State Department awards $546M engineering services contract to OBXTEK INC, with 2118 days duration

Contract Overview

Contract Amount: $54,611,038 ($54.6M)

Contractor: Obxtek Inc

Awarding Agency: Department of State

Start Date: 2020-01-13

End Date: 2025-10-31

Contract Duration: 2,118 days

Daily Burn Rate: $25.8K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: TIME AND MATERIALS

Sector: Other

Official Description: SECD STAFFING

Place of Performance

Location: DUNN LORING, FAIRFAX County, VIRGINIA, 22027

State: Virginia Government Spending

Plain-Language Summary

Department of State obligated $54.6 million to OBXTEK INC for work described as: SECD STAFFING Key points: 1. Contract value represents significant investment in engineering services for the State Department. 2. Full and open competition after exclusion of sources suggests a deliberate procurement strategy. 3. Time and Materials pricing model introduces potential for cost overruns if not managed closely. 4. Long contract duration of 2118 days indicates a sustained need for these services. 5. The award to OBXTEK INC positions them as a key provider for State Department engineering needs. 6. The North American Industry Classification System (NAICS) code 541330 indicates a focus on engineering services.

Value Assessment

Rating: fair

The total award amount of $546,110,380 over approximately 5.8 years suggests a substantial but not necessarily excessive annual spend for engineering services. Benchmarking against similar large-scale engineering contracts within government agencies is necessary for a definitive value assessment. The Time and Materials (T&M) contract type, while flexible, can lead to higher costs compared to fixed-price contracts if not meticulously monitored for efficiency and necessity of hours billed. Without specific performance metrics or comparison data, it's difficult to definitively assess value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' which implies that while the competition was intended to be broad, specific sources were excluded for defined reasons. This suggests a more controlled competitive environment than a purely full and open process. The presence of '2' noted in the data likely refers to the number of bids received or offers evaluated, indicating a limited pool of competitors participated in this specific award action.

Taxpayer Impact: A limited number of bidders can potentially lead to less aggressive pricing for taxpayers. However, the 'after exclusion of sources' clause suggests that the government had reasons for limiting the pool, which might be related to specific technical requirements or past performance.

Public Impact

The primary beneficiary is the Department of State, which receives essential engineering services to support its global operations and infrastructure. Services delivered likely encompass a wide range of engineering disciplines required for diplomatic facilities, security systems, and operational support. The geographic impact is potentially global, given the State Department's international presence, though specific project locations are not detailed. Workforce implications include employment opportunities for engineers and technical staff employed by OBXTEK INC and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The Time and Materials (T&M) pricing structure carries inherent risks of cost escalation if labor hours and material costs are not rigorously controlled and justified.
The 'after exclusion of sources' aspect of the competition warrants scrutiny to ensure that the exclusion criteria were objective and served the government's best interest without unduly limiting competition.
A long contract duration (2118 days) increases the risk of scope creep or the need for contract modifications, potentially impacting the original cost and timeline.
Lack of specific performance metrics in the provided data makes it challenging to assess the contractor's efficiency and effectiveness throughout the contract period.

Positive Signals

The award was made under a competitive process, indicating that multiple entities were considered, even if some were excluded.
The substantial value of the contract suggests a high level of trust and confidence in OBXTEK INC's capabilities to deliver critical engineering services.
The long duration implies a stable, long-term partnership, which can foster efficiency and specialized knowledge development within the contractor.
The contract is for engineering services, a critical function for the State Department's mission, suggesting a well-defined and necessary requirement.

Sector Analysis

The engineering services sector is a vital component of government contracting, supporting infrastructure development, maintenance, and specialized technical requirements across various agencies. The market size for government engineering services is substantial, with significant spending allocated annually. This contract fits within the broader category of professional services, specifically focusing on engineering expertise. Comparable spending benchmarks would involve analyzing other large-scale engineering support contracts awarded by agencies like the Department of Defense, GSA, or other civilian departments.

Small Business Impact

The provided data indicates that small business participation (ss: false, sb: false) was not a primary set-aside consideration for this specific contract award. This suggests that the primary focus was on securing the necessary engineering expertise through the most competitive means available, potentially favoring larger, established firms. There is no explicit information on subcontracting plans for small businesses within this data snippet, which could be a missed opportunity to engage the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the purview of the Department of State's contracting officers and program managers. Accountability measures would be defined within the contract's terms and conditions, likely including performance standards, reporting requirements, and payment schedules tied to deliverables. Transparency is facilitated through contract databases like FPDS, where basic award information is publicly available. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arise concerning the contract's execution.

Related Government Programs

Department of State Facilities Engineering
Department of State Diplomatic Security Services
General Services Administration (GSA) Engineering Contracts
Department of Defense Engineering Support Services
Federal Infrastructure Engineering Services

Risk Flags

Potential for cost overruns due to Time and Materials pricing.
Limited competition may impact price discovery.
Need for rigorous oversight of contractor performance and billing.
Risk of scope creep over the long contract duration.

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $54.6 million to OBXTEK INC. SECD STAFFING

Who is the contractor on this award?

The obligated recipient is OBXTEK INC.

Which agency awarded this contract?

Awarding agency: Department of State (Department of State).

What is the total obligated amount?

The obligated amount is $54.6 million.

What is the period of performance?

Start: 2020-01-13. End: 2025-10-31.

What specific types of engineering services are being procured under this contract?

The provided data indicates the contract falls under NAICS code 541330, which is 'Engineering Services.' This broad category typically encompasses services such as civil, mechanical, electrical, environmental, and structural engineering, as well as project management, design, consulting, and technical analysis. Given the contracting agency is the Department of State, these services likely relate to the design, construction, renovation, security, and maintenance of U.S. diplomatic facilities worldwide, as well as potentially supporting operational technology and infrastructure.

How does the Time and Materials (T&M) pricing structure compare to fixed-price contracts for similar engineering services?

Time and Materials (T&M) contracts offer flexibility, allowing the government to pay for actual labor hours and material costs incurred. This is often used when the scope of work is not clearly defined or is expected to change. However, T&M contracts carry a higher risk of cost overruns for the government compared to fixed-price contracts, as there is less incentive for the contractor to control costs. Fixed-price contracts provide cost certainty but require a well-defined scope of work upfront. For complex, evolving engineering projects, T&M can be appropriate, but it necessitates stringent oversight to manage expenditures effectively.

What are the potential risks associated with the 'Full and Open Competition After Exclusion of Sources' procurement method?

This procurement method suggests that the government initially intended a broad competition but then excluded certain potential offerors based on specific criteria. While this can be legitimate if based on technical requirements, past performance, or security concerns, it carries risks. The primary risk is that excluding qualified sources might limit the pool of bidders, potentially leading to higher prices or less innovative solutions than might have been achieved with wider competition. It's crucial that the exclusion criteria were objective, well-documented, and served a clear government interest to avoid perceptions of impropriety or reduced value for taxpayers.

What is the historical spending pattern for engineering services by the Department of State?

Analyzing historical spending patterns for engineering services by the Department of State would require accessing detailed procurement data over multiple fiscal years. This contract's value of $546 million over nearly six years suggests a significant and ongoing investment. Without historical data, it's difficult to determine if this award represents an increase, decrease, or stable level of spending compared to previous periods. Understanding past spending trends would help contextualize the current award size and assess its long-term financial implications for the agency.

What performance metrics are typically used to evaluate engineering service contracts of this magnitude?

For engineering service contracts of this magnitude, performance metrics often include adherence to project schedules, quality of deliverables (e.g., design accuracy, technical reports), cost control (especially critical for T&M contracts), compliance with safety and environmental regulations, responsiveness to government requests, and overall client satisfaction. Key Performance Indicators (KPIs) are usually established in the contract's Performance Work Statement (PWS). Regular performance reviews, site inspections, and progress reports are common mechanisms for monitoring and evaluating contractor performance.

How does the $546 million award compare to the total budget or spending of the Department of State?

The Department of State's annual budget typically runs into the tens of billions of dollars. A $546 million contract award over approximately 5.8 years, while substantial in absolute terms, represents a fraction of the department's overall annual expenditure. To provide precise context, one would need to compare this award amount to the specific budget allocated for facilities, infrastructure, or relevant operational support within the State Department's annual appropriations. This would help determine its relative significance within the agency's financial landscape.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 2000 CORPORATE RDG STE 400, MC LEAN, VA, 22102

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Service Disabled Veteran Owned Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $54,611,038

Exercised Options: $54,611,038

Current Obligation: $54,611,038

Actual Outlays: $18,882,835

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $6,477,589

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS00Q14OADS131

IDV Type: IDC

Timeline