DoD's $49.6M consulting contract with Dynamics Research Corporation shows fair value, but limited competition raises concerns
Contract Overview
Contract Amount: $49,664,523 ($49.7M)
Contractor: Dynamics Research Corporation
Awarding Agency: Department of Defense
Start Date: 2012-09-28
End Date: 2024-02-27
Contract Duration: 4,169 days
Daily Burn Rate: $11.9K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 4
Pricing Type: COST PLUS FIXED FEE
Sector: Other
Official Description: BASE PERIOD DCOE PROGRAM EVALUATION
Place of Performance
Location: WILLISTON, CHITTENDEN County, VERMONT, 05495
State: Vermont Government Spending
Plain-Language Summary
Department of Defense obligated $49.7 million to DYNAMICS RESEARCH CORPORATION for work described as: BASE PERIOD DCOE PROGRAM EVALUATION Key points: 1. The contract's total value of $49.6 million over its lifespan suggests a moderate investment in administrative management consulting. 2. While the contract was awarded under full and open competition, the number of bids received (4) indicates a potentially limited competitive landscape for this specific service. 3. The cost-plus-fixed-fee pricing structure introduces some risk of cost overruns, though it can be beneficial for complex or evolving requirements. 4. The contract's duration of over 11 years (4169 days) is exceptionally long, potentially indicating a stable, long-term need or a lack of periodic re-competition. 5. The services provided fall under Administrative Management and General Management Consulting, a common area for federal agency support. 6. The contract's performance period spans a significant portion of recent history, offering a substantial dataset for evaluating contractor performance and value.
Value Assessment
Rating: fair
The contract's total value of approximately $49.6 million over more than 11 years averages to roughly $4.3 million annually. Benchmarking this against similar large-scale management consulting contracts for federal agencies is challenging without more specific service details. However, the duration suggests a potentially stable, if not exceptionally competitive, pricing environment. The cost-plus-fixed-fee structure necessitates careful oversight to ensure costs remain reasonable and aligned with the fixed fee.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which is the preferred method for ensuring broad market access. However, only four bids were received, suggesting that the market for this specific type of consulting service, or the requirements of this particular contract, may be specialized or that potential bidders were deterred by contract terms or duration. This level of competition is adequate but not robust, potentially limiting price discovery.
Taxpayer Impact: While full and open competition was utilized, a limited number of bidders means taxpayers may not have benefited from the most aggressive pricing possible. The agency should ensure that the fixed fee component is competitive and that costs are rigorously scrutinized.
Public Impact
The Department of Defense benefits from expert administrative management and general management consulting services, aimed at improving operational efficiency and strategic planning. The contract supports the agency's internal operations by providing analytical and advisory support, likely impacting various administrative functions. The geographic impact is primarily within the Department of Defense's operational areas, though the specific locations are not detailed. Workforce implications are indirect, potentially involving the augmentation of government staff with specialized consulting expertise rather than direct hiring.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- The exceptionally long contract duration (over 11 years) raises questions about potential complacency and the opportunity for market innovation through regular re-competition.
- The cost-plus-fixed-fee (CPFF) contract type, while flexible, carries inherent risks of cost escalation if not managed diligently.
- The relatively low number of bids (4) under full and open competition suggests potential barriers to entry or a niche market, which could impact long-term cost-effectiveness.
- Lack of specific performance metrics or outcome data makes it difficult to definitively assess the value and impact of the consulting services provided.
- The absence of small business subcontracting goals (sb: false) means potential missed opportunities to engage smaller, specialized firms.
Positive Signals
- The contract was awarded through full and open competition, maximizing the pool of potential offerors.
- The use of a fixed fee component in the CPFF contract provides some level of cost certainty for the government.
- The long duration indicates a stable, ongoing need for the services, suggesting the contractor has consistently met requirements.
- The contract is managed by the Defense Contract Management Agency (DCMA), a specialized agency for contract oversight.
- The contract has a defined end date, providing a natural point for re-evaluation and potential re-competition.
Sector Analysis
This contract falls within the professional, scientific, and technical services sector, specifically administrative management and general management consulting. This sector is a significant component of federal spending, supporting agencies across all domains. The market is characterized by a mix of large, established firms and smaller, specialized consultancies. Federal spending in this category often focuses on improving efficiency, strategic planning, and organizational effectiveness. Comparable spending benchmarks would typically be assessed based on the specific nature of the consulting services, the agency size, and the complexity of the problems addressed.
Small Business Impact
The data indicates that this contract was not set aside for small businesses (sb: false). Furthermore, there is no explicit mention of subcontracting requirements related to small businesses. This suggests that opportunities for small businesses to participate in this contract may be limited, potentially through direct subcontracting by the prime contractor, Dynamics Research Corporation. Without specific subcontracting plans or goals, the direct impact on the small business ecosystem is unclear, representing a missed opportunity for broader federal contracting participation.
Oversight & Accountability
The contract is managed by the Defense Contract Management Agency (DCMA), which provides oversight for defense contracts. The contract type (Cost Plus Fixed Fee) necessitates robust financial oversight to monitor costs against the fixed fee. Transparency is generally facilitated through contract award databases, but specific details on ongoing performance monitoring, reporting requirements, and Inspector General (IG) involvement would require deeper investigation into the contract's specific clauses and agency procedures.
Related Government Programs
- Management and Consulting Services
- Professional Services Contracts
- Department of Defense Administrative Support
- General Management Consulting
- Federal IT Consulting (if applicable)
- Program Management Support
Risk Flags
- Long Contract Duration
- Limited Competition (Number of Bids)
- Cost-Plus Contract Type Risk
- Lack of Small Business Subcontracting Focus
Tags
defense, department-of-defense, dynamics-research-corporation, administrative-management-consulting, general-management-consulting, cost-plus-fixed-fee, full-and-open-competition, delivery-order, management-consulting, federal-contract, dod, vermont
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $49.7 million to DYNAMICS RESEARCH CORPORATION. BASE PERIOD DCOE PROGRAM EVALUATION
Who is the contractor on this award?
The obligated recipient is DYNAMICS RESEARCH CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $49.7 million.
What is the period of performance?
Start: 2012-09-28. End: 2024-02-27.
What is the track record of Dynamics Research Corporation (DRC) with federal contracts, particularly within the Department of Defense?
Dynamics Research Corporation (DRC) has a history of performing federal contracts, primarily with the Department of Defense. While specific details on past performance quality for this particular contract are not provided in the summary data, the longevity of this contract (over 11 years) suggests a sustained relationship and likely satisfactory performance to warrant continued engagement. Federal procurement databases often contain past performance evaluations, which would offer a more granular view of DRC's track record, including any awards, penalties, or areas of concern on previous or concurrent contracts. Analyzing their portfolio beyond this single award would reveal their broader capabilities and reliability as a federal contractor.
How does the annual cost of this contract compare to similar management consulting engagements in the federal government?
The annual cost of this contract, averaging approximately $4.3 million ($49.6M / ~11.5 years), falls within a moderate range for large-scale federal management consulting services. However, a direct comparison is difficult without knowing the specific scope of work, the level of expertise required, and the complexity of the challenges addressed. Contracts for strategic planning, organizational restructuring, or specialized policy analysis can command higher rates than general administrative support. To benchmark effectively, one would need to compare it against contracts with similar North American Industry Classification System (NAICS) codes (541611), similar contract types (CPFF), and awarded to agencies of comparable size and complexity. The long duration might also imply a negotiated rate that reflects stability rather than peak market competition.
What are the primary risks associated with the Cost Plus Fixed Fee (CPFF) contract type used here?
The primary risk associated with a Cost Plus Fixed Fee (CPFF) contract is the potential for cost overruns. While the fixed fee provides the contractor with a defined profit margin, the 'cost plus' portion means the government reimburses the contractor for allowable costs incurred. If costs escalate beyond initial projections due to inefficiencies, scope creep, or unforeseen circumstances, the total contract value can increase significantly, potentially exceeding the government's budget. This necessitates rigorous oversight by the contracting agency to ensure that all costs claimed are reasonable, allocable, and necessary for contract performance. The government bears the risk of higher-than-expected costs, while the contractor is incentivized to control costs to protect their fixed fee.
Given the contract's duration, what can be inferred about the program's effectiveness and the contractor's performance?
The contract's duration of over 11 years (4169 days) strongly suggests that the services provided by Dynamics Research Corporation have been consistently required and deemed effective by the Department of Defense. Agencies typically do not maintain such long-term contracts unless the services are critical and the contractor is meeting performance expectations. This extended period implies a stable need for administrative management and general management consulting, and that the contractor has likely demonstrated reliability, adaptability, and value over time. However, without specific performance metrics or periodic reviews, it's impossible to definitively quantify the program's effectiveness or the contractor's success beyond the implicit endorsement of continued engagement.
How has federal spending on administrative management and general management consulting services evolved, and where does this contract fit?
Federal spending on administrative management and general management consulting services (NAICS code 541611) has been a substantial and relatively consistent area of expenditure for government agencies seeking external expertise to improve operations, strategy, and efficiency. Spending in this category often fluctuates based on agency priorities, budget cycles, and the perceived need for specialized skills not available in-house. This $49.6 million contract represents a significant, albeit singular, investment within this broader category. Its long duration places it as a substantial, long-term engagement rather than a series of short-term projects. Understanding its place requires comparing its total value and annual spend against the overall federal outlays for similar consulting services across different agencies and fiscal years.
What are the implications of awarding a contract with a long duration like this one?
Awarding a contract with a duration exceeding 11 years has several implications. For the government, it provides stability and ensures continuity of essential services, potentially reducing administrative burden associated with frequent re-procurement. It can also foster a deeper working relationship and institutional knowledge with the contractor. However, it also carries risks: the government may be locked into potentially suboptimal pricing or service levels if market conditions change, and it reduces opportunities for new or innovative contractors to enter the market. For the contractor, it offers revenue predictability and the chance to build significant expertise. From a taxpayer perspective, the long duration necessitates careful monitoring to ensure continued value for money and prevent complacency.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Administrative Management and General Management Consulting Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Solicitation ID: W81XWH05R0004
Offers Received: 4
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Science Applications International Corporation
Address: 60 FRONTAGE RD, ANDOVER, MA, 01810
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $49,717,586
Exercised Options: $49,664,523
Current Obligation: $49,664,523
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W81XWH08D0029
IDV Type: IDC
Timeline
Start Date: 2012-09-28
Current End Date: 2024-02-27
Potential End Date: 2024-02-27 00:00:00
Last Modified: 2024-03-04
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