DoD's $113M NAVSEA ERP support contract to SAIC shows long-term engagement with engineering services

Contract Overview

Contract Amount: $113,197,378 ($113.2M)

Contractor: Science Applications International Corporation

Awarding Agency: Department of Defense

Start Date: 2008-09-30

End Date: 2024-01-25

Contract Duration: 5,595 days

Daily Burn Rate: $20.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: NAVSEA ERP PROGRAM OFFICE SUPPORT SERVICES

Place of Performance

Location: ANDOVER, ESSEX County, MASSACHUSETTS, 01810

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $113.2 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION for work described as: NAVSEA ERP PROGRAM OFFICE SUPPORT SERVICES Key points: 1. The contract demonstrates a significant, long-term commitment to engineering services for the Navy's ERP program. 2. SAIC has been a consistent provider, suggesting a stable relationship and potentially deep institutional knowledge. 3. The cost-plus-fixed-fee structure requires careful monitoring to ensure costs remain reasonable and the fixed fee is justified. 4. With a duration of over 15 years, performance trends and evolving needs are critical to assess value. 5. The contract's value places it as a substantial component within the broader defense engineering services sector. 6. The absence of small business set-asides indicates a focus on large prime contractors for this specific requirement.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific deliverables and performance metrics. However, the extended duration and consistent funding suggest a perceived value by the agency. The cost-plus-fixed-fee (CPFF) pricing structure, while common for complex services, carries inherent risks of cost overruns if not meticulously managed. Comparing the per-unit cost of services against industry benchmarks for similar ERP support and engineering services would be necessary for a more definitive value assessment. The total value of over $113 million over nearly 16 years indicates a substantial investment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to compete. The fact that it resulted in a single delivery order suggests that while competition was available, SAIC was ultimately selected. The level of competition at the prime contract level is positive for price discovery, but the specific details of the bidding process and the number of proposals received would provide a clearer picture of the competitive intensity.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to more favorable pricing and innovative solutions.

Public Impact

The primary beneficiaries are the Department of the Navy and its Enterprise Resource Planning (ERP) program, which relies on these services for operational efficiency. Services delivered likely include program management, systems engineering, technical support, and integration services crucial for maintaining and evolving complex ERP systems. The geographic impact is likely concentrated around NAVSEA facilities and contractor locations, supporting naval operations nationwide. Workforce implications include the employment of engineers, IT specialists, and program managers, both within the government and at the contractor's organization.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contracts require diligent oversight to prevent scope creep and ensure cost efficiency.
The extended duration of the contract (over 15 years) necessitates ongoing evaluation to ensure continued relevance and value.
Performance metrics and quality assurance are critical for a contract of this magnitude and duration to ensure effective service delivery.

Positive Signals

Awarded under full and open competition, suggesting a robust initial selection process.
The contractor, SAIC, is a well-established entity with significant experience in government contracting, potentially indicating reliability.
The contract has been consistently funded and extended, implying satisfactory performance and ongoing agency need.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting large-scale enterprise resource planning systems for a major government agency. The market for defense engineering services is substantial, characterized by long-term relationships, complex technical requirements, and significant government investment. Comparable spending benchmarks would involve analyzing other large IT and systems engineering support contracts within the Department of Defense and other federal agencies, focusing on contracts with similar scope and duration.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. This suggests that the primary requirement was not specifically targeted for small business participation at the prime contract level. However, the prime contractor, SAIC, may engage small businesses as subcontractors to fulfill certain aspects of the contract, contributing to the broader small business ecosystem. Further analysis of subcontracting plans would be needed to fully assess the impact on small businesses.

Oversight & Accountability

Oversight for this contract is likely managed by the Defense Contract Management Agency (DCMA) and the NAVSEA ERP Program Office. Accountability measures would be embedded in the contract's terms, including performance standards, reporting requirements, and payment schedules tied to milestones. Transparency is facilitated through contract databases like FPDS, though detailed performance reports are often internal. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Navy Enterprise Resource Planning (ERP) Program
Department of Defense IT Services
Engineering and Technical Services
Defense Contract Management
Federal IT Modernization

Risk Flags

Long contract duration may require proactive management to ensure continued relevance and innovation.
Cost-plus-fixed-fee structure necessitates rigorous oversight to control costs and ensure value.
Absence of small business set-aside may limit opportunities for smaller firms in prime contracting roles.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $113.2 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION. NAVSEA ERP PROGRAM OFFICE SUPPORT SERVICES

Who is the contractor on this award?

The obligated recipient is SCIENCE APPLICATIONS INTERNATIONAL CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $113.2 million.

What is the period of performance?

Start: 2008-09-30. End: 2024-01-25.

What is the historical spending trend for this contract over its lifespan?

The data indicates this contract has been active since September 30, 2008, with an end date of January 25, 2024, spanning approximately 15.6 years. The total obligated amount is $113,197,377.65. While the provided data doesn't detail annual spending, the cumulative amount suggests consistent funding over the contract's duration. To understand the trend, one would need to examine annual award or obligation data. A consistent level of spending would imply ongoing program needs and stable service delivery, whereas fluctuating spending could indicate program adjustments, funding challenges, or shifts in service requirements. The 'br' field shows $20,232,000 in obligations for 2023, providing a recent snapshot.

How does the pricing structure (Cost Plus Fixed Fee) compare to industry standards for similar services?

Cost Plus Fixed Fee (CPFF) contracts are common in government and industry for services where the scope is not precisely defined at the outset or involves significant research and development. For complex IT support and engineering services like ERP program support, CPFF can be appropriate as it allows for flexibility. However, it places the risk of cost overruns primarily on the government. Industry standards often favor fixed-price contracts for well-defined scopes to incentivize efficiency. For CPFF, the 'fixed fee' component is crucial; it should be a reasonable percentage of the estimated cost and should not escalate without justification. Benchmarking the fee percentage against similar contracts awarded by DoD or other agencies for comparable services would be essential to assess if the fee is competitive and reflects the risk and effort involved.

What are the key performance indicators (KPIs) used to evaluate SAIC's performance under this contract?

Specific Key Performance Indicators (KPIs) for this contract are not publicly detailed in the provided data. However, for a contract supporting an Enterprise Resource Planning (ERP) program, typical KPIs would likely include system uptime and availability, response times for issue resolution, successful implementation of system updates or enhancements, user satisfaction rates, adherence to project timelines for any new development or integration, and overall program cost management. The contracting officer's representative (COR) and the program office would monitor these metrics. Performance evaluations are critical for CPFF contracts to ensure the contractor is delivering value and to justify the fee.

What is the potential impact of this contract's duration on innovation and adaptability?

A contract duration of over 15 years, as seen here, presents a dual impact on innovation and adaptability. On one hand, the long-term relationship allows the contractor, SAIC, to develop deep expertise and institutional knowledge of the NAVSEA ERP system, potentially leading to more efficient and tailored solutions. This stability can foster trust and long-term planning. On the other hand, very long contracts can sometimes lead to complacency or a resistance to adopting newer technologies if not managed proactively. The government must ensure that contract modifications and performance expectations encourage continuous improvement and the integration of innovative solutions to keep the ERP system modern and effective, rather than allowing it to become outdated.

How does the $113M total value compare to other large engineering services contracts within the Department of Defense?

The $113 million total value over approximately 15.6 years places this contract as a significant, but not exceptionally large, engineering services contract within the Department of Defense. DoD awards numerous contracts in the hundreds of millions, and even billions, for major weapon systems, IT infrastructure, and large-scale support services. For context, major IT modernization programs or shipbuilding support contracts can easily exceed this value annually. However, for a specific, focused support service like ERP program office support, $113 million represents a substantial and sustained investment, indicating the critical nature of the ERP system to NAVSEA's operations and SAIC's long-term role in its sustainment.

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

Solicitation ID: N0002408R3211

Offers Received: 4

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 12010 SUNSET HILLS RD, RESTON, VA, 20190

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

Financial Breakdown

Contract Ceiling: $124,606,877

Exercised Options: $124,606,877

Current Obligation: $113,197,378

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017804D4119

IDV Type: IDC

Timeline