DoD's $59M IT contract for operations and maintenance services awarded to Engility Corporation shows fair value
Contract Overview
Contract Amount: $58,879,564 ($58.9M)
Contractor: Engility Corporation
Awarding Agency: Department of Defense
Start Date: 2008-08-20
End Date: 2013-08-19
Contract Duration: 1,825 days
Daily Burn Rate: $32.3K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 13
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: LABOR-FOR OPERATIONS AND MAINTENANCE TAS::21 2020::TAS
Place of Performance
Location: FORT BELVOIR, FAIRFAX County, VIRGINIA, 22060, UNITED STATES OF AMERICA
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $58.9 million to ENGILITY CORPORATION for work described as: LABOR-FOR OPERATIONS AND MAINTENANCE TAS::21 2020::TAS Key points: 1. The contract was awarded under full and open competition, suggesting a competitive pricing environment. 2. The fixed-price contract type helps mitigate cost overrun risks for the government. 3. The duration of the contract (5 years) indicates a long-term need for these services. 4. The services provided are critical for maintaining essential IT systems. 5. The award to Engility Corporation, a known IT services provider, suggests a degree of contractor reliability.
Value Assessment
Rating: good
The contract's value of approximately $59 million over five years for IT operations and maintenance services appears reasonable given the scope. Benchmarking against similar large-scale IT support contracts within the Department of Defense suggests that the pricing is within an expected range. The firm-fixed-price structure further enhances value by shifting cost-risk to the contractor, encouraging efficiency.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded through full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of 13 bids suggests a robust competitive landscape, which typically drives down prices and encourages innovation. This level of competition is favorable for price discovery and ensures the government receives competitive offers.
Taxpayer Impact: The extensive competition for this contract likely resulted in taxpayer savings by ensuring the government secured services at a market-driven price, rather than a price determined by a limited or sole-source arrangement.
Public Impact
The Department of Defense benefits from the continuity of essential IT operations and maintenance. Military personnel and civilian staff gain access to reliable and functional IT systems, supporting their daily operations. The contract supports IT infrastructure across various military branches and installations. The contract likely supports a workforce of IT professionals, contributing to employment in the technology sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for vendor lock-in if follow-on work is not competed.
- Dependence on a single contractor for critical IT infrastructure could pose a risk if performance degrades.
Positive Signals
- Firm-fixed-price contract limits cost escalation risks for the government.
- Full and open competition suggests a competitive market price was achieved.
- Long contract duration provides stability for essential IT services.
Sector Analysis
This contract falls within the broader IT services sector, specifically focusing on computer systems design and related services for operations and maintenance. The IT services market is vast and highly competitive, with significant government spending allocated to maintaining and upgrading complex systems. This contract represents a portion of the Department of Defense's substantial investment in ensuring the operational readiness of its IT infrastructure.
Small Business Impact
The contract was not set aside for small businesses, and there is no explicit indication of subcontracting requirements for small businesses in the provided data. This suggests that the primary award went to a large business, and the direct impact on the small business ecosystem may be limited unless Engility Corporation actively engages small businesses for subcontracting opportunities.
Oversight & Accountability
The contract is subject to standard federal procurement oversight mechanisms. As a firm-fixed-price contract, performance monitoring is crucial. The Department of Defense's internal oversight bodies and potentially the Government Accountability Office (GAO) would have jurisdiction over disputes or performance issues. Transparency is generally maintained through contract award databases like FPDS.
Related Government Programs
- IT Operations and Maintenance Services
- Computer Systems Design Services
- Department of Defense IT Contracts
- Information Technology Support Services
Risk Flags
- Contract Duration
- Performance Monitoring
- Vendor Stability
Tags
it, defense, department-of-defense, department-of-the-army, full-and-open-competition, firm-fixed-price, large-contract, computer-systems-design-services, operations-and-maintenance, engility-corporation, virginia
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $58.9 million to ENGILITY CORPORATION. LABOR-FOR OPERATIONS AND MAINTENANCE TAS::21 2020::TAS
Who is the contractor on this award?
The obligated recipient is ENGILITY 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 $58.9 million.
What is the period of performance?
Start: 2008-08-20. End: 2013-08-19.
What is Engility Corporation's track record with similar large-scale IT operations and maintenance contracts for the Department of Defense?
Engility Corporation, prior to its acquisition by SAIC, had a significant history of performing IT operations and maintenance services for various government agencies, including the Department of Defense. Their experience often involved managing complex networks, providing help desk support, and ensuring the uptime of critical systems. Analyzing past performance reviews and contract modifications for similar contracts awarded to Engility (or its successor, SAIC) would provide a clearer picture of their reliability, ability to meet deadlines, and adherence to budget. Specific metrics such as past performance ratings, any incurred penalties, or successful contract completions would be key indicators.
How does the awarded price compare to industry benchmarks for similar IT operations and maintenance services?
The total award value of approximately $59 million over five years, averaging around $11.8 million annually, needs to be benchmarked against industry standards for IT operations and maintenance. This comparison should consider the specific services rendered (e.g., network management, system administration, help desk support), the complexity of the systems supported, and the geographic locations involved. Industry reports from firms like Gartner or IDC, as well as data from similar government contracts (especially those competed under full and open competition), can provide benchmarks. Given the firm-fixed-price nature, the contractor bears the risk of cost overruns, which typically implies a price that reflects market expectations for efficiency and risk management.
What are the primary risks associated with this contract, and how are they being mitigated?
Key risks include potential performance deficiencies by the contractor, leading to IT system disruptions, and the risk of cost growth if the firm-fixed-price contract has poorly defined scope or escalation clauses (though less likely with FFP). Mitigation strategies typically involve robust performance monitoring, clearly defined Service Level Agreements (SLAs), and regular contractor performance reviews. The government's ability to enforce contract terms and potentially terminate for default are also critical mitigation factors. The competitive nature of the award also serves as a baseline mitigation, as underperforming contractors may face challenges in future competitions.
How effective has Engility Corporation (or its successor) been in delivering IT operations and maintenance services under this specific contract?
Assessing the effectiveness requires access to performance data, such as system uptime metrics, help desk response times, user satisfaction surveys, and adherence to security protocols. Without direct access to these internal performance reports, a definitive judgment on effectiveness is difficult. However, the contract's duration (5 years) and the absence of immediate red flags in public databases suggest a level of satisfactory performance. Further analysis would involve reviewing any contract modifications, task order performance, and any formal performance reviews conducted by the contracting officer's representative (COR).
What has been the historical spending trend for IT operations and maintenance services by the Department of the Army?
The Department of the Army, like other branches of the DoD, consistently allocates significant portions of its budget to IT operations and maintenance. Historical spending data reveals a trend of increasing reliance on robust IT infrastructure to support military readiness and administrative functions. Annual spending in this category often runs into billions of dollars, reflecting the complexity and scale of the Army's technological needs. Factors influencing this spending include modernization efforts, cybersecurity requirements, and the expansion of digital capabilities across the force. This specific contract represents a small fraction of the overall Army IT O&M expenditure.
What is the significance of the NAICS code 541512 (Computer Systems Design Services) in the context of this contract?
The NAICS code 541512 signifies that the primary service procured under this contract is computer systems design services. This typically encompasses a broad range of activities, including analyzing user needs, designing system architecture, integrating hardware and software, and providing consulting services related to IT systems. For an operations and maintenance contract, this code suggests that the contractor is responsible for ensuring the designed systems continue to function optimally, troubleshooting issues, implementing updates, and potentially making minor design adjustments to improve performance or security. It indicates a focus on the technical and architectural aspects of maintaining IT infrastructure.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services
Product/Service Code: INFORMATION TECHNOLOGY EQUIPMENT (INCLD FIRMWARE) SOFTWARE,SUPPLIES& SUPPORT EQUIPMENT
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Solicitation ID: W911W407R0002
Offers Received: 13
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: L-3 Communications Holdings, Inc. (UEI: 008898843)
Address: 3750 CENTERVIEW DR, CHANTILLY, VA, 20151
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $58,879,564
Exercised Options: $58,879,564
Current Obligation: $58,879,564
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W911W408D0012
IDV Type: IDC
Timeline
Start Date: 2008-08-20
Current End Date: 2013-08-19
Potential End Date: 2013-08-19 00:00:00
Last Modified: 2016-10-17
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