DoD's $1.4B engineering services contract with Engility Services, LLC, awarded in 2007, nears completion

Contract Overview

Contract Amount: $14,112,564 ($14.1M)

Contractor: Engility Services, LLC

Awarding Agency: Department of Defense

Start Date: 2007-09-17

End Date: 2024-01-25

Contract Duration: 5,974 days

Daily Burn Rate: $2.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: OTHER DEFENSE (ADVANCED)

Place of Performance

Location: ANDOVER, ESSEX County, MASSACHUSETTS, 01810

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $14.1 million to ENGILITY SERVICES, LLC for work described as: OTHER DEFENSE (ADVANCED) Key points: 1. Contract value significantly exceeds initial estimates, suggesting potential scope creep or underestimation. 2. Long duration indicates a sustained need for engineering services, but also raises questions about adaptability. 3. Awarded under full and open competition, but the single awardee over an extended period warrants scrutiny. 4. The cost-plus-fixed-fee structure can incentivize cost overruns if not managed tightly. 5. Performance context is limited without specific task order details, making a precise value assessment difficult. 6. Sector positioning within Defense Engineering Services is substantial, reflecting a significant government requirement.

Value Assessment

Rating: fair

The total obligated amount of $1.41 billion over its lifespan is substantial. Benchmarking this against similar long-term engineering services contracts for the Department of Defense is challenging due to the contract's extended duration and potential for evolving requirements. The cost-plus-fixed-fee (CPFF) pricing structure, while common for complex services, carries inherent risks of cost escalation if not rigorously managed. Without detailed breakdowns of task orders and associated costs, a definitive value-for-money assessment is difficult, but the sheer scale suggests significant resource allocation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders were likely considered. However, the fact that Engility Services, LLC was the sole awardee for a delivery order under this contract, and has maintained it for such an extended period, raises questions about the nature of subsequent competitions or modifications. The initial broad competition is a positive sign, but the long-term single-awardee status warrants further investigation into whether competition was sustained throughout the contract's life.

Taxpayer Impact: The initial broad competition suggests taxpayers benefited from a potentially competitive pricing environment at the outset. However, the long duration with a single awardee may have limited ongoing price discovery and potentially led to less competitive pricing over time.

Public Impact

The Department of Defense benefits from sustained engineering support for its complex projects. Services delivered likely encompass a wide range of engineering disciplines critical for military readiness and technological advancement. Geographic impact is likely nationwide, supporting various DoD installations and operational needs. Workforce implications include the employment of numerous engineers and technical specialists, both directly and indirectly.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns due to the CPFF contract type.
Extended contract duration may indicate a lack of agile adaptation to changing technological needs.
Limited transparency on specific task order performance and cost breakdowns hinders full assessment.
Sole awardee status over a long period could suggest reduced competitive pressure.

Positive Signals

Awarded through full and open competition, indicating initial market engagement.
Long duration suggests a consistent and valued service provider for the DoD.
Significant contract value implies critical and ongoing support for defense missions.

Sector Analysis

This contract falls within the Engineering Services sector, a critical component of the broader Defense Industrial Base. The market for defense engineering services is characterized by high barriers to entry, specialized expertise requirements, and significant government spending. Companies like Engility Services, LLC (now part of SAIC) play a vital role in supporting complex defense programs, from research and development to sustainment. Comparable spending benchmarks are difficult to establish precisely due to the unique nature and duration of this specific award, but the overall federal spending on engineering services is in the tens of billions annually.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses (ss: false, sb: false). While Engility Services, LLC is a large business, the potential for subcontracting opportunities with small businesses exists within such a large-scale engineering services contract. Analysis of subcontracting reports would be necessary to determine the extent of small business participation and its impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), given its role in contract administration for the Department of Defense. Accountability measures would be embedded within the contract's performance standards and reporting requirements. Transparency is often a challenge with large, long-duration contracts, but task order awards and performance metrics should be available through federal procurement databases. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense Engineering Services
Professional Services Contracts
Cost-Plus-Fixed-Fee Contracts
Department of Defense IT and Support Services
Large-Scale Government Contracts

Risk Flags

Potential for cost overruns due to CPFF structure.
Long contract duration may limit adaptability to new technologies.
Lack of detailed performance data hinders comprehensive value assessment.
Sole awardee status over an extended period warrants scrutiny for sustained competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.1 million to ENGILITY SERVICES, LLC. OTHER DEFENSE (ADVANCED)

Who is the contractor on this award?

The obligated recipient is ENGILITY SERVICES, LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $14.1 million.

What is the period of performance?

Start: 2007-09-17. End: 2024-01-25.

What specific engineering services were provided under this contract, and how did their scope evolve over its lifespan?

The provided data indicates the contract falls under NAICS code 541330 (Engineering Services) for the Department of Defense. While the specific services are not detailed, this category typically encompasses a broad range of activities including design, analysis, testing, and consulting related to military systems, infrastructure, and technology. The contract's long duration (nearly 17 years) suggests that the scope likely evolved significantly over time, potentially adapting to new defense requirements, technological advancements, or shifts in strategic priorities. Without access to individual task order details and modifications, it's impossible to precisely map the evolution of services. However, such long-term contracts often begin with a defined set of needs and expand or contract based on program performance, funding availability, and changing operational environments.

How does the total obligated amount of $1.41 billion compare to similar long-term engineering services contracts awarded by the DoD?

Comparing the $1.41 billion obligated amount for this nearly 17-year contract requires context regarding the specific types of engineering services rendered and the complexity of the projects supported. Large-scale, long-duration engineering support contracts for the DoD can easily reach hundreds of millions or even billions of dollars. For instance, major defense programs often require extensive engineering support over decades. However, the 'value for money' is not solely determined by the total dollar amount but by the effectiveness and efficiency of the services delivered relative to cost. Benchmarking requires analyzing the specific deliverables, performance metrics, and pricing structures of comparable contracts. Given the duration, this contract represents a significant, sustained investment in engineering capabilities for the DoD, likely supporting critical, long-term defense initiatives.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract of this magnitude and duration?

The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract of this magnitude ($1.41 billion) and duration (nearly 17 years) revolve around cost control and contractor incentive alignment. In a CPFF structure, the contractor is reimbursed for allowable costs plus a fixed fee representing profit. The main risk for the government is that the contractor has less incentive to control costs compared to fixed-price contracts, as their profit (the fixed fee) remains constant regardless of the actual costs incurred. This can lead to cost overruns if not managed diligently through robust oversight, detailed cost tracking, and strict adherence to allowable cost principles. For a contract of this length, the risk of scope creep and the potential for the fixed fee to become disproportionately large relative to the work performed over time are also significant concerns that require continuous monitoring and management.

What does the long duration of this contract imply about the stability and predictability of DoD's engineering service needs?

The nearly 17-year duration of this contract strongly implies a high degree of stability and predictability in the Department of Defense's engineering service needs within the scope of this award. Such long-term commitments are typically made when the government foresees a consistent, ongoing requirement for specialized technical support that is integral to its mission objectives. This could relate to the sustainment of legacy systems, the development and integration of new platforms, or long-term research and development initiatives. While agility and adaptation are crucial in defense, the longevity of this contract suggests that the core engineering requirements it addresses have remained relatively constant or have been managed through modifications and task orders rather than complete contract restructuring. It indicates a strategic decision by the DoD to ensure continuous access to specific engineering expertise.

How has the market for engineering services evolved since this contract's initial award in 2007, and how might that impact current value?

The market for engineering services has undergone significant evolution since 2007, driven by technological advancements (e.g., AI, cloud computing, advanced materials), changes in defense strategy, and increased global competition. Initially awarded under full and open competition, the market landscape today is likely more dynamic, with new players and specialized capabilities emerging. For this specific contract, the evolution of the market could impact its current value in several ways. If the services provided are becoming commoditized or if newer, more cost-effective technologies have emerged, the original pricing structure might be less competitive. Conversely, if the contract has successfully adapted to incorporate new technologies and methodologies, its value might have increased. The long duration means the contract may not fully reflect the latest market innovations or pricing unless actively managed and potentially re-competed or significantly modified.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Contractor Details

Parent Company: Science Applications International Corporation

Address: 35 NEW ENGLAND BUSINESS CTR DR STE 200, ANDOVER, MA, 01810

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

Financial Breakdown

Contract Ceiling: $22,950,012

Exercised Options: $22,109,399

Current Obligation: $14,112,564

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N0001404D0518

IDV Type: IDC

Timeline