DoD's Air Force awards $125M+ in engineering services, with OBXTEK Inc. as prime contractor

Contract Overview

Contract Amount: $125,355,767 ($125.4M)

Contractor: Obxtek Inc

Awarding Agency: Department of Defense

Start Date: 2018-04-25

End Date: 2024-02-05

Contract Duration: 2,112 days

Daily Burn Rate: $59.4K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 9

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: THIS CONTRACT SUPPORTS THE SAF/AQ ORGANIZATION, OTHER PEOS AS DIRECTED, AND OTHER HEADQUARTERS AIR FORCE ORGANIZATIONS WHERE IT IS IN THE INTEREST OF THE SAF/AQ TO HAVE AN ACQUISITION SUPPORT PRESENCE WITHIN THAT ORGANIZATION.

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20301

State: District of Columbia Government Spending

Plain-Language Summary

Department of Defense obligated $125.4 million to OBXTEK INC for work described as: THIS CONTRACT SUPPORTS THE SAF/AQ ORGANIZATION, OTHER PEOS AS DIRECTED, AND OTHER HEADQUARTERS AIR FORCE ORGANIZATIONS WHERE IT IS IN THE INTEREST OF THE SAF/AQ TO HAVE AN ACQUISITION SUPPORT PRESENCE WITHIN THAT ORGANIZATION. Key points: 1. Contract value exceeds $125 million over its period of performance. 2. Services are categorized under Engineering Services (NAICS 541330). 3. The contract was awarded under full and open competition. 4. OBXTEK Inc. is the prime contractor for this significant award. 5. The contract spans over six years, indicating a long-term need. 6. Delivery orders are used, suggesting a flexible task-based approach. 7. The contract supports various Air Force organizations, including SAF/AQ.

Value Assessment

Rating: good

The contract's total value of over $125 million over six years suggests a substantial investment in engineering support. Benchmarking against similar large-scale engineering services contracts within the Department of Defense is necessary for a precise value-for-money assessment. However, the firm-fixed-price nature of the contract provides cost certainty for the government, which is a positive indicator. The absence of specific performance metrics makes a detailed assessment of efficiency challenging without further data.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'full and open competition after exclusion of sources,' indicating a competitive bidding process where all responsible sources were permitted to submit offers. The presence of 9 bidders suggests a healthy level of competition for this significant engineering services requirement. A competitive process generally leads to better price discovery and potentially more favorable terms for the government.

Taxpayer Impact: The competitive nature of this award is beneficial for taxpayers, as it likely drove down prices and ensured the government received a fair market value for the engineering services procured.

Public Impact

The primary beneficiaries are various organizations within the Department of the Air Force, including the SAF/AQ organization, which receive critical acquisition and engineering support. The services delivered encompass engineering expertise essential for supporting complex Air Force programs and operations. The contract's impact is primarily concentrated within the District of Columbia, where the supporting organizations are located. The contract supports a workforce of engineers and technical specialists, contributing to specialized employment within the defense sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if delivery orders are not tightly managed.
Reliance on a single prime contractor (OBXTEK Inc.) for a large portion of services.
Ensuring consistent quality across multiple delivery orders and taskings.

Positive Signals

Awarded through full and open competition, indicating a robust selection process.
Firm-fixed-price contract type provides cost predictability.
Long contract duration suggests a stable, ongoing need for these critical services.
Support for key Air Force acquisition functions.

Sector Analysis

This contract falls within the Engineering Services sector, a critical component of the broader professional, scientific, and technical services industry. This sector is characterized by specialized expertise and is vital for government agencies, particularly in defense, requiring complex technical solutions. The market size for engineering services supporting the federal government is substantial, with significant spending allocated annually to research, development, and acquisition support. This contract represents a portion of that broader spending, focusing on acquisition support for Air Force organizations.

Small Business Impact

The data indicates that small business participation (SB set-aside) was not a feature of this contract, as 'sb' is false. There is no explicit information regarding subcontracting plans for small businesses. Without this information, it's difficult to assess the direct impact on the small business ecosystem. However, the absence of a small business set-aside suggests that larger, established firms were the primary focus of this competition.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program management offices within the Department of the Air Force. Transparency is facilitated through contract databases like FPDS. Accountability measures are inherent in the firm-fixed-price structure, which obligates the contractor to deliver services within the agreed-upon price. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense Engineering Services
Air Force Acquisition Support
Professional, Scientific, and Technical Services
Federal IT and Engineering Contracts
Department of Defense Contract Awards

Risk Flags

Potential for cost overruns if not managed tightly.
Contractor performance variability.
Scope creep risk.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $125.4 million to OBXTEK INC. THIS CONTRACT SUPPORTS THE SAF/AQ ORGANIZATION, OTHER PEOS AS DIRECTED, AND OTHER HEADQUARTERS AIR FORCE ORGANIZATIONS WHERE IT IS IN THE INTEREST OF THE SAF/AQ TO HAVE AN ACQUISITION SUPPORT PRESENCE WITHIN THAT ORGANIZATION.

Who is the contractor on this award?

The obligated recipient is OBXTEK INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $125.4 million.

What is the period of performance?

Start: 2018-04-25. End: 2024-02-05.

What is the historical spending trend for engineering services by the Department of the Air Force?

The Department of the Air Force consistently allocates significant funding towards engineering services, reflecting the complex and technologically advanced nature of its operations. Historical data indicates a steady demand for these services, driven by aircraft development, weapons systems sustainment, and infrastructure projects. Spending in this category often fluctuates based on major acquisition programs, modernization efforts, and readiness requirements. For instance, periods of increased spending may correlate with the introduction of new aircraft platforms or upgrades to existing systems. Conversely, budget constraints or shifts in strategic priorities can lead to temporary reductions. Analyzing trends over the past 5-10 years reveals a substantial, multi-billion dollar annual expenditure on engineering support across various Air Force commands and agencies, underscoring its critical role in maintaining air and space superiority.

How does OBXTEK Inc.'s performance on this contract compare to industry benchmarks for similar engineering services?

Assessing OBXTEK Inc.'s performance requires access to specific performance metrics and quality ratings, which are not detailed in the provided data. However, the contract's duration (over six years) and substantial value ($125M+) suggest a sustained level of performance deemed acceptable by the Air Force. Industry benchmarks for engineering services often focus on on-time delivery, adherence to technical specifications, cost control, and customer satisfaction. Without direct performance reports or past performance reviews, a definitive comparison is challenging. Generally, contractors in this space are expected to demonstrate technical proficiency, effective project management, and responsiveness to client needs. The fact that the contract continued and was potentially renewed or extended implies a satisfactory relationship and delivery of required services, though specific comparative data against peers would be needed for a rigorous evaluation.

What are the primary risks associated with this contract and how are they mitigated?

Key risks for this contract include potential cost overruns if the firm-fixed-price structure is not managed effectively, scope creep beyond the defined requirements, and contractor performance issues. Mitigation strategies typically involve robust contract oversight by the government, clear definition of tasks within delivery orders, performance monitoring, and established communication channels with the contractor. For instance, the Air Force likely employs Contracting Officer's Representatives (CORs) to oversee task execution and ensure compliance with technical specifications. Regular progress reviews and performance evaluations help identify and address any deviations early on. Furthermore, the competitive award process itself serves as a risk mitigation tool by selecting a contractor with a demonstrated capability to perform the required services.

What is the typical profit margin for engineering services contracts of this size within the Department of Defense?

Profit margins for engineering services contracts within the Department of Defense can vary significantly based on factors such as contract type, complexity, competition level, and the specific services provided. For firm-fixed-price contracts, which offer cost certainty to the government, contractor profit margins are generally expected to be within a reasonable range, often influenced by industry standards and negotiation. While precise figures are proprietary, industry analyses suggest that profit margins for professional and technical services can range from 5% to 15% or higher, depending on the risk and value added by the contractor. Factors like specialized expertise, innovation, and the level of management effort required can influence the achievable profit. Without specific details on OBXTEK Inc.'s cost structure and negotiation outcomes, it's difficult to pinpoint an exact margin, but it would likely fall within this general industry spectrum.

How has the Air Force's reliance on external engineering services evolved over the past decade?

The Air Force's reliance on external engineering services has generally increased over the past decade, driven by several factors. These include the increasing complexity of modern aerospace and defense technologies, the need for specialized expertise that may not be available in-house, and efforts to optimize workforce structure by outsourcing non-core functions. Budgetary pressures and a focus on core competencies have also encouraged greater use of contractors for support services, including engineering and acquisition support. This trend allows the Air Force to access cutting-edge technology and specialized skills more flexibly than maintaining large internal teams. However, this reliance also necessitates robust oversight to ensure cost-effectiveness, quality, and security, leading to evolving contracting strategies and performance management practices.

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

Solicitation ID: FA701417R5011

Offers Received: 9

Pricing Type: FIRM FIXED PRICE (J)

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: $382,227,496

Exercised Options: $231,172,221

Current Obligation: $125,355,767

Actual Outlays: $6,751,901

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