DoD's $148M R&D contract for engineering services awarded to Science Applications International Corp. shows potential value concerns
Contract Overview
Contract Amount: $364,369,976 ($364.4M)
Contractor: Science Applications International Corporation
Awarding Agency: Department of Defense
Start Date: 2005-07-07
End Date: 2010-08-31
Contract Duration: 1,881 days
Daily Burn Rate: $193.7K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: FIRM FIXED PRICE
Sector: R&D
Official Description: 200510!004130!2100!W31P4Q!USA AVIATION AND MISSILE COMMAND!W31P4Q05A0031 !A!N! !Y!0008 ! !20050707!20100705!148095086!148095086!054781240!N!SCIENCE APPLICATIONS INTERNATI!10260 CAMPUS POINT DR !SAN DIEGO !CA!92121!37000!089!01!HUNTSVILLE !MADISON !ALABAMA !+000000065988!N!N!000000000000!R425!ENGINEERING TECHNICAL SERVICES !S1 !SERVICES !000 !* !541710!E! !7! ! ! ! ! !20200930!C! ! !N!Z!A!N!J!2!001! ! !Z!N!Z! ! !Y!C!N! ! ! !C!C!A!A!000!A!B!N! ! ! ! ! ! !0001! !
Place of Performance
Location: HUNTSVILLE, MADISON County, ALABAMA, 35898
State: Alabama Government Spending
Plain-Language Summary
Department of Defense obligated $364.4 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION for work described as: 200510!004130!2100!W31P4Q!USA AVIATION AND MISSILE COMMAND!W31P4Q05A0031 !A!N! !Y!0008 ! !20050707!20100705!148095086!148095086!054781240!N!SCIENCE APPLICATIONS INTERNATI!10260 CAMPUS POINT DR !SAN DIEGO !CA!92121!37000!089!01!HUNTSVILLE !MADISON !ALABAMA !+000000065988!N!N!00000… Key points: 1. The contract's value of $148 million over 5 years raises questions about cost-effectiveness for engineering and technical services. 2. A single award to Science Applications International Corporation (SAIC) suggests limited competition, potentially impacting price negotiation. 3. The duration of the contract (over 5 years) and its significant value warrant scrutiny for performance and risk management. 4. This contract falls within the R&D sector, specifically engineering and technical services, a common area for significant federal investment. 5. The contract's performance period spans from 2005 to 2010, indicating a need to assess outcomes against initial objectives. 6. The absence of small business set-asides or subcontracting requirements needs further investigation regarding broader economic impact.
Value Assessment
Rating: questionable
The total value of $148,095,086 for engineering and technical services over approximately five years appears substantial. Without specific benchmarks for comparable R&D engineering services contracts, it is difficult to definitively assess value for money. However, the significant expenditure necessitates a thorough review of deliverables and outcomes to ensure it aligns with taxpayer investment. The contract was awarded as a firm-fixed-price type, which typically shifts risk to the contractor, but the overall cost-effectiveness remains a key area for evaluation.
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 data indicates there were 3 bids received. While full and open competition is generally preferred for maximizing competition and achieving fair pricing, the number of bidders (3) is moderate and does not necessarily guarantee the most competitive outcome. Further analysis would be needed to understand the specific requirements and the pool of potential bidders to fully assess the competitive landscape.
Taxpayer Impact: Full and open competition is intended to ensure that the government receives the best possible value by encouraging a wide range of offers. With three bidders, taxpayers benefit from a degree of price discovery, though the potential for even greater savings with more robust competition exists.
Public Impact
The primary beneficiary of this contract is the Department of the Army, receiving critical engineering and technical services. Services delivered likely include research, development, testing, and evaluation support for aviation and missile systems. The geographic impact is centered around the U.S. Army Aviation and Missile Command, with potential implications for personnel in Huntsville, Alabama. The contract supports a workforce of engineers, scientists, and technical specialists, contributing to the federal R&D sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns if scope creep occurs within the extensive R&D services.
- Risk of contractor performance not meeting the evolving technical requirements of advanced aviation and missile systems.
- Dependency on a single contractor for critical technical expertise could pose a risk if performance degrades.
- The long contract duration may lead to outdated technology or methodologies if not actively managed.
Positive Signals
- Firm-fixed-price contract structure helps control costs and shifts risk to the contractor.
- Full and open competition, even with three bidders, suggests an effort to secure competitive pricing.
- The contractor, Science Applications International Corporation, is a large, established entity with significant experience in government contracting.
- The contract supports critical national defense capabilities in aviation and missile technology.
Sector Analysis
This contract falls within the Research and Development (R&D) sector, specifically under the North American Industry Classification System (NAICS) code 541710, which covers Research and Development in the Physical, Engineering, and Life Sciences. This sector is characterized by innovation, long development cycles, and significant government investment, particularly in defense. Comparable spending benchmarks for large-scale engineering and technical services contracts within the Department of Defense can range from tens to hundreds of millions of dollars, depending on the complexity and duration.
Small Business Impact
The contract data indicates that this was not a small business set-aside, and there is no explicit mention of subcontracting requirements for small businesses. This suggests that the primary focus was on securing specialized R&D capabilities from larger firms. The lack of small business involvement could mean missed opportunities to leverage the innovation and agility of smaller companies within the defense supply chain and potentially limit the economic benefits to the small business ecosystem.
Oversight & Accountability
Oversight for this contract would primarily fall under the U.S. Army Aviation and Missile Command, responsible for managing the contract's performance and ensuring compliance with its terms. Accountability measures are typically embedded within the contract's performance work statement, including milestones, deliverables, and quality assurance provisions. Transparency is facilitated through contract databases like FPDS, which provide public access to contract awards, though detailed performance reports are often internal. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.
Related Government Programs
- Department of Defense Research and Development Contracts
- Engineering and Technical Services Contracts
- Aviation Systems Development
- Missile Systems Development
- Science Applications International Corporation Contracts
- Firm Fixed Price Contracts
Risk Flags
- Potential for cost overruns due to the nature of R&D.
- Contract duration may exceed the relevance of technologies developed.
- Limited competition (3 bidders) may not have yielded the lowest possible price.
- Performance risks associated with complex engineering and technical services.
Tags
department-of-defense, department-of-the-army, aviation-and-missile-command, research-and-development, engineering-services, technical-services, firm-fixed-price, full-and-open-competition, large-contract, science-applications-international-corporation, alabama, 2005-2010
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $364.4 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION. 200510!004130!2100!W31P4Q!USA AVIATION AND MISSILE COMMAND!W31P4Q05A0031 !A!N! !Y!0008 ! !20050707!20100705!148095086!148095086!054781240!N!SCIENCE APPLICATIONS INTERNATI!10260 CAMPUS POINT DR !SAN DIEGO !CA!92121!37000!089!01!HUNTSVILLE !MADISON !ALABAMA !+000000065988!N!N!000000000000!R425!ENGINEERING TECHNICAL SERVICES !S1 !SERVICES !000 !* !541710!E! !7! ! ! ! ! !20200930!C! ! !N!Z!A!N!J!2!001! ! !Z!N!Z! ! !Y!C!N! ! ! !C!C!A!A!000!A!B!N! ! ! ! ! ! !0001! !
Who is the contractor on this award?
The obligated recipient is SCIENCE APPLICATIONS INTERNATIONAL 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 $364.4 million.
What is the period of performance?
Start: 2005-07-07. End: 2010-08-31.
What was the specific nature of the engineering and technical services provided under this contract?
The contract, awarded under NAICS code 541710 (Research and Development in the Physical, Engineering, and Life Sciences), was for engineering and technical services supporting the U.S. Army Aviation and Missile Command. While the specific details are not fully elaborated in the provided data, such services typically encompass a broad range of activities including systems engineering, design, analysis, testing, integration, and lifecycle support for complex defense systems. Given the focus on aviation and missiles, this likely involved advanced research, development, and sustainment engineering for platforms and associated technologies critical to national defense.
How does the $148 million contract value compare to similar R&D engineering services contracts awarded by the DoD during that period?
The $148 million contract value for a five-year period (2005-2010) for specialized R&D engineering services is substantial but not necessarily an outlier within the Department of Defense's large-scale procurement landscape. Major defense contractors frequently receive contracts in this range, and often higher, for complex systems development and support. To provide a precise comparison, one would need to analyze a portfolio of similar contracts awarded by the Army or other DoD branches for comparable services (e.g., systems engineering, technical support for aviation/missile programs) during the mid-2000s. Factors like contract type (firm-fixed-price), competition level, and specific technical scope heavily influence pricing.
What were the key performance indicators (KPIs) or metrics used to evaluate the contractor's performance?
The provided data does not explicitly list the Key Performance Indicators (KPIs) or specific metrics used to evaluate Science Applications International Corporation's (SAIC) performance under this contract. However, typical performance evaluations for such R&D engineering services contracts would likely include adherence to technical specifications, timely delivery of milestones and reports, quality of work (e.g., accuracy of analyses, effectiveness of designs), cost control within the firm-fixed-price structure, and overall responsiveness to the Army Aviation and Missile Command's requirements. Formal reviews, progress reports, and potentially user feedback from the program office would form the basis of performance assessments.
Were there any identified risks or challenges associated with this contract, and how were they managed?
While specific risk registers are not detailed, potential risks inherent in a large, multi-year R&D engineering contract include technical challenges in developing cutting-edge systems, potential for scope creep, contractor performance issues, and evolving threat landscapes requiring adaptation. The firm-fixed-price nature of the contract shifts some financial risk to SAIC. Management strategies would typically involve robust program oversight by the Army, regular progress reviews, clear definition of requirements, and contingency planning. The contract's duration (over 5 years) also presents a risk of technological obsolescence if not managed proactively through contract modifications or updates.
What was the historical spending trend for similar engineering and technical services by the Army Aviation and Missile Command prior to this contract?
The provided data snippet focuses on a single contract award and does not offer historical spending trends for the Army Aviation and Missile Command (AMCOM) regarding similar engineering and technical services. To analyze historical spending, one would need access to broader contract databases covering multiple years and contract vehicles utilized by AMCOM for R&D, engineering, and technical support. Such an analysis would reveal patterns in contract values, types of services procured, dominant contractors, and overall budget allocation trends for these critical functions within AMCOM.
Did the full and open competition result in a competitive price, or could the government have achieved better pricing with more bidders?
The contract was awarded under full and open competition with three bids received. While having three bidders is generally positive for price discovery compared to sole-source or limited competition, it's difficult to definitively state whether the government achieved the 'best possible' price without knowing the specific market dynamics and the number of technically capable sources. A higher number of bidders often correlates with more aggressive pricing. However, the firm-fixed-price structure provides a ceiling. A thorough analysis would involve benchmarking the awarded price against independent cost estimates or other competitive bids for similar services during that timeframe.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 3
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 1710 SAIC DR, MCLEAN, VA, 22102
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $580,186,446
Exercised Options: $580,186,446
Current Obligation: $364,369,976
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W31P4Q05A0031
IDV Type: IDC
Timeline
Start Date: 2005-07-07
Current End Date: 2010-08-31
Potential End Date: 2010-08-31 12:08:00
Last Modified: 2024-05-17
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