DoD's $59.7M contract for IT services awarded to SCIENCE AND ENGINEERING SERVICES, LLC shows a high per-unit cost

Contract Overview

Contract Amount: $59,698,982 ($59.7M)

Contractor: Science and Engineering Services, LLC

Awarding Agency: Department of Defense

Start Date: 2008-09-18

End Date: 2010-06-30

Contract Duration: 650 days

Daily Burn Rate: $91.8K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: MSD-V2

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35810

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $59.7 million to SCIENCE AND ENGINEERING SERVICES, LLC for work described as: MSD-V2 Key points: 1. The contract value of $59.7M over approximately two years suggests a significant investment in IT services. 2. The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' indicates a specific, though not entirely open, procurement process. 3. The award to SCIENCE AND ENGINEERING SERVICES, LLC warrants scrutiny regarding their past performance and pricing competitiveness. 4. The contract's duration and firm fixed-price nature provide some cost certainty but may limit flexibility. 5. The absence of small business set-aside flags suggests larger prime contractors were likely involved or targeted. 6. The North American Industry Classification System (NAICS) code 334111 points to the manufacturing of electronic computers, which may be a component of the services rendered.

Value Assessment

Rating: questionable

The total award of $59.7M for a period of roughly 650 days results in a daily burn rate of approximately $91,845. This rate appears high when compared to typical IT service contracts of similar scope and duration. Without specific details on the services rendered, it is difficult to benchmark precisely, but the overall expenditure suggests a need for detailed justification of value for money.

Cost Per Unit: $91,845 per day (estimated daily burn rate)

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES.' This procurement method implies that while multiple sources were considered, certain entities were excluded, potentially limiting the breadth of competition. The fact that there was only one bid received (no: 1) is a significant concern, as it severely restricts price discovery and suggests potential issues with the solicitation or market conditions.

Taxpayer Impact: A single bid in a limited competition raises concerns about whether taxpayers received the best possible price. The lack of robust competition could have led to a higher cost than if multiple vendors had vied for the contract.

Public Impact

The primary beneficiary is the Department of Defense, specifically the Department of the Army, receiving IT services. The services delivered are related to electronic computer manufacturing, though the exact nature of the services is not detailed. The geographic impact is likely within the operational areas of the Department of the Army. Workforce implications could include IT specialists and potentially manufacturing personnel, depending on the service specifics.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Single bid received, indicating potentially insufficient competition and limited price negotiation.
High estimated daily burn rate suggests potential for overpayment if not carefully managed.
Procurement method 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' warrants further investigation into the reasons for exclusion.
NAICS code 334111 (Electronic Computer Manufacturing) seems specific and may not fully align with general IT services, requiring clarification.

Positive Signals

Firm Fixed Price contract type provides cost certainty for the government.
Contract awarded to SCIENCE AND ENGINEERING SERVICES, LLC, suggesting they met the government's requirements.
The contract was awarded by the Department of the Army, a major component of the DoD.

Sector Analysis

The IT services sector is vast and highly competitive. Contracts related to electronic computer manufacturing, as indicated by NAICS code 334111, often involve complex hardware, software, and integration services. The total contract value of $59.7M places this within the mid-to-large tier for federal IT procurements. Benchmarking this specific contract is challenging without more granular data on the services provided, but the daily expenditure rate is a key area for comparison against industry standards for similar government IT support.

Small Business Impact

The contract does not indicate any specific small business set-aside provisions (ss: false, sb: false). This suggests that the procurement was not specifically targeted towards small businesses, and larger companies were likely eligible and potentially dominant in the bidding process. There is no information provided on subcontracting plans, so the impact on the small business ecosystem is unclear but likely minimal unless SCIENCE AND ENGINEERING SERVICES, LLC voluntarily engages small businesses.

Oversight & Accountability

Oversight for this contract would fall under the Department of the Army's contracting and program management offices. Transparency is limited by the available data; the specific services and performance metrics are not publicly detailed. Accountability would be managed through contract performance reviews and payment processes. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

IT Services Contracts
Defense IT Spending
Electronic Computer Manufacturing Support
Department of the Army Procurements
Firm Fixed Price Contracts

Risk Flags

Limited Competition (1 Bid)
Potential for Overpricing
Unclear Service Scope vs. NAICS Code
Justification for Source Exclusion Needed

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $59.7 million to SCIENCE AND ENGINEERING SERVICES, LLC. MSD-V2

Who is the contractor on this award?

The obligated recipient is SCIENCE AND ENGINEERING SERVICES, LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $59.7 million.

What is the period of performance?

Start: 2008-09-18. End: 2010-06-30.

What specific IT services were rendered under this contract, and how do they align with the NAICS code 334111 (Electronic Computer Manufacturing)?

The provided data lists NAICS code 334111, which pertains to the 'Electronic Computer Manufacturing' subsector. However, the contract description is 'SCIENCE AND ENGINEERING SERVICES, LLC'. This creates a potential mismatch or suggests the services were highly specialized, possibly involving the manufacturing or integration of computer hardware as part of a larger IT solution for the Department of Defense. Without further details from the contract's statement of work, it's impossible to ascertain the precise nature of the IT services. They could range from custom hardware development and production to complex system integration, maintenance of specialized computing infrastructure, or even research and development related to electronic computing components. Clarification is needed to understand how the 'manufacturing' aspect translates into the 'services' procured by the Army.

What is the justification for the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' procurement method, and which sources were excluded?

The procurement method 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' (FOUCAES) is used when the government intends to solicit offers from all responsible sources, but specific sources are excluded from consideration. The reasons for exclusion are typically based on factors such as national security, proprietary information, or specific technical requirements that only certain entities can meet. Without access to the contract's justification and approval (J&A) document, the specific rationale for excluding certain sources and the identities of those excluded remain unknown. This method can sometimes limit competition, and understanding the basis for exclusion is crucial to assessing whether it was justified and if it impacted the final price obtained for the government.

How does the estimated daily burn rate of $91,845 compare to industry benchmarks for similar IT services contracts awarded by the Department of Defense?

An estimated daily burn rate of $91,845 for an IT services contract is substantial. Benchmarking this figure requires detailed knowledge of the specific services provided, the labor categories involved, and the level of expertise required. For general IT support or standard software development, this rate might be considered high. However, if the contract involves highly specialized areas such as advanced cybersecurity, complex system integration for mission-critical platforms, or the development/maintenance of unique hardware as suggested by the NAICS code, the rate could be more justifiable. Comparisons with other DoD contracts for similar specialized engineering or IT services, adjusted for contract duration and scope, would be necessary for a precise assessment. The lack of competition (one bid) further complicates a direct value-for-money assessment.

What is the track record of SCIENCE AND ENGINEERING SERVICES, LLC in performing similar federal contracts, particularly those with the Department of Defense?

Information on the track record of SCIENCE AND ENGINEERING SERVICES, LLC is not provided in the data snippet. A thorough analysis would require examining their past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), previous contract awards, and any history of contract disputes or terminations. Assessing their experience with similar IT services, especially those related to electronic computer manufacturing or complex engineering solutions for the DoD, is critical. A strong track record with successful past performance can provide some assurance regarding their capability to execute this $59.7M contract. Conversely, a history of issues could indicate higher performance risks.

Given the limited competition (one bid), what steps were taken to ensure fair and reasonable pricing for this contract?

When a contract receives only one bid, especially after a 'limited' competition, ensuring fair and reasonable pricing becomes paramount. The contracting officer is responsible for validating the price through various means, such as comparing it to historical prices for similar services, analyzing the contractor's cost breakdown, or obtaining independent government cost estimates. The 'firm fixed price' nature of the contract suggests the price was negotiated upfront. However, the absence of competing bids means there was no market-driven pressure to lower the price. The government would need to rely heavily on its own cost analysis capabilities and potentially negotiate aggressively with the sole bidder to achieve a fair price, making the justification for the price particularly important.

What are the potential risks associated with a contract that received only one bid, and how might these risks manifest?

A contract receiving only one bid carries several inherent risks. Firstly, there's a significant risk of paying an inflated price due to the lack of competitive pressure. The sole bidder knows they are the only option, potentially leading to less incentive to offer their best pricing. Secondly, there's a risk related to performance; if the contractor is not fully capable or motivated, the government has limited recourse without incurring significant costs and delays associated with re-soliciting. Thirdly, the exclusion of other potential sources, even if justified, might mean that a more innovative or cost-effective solution was overlooked. These risks could manifest as cost overruns, schedule delays, subpar service quality, or a failure to meet the program's objectives.

Industry Classification

NAICS: Manufacturing › Computer and Peripheral Equipment Manufacturing › Electronic Computer Manufacturing

Product/Service Code: INSTRUMENTS AND LABORATORY EQPT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Science and Engineering Services LLC (UEI: 783196348)

Address: 4015 PULASKI PIKE NW, HUNTSVILLE, AL, 05

Business Categories: Category Business, Small Business

Financial Breakdown

Contract Ceiling: $59,698,982

Exercised Options: $59,698,982

Current Obligation: $59,698,982

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W15P7T05DB201

IDV Type: IDC

Timeline