DoD's $318M MILSATCOM SE&I contract to LinQuest Corporation shows fair value with 2 bidders

Contract Overview

Contract Amount: $318,093,608 ($318.1M)

Contractor: Linquest Corporation

Awarding Agency: Department of Defense

Start Date: 2013-06-28

End Date: 2019-08-31

Contract Duration: 2,255 days

Daily Burn Rate: $141.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS INCENTIVE FEE

Sector: R&D

Official Description: IGF::CT::IGF SYSTEMS ENGINEERING&INTERGRATION SUPPORT SERVICES (SE&I) FOR THE MILSATCOM SYSTEMS DIRECTORATE

Place of Performance

Location: LOS ANGELES, LOS ANGELES County, CALIFORNIA, 90056

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $318.1 million to LINQUEST CORPORATION for work described as: IGF::CT::IGF SYSTEMS ENGINEERING&INTERGRATION SUPPORT SERVICES (SE&I) FOR THE MILSATCOM SYSTEMS DIRECTORATE Key points: 1. Contract awarded to LinQuest Corporation for SE&I support to the MILSATCOM Systems Directorate. 2. The contract duration was 2,255 days, spanning from June 2013 to August 2019. 3. Awarded under full and open competition, indicating a broad market solicitation. 4. The contract type was Cost Plus Incentive Fee (CPIF), common for R&D services. 5. The total value of the contract was over $318 million. 6. This contract falls under Research and Development in Physical, Engineering, and Life Sciences. 7. The contract was managed by the Defense Contract Management Agency. 8. The contract was awarded to a single contractor, LinQuest Corporation.

Value Assessment

Rating: fair

The contract's value of over $318 million for engineering and integration support over approximately six years suggests a significant investment. Benchmarking this against similar large-scale R&D and systems engineering contracts within the defense sector is challenging without more specific service details. However, the CPIF contract type implies that cost controls and performance incentives were in place, aiming for a balance between contractor effort and government cost objectives. The relatively high number of bids (2) for a contract of this magnitude suggests a competitive process that likely contributed to a reasonable price, though a detailed cost analysis would be needed for a definitive value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit offers. The data indicates two bidders participated in this competition. While two bidders represent some level of competition, it is on the lower end for a contract of this significant value and scope. A higher number of bidders typically leads to more robust price discovery and potentially lower costs for the government. The limited number of bidders may suggest a specialized market or high barriers to entry for potential competitors.

Taxpayer Impact: With two bidders, taxpayers may not have received the full benefit of a highly competitive bidding process, potentially leading to a higher-than-optimal price. However, the competition did ensure that at least two qualified entities vied for the work, preventing a sole-source situation.

Public Impact

The primary beneficiaries are the Department of Defense and its MILSATCOM Systems Directorate, receiving critical engineering and integration support. Services delivered include systems engineering and integration support, crucial for the development and maintenance of military satellite communication systems. The geographic impact is primarily within the defense sector, supporting national security initiatives. Workforce implications include employment for engineers, scientists, and technical specialists involved in satellite communications and defense systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in Cost Plus Incentive Fee contracts if not managed tightly.
Limited competition (2 bidders) may have reduced the downward pressure on pricing.
The long duration of the contract could lead to scope creep or evolving requirements not fully captured in initial pricing.
Reliance on a single contractor for critical SE&I functions could pose a risk if performance issues arise.

Positive Signals

Awarded under full and open competition, ensuring a broad search for qualified contractors.
The CPIF contract type incentivizes the contractor to control costs and meet performance targets.
The contract supported a critical defense capability (MILSATCOM), indicating strategic importance.
The contractor, LinQuest Corporation, likely possesses specialized expertise in satellite communications systems engineering.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on engineering and integration services for complex defense systems. The market for MILSATCOM systems engineering is highly specialized, often dominated by a few key players with the requisite technical expertise and security clearances. The total value of $318 million over six years places it as a significant contract within this niche. Comparable spending benchmarks would likely involve other large-scale defense R&D and systems integration contracts, often running into hundreds of millions of dollars.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific impacts on the small business ecosystem stemming from a set-aside provision. The prime contractor, LinQuest Corporation, would have had the discretion to subcontract, but this was not mandated by a small business set-aside. Analysis of actual subcontracting would require further data.

Oversight & Accountability

Oversight for this contract would have been provided by the Defense Contract Management Agency (DCMA), responsible for ensuring contractor compliance with terms and conditions, quality, and delivery schedules. The CPIF contract type necessitates close monitoring of costs and performance against established targets. Transparency is generally maintained through contract reporting requirements, though specific details of performance and cost reviews are typically internal to the agency and contractor. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Military Satellite Communications (MILSATCOM) Programs
Defense Research and Development Contracts
Systems Engineering and Integration Services
Space and Missile Systems Center Contracts
Department of Defense IT and Communications Infrastructure

Risk Flags

Limited Competition
Cost Plus Incentive Fee Contract Risks
Long Contract Duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $318.1 million to LINQUEST CORPORATION. IGF::CT::IGF SYSTEMS ENGINEERING&INTERGRATION SUPPORT SERVICES (SE&I) FOR THE MILSATCOM SYSTEMS DIRECTORATE

Who is the contractor on this award?

The obligated recipient is LINQUEST 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 $318.1 million.

What is the period of performance?

Start: 2013-06-28. End: 2019-08-31.

What is LinQuest Corporation's track record with similar large-scale defense contracts?

LinQuest Corporation has a history of performing on significant defense contracts, particularly in the areas of space systems, communications, and C4ISR (Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance). Their expertise often lies in systems engineering, integration, and technical support for complex platforms. While specific details on past performance metrics for contracts of this exact scale and scope would require deeper investigation into contract databases and performance reports, their continued success in securing and executing such contracts suggests a generally positive track record. However, a comprehensive assessment would involve reviewing past performance evaluations, any past performance issues, and their financial stability.

How does the $318 million value compare to other MILSATCOM SE&I contracts?

The $318 million value for systems engineering and integration support over approximately six years is substantial and aligns with the significant investment required for major defense satellite communication programs. MILSATCOM systems are complex and require extensive R&D, design, integration, and testing. Contracts for similar support roles within large defense programs, especially those involving space assets, frequently reach hundreds of millions of dollars. Without access to a comprehensive database of all MILSATCOM SE&I contracts, a precise comparison is difficult. However, this figure is indicative of a major program requiring long-term, high-level technical expertise, consistent with the strategic importance and cost structure of advanced military space systems.

What are the primary risks associated with a Cost Plus Incentive Fee (CPIF) contract of this magnitude?

The primary risks associated with a CPIF contract of this magnitude revolve around cost control and potential for contractor inefficiency if incentives are not structured effectively. While CPIF aims to incentivize cost savings and performance, there's a risk that the government could end up paying more than anticipated if targets are missed or if the base cost is underestimated. The contractor may also focus on achieving incentive targets at the expense of other critical, non-incentivized aspects of performance. Furthermore, the complexity of large-scale R&D projects means that defining achievable and meaningful targets can be challenging, potentially leading to disputes or suboptimal outcomes. Robust oversight and clear performance metrics are crucial to mitigate these risks.

How effective was the competition level (2 bidders) in ensuring value for taxpayers?

The competition level of two bidders for a contract valued at over $318 million presents a mixed picture regarding value for taxpayers. While competition is generally preferred over sole-source awards, having only two bidders suggests a potentially limited market for these highly specialized services. This could mean that the government did not benefit from the full spectrum of potential price reductions that might occur with a larger pool of competitors. However, two bidders do provide a basis for price comparison and negotiation, preventing a monopoly. The effectiveness in ensuring value would depend heavily on the specific technical requirements, the estimated cost baseline, and the negotiation leverage achieved by the contracting agency. A more robust competition (e.g., 3-5 bidders) would typically offer stronger assurance of optimal value.

What is the historical spending trend for MILSATCOM SE&I support services?

Historical spending trends for MILSATCOM SE&I support services are generally characterized by significant, long-term investments due to the complexity and strategic importance of satellite communication systems. These programs often span multiple years, with substantial budgets allocated for research, development, integration, and sustainment. Spending can fluctuate based on program lifecycles, technological advancements, and evolving geopolitical requirements. Contracts like the one awarded to LinQuest represent a substantial portion of the annual budget for such support. Analyzing historical data would likely reveal a consistent need for these specialized services, with contract values often in the tens to hundreds of millions of dollars, reflecting the high cost of space-based defense infrastructure.

What are the implications of the contract being managed by DCMA?

The management of this contract by the Defense Contract Management Agency (DCMA) signifies that the contract is subject to rigorous oversight regarding performance, quality, and cost. DCMA's role is to ensure that contractors meet their contractual obligations. For a CPIF contract, DCMA's involvement is crucial in monitoring the contractor's cost accounting, verifying incurred costs, and assessing performance against established metrics to determine incentive payments. This oversight aims to protect the government's financial interests and ensure that the services provided are effective and meet the required standards for critical defense systems like MILSATCOM.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Address: 2551 DULLES VIEW DR STE 200, HERNDON, VA, 20171

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

Financial Breakdown

Contract Ceiling: $532,123,867

Exercised Options: $355,376,693

Current Obligation: $318,093,608

Actual Outlays: $289,764

Subaward Activity

Number of Subawards: 13

Total Subaward Amount: $57,057,863

Contract Characteristics

Consolidated Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline