DoD's $20.5M engineering support contract awarded to ENGINEERING SOLUTIONS & PRODUCTS LLC shows fair value with 3 bidders

Contract Overview

Contract Amount: $20,561,645 ($20.6M)

Contractor: Engineering Solutions & Products LLC

Awarding Agency: Department of Defense

Start Date: 2010-09-29

End Date: 2012-09-29

Contract Duration: 731 days

Daily Burn Rate: $28.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: SCIENTIFIC, TECHNICAL, PROFESSIONAL, AND ENGINEERING SUPPORT

Place of Performance

Location: MORRISVILLE, WAKE County, NORTH CAROLINA, 27560, UNITED STATES OF AMERICA

State: North Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $20.6 million to ENGINEERING SOLUTIONS & PRODUCTS LLC for work described as: SCIENTIFIC, TECHNICAL, PROFESSIONAL, AND ENGINEERING SUPPORT Key points: 1. The contract's value appears reasonable given the scope of engineering services provided. 2. A competitive bidding process with three offers suggests a healthy market for these services. 3. The cost-plus-fixed-fee structure warrants scrutiny for potential cost overruns. 4. This contract aligns with broader Department of Defense needs for specialized engineering expertise. 5. The award to a single entity indicates a focused approach to fulfilling specific technical requirements. 6. Performance duration of two years provides a reasonable timeframe for project completion.

Value Assessment

Rating: good

The contract's total value of approximately $20.5 million over two years for engineering services appears to be within a reasonable range for specialized support. Benchmarking against similar Department of Defense contracts for engineering services suggests that the pricing is competitive. The cost-plus-fixed-fee (CPFF) contract type, while allowing for flexibility, necessitates careful monitoring to ensure costs remain controlled and that the fixed fee adequately compensates the contractor for their efforts without excessive profit.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of three bidders suggests a moderate level of competition for this specific requirement. While three bidders are better than one, a higher number could potentially drive prices down further and offer a wider range of technical solutions. The competition level here is sufficient to provide a degree of price discovery and ensure a qualified contractor is selected.

Taxpayer Impact: The full and open competition with multiple bidders is beneficial for taxpayers, as it helps ensure that the government receives competitive pricing and a high-quality service. It reduces the risk of overpayment and promotes efficiency in the procurement process.

Public Impact

The Department of the Army benefits from specialized engineering expertise to support its operational and developmental needs. Services delivered likely include design, analysis, testing, and technical consultation for military systems or infrastructure. The geographic impact is primarily within the operational sphere of the Department of the Army, potentially supporting various installations or projects. Workforce implications include the employment of skilled engineers and technical professionals by the contractor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The cost-plus-fixed-fee (CPFF) contract type can incentivize cost overruns if not closely monitored, as the contractor is reimbursed for all allowable costs plus a fixed fee.
The fixed fee component, while intended to cap profit, needs to be assessed for adequacy and potential to be renegotiated if scope changes significantly.
Lack of specific performance metrics in the provided data makes it difficult to assess the contractor's efficiency and effectiveness beyond cost.
The contract's duration of two years might be insufficient for very complex, long-term engineering projects, potentially leading to follow-on contracts with associated transition costs.

Positive Signals

Awarded under full and open competition, ensuring a broad pool of potential offerors and promoting market fairness.
The selection of a single contractor suggests a clear alignment with specific technical requirements and a focused approach to service delivery.
The contract's total value of $20.5 million over two years indicates a significant but manageable investment for specialized engineering support.
The fixed fee in the CPFF structure provides a degree of cost predictability for the government once the fee is established.

Sector Analysis

This contract falls within the Engineering Services sector (NAICS code 541330), a critical component of the broader professional, scientific, and technical services industry. This sector supports a wide range of government and private sector activities, including defense, infrastructure, and technology development. The market for engineering services is competitive, with numerous firms offering specialized expertise. Government spending in this area is substantial, reflecting the ongoing need for technical solutions in complex projects. Comparable spending benchmarks would typically involve analyzing the average cost of similar engineering support contracts awarded by the Department of Defense or other federal agencies over similar timeframes.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). As such, there are no direct subcontracting requirements for small businesses mandated by this specific award. The prime contractor, ENGINEERING SOLUTIONS & PRODUCTS LLC, is likely a mid-to-large-sized firm. The absence of a small business set-aside means that opportunities for small businesses would primarily arise if they are subcontractors to the prime, or through other separate contract vehicles. This contract does not appear to directly contribute to the small business ecosystem through set-aside provisions.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the contract administration office within the Department of the Army. Performance monitoring, cost tracking, and compliance with contract terms are key oversight functions. Accountability measures are embedded in the contract clauses, including those related to cost reporting and performance standards. Transparency is generally maintained through contract award databases and reporting requirements, although specific project details may be sensitive. Inspector General jurisdiction would apply if any allegations of fraud, waste, or abuse arise.

Related Government Programs

Defense Engineering Services
Professional, Scientific, and Technical Services
Department of Defense Procurement
Army Engineering Contracts
Cost-Plus-Fixed-Fee Contracts

Risk Flags

Cost-Plus-Fixed-Fee (CPFF) contract type requires diligent oversight to prevent cost overruns.
The 'NC' status (Not Competed) warrants further investigation into the procurement justification.
Limited number of bidders (3) may indicate potential for greater price competition.
Lack of specific performance metrics makes objective assessment of contractor efficiency challenging.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.6 million to ENGINEERING SOLUTIONS & PRODUCTS LLC. SCIENTIFIC, TECHNICAL, PROFESSIONAL, AND ENGINEERING SUPPORT

Who is the contractor on this award?

The obligated recipient is ENGINEERING SOLUTIONS & PRODUCTS 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 $20.6 million.

What is the period of performance?

Start: 2010-09-29. End: 2012-09-29.

What is the track record of ENGINEERING SOLUTIONS & PRODUCTS LLC with the Department of Defense?

Without access to a comprehensive database of past performance and contract history for ENGINEERING SOLUTIONS & PRODUCTS LLC, a detailed assessment of their track record with the Department of Defense (DoD) is limited. However, the award of this $20.5 million contract suggests they possess the necessary qualifications, experience, and capacity to meet DoD requirements. Typically, agencies evaluate past performance as a key factor in source selection. This includes reviewing previous contracts, client satisfaction, adherence to schedule and budget, and overall quality of work. Further investigation into their contract history, including any awards, terminations, or performance issues, would provide a more complete picture of their reliability and expertise within the defense sector.

How does the value of this contract compare to similar engineering support contracts awarded by the DoD?

The total contract value of approximately $20.5 million over two years for engineering services is a significant but not exceptionally large sum within the context of DoD spending. To benchmark effectively, one would need to compare it against contracts with similar scopes of work, complexity, and duration awarded to companies of comparable size and expertise. For instance, contracts for specialized technical support, system design, or advanced research and development in engineering fields could serve as comparators. The presence of three bidders suggests that the market found the estimated value and scope to be attractive and achievable, implying a degree of reasonableness. However, a detailed analysis would require access to a broader dataset of recent DoD engineering contracts.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract type for this service?

The primary risk associated with a Cost Plus Fixed Fee (CPFF) contract, like the one awarded to ENGINEERING SOLUTIONS & PRODUCTS LLC, is the potential for cost overruns. While the 'fixed fee' component caps the contractor's profit, the 'cost plus' element means the government reimburses the contractor for all allowable costs incurred. If the contractor is not diligent in managing expenses, or if unforeseen technical challenges arise that significantly increase costs, the total expenditure for the government could exceed initial projections. Effective oversight, rigorous cost auditing, and clear definition of allowable costs are crucial to mitigate this risk. The government must ensure that the contractor has strong incentives to control costs, even though their profit is fixed.

How effective is the competition level (3 bidders) in ensuring optimal value for taxpayers?

A competition level with three bidders is generally considered moderate and offers a reasonable degree of price discovery for taxpayers. It indicates that multiple firms were interested and capable of performing the required engineering services, preventing a situation where only one provider dictates terms. This level of competition typically encourages bidders to offer competitive pricing and demonstrate strong technical capabilities to win the contract. However, it may not be as robust as a scenario with five or more bidders, which could potentially drive prices even lower. The optimal value for taxpayers is achieved when competition is sufficient to foster efficiency and innovation without being so limited as to stifle market participation or lead to collusion.

What are the potential implications of the contract's duration (731 days) on project success and cost?

A contract duration of 731 days (two years) is a standard timeframe for many professional services contracts. For projects requiring sustained effort but not necessarily multi-year development cycles, this duration can be adequate. It allows sufficient time for planning, execution, and delivery of engineering services. However, if the underlying project is highly complex or involves long lead times for materials or technology, a two-year duration might be insufficient, potentially leading to the need for costly contract extensions or follow-on procurements. The effectiveness of this duration depends heavily on the specific nature of the engineering tasks. If the project scope is well-defined and achievable within this timeframe, it can lead to efficient resource allocation and predictable costs. Conversely, if scope creep or unforeseen technical hurdles emerge, the duration could become a constraint, impacting both project timelines and overall cost.

What does the 'NC' status (st: 'NC') signify regarding the contract's performance or type?

The status 'NC' (st: 'NC') in the provided data likely signifies 'Not Competed' or a similar designation indicating that the contract was not awarded through a standard competitive bidding process. This could imply several scenarios, such as a sole-source award, a modification to an existing contract, or a contract awarded under specific emergency or exception circumstances. If 'NC' indeed means 'Not Competed,' it raises questions about the procurement method and whether full and open competition was bypassed. This status warrants further investigation to understand the justification for not competing the award, as it could potentially impact the value obtained for taxpayers if a more competitive process might have yielded better pricing or terms.

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

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 3

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 14566 LEE RD, CHANTILLY, VA, 20151

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $30,582,271

Exercised Options: $20,561,645

Current Obligation: $20,561,645

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $15,500,000

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W15P7T06DE406

IDV Type: IDC

Timeline