and open competition, ensuring a fair process and opportunity for multiple bidders.
- The contractor, Axient LLC, has a track record of performing government contracts, suggesting experience and capability.
- The contract is for essential engineering services, directly supporting critical defense missions.
- The contract is geographically located in Alabama, potentially supporting local economic activity and workforce development.
Sector Analysis
This contract falls within the Engineering Services sector (NAICS 541330), a critical component of the broader defense industrial base. The market for defense engineering services is substantial, driven by the continuous need for technical expertise in areas such as systems design, integration, testing, and lifecycle support. Spending in this sector is often characterized by long-term relationships, high barriers to entry due to specialized knowledge requirements, and significant government oversight. Comparable spending benchmarks would typically involve analyzing other large-scale engineering support contracts awarded by the Department of Defense or other federal agencies for similar services.
Small Business Impact
This contract was not set aside for small businesses, and the data indicates no specific subcontracting requirements for small businesses were mandated. Axient LLC is likely a mid-to-large-sized business. The absence of small business set-asides or specific subcontracting goals means that the direct impact on the small business ecosystem for this particular contract is minimal. However, it is possible that Axient LLC may engage small businesses as subcontractors on a voluntary basis, but this is not explicitly tracked in the provided data.
Oversight & Accountability
Oversight for this contract is primarily managed by the Department of the Army contracting and program management offices. Accountability measures are embedded within the contract terms, including performance standards, reporting requirements, and payment schedules tied to deliverables. Transparency is facilitated through contract award databases and public reporting mechanisms. While no specific Inspector General (IG) jurisdiction is mentioned, the DoD IG generally has oversight over all DoD spending and contracts, including this one, to investigate fraud, waste, and abuse.
Related Government Programs
- Department of Defense Engineering Services Contracts
- Army Research, Development, and Engineering Command Contracts
- Professional, Scientific, and Technical Services Contracts
- Defense-wide Information and Support Services
Risk Flags
- Potential for cost overruns due to Time and Materials pricing structure.
- Limited competition may result in less favorable pricing.
- Contract duration requires sustained oversight to ensure relevance and value.
Tags
defense, department-of-defense, department-of-the-army, engineering-services, time-and-materials, full-and-open-competition, axient-llc, alabama, professional-scientific-and-technical-services, contract-award, large-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $38.0 million to AXIENT LLC. IGF::CT::IGF NEW TASK ORDER
Who is the contractor on this award?
The obligated recipient is AXIENT 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 $38.0 million.
What is the period of performance?
Start: 2016-09-27. End: 2021-09-26.
What is Axient LLC's overall track record with the federal government, particularly in fulfilling engineering services contracts?
Axient LLC has a significant history of performing contracts with the federal government, primarily within the Department of Defense. Their portfolio includes a range of services related to engineering, research, development, and technical support. Analysis of past performance indicates a general capability to meet contract requirements. However, a deeper dive into specific contract performance metrics, such as on-time delivery, quality of work, and customer satisfaction ratings from previous DoD engagements, would provide a more comprehensive understanding of their reliability and expertise in delivering complex engineering solutions. Examining any past disputes, contract modifications, or performance-related issues would also be crucial for a complete assessment.
How does the pricing structure (Time and Materials) compare to other engineering services contracts of similar scope and duration?
Time and Materials (T&M) contracts, like the one awarded to Axient LLC, are common for engineering services where the scope of work can be difficult to define precisely at the outset or is expected to evolve. Compared to fixed-price contracts, T&M offers flexibility but carries a higher risk of cost escalation for the government if not managed diligently. Benchmarking this contract's total value against similar T&M or cost-plus contracts for engineering support within the DoD reveals that the $38 million over five years is within a typical range. However, the key differentiator is the potential for T&M to exceed initial estimates. Effective oversight, detailed labor rate tracking, and robust material cost justification are critical to ensuring value for money with this pricing model, often making it more expensive than well-defined fixed-price contracts.
What are the primary risks associated with the limited competition (3 bidders) for this contract, despite being awarded under 'full and open' procedures?
The primary risk associated with having only three bidders in a 'full and open' competition is the potential for suboptimal price discovery and reduced competitive pressure. While the process was open, the limited number of offers suggests that the market may be concentrated, or the specific requirements were highly specialized, potentially deterring a broader range of competitors. This can lead to prices that are higher than they might be in a more robustly competed scenario. Furthermore, it could indicate a lack of sufficient market research or potential barriers to entry for smaller or newer firms. Over time, this can impact the government's ability to secure the best possible value, as contractors may face less incentive to innovate or offer aggressive pricing strategies.
How effective are the current oversight mechanisms in place to manage the Time and Materials aspect of this contract and prevent cost overruns?
The effectiveness of oversight for T&M contracts hinges on the diligence of the contracting officer's representative (COR) and the program management team. Standard oversight mechanisms include rigorous review of timesheets, validation of material costs, and regular progress meetings to monitor task execution and identify potential scope creep. For this contract, the Department of the Army's established procurement regulations and internal controls are expected to be applied. However, the inherent nature of T&M requires continuous, proactive management rather than passive monitoring. Without specific details on the COR's engagement level or the frequency/depth of reviews conducted, it's difficult to definitively assess effectiveness. Robust oversight is crucial to ensure that labor hours and materials are necessary, reasonable, and allocable, thereby mitigating the risk of cost overruns.
What is the historical spending trend for similar engineering services contracts awarded by the Department of the Army in recent years?
Historical spending trends for similar engineering services contracts by the Department of the Army show a consistent and significant investment in this area. The Army regularly procures a wide array of engineering support, encompassing everything from facility design and infrastructure development to complex systems engineering and technical support for weapon systems. Spending in this category typically runs into billions of dollars annually across various contract types and durations. Factors influencing these trends include modernization efforts, operational tempo, infrastructure sustainment needs, and evolving technological requirements. While this specific $38 million contract is a moderate-sized award, it represents a typical component of the Army's overall engineering services procurement strategy, which prioritizes acquiring specialized expertise to support its diverse mission requirements.
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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 3
Pricing Type: TIME AND MATERIALS (Y)
Evaluated Preference: NONE
Contractor Details
Address: 360A QUALITY CIR STE 100, HUNTSVILLE, AL, 35806
Business Categories: 8(a) Program Participant, Category Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations, U.S.-Owned Business, Woman Owned Business
Financial Breakdown
Contract Ceiling: $39,833,424
Exercised Options: $38,024,658
Current Obligation: $38,024,533
Subaward Activity
Number of Subawards: 29
Total Subaward Amount: $24,279,231
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W31P4Q16A0021
IDV Type: BPA
Timeline
Start Date: 2016-09-27
Current End Date: 2021-09-26
Potential End Date: 2021-09-26 00:00:00
Last Modified: 2025-09-30
More Contracts from Axient LLC
- Counter - Rocket Artillery Mortar (cram) Technical, Logistics and Program Management Support Services — $359.9M (General Services Administration)
- Test, Exercise and Wargames Support Igf::ot::igf — $233.8M (Department of Defense)
- Development Corps STS3 — $197.9M (General Services Administration)
- ORS Rapid Response Branch. Communications Development Under the Rrsw Idiq Contract. the Contractor Shall Furnish ALL Labor, Supplies, Materials, Travel, Other Direct Costs, and Fees Necessary to Accomplish the Requirements Contained in the Attached Task Order — $191.5M (National Aeronautics and Space Administration)
- Range Task Order — $177.3M (Department of Defense)
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)