Department of the Army's $37.5M engineering services contract awarded to AMERICAN SYSTEMS CORPORATION shows long duration and time-and-materials pricing
Contract Overview
Contract Amount: $37,456,836 ($37.5M)
Contractor: American Systems Corporation
Awarding Agency: Department of Defense
Start Date: 2008-01-23
End Date: 2014-01-23
Contract Duration: 2,192 days
Daily Burn Rate: $17.1K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: TIME AND MATERIALS
Sector: Other
Official Description: U400400 - JCI&I 2 T&E - T&M TAS::21 2020::TAS
Place of Performance
Location: NORFOLK, NORFOLK (CITY) County, VIRGINIA, 23551, UNITED STATES OF AMERICA
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $37.5 million to AMERICAN SYSTEMS CORPORATION for work described as: U400400 - JCI&I 2 T&E - T&M TAS::21 2020::TAS Key points: 1. The contract's duration of 2192 days (nearly 6 years) suggests a long-term need for engineering services. 2. A time-and-materials pricing structure can lead to cost overruns if not carefully managed and monitored. 3. The award was made under full and open competition, indicating a broad search for qualified contractors. 4. The contract was awarded to a single vendor, AMERICAN SYSTEMS CORPORATION, for the entire duration. 5. The contract's primary service area is engineering, aligning with the contractor's stated capabilities. 6. The contract's value of approximately $37.5 million over its life indicates a significant investment in engineering support.
Value Assessment
Rating: fair
Benchmarking the value of this contract is challenging without more specific details on the engineering services provided. However, a nearly six-year duration for a $37.5 million contract suggests an average annual value of around $6.3 million. This is a substantial amount, and the time-and-materials pricing model warrants close scrutiny to ensure cost-effectiveness compared to fixed-price or other contract types for similar engineering support services.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. The data indicates one award, implying that AMERICAN SYSTEMS CORPORATION was selected as the most advantageous offer. The level of competition is not explicitly detailed beyond 'full and open,' but this method generally promotes price discovery and allows the government to select from a wide range of capable providers.
Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages a competitive bidding process, which can lead to better pricing and value for the government.
Public Impact
The primary beneficiaries are likely the Department of the Army, receiving specialized engineering services to support its operations and programs. The services delivered are engineering support, potentially encompassing design, analysis, testing, and technical consultation. The geographic impact is primarily within Virginia, where the contractor is located, but the services could support Army operations nationwide or globally. Workforce implications include employment opportunities for engineers and technical staff at AMERICAN SYSTEMS CORPORATION and potentially at government facilities where services are rendered.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Time-and-materials pricing can lead to cost uncertainty and potential overruns if not managed diligently.
- The long contract duration of nearly six years requires sustained oversight to ensure continued relevance and value.
- Lack of specific details on the engineering tasks makes it difficult to assess the true value for money.
- The contract is not set aside for small businesses, potentially limiting opportunities for smaller firms in this sector.
Positive Signals
- Awarded under full and open competition, indicating a robust bidding process.
- The contractor, AMERICAN SYSTEMS CORPORATION, has secured a significant, long-term contract, suggesting a level of trust and capability.
- The contract aligns with engineering services, a critical support function for defense agencies.
Sector Analysis
This contract falls within the Engineering Services sector (NAICS code 541330). This sector is crucial for government operations, providing specialized expertise for complex projects. The market for engineering services is competitive, with many firms offering a range of capabilities. Government spending in this area is substantial, supporting everything from infrastructure development to advanced technological research and development. Comparable spending benchmarks would depend heavily on the specific type and scale of engineering services required.
Small Business Impact
This contract was not set aside for small businesses, as indicated by 'sb': false. This means that the competition was open to all eligible firms, regardless of size. While AMERICAN SYSTEMS CORPORATION may utilize small businesses as subcontractors, the primary award did not prioritize small business participation. This could limit subcontracting opportunities for small businesses in the engineering services domain for this specific contract.
Oversight & Accountability
Oversight mechanisms for this contract would typically involve contract officers, contracting specialists, and technical monitors within the Department of the Army. Accountability measures are embedded in the contract terms, performance metrics, and payment schedules. Transparency is facilitated through contract award databases, though detailed performance reports may not be publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.
Related Government Programs
- Engineering Services Contracts
- Department of Defense Support Contracts
- Time and Materials Contracts
- Long-Term Government Contracts
- Army Technical Support Services
Risk Flags
- Long contract duration with T&M pricing increases cost uncertainty.
- Lack of specific service details hinders value assessment.
- No small business set-aside may limit opportunities for smaller firms.
Tags
department-of-defense, department-of-the-army, engineering-services, time-and-materials, full-and-open-competition, long-term-contract, virginia, american-systems-corporation, defense-sector, professional-services
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $37.5 million to AMERICAN SYSTEMS CORPORATION. U400400 - JCI&I 2 T&E - T&M TAS::21 2020::TAS
Who is the contractor on this award?
The obligated recipient is AMERICAN SYSTEMS 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 $37.5 million.
What is the period of performance?
Start: 2008-01-23. End: 2014-01-23.
What specific types of engineering services were provided under this contract?
The provided data indicates the contract falls under NAICS code 541330, 'Engineering Services.' However, it does not specify the exact nature of these services. These could range broadly from civil, mechanical, electrical, or aerospace engineering to specialized areas like systems engineering, test and evaluation, or technical consulting. Without further details, it's impossible to ascertain if the services were for design, analysis, research, development, testing, or operational support. Understanding the specific tasks is crucial for evaluating the contract's true value and performance.
How does the $37.5 million value compare to similar engineering services contracts awarded by the Department of the Army?
Comparing the $37.5 million value requires context on the contract's duration and scope. This contract spans 2192 days (nearly 6 years), averaging approximately $6.3 million annually. This annual figure is a moderate size for large-scale engineering support contracts within the Department of the Army, which can range from a few million to hundreds of millions of dollars annually depending on the complexity and criticality of the engineering needs. Benchmarking would necessitate examining contracts with similar service descriptions, durations, and performance periods.
What are the potential risks associated with the Time and Materials (T&M) pricing structure used in this contract?
The primary risk with a Time and Materials (T&M) pricing structure is the potential for cost overruns. Unlike fixed-price contracts, T&M contracts reimburse the contractor for direct labor hours at specified hourly rates and for the actual cost of materials. If not rigorously managed with clear ceilings, labor hour limitations, and detailed oversight, contractors may incur higher costs than anticipated. This necessitates strong government oversight to ensure efficient performance and prevent unnecessary expenditures, making it crucial to monitor labor hours and material usage closely.
What is the track record of AMERICAN SYSTEMS CORPORATION in performing similar government contracts?
The award of a nearly six-year, $37.5 million contract by the Department of the Army suggests that AMERICAN SYSTEMS CORPORATION has a demonstrated capability and a satisfactory performance record with the government, at least in the eyes of the contracting officials. To fully assess their track record, one would need to examine past performance evaluations, any history of contract disputes or terminations, and their experience with similar engineering services and contract types. Publicly available contract databases and performance rating systems can provide further insights.
How does the duration of this contract (2192 days) impact its overall value and risk?
A contract duration of 2192 days (approximately 5.9 years) indicates a long-term requirement for the services provided. This extended period can offer value by ensuring continuity of essential engineering support and potentially reducing administrative costs associated with frequent re-competition. However, it also increases the risk of scope creep, technological obsolescence, and potential cost increases over time, especially with a T&M pricing structure. Sustained government oversight is critical to manage these risks and ensure the contract remains aligned with evolving needs and provides good value throughout its life.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services
Product/Service Code: SPECIAL STUDIES/ANALYSIS, NOT R&D › SPECIAL STUDIES - NOT R and D
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Solicitation ID: W91C9G06R0002
Offers Received: 1
Pricing Type: TIME AND MATERIALS (Y)
Evaluated Preference: NONE
Contractor Details
Address: 14151 PARK MEADOW DR STE 500, CHANTILLY, VA, 20151
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Subchapter S Corporation
Financial Breakdown
Contract Ceiling: $83,001,384
Exercised Options: $83,001,384
Current Obligation: $37,456,836
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W91C9G07D0002
IDV Type: IDC
Timeline
Start Date: 2008-01-23
Current End Date: 2014-01-23
Potential End Date: 2014-01-23 00:00:00
Last Modified: 2016-10-17
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