Siemens awarded $20.8M contract for engineering services, spanning nearly a decade

Contract Overview

Contract Amount: $20,800,000 ($20.8M)

Contractor: Siemens Government Technologies Inc

Awarding Agency: Department of Defense

Start Date: 2013-09-30

End Date: 2032-08-26

Contract Duration: 6,905 days

Daily Burn Rate: $3.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 19

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: ESPC

Place of Performance

Location: FORT IRWIN, SAN BERNARDINO County, CALIFORNIA, 92310

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $20.8 million to SIEMENS GOVERNMENT TECHNOLOGIES INC for work described as: ESPC Key points: 1. Contract value represents a significant long-term investment in engineering support. 2. Full and open competition suggests a robust bidding process. 3. Long contract duration (2013-2032) indicates a sustained need for these services. 4. The contract is a delivery order, implying it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle. 5. Engineering services are critical for complex defense projects. 6. The fixed-price contract type shifts risk to the contractor. 7. The contract is not set aside for small businesses.

Value Assessment

Rating: good

The contract's total value of $20.8 million over its nearly 10-year duration (from award in 2013 to end in 2032) averages approximately $2.3 million per year. Without specific benchmarks for similar long-term engineering support contracts within the Department of the Army, a precise value-for-money assessment is challenging. However, the firm-fixed-price structure suggests that the government has negotiated a set price, which can provide cost certainty. The number of delivery orders (19) indicates a consistent need for services throughout the contract period.

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 bids. The fact that it resulted in a single delivery order suggests that while the initial competition for the IDIQ vehicle may have been broad, this specific order was placed with a single contractor. Further details on the number of bidders for the original IDIQ or this specific delivery order would provide a clearer picture of the competitive landscape.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to better pricing and service quality. It ensures that the government explores a wide range of potential providers.

Public Impact

The Department of the Army benefits from specialized engineering expertise. Services likely support critical infrastructure or operational needs within the Army. The contract's duration suggests ongoing support for long-term projects. Geographic impact is likely concentrated where Army engineering projects are located, primarily in California based on the award notice. Workforce implications include employment for engineers and technical staff at Siemens Government Technologies.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long-term nature of the contract could lead to contractor lock-in if not managed carefully.
Reliance on a single contractor for engineering services might limit future flexibility.
Potential for scope creep if not rigorously managed under the fixed-price structure.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Full and open competition suggests a competitive award process.
Long duration indicates a stable, ongoing requirement being met effectively.

Sector Analysis

This contract falls within the Engineering Services sector (NAICS code 541330). This sector is characterized by firms providing specialized engineering expertise for a wide range of industries, including defense. The market size for engineering services is substantial, with government contracts forming a significant portion. This specific contract represents a long-term commitment by the Department of the Army for essential engineering support, likely related to complex defense systems or infrastructure.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of specific subcontracting requirements for small businesses in the provided data. Therefore, the direct impact on the small business ecosystem is likely minimal, as the primary awardee is a large corporation. However, Siemens may engage small businesses as subcontractors, which would depend on their internal subcontracting plans.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program management office within the Department of the Army. Accountability measures are inherent in the firm-fixed-price contract type, which obligates the contractor to deliver specified services at an agreed-upon price. Transparency is generally maintained through contract award databases, although specific performance details may be sensitive.

Related Government Programs

Department of Defense Engineering Services
Army Facilities Engineering
Defense Infrastructure Projects
Engineering and Technical Services Contracts

Risk Flags

Long contract duration may require careful performance monitoring.
Potential for cost escalation not captured in fixed price if not managed.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.8 million to SIEMENS GOVERNMENT TECHNOLOGIES INC. ESPC

Who is the contractor on this award?

The obligated recipient is SIEMENS GOVERNMENT TECHNOLOGIES INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $20.8 million.

What is the period of performance?

Start: 2013-09-30. End: 2032-08-26.

What specific types of engineering services are being provided under this contract?

The provided data indicates the contract is for 'Engineering Services' under NAICS code 541330. While the specific nature of these services isn't detailed, this category typically encompasses a broad range of activities including design, consulting, and project management related to various engineering disciplines such as civil, mechanical, electrical, and aerospace engineering. Given the awardee is Siemens Government Technologies and the agency is the Department of the Army, these services likely support military infrastructure, weapon systems, or operational readiness. Further details would require examining the contract's statement of work (SOW) or task orders issued against it.

How does the $20.8 million contract value compare to similar long-term engineering support contracts within the Department of the Army?

Comparing the $20.8 million value requires context regarding the scope and duration of similar contracts. This contract spans nearly a decade (2013-2032), averaging over $2 million annually. The Department of the Army procures a vast array of engineering services, ranging from small, specialized task orders to massive, multi-billion dollar programs. Without knowing the specific engineering discipline, geographic location, and complexity of the services rendered, a direct comparison is difficult. However, for long-term, sustained engineering support, this value appears moderate, suggesting it addresses a significant but not necessarily the largest-scale requirement within the Army's extensive portfolio.

What are the potential risks associated with a firm-fixed-price contract of this duration?

A primary risk with firm-fixed-price (FFP) contracts, especially those with long durations like this one (nearly 10 years), is the potential for the contractor to face unforeseen cost increases that erode their profit margin, potentially leading to performance issues or requests for equitable adjustments. Conversely, if market conditions change significantly and the contractor underestimated costs, they could realize substantial profits. For the government, the risk lies in ensuring the initial price was set appropriately and that the contractor maintains quality and commitment throughout the extended period. Scope creep, if not managed meticulously through the task order process, can also become a risk, potentially leading to cost overruns if not properly controlled.

What does the 'Delivery Order' (AW) designation imply about the contract structure?

The 'Delivery Order' (AW) designation indicates that this contract is likely a type of indefinite-delivery/indefinite-quantity (IDIQ) contract, or a similar vehicle like a Basic Ordering Agreement (BOA). Under an IDIQ, the government commits to a minimum quantity (often zero) and a maximum quantity or dollar amount over a specified period. Individual delivery orders are then issued to procure specific quantities of goods or services at pre-negotiated prices. This allows the government flexibility to order as needed, while the contractor is obligated to fulfill orders up to the contract ceiling. The fact that this is a single delivery order suggests it represents a significant, defined need within the broader IDIQ framework.

How does the 'Full and Open Competition' (CT) impact the value and quality of services received?

Awarding a contract under 'Full and Open Competition' means that all responsible sources were allowed to submit bids, fostering a competitive environment. This typically leads to better price discovery and potentially higher quality services as contractors vie for the award. For taxpayers, it increases the likelihood that the government is receiving services at a fair market price. While this specific data point refers to the competition level for the award, the number of bidders and the evaluation criteria used would further refine the understanding of how competition influenced the final outcome and the value obtained by the Department of the Army.

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: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W912DY08R0019

Offers Received: 19

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Siemens Aktiengesellschaft

Address: 1881 CAMPUS COMMONS DR STE 300, RESTON, VA, 20191

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

Financial Breakdown

Contract Ceiling: $20,800,000

Exercised Options: $20,800,000

Current Obligation: $20,800,000

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W912DY09D0021

IDV Type: IDC

Timeline