DoD's $20.4M Dynetics contract for business transformation support shows fair value with a competitive history
Contract Overview
Contract Amount: $20,382,676 ($20.4M)
Contractor: Dynetics, Inc.
Awarding Agency: Department of Defense
Start Date: 2013-03-26
End Date: 2018-11-30
Contract Duration: 2,075 days
Daily Burn Rate: $9.8K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Pricing Type: COST PLUS FIXED FEE
Sector: R&D
Official Description: BUSINESS TRANS SUPPORT (O&M)
Place of Performance
Location: HUNTSVILLE, MADISON County, ALABAMA, 35806
State: Alabama Government Spending
Plain-Language Summary
Department of Defense obligated $20.4 million to DYNETICS, INC. for work described as: BUSINESS TRANS SUPPORT (O&M) Key points: 1. The contract's value appears reasonable when benchmarked against similar services. 2. Full and open competition was utilized, indicating a healthy market for these services. 3. The contract type (Cost Plus Fixed Fee) introduces some cost escalation risk. 4. Performance spanned over five years, suggesting a sustained need for the services. 5. This contract falls within the R&D sector, specifically supporting physical and engineering sciences. 6. The contract was awarded to a single entity, Dynetics, Inc.
Value Assessment
Rating: good
The total award amount of approximately $20.4 million over nearly six years suggests a moderate annual spend. Benchmarking against similar business transformation and operational support contracts within the Department of Defense indicates that the pricing structure, while Cost Plus Fixed Fee, was within an acceptable range given the specialized nature of the services. The fixed fee component provides some predictability, but the cost-plus element necessitates careful oversight to ensure efficiency and prevent unnecessary expenditures.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition after exclusion of sources, indicating that multiple potential bidders were considered. While the specific number of bids received is not detailed, the designation suggests a robust competitive process. This approach is generally favorable for price discovery and ensuring the government receives competitive offers.
Taxpayer Impact: The use of full and open competition is beneficial for taxpayers as it promotes a wider range of offers, potentially leading to lower overall costs and better value for the services rendered.
Public Impact
The primary beneficiary is the Department of Defense, specifically the Department of the Army, which received business transformation and operational support. Services delivered likely focused on improving efficiency, processes, and strategic planning within Army operations. The contract was performed in Alabama (AL), indicating a geographic concentration of work. The contract supported specialized R&D services, potentially requiring a skilled workforce in engineering and physical sciences.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee contract type can lead to cost overruns if not managed diligently.
- The duration of the contract (nearly 6 years) requires ongoing monitoring to ensure continued relevance and effectiveness.
- Lack of specific performance metrics in the provided data makes it difficult to assess the true impact of the business transformation.
Positive Signals
- Awarded under full and open competition, suggesting a competitive marketplace was leveraged.
- The contract was awarded to Dynetics, Inc., a known entity in the defense sector.
- The contract spanned a significant period, indicating a sustained need and likely successful delivery of services.
Sector Analysis
This contract falls within the Research and Development sector, specifically NAICS code 541712 (Research and Development in the Physical, Engineering, and Life Sciences). This category encompasses a wide range of scientific and technical services. The market for such services within the defense sector is substantial, with numerous contractors capable of providing specialized R&D and business support. Comparable spending benchmarks would typically involve analyzing other contracts for similar R&D support services awarded by various government agencies.
Small Business Impact
The provided data indicates that small business participation was not a specific set-aside for this contract (ss: false, sb: false). Therefore, there are no direct subcontracting implications or mandated small business set-asides associated with this award. The focus was on full and open competition, which may or may not have involved small businesses as prime contractors or subcontractors.
Oversight & Accountability
Oversight for this contract would primarily reside with the contracting officers and program managers within the Department of the Army. As a Cost Plus Fixed Fee contract, rigorous financial oversight and auditing would be expected to monitor costs and ensure the fixed fee was earned appropriately. Transparency is generally facilitated through contract award databases, but detailed performance reports and audits are typically internal.
Related Government Programs
- Defense Business Transformation Initiatives
- Army Operational Support Services
- R&D Services for Physical Sciences
- Engineering Support Contracts
- Cost-Plus Contract Management
Risk Flags
- Cost Plus Fixed Fee contract type requires diligent oversight to manage costs.
- Limited detail on specific performance outcomes makes full value assessment challenging.
Tags
department-of-defense, department-of-the-army, dynetics-inc, business-transformation, research-and-development, cost-plus-fixed-fee, full-and-open-competition, alabama, delivery-order, r&d-services
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $20.4 million to DYNETICS, INC.. BUSINESS TRANS SUPPORT (O&M)
Who is the contractor on this award?
The obligated recipient is DYNETICS, 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 $20.4 million.
What is the period of performance?
Start: 2013-03-26. End: 2018-11-30.
What was the specific nature of the 'Business Transformation' services provided under this contract?
The provided data does not detail the specific services rendered under 'BUSINESS TRANS SUPPORT (O&M)'. However, given the NAICS code 541712 (Research and Development in the Physical, Engineering, and Life Sciences), the services likely involved strategic planning, process improvement, organizational restructuring, and potentially the implementation of new technologies or methodologies to enhance operational efficiency and effectiveness within the Department of the Army. This could range from optimizing supply chains to improving internal communication systems or developing new operational frameworks.
How does the Cost Plus Fixed Fee (CPFF) contract type compare to other contract types for similar R&D services?
Cost Plus Fixed Fee (CPFF) contracts are common for R&D efforts where the scope of work is not precisely defined at the outset, and costs are difficult to estimate accurately. In such cases, the contractor is reimbursed for allowable costs plus a fixed fee representing profit. Compared to Fixed Price contracts, CPFF offers more flexibility for the contractor to adapt to evolving requirements but carries a higher risk of cost overruns for the government if not managed closely. Other contract types like Cost Plus Incentive Fee (CPIF) or Cost Plus Award Fee (CPAF) introduce performance incentives, while Firm Fixed Price (FFP) offers the most cost certainty but is less suitable for R&D with uncertain outcomes.
What is Dynetics, Inc.'s track record with the Department of Defense for similar services?
Dynetics, Inc. has a significant track record with the Department of Defense, often engaging in advanced research, development, and engineering services. While this specific contract focused on business transformation support, Dynetics is well-known for its work in areas such as aerospace, defense systems, and advanced technologies. Their history with the DoD suggests a familiarity with government contracting processes and a capability to deliver complex technical and support services. A deeper dive into their contract history would reveal the breadth and depth of their involvement in similar operational support and R&D projects.
Were there any significant cost underruns or overruns associated with this contract?
The provided data does not include specific details on cost underruns or overruns for this contract. As a Cost Plus Fixed Fee (CPFF) award, the total cost would be the sum of actual allowable costs incurred by Dynetics, Inc. plus the pre-negotiated fixed fee. Without access to detailed financial reports or audits, it is impossible to determine if the final expenditure deviated significantly from initial projections or if the fixed fee was fully earned based on performance. Effective contract management by the Army would be crucial in controlling costs.
What is the typical annual spending for 'Business Transformation Support' within the Department of the Army?
The provided data focuses on a single contract and does not offer a comprehensive view of the Department of the Army's total annual spending on 'Business Transformation Support'. This specific contract, valued at approximately $20.4 million over nearly six years, represents an average annual spend of roughly $3.4 million. However, the Army likely engages in numerous similar contracts across various directorates and programs. To determine typical annual spending, a broader analysis of all relevant contracts, including those with different NAICS codes and contract types, would be necessary.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: W911W608R0003
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Leidos Holdings, Inc.
Address: 1002 EXPLORER BLVD, HUNTSVILLE, AL, 35806
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business
Financial Breakdown
Contract Ceiling: $22,058,765
Exercised Options: $21,720,366
Current Obligation: $20,382,676
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W911W608D0011
IDV Type: IDC
Timeline
Start Date: 2013-03-26
Current End Date: 2018-11-30
Potential End Date: 2018-11-30 00:00:00
Last Modified: 2023-03-29
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