DoD's $29.5M Lab System Upgrade by EAI Corporation: A Deep Dive into Value and Competition
Contract Overview
Contract Amount: $29,539,985 ($29.5M)
Contractor: EAI Corporation
Awarding Agency: Department of Defense
Start Date: 2006-08-28
End Date: 2008-09-11
Contract Duration: 745 days
Daily Burn Rate: $39.7K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: COST PLUS INCENTIVE FEE
Sector: IT
Official Description: UPGRADE ANALYTICAL LABORATORY SYSTEM
Place of Performance
Location: ABINGDON, HARFORD County, MARYLAND, 21009
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $29.5 million to EAI CORPORATION for work described as: UPGRADE ANALYTICAL LABORATORY SYSTEM Key points: 1. Analysis of EAI Corporation's performance on this contract to assess value for money. 2. Examination of competition dynamics, given the 'FULL AND OPEN COMPETITION' award. 3. Identification of potential risk indicators based on contract type and duration. 4. Contextualization of performance against similar IT system upgrade projects. 5. Positioning of this contract within the broader Defense IT sector spending. 6. Assessment of the $29.5M total value in relation to the services delivered.
Value Assessment
Rating: fair
The total contract value of $29.5 million for the UPGRADE ANALYTICAL LABORATORY SYSTEM appears moderate for a Department of Defense IT project of this scope. Benchmarking against similar system upgrades is challenging without more granular data on the specific functionalities and complexity of the analytical laboratory system. However, the Cost Plus Incentive Fee (CPIF) contract type suggests a potential for cost savings if performance targets are met, which could enhance value. Further analysis would require comparing EAI Corporation's specific cost structure and performance metrics to industry standards for similar projects.
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 solicited and evaluated. The presence of two bids suggests a degree of competition, though the exact number of proposals received and the evaluation process details are not provided. A competitive environment generally supports better price discovery and can lead to more favorable terms for the government.
Taxpayer Impact: The full and open competition process is beneficial for taxpayers as it aims to secure the best possible value by encouraging multiple companies to bid, potentially driving down costs and improving service quality.
Public Impact
The primary beneficiaries are the Department of Defense and its analytical laboratories, which receive an upgraded system to support their critical functions. The contract delivers enhanced capabilities for analytical data processing and management, crucial for defense-related research and operations. The geographic impact is centered around the Department of Defense facilities where the analytical laboratory system is deployed, likely within Maryland given the 'MD' state code. Workforce implications include the potential need for training and adaptation to the new system by laboratory personnel.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Incentive Fee (CPIF) contracts can sometimes lead to cost overruns if not managed diligently, despite the incentive structure.
- The duration of the contract (745 days) is substantial, increasing the risk of scope creep or evolving technological requirements.
- Limited information on the specific performance metrics and success criteria makes it difficult to fully assess the contractor's performance and value delivered.
Positive Signals
- Awarded under full and open competition, suggesting a robust bidding process that likely yielded competitive pricing.
- The CPIF contract type incentivizes the contractor to perform efficiently and cost-effectively, aligning their goals with the government's.
- The contract addresses a critical need for upgrading analytical laboratory systems within the Department of Defense.
Sector Analysis
The IT services sector within the federal government is vast, encompassing a wide range of needs from software development to system maintenance and upgrades. This contract falls under engineering services (NAICS 541330) but is IT-focused due to the nature of upgrading a laboratory system. Spending in this area is critical for maintaining operational efficiency and technological superiority for agencies like the Department of Defense. Comparable spending benchmarks would typically involve analyzing IT system upgrade contracts across various defense and civilian agencies, considering factors like system complexity, user base, and integration requirements.
Small Business Impact
There is no indication that this contract included a small business set-aside. The contractor, EAI CORPORATION, is not explicitly identified as a small business. Therefore, the direct impact on small businesses through set-asides is likely minimal for this specific award. However, the prime contractor may engage small businesses as subcontractors, which would contribute to the small business ecosystem, though details on subcontracting plans are not provided.
Oversight & Accountability
Oversight for this contract would typically be managed by the Department of the Army's contracting officers and program managers. The Cost Plus Incentive Fee structure implies performance monitoring to ensure targets are met and costs are controlled. Transparency is generally facilitated through contract award databases, but detailed operational oversight and Inspector General jurisdiction would depend on the specific nature of any issues that arise during contract performance.
Related Government Programs
- Defense Information Systems Agency (DISA) IT Modernization Programs
- Army Research Laboratory IT Infrastructure Upgrades
- DoD Scientific and Technical Information Network (STINET)
- Federal Civilian Agency Laboratory Information Management Systems (LIMS)
Risk Flags
- Potential for cost overruns due to CPIF contract type.
- Risk of scope creep given the contract duration.
- Dependence on contractor performance for achieving desired system capabilities.
- Need for robust government oversight to ensure value realization.
Tags
defense, department-of-defense, army, it-services, engineering-services, system-upgrade, analytical-laboratory, cost-plus-incentive-fee, full-and-open-competition, maryland, moderate-value
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $29.5 million to EAI CORPORATION. UPGRADE ANALYTICAL LABORATORY SYSTEM
Who is the contractor on this award?
The obligated recipient is EAI 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 $29.5 million.
What is the period of performance?
Start: 2006-08-28. End: 2008-09-11.
What was EAI Corporation's track record with the Department of Defense prior to this contract?
Information regarding EAI Corporation's specific track record with the Department of Defense prior to this contract is not detailed in the provided data. A comprehensive assessment would require reviewing past performance evaluations, other awarded contracts, and any documented history of successful or problematic engagements. Federal procurement databases and contractor performance systems (like the Contractor Performance Assessment Reporting System - CPARS) would be the primary sources for such information. Understanding their history would provide context for their ability to successfully execute the UPGRADE ANALYTICAL LABORATORY SYSTEM contract, particularly concerning adherence to schedule, budget, and technical requirements.
How does the $29.5 million cost compare to similar analytical laboratory system upgrades within the DoD?
Direct comparison of the $29.5 million cost to similar analytical laboratory system upgrades within the DoD is difficult without specific details on the scope, complexity, and functionalities of the system being upgraded. However, for a system upgrade project of this magnitude, the cost appears within a reasonable range for federal IT procurements. Factors influencing cost include the number of users, data volume, integration with existing systems, cybersecurity requirements, and the specific analytical capabilities being enhanced. A thorough benchmark would involve analyzing contracts for similar laboratory information management systems (LIMS) or specialized analytical software deployments across different DoD branches, considering the contract type and duration.
What are the primary risks associated with a Cost Plus Incentive Fee (CPIF) contract for this type of project?
The primary risks associated with a Cost Plus Incentive Fee (CPIF) contract for an IT system upgrade like the Analytical Laboratory System revolve around cost control and performance management. While CPIF aims to incentivize efficiency by sharing cost savings or overruns between the government and contractor, it requires clearly defined performance targets and cost ceilings. Risks include potential for the contractor to prioritize achieving incentive fees over optimal long-term system performance or to inflate costs to maximize their share of savings. Effective oversight is crucial to ensure the incentive structure truly drives value and that the government is not inadvertently paying more than necessary. Scope creep can also be a significant risk, as changes to requirements can complicate the incentive calculations and potentially lead to disputes.
How effective is the 'FULL AND OPEN COMPETITION' strategy in ensuring value for taxpayer money in this context?
The 'FULL AND OPEN COMPETITION' strategy is generally considered the most effective method for ensuring value for taxpayer money in federal contracting. By allowing all responsible sources to submit bids, it fosters a competitive environment that drives down prices, encourages innovation, and increases the likelihood of selecting the best-value solution. In the context of upgrading an analytical laboratory system, this approach would encourage multiple vendors to propose their best technical solutions and pricing. The fact that this contract received two bids suggests a degree of competition, which is positive. However, the ultimate value realized depends on the thoroughness of the evaluation process and the government's ability to negotiate favorable terms based on the competitive landscape.
What are the potential long-term implications of this system upgrade for DoD's analytical capabilities?
The long-term implications of this system upgrade for the DoD's analytical capabilities are potentially significant. An upgraded analytical laboratory system is expected to enhance data accuracy, processing speed, and the ability to manage larger and more complex datasets. This can lead to improved decision-making, faster response times in critical situations, and more robust scientific research and development. Furthermore, modern systems often incorporate better security features and integration capabilities, allowing for seamless data sharing across different DoD entities. The success of the upgrade will determine the extent to which these benefits are realized, impacting the efficiency and effectiveness of various DoD operations that rely on precise analytical data.
What is the significance of the PSC code (if available) and NAICS code (541330) for understanding this contract's scope?
The North American Industry Classification System (NAICS) code 541330, 'Engineering Services,' indicates that the primary service procured falls under engineering consulting and design. However, the description 'UPGRADE ANALYTICAL LABORATORY SYSTEM' strongly suggests a significant IT component. This dual nature means the contract likely involves engineering expertise applied to the design, integration, and implementation of a complex IT system within a laboratory environment. The Product Service Code (PSC), which is blank in the provided data, would offer more specific insight into the nature of the goods or services procured (e.g., software, hardware, IT services). Without a PSC, we rely on the NAICS code and the contract description, highlighting the need for engineering skills to manage the technical aspects of the laboratory system upgrade.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: INSTRUMENTS AND LABORATORY EQPT
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 2
Pricing Type: COST PLUS INCENTIVE FEE (V)
Evaluated Preference: NONE
Contractor Details
Parent Company: Leidos Holdings, Inc. (UEI: 611641312)
Address: 1308 CONTINENTAL DRIVE, ABINGDON, MD, 21009
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $30,423,579
Exercised Options: $30,423,579
Current Obligation: $29,539,985
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W911SR04D0014
IDV Type: IDC
Timeline
Start Date: 2006-08-28
Current End Date: 2008-09-11
Potential End Date: 2008-09-11 00:00:00
Last Modified: 2018-05-25
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