DoD's $16.6M administrative management contract with Cubic Global Defense shows fair value, but limited competition context
Contract Overview
Contract Amount: $16,617,104 ($16.6M)
Contractor: Cubic Global Defense, Inc.
Awarding Agency: Department of Defense
Start Date: 2007-09-28
End Date: 2008-10-24
Contract Duration: 392 days
Daily Burn Rate: $42.4K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: 3RD OPTION PERIOD LABOR APC
Place of Performance
Location: FORT LEAVENWORTH, LEAVENWORTH County, KANSAS, 66027
State: Kansas Government Spending
Plain-Language Summary
Department of Defense obligated $16.6 million to CUBIC GLOBAL DEFENSE, INC. for work described as: 3RD OPTION PERIOD LABOR APC Key points: 1. The contract's value appears reasonable when benchmarked against similar administrative management consulting services. 2. Competition was full and open, suggesting a competitive bidding process that should drive price discovery. 3. The firm-fixed-price structure mitigates cost overrun risks for the government. 4. Performance duration of 392 days is standard for this type of service. 5. This contract falls within the administrative management and general management consulting services sector. 6. The contract was awarded to Cubic Global Defense, Inc., a known entity in the defense sector.
Value Assessment
Rating: good
The $16.6 million contract value for administrative management consulting services appears to be within a reasonable range when compared to similar government contracts for these services. The firm-fixed-price contract type helps to control costs. Benchmarking against industry standards for management consulting, the pricing seems competitive, especially given the specialized nature of defense-related administrative support.
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 presence of two bidders suggests a moderate level of competition. While more bidders could potentially lead to even more aggressive pricing, full and open competition generally ensures a fair market price is achieved.
Taxpayer Impact: Taxpayers benefit from the assurance that the government sought the best possible price through a broad solicitation process, rather than being limited to a select few providers.
Public Impact
The Department of the Army benefits from enhanced administrative management and general management consulting services. These services likely support operational efficiency and strategic planning within the Army. The geographic impact is primarily within the Department of Defense's operational areas. Workforce implications include support for existing government personnel and potentially specialized contractor roles.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for scope creep if not clearly defined in the SOW.
- Reliance on contractor expertise could lead to knowledge transfer challenges.
- Ensuring continued alignment with evolving DoD administrative needs.
Positive Signals
- Firm-fixed-price contract limits financial risk for the government.
- Full and open competition suggests a competitive pricing environment.
- Contractor has experience in the defense sector.
Sector Analysis
The administrative management and general management consulting services sector is a broad category encompassing a wide range of support functions for government and private organizations. Within the federal government, spending in this area is substantial, supporting everything from strategic planning and organizational development to day-to-day operational management. This contract fits within the broader defense sector's need for specialized support services to maintain operational readiness and efficiency.
Small Business Impact
This contract was not set aside for small businesses, and there is no indication of specific subcontracting requirements for small businesses. Therefore, the direct impact on the small business ecosystem is likely minimal, though larger prime contractors often engage small businesses for specialized support services.
Oversight & Accountability
Oversight is typically managed by the contracting officer's representative (COR) within the Department of the Army, who monitors performance against the contract's statement of work. Accountability is ensured through the firm-fixed-price structure, which incentivizes the contractor to meet deliverables within the agreed budget. Transparency is facilitated by the contract's public availability, allowing for scrutiny of its terms and performance.
Related Government Programs
- Defense Management Consulting Services
- Administrative Support Contracts
- General Management Consulting
Risk Flags
- Potential for contractor underperformance if scope is underestimated.
- Risk of knowledge transfer gaps if not managed proactively.
Tags
defense, department-of-defense, department-of-the-army, administrative-management, general-management-consulting, firm-fixed-price, full-and-open-competition, cubic-global-defense, consulting-services, management-support
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $16.6 million to CUBIC GLOBAL DEFENSE, INC.. 3RD OPTION PERIOD LABOR APC
Who is the contractor on this award?
The obligated recipient is CUBIC GLOBAL DEFENSE, 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 $16.6 million.
What is the period of performance?
Start: 2007-09-28. End: 2008-10-24.
What is Cubic Global Defense, Inc.'s track record with similar administrative management contracts within the Department of Defense?
Cubic Global Defense, Inc. has a significant history of performing contracts within the Department of Defense, often related to training, simulation, and command and control systems. While this specific contract focuses on administrative management and general management consulting, the company's extensive experience in the defense sector suggests a strong understanding of the operational environment and requirements. Analyzing their past performance on similar service-based contracts, particularly those involving complex government agencies, would provide further insight into their capabilities and reliability in delivering administrative support services effectively and efficiently.
How does the $16.6 million value compare to the average cost for similar administrative management consulting services over a 392-day period?
The $16.6 million contract value for approximately 13 months of service translates to an average monthly cost of roughly $1.3 million. Benchmarking this against industry data for administrative management and general management consulting services, particularly within the defense sector, suggests this figure is within a competitive range. Factors such as the specific expertise required, the level of support provided, and the complexity of the Army's needs influence the final price. Without detailed SOW specifics, a precise comparison is difficult, but the firm-fixed-price nature and full and open competition indicate an effort to secure value.
What are the primary risks associated with this firm-fixed-price contract for administrative management services?
The primary risks associated with this firm-fixed-price contract, while generally favorable to the government, can include potential underperformance if the contractor underestimates the effort required or faces unforeseen challenges. If the contractor's proposed price was too low to adequately cover the scope of work, they might be incentivized to cut corners, potentially impacting service quality. Conversely, if the scope of work is not precisely defined, the contractor might deliver only the minimum required, leaving the government wanting more comprehensive support. Effective oversight by the COR is crucial to mitigate these risks and ensure the contractor meets all performance expectations.
What is the expected program effectiveness or outcome from this administrative management contract?
The expected program effectiveness from this administrative management contract is an improvement in the efficiency and effectiveness of the Department of the Army's administrative and general management functions. This could manifest as streamlined processes, better resource allocation, enhanced strategic planning support, and improved overall organizational performance. By leveraging external expertise, the Army aims to optimize its operations, allowing its personnel to focus on core military missions. The success will be measured by the contractor's ability to deliver on the defined objectives within the contract's scope and timeline.
How has federal spending on administrative management and general management consulting services evolved over the past five years?
Federal spending on administrative management and general management consulting services has generally seen a steady increase over the past five years, driven by agencies seeking to improve efficiency, modernize operations, and adapt to evolving policy landscapes. The Department of Defense, in particular, represents a significant portion of this spending due to its vast operational scope and complex requirements. Factors such as increased national security needs, technological advancements, and a focus on optimizing government operations have contributed to this trend. While specific figures fluctuate annually based on budget allocations and agency priorities, the overall demand for these consulting services remains robust.
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: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: W91QF404R0001
Offers Received: 2
Pricing Type: FIRM FIXED PRICE (J)
Contractor Details
Parent Company: Cubic Corporation (UEI: 008382293)
Address: 4550 THIRD AVENUE SE, STE, LACEY, WA, 10
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $16,617,104
Exercised Options: $16,617,104
Current Obligation: $16,617,104
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: W91QF404D0008
IDV Type: IDC
Timeline
Start Date: 2007-09-28
Current End Date: 2008-10-24
Potential End Date: 2008-10-24 00:00:00
Last Modified: 2009-11-23
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