DoD's $67M EPASS contract for ISR support awarded to Apogee Engineering shows fair competition and potential value

Contract Overview

Contract Amount: $67,081,708 ($67.1M)

Contractor: Apogee Engineering, LLC

Awarding Agency: Department of Defense

Start Date: 2020-05-22

End Date: 2025-05-21

Contract Duration: 1,825 days

Daily Burn Rate: $36.8K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: SCAT 1 ENGINEERING PROFESSIONAL AND ADMINISTRATIVE SUPPORT SERVICES (EPASS) TO SUPPORT INTELLIGENCE SURVEILLANCE RECONNAISSANCE (ISR) AND SPECIAL OPERATIONS FORCES DIRECTORATE, ISR SENSORS AND FOREIGN MILITARY SALES (AFLCMC/WIN)

Place of Performance

Location: COLORADO SPRINGS, EL PASO County, COLORADO, 80920

State: Colorado Government Spending

Plain-Language Summary

Department of Defense obligated $67.1 million to APOGEE ENGINEERING, LLC for work described as: SCAT 1 ENGINEERING PROFESSIONAL AND ADMINISTRATIVE SUPPORT SERVICES (EPASS) TO SUPPORT INTELLIGENCE SURVEILLANCE RECONNAISSANCE (ISR) AND SPECIAL OPERATIONS FORCES DIRECTORATE, ISR SENSORS AND FOREIGN MILITARY SALES (AFLCMC/WIN) Key points: 1. Contract awarded through full and open competition, indicating a robust bidding process. 2. Apogee Engineering, LLC, a relatively small business, secured this significant award. 3. The contract type (Cost Plus Fixed Fee) allows for flexibility but requires careful oversight. 4. Performance period spans five years, suggesting a long-term need for these services. 5. The contract is for engineering and administrative support for ISR and Special Operations. 6. The award value of $67M over five years suggests a substantial annual spend.

Value Assessment

Rating: good

The contract's value of approximately $13.4 million annually is within a reasonable range for specialized engineering and administrative support services for intelligence, surveillance, and reconnaissance (ISR) and special operations. Benchmarking against similar large-scale DoD contracts for engineering support, this pricing appears competitive, especially given the critical nature of the services. The Cost Plus Fixed Fee (CPFF) structure, while common for complex projects, necessitates diligent cost tracking to ensure value for money.

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,' which implies that while initial solicitations may have had some restrictions, the final award was made after a broad competitive process. The presence of two bidders suggests a reasonable level of competition for this specialized requirement. A higher number of bidders would typically drive prices down further, but two qualified bidders for a niche service like ISR support is not necessarily indicative of a lack of competition.

Taxpayer Impact: The competitive nature of this award, despite only two bidders, suggests that taxpayer funds were likely used efficiently by encouraging at least some price discovery among qualified contractors.

Public Impact

The primary beneficiaries are the Department of the Air Force's ISR and Special Operations Forces Directorate, receiving critical engineering and administrative support. Services delivered include technical expertise and administrative functions essential for maintaining and enhancing ISR capabilities. The geographic impact is likely concentrated around the Air Force's ISR sensor development and foreign military sales activities, primarily within the United States. Workforce implications include the employment of specialized engineers and administrative personnel by Apogee Engineering, LLC.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

CPFF contract type requires robust oversight to manage costs effectively.
Limited number of bidders (2) could potentially limit price competition.
Contract duration of five years necessitates ongoing performance monitoring.

Positive Signals

Awarded through full and open competition, indicating a fair and accessible process.
Apogee Engineering, LLC, is a small business, aligning with government goals to support smaller contractors.
The contract supports critical ISR and Special Operations capabilities for national security.

Sector Analysis

This contract falls within the broader Engineering Services sector, specifically supporting defense intelligence and special operations. The market for ISR and related defense support services is highly specialized, with a limited number of prime contractors possessing the necessary clearances and expertise. Spending in this niche is driven by national security priorities and technological advancements in surveillance and reconnaissance.

Small Business Impact

Apogee Engineering, LLC, is identified as a small business, and this contract award aligns with federal objectives to award a portion of government contracts to small businesses. While this is a prime contract award to a small business, the potential for subcontracting opportunities for other small businesses exists, though not explicitly detailed in the provided data. The impact on the small business ecosystem is positive, providing a significant contract vehicle for a growing small firm in the defense sector.

Oversight & Accountability

Oversight for this Cost Plus Fixed Fee contract will likely be managed by the Air Force Life Cycle Management Center (AFLCMC/WIN). Accountability measures will be tied to performance metrics outlined in the contract and regular reporting requirements. Transparency is facilitated through contract award databases, though detailed cost breakdowns may be limited due to security classifications. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Intelligence, Surveillance, and Reconnaissance (ISR) Support Services
Special Operations Forces Support
Engineering and Technical Services
Foreign Military Sales Support
Department of Defense Contract Awards

Risk Flags

Cost Overrun Risk (CPFF)
Limited Bidder Pool
Performance Monitoring Complexity

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $67.1 million to APOGEE ENGINEERING, LLC. SCAT 1 ENGINEERING PROFESSIONAL AND ADMINISTRATIVE SUPPORT SERVICES (EPASS) TO SUPPORT INTELLIGENCE SURVEILLANCE RECONNAISSANCE (ISR) AND SPECIAL OPERATIONS FORCES DIRECTORATE, ISR SENSORS AND FOREIGN MILITARY SALES (AFLCMC/WIN)

Who is the contractor on this award?

The obligated recipient is APOGEE ENGINEERING, LLC.

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 $67.1 million.

What is the period of performance?

Start: 2020-05-22. End: 2025-05-21.

What is Apogee Engineering, LLC's track record with similar DoD contracts?

Apogee Engineering, LLC, has a history of supporting DoD programs, particularly in areas related to engineering, technical services, and program management. While specific details on past ISR-related contracts are not provided here, their presence as a prime contractor on this significant award suggests prior successful performance and capability in meeting defense requirements. Further investigation into their contract history, including past performance reviews and any reported issues, would provide a more comprehensive understanding of their reliability and expertise in executing complex defense support services.

How does the annual value of this contract compare to similar ISR support contracts?

The annual value of this contract, estimated at approximately $13.4 million ($67M / 5 years), appears to be within the typical range for specialized engineering and administrative support services for critical defense functions like ISR and Special Operations. Large-scale contracts for similar services can range from tens to hundreds of millions of dollars annually, depending on the scope, duration, and specific technological requirements. Given the niche nature of ISR sensor support and foreign military sales, this value suggests a substantial but not exceptionally high expenditure compared to broader defense IT or weapons system development contracts.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for ISR support?

The primary risk with a CPFF contract, like this one for ISR support, is the potential for cost overruns if not managed diligently. While the contractor's profit is fixed, they are reimbursed for all allowable costs. This can incentivize less cost-conscious behavior compared to fixed-price contracts. For the government, the risk lies in paying higher-than-necessary costs if the contractor's efficiency is low or if scope creep occurs without adequate controls. Robust government oversight, detailed cost tracking, and clear performance metrics are crucial to mitigate these risks and ensure value for taxpayer money.

How effective is the 'full and open competition after exclusion of sources' method for specialized defense contracts?

The 'full and open competition after exclusion of sources' method aims to balance the need for broad competition with the reality that some specialized defense contracts may initially require specific capabilities or clearances that limit the pool of potential bidders. By excluding sources initially but then opening it up, the government seeks to ensure that all capable vendors have a fair chance to compete. For highly specialized areas like ISR support, this method can be effective in identifying qualified contractors while still promoting competition. However, the effectiveness hinges on the justification for initial exclusions and the breadth of the subsequent open competition.

What is the historical spending trend for ISR engineering and support services within the Department of Defense?

Historical spending on ISR engineering and support services within the DoD has generally trended upwards over the past two decades, driven by increasing reliance on intelligence gathering, advancements in sensor technology, and evolving geopolitical landscapes. While specific figures fluctuate based on global security priorities and budget allocations, the demand for specialized engineering, data analysis, and operational support for ISR platforms remains consistently high. This contract represents a continuation of that trend, reflecting the ongoing investment in maintaining and enhancing critical ISR capabilities.

What are the implications of awarding this contract to a small business like Apogee Engineering, LLC?

Awarding this significant contract to Apogee Engineering, LLC, a small business, has several positive implications. It directly supports the government's small business contracting goals, fostering growth and capacity within the small business sector. It also introduces potential for innovation and agility that smaller firms can sometimes offer. However, it also places a significant responsibility on Apogee to manage the complex requirements and potential risks associated with a large DoD contract. The government will need to ensure adequate support and oversight are in place to facilitate Apogee's successful performance.

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: FA862220R8238

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 8610 EXPLORER DRIVE, SUITE 305, COLORADO SPRINGS, CO, 80920

Business Categories: Black American Owned Business, Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $102,278,180

Exercised Options: $92,277,834

Current Obligation: $67,081,708

Actual Outlays: $566,336

Subaward Activity

Number of Subawards: 6

Total Subaward Amount: $23,512,872

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 47QRAD19D3001

IDV Type: IDC

Timeline