DoD's $53.6M contract for industrial design services awarded to Battelle Memorial Institute shows fair competition and good value

Contract Overview

Contract Amount: $53,562,292 ($53.6M)

Contractor: Battelle Memorial Institute

Awarding Agency: Department of Defense

Start Date: 2006-02-14

End Date: 2011-04-29

Contract Duration: 1,900 days

Daily Burn Rate: $28.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: 200606!000003!5700!FA8100!OC-ALC/PK !FA810004D0002 !A!N! !Y!0003 ! !20060214!20060508!007901598!007901598!007901598!N!BATTELLE MEMORIAL INSTITUTE !505 KING AVE !COLUMBUS !OH!43201!18000!049!39!COLUMBUS !FRANKLIN !OHIO !+000000806723!N!N!000000000000!Z159!MAINT/OTHER INDUSTRIAL BUILDINGS !S1 !SERVICES !000 !NOT DISCERNABLE !541420!E! !5!B!S! ! ! !99990909!B! ! !A! !A!N!J!2!002!B! !C!N!F! ! !N!Z!N! ! ! ! ! !A!A!000!A!C!N! ! ! ! ! ! !0001! !

Place of Performance

Location: TINKER AFB, OKLAHOMA County, OKLAHOMA, 73145

State: Oklahoma Government Spending

Plain-Language Summary

Department of Defense obligated $53.6 million to BATTELLE MEMORIAL INSTITUTE for work described as: 200606!000003!5700!FA8100!OC-ALC/PK !FA810004D0002 !A!N! !Y!0003 ! !20060214!20060508!007901598!007901598!007901598!N!BATTELLE MEMORIAL INSTITUTE !505 KING AVE !COLUMBUS !OH!43201!18000!049!39!COLUMBUS !FRAN… Key points: 1. The contract demonstrates a competitive award process with a single bid, suggesting potential for price negotiation. 2. The firm-fixed-price contract type mitigates cost overrun risks for the government. 3. The contract duration of 1900 days indicates a long-term need for these specialized services. 4. The award was made to a single entity, Battelle Memorial Institute, known for its research and development capabilities. 5. The contract's scope covers maintenance and other industrial building services, a critical support function. 6. The contract was awarded by the Department of Defense, highlighting its strategic importance.

Value Assessment

Rating: good

The total award amount of $53,562,291.79 for a duration of approximately 5 years appears reasonable given the scope of industrial design services. Benchmarking against similar contracts for industrial design and maintenance support within the Department of Defense is challenging without more granular data on specific deliverables. However, the firm-fixed-price nature of the contract suggests that the initial bid was deemed competitive and offered good value at the time of award. The contract's value is further supported by the contractor's established expertise in research and development.

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 a bid. Despite the full and open competition, only one bid was received. This could suggest a highly specialized niche market, limited contractor availability, or potentially a lack of aggressive outreach by the agency. While competition is generally preferred for price discovery, the single bid here warrants a closer look at the market dynamics to ensure optimal value was achieved.

Taxpayer Impact: A single bid in a full and open competition scenario means taxpayers may not have benefited from the full range of potential price reductions that multiple competing offers could have generated. However, if the single bid was already highly competitive and met all requirements, the value proposition remains sound.

Public Impact

The primary beneficiaries are likely the Department of Defense and its various branches, which will receive essential industrial design and maintenance support services. The services delivered will contribute to the upkeep and operational efficiency of industrial buildings and facilities critical to military operations. The geographic impact is primarily within the United States, supporting defense infrastructure. Workforce implications may include employment opportunities for industrial designers, engineers, and maintenance personnel employed by Battelle Memorial Institute and its potential subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition resulting in a single bid could indicate potential market concentration or insufficient outreach, possibly leading to suboptimal pricing.
The long contract duration, while potentially beneficial for program stability, could also lock in pricing that might become less competitive over time if market rates decrease.

Positive Signals

Awarded under full and open competition, ensuring a broad initial market approach.
Firm-fixed-price contract type provides cost certainty and reduces the risk of budget overruns for the government.
Contractor, Battelle Memorial Institute, is a reputable organization with a strong track record in research and development, suggesting capability and reliability.

Sector Analysis

The contract falls within the professional, scientific, and technical services sector, specifically industrial design services. This sector is characterized by specialized expertise and often involves complex problem-solving for government and commercial clients. The market size for industrial design services supporting federal agencies is substantial, driven by the need for efficient facility management, infrastructure development, and operational support. This contract represents a significant investment in maintaining and improving critical industrial facilities within the defense sector.

Small Business Impact

There is no explicit indication of small business set-asides or subcontracting requirements in the provided data. The contract was awarded to a single large entity, Battelle Memorial Institute. Further analysis would be needed to determine if any subcontracting opportunities were extended to small businesses. Without specific set-aside goals or reporting, the direct impact on the small business ecosystem from this particular contract is not discernible.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the contracting agency, the Department of the Air Force, and potentially the Department of Defense's Inspector General. Mechanisms would include regular performance reviews, milestone tracking, and financial audits to ensure compliance with contract terms and satisfactory delivery of services. Transparency is generally maintained through contract databases like FPDS, which provide award details, though specific performance metrics might be internal.

Related Government Programs

Industrial Facility Maintenance Contracts
Research and Development Support Services
Professional, Scientific, and Technical Services
Defense Infrastructure Support
Government Facility Management

Risk Flags

Single Bid in Full and Open Competition
Long Contract Duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $53.6 million to BATTELLE MEMORIAL INSTITUTE. 200606!000003!5700!FA8100!OC-ALC/PK !FA810004D0002 !A!N! !Y!0003 ! !20060214!20060508!007901598!007901598!007901598!N!BATTELLE MEMORIAL INSTITUTE !505 KING AVE !COLUMBUS !OH!43201!18000!049!39!COLUMBUS !FRANKLIN !OHIO !+000000806723!N!N!000000000000!Z159!MAINT/OTHER INDUSTRIAL BUILDINGS !S1 !SERVICES !000 !NOT DISCERNABLE !541420!E! !5!B!S! ! ! !999

Who is the contractor on this award?

The obligated recipient is BATTELLE MEMORIAL INSTITUTE.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $53.6 million.

What is the period of performance?

Start: 2006-02-14. End: 2011-04-29.

What is Battelle Memorial Institute's track record with similar government contracts, particularly within the Department of Defense?

Battelle Memorial Institute has a long-standing history of supporting government agencies, including the Department of Defense, across a wide range of research, development, and technical services. Their expertise spans areas such as national security, energy, health, and environmental science. While this specific contract focuses on industrial design and building maintenance, Battelle's broader portfolio demonstrates a capacity to manage complex, large-scale projects. Their performance on previous DoD contracts would typically be assessed through past performance evaluations during the bidding process, which would have informed the decision to award this contract. A review of their contract history would likely reveal a pattern of successful project completion and adherence to government requirements, although specific details on past performance metrics for similar contracts would require deeper data access.

How does the per-unit cost or value proposition of this contract compare to industry benchmarks for industrial design services?

Determining a precise per-unit cost benchmark for this contract is challenging due to the broad scope of 'maintenance and other industrial buildings' services and the lack of specific deliverable breakdowns. Industrial design services can vary significantly in cost depending on complexity, required expertise, and project duration. However, the total award of approximately $53.6 million over roughly five years suggests an average annual value of over $10 million. This figure needs to be contextualized against the scale and criticality of the facilities being supported. Without specific metrics like cost per square foot maintained, cost per design hour, or cost per facility upgraded, a direct comparison to industry benchmarks is difficult. Generally, firm-fixed-price contracts aim to secure value by setting a ceiling price, implying the government believed this price was competitive at the time of award.

What are the primary risks associated with this contract, and how are they mitigated?

The primary risks associated with this contract include potential cost overruns (though mitigated by the firm-fixed-price structure), contractor performance issues, and the risk of receiving only a single bid in a competitive process. The firm-fixed-price contract type shifts the risk of cost increases to the contractor, providing budget certainty for the government. Contractor performance is typically managed through contract oversight, performance metrics, and potential penalties or incentives. The risk of a single bid is mitigated by the government's due diligence in ensuring the bid price is fair and reasonable, and by leveraging the contractor's known capabilities. However, the long duration could also pose a risk if market conditions or technological needs change significantly, potentially making the contracted services less optimal over time.

How effective has the Department of the Air Force been in managing similar long-term industrial support contracts?

The Department of the Air Force, as part of the DoD, has extensive experience managing long-term contracts for facility maintenance, infrastructure support, and specialized technical services. Their effectiveness is generally assessed through program outcomes, budget adherence, and contractor performance reviews. Agencies like the Air Force typically employ robust contract management frameworks, including dedicated contracting officers, program managers, and quality assurance personnel. While specific effectiveness metrics for this particular contract are not detailed, the Air Force's continued reliance on such contracts suggests a generally effective approach to managing complex support requirements. Challenges can arise, but established oversight mechanisms are designed to address performance and cost issues proactively.

What is the historical spending trend for industrial design and maintenance services within the Department of Defense?

Historical spending trends for industrial design and maintenance services within the Department of Defense are substantial and generally increase over time, driven by the vastness of military infrastructure and the need for continuous upkeep and modernization. The DoD manages a massive portfolio of real property, requiring significant annual investment in maintenance, repair, and upgrades. Spending in this category is influenced by factors such as aging infrastructure, new construction projects, evolving operational requirements, and budget allocations. While the specific amount for 'industrial design services' might be a subset, the overall spending on facility maintenance and related services runs into billions of dollars annually across the DoD. This contract, valued at approximately $53.6 million, represents a portion of that larger, consistent expenditure.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Specialized Design Services › Industrial Design Services

Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 505 KING AVE, COLUMBUS, OH, 43201

Business Categories: Category Business, Nonprofit Organization, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA810004D0002

IDV Type: IDC

Timeline