DoD's $198.6M Systems Engineering Contract Awarded to SAIC Shows Fair Competition and R&D Focus
Contract Overview
Contract Amount: $198,589,700 ($198.6M)
Contractor: Science Applications International Corporation
Awarding Agency: Department of Defense
Start Date: 2010-07-28
End Date: 2018-12-31
Contract Duration: 3,078 days
Daily Burn Rate: $64.5K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 4
Pricing Type: COST PLUS AWARD FEE
Sector: R&D
Official Description: SYSTEMS ENGINEERING AND INTEGRATION CONTRACT
Place of Performance
Location: RESTON, FAIRFAX County, VIRGINIA, 20190
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $198.6 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION for work described as: SYSTEMS ENGINEERING AND INTEGRATION CONTRACT Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. Primarily focused on Research and Development in Physical, Engineering, and Life Sciences. 3. The contract type, Cost Plus Award Fee, incentivizes performance but requires careful oversight. 4. Duration of over 3000 days indicates a long-term, potentially complex project. 5. The awardee, Science Applications International Corporation (SAIC), is a major defense contractor. 6. The contract's value is substantial, reflecting significant investment in systems engineering. 7. The specific NAICS code points to a focus on non-biotech R&D services.
Value Assessment
Rating: good
The contract's value of approximately $198.6 million over its duration suggests a significant investment in systems engineering and integration. Benchmarking this against similar large-scale R&D contracts within the Department of Defense is challenging without more specific service details. However, the Cost Plus Award Fee (CPAF) structure implies that pricing is tied to performance, which can be a mechanism for achieving value if well-managed. The absence of a specific contract award value per year makes a direct per-unit cost comparison difficult, but the overall investment aligns with the complexity of systems engineering for major defense programs.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under a 'full and open competition' solicitation, indicating that all responsible sources were permitted to submit bids. The presence of four bids suggests a reasonable level of competition for this significant R&D effort. A competitive process like this is generally expected to drive more favorable pricing and innovative solutions as contractors vie for the award. The specific number of bidders (4) provides a baseline for understanding the market's interest and the potential for price discovery.
Taxpayer Impact: Taxpayers benefit from a full and open competition as it increases the likelihood of receiving competitive pricing and a wider range of technical solutions. This process helps ensure that the government is not overpaying and is obtaining the best value for its investment.
Public Impact
The Department of the Air Force benefits from advanced systems engineering and integration capabilities. Services delivered likely support the development and enhancement of complex defense systems. The geographic impact is primarily within Virginia, where SAIC has a significant presence. Workforce implications include employment for engineers, scientists, and technical specialists.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Award Fee contracts require diligent oversight to ensure award fees are justified by performance and do not inflate costs unnecessarily.
- The long duration of the contract (over 8 years) necessitates sustained monitoring to ensure continued relevance and effectiveness of services.
- The broad 'Research and Development in the Physical, Engineering, and Life Sciences' category could encompass a wide range of activities, requiring clear scope management.
Positive Signals
- Awarded through full and open competition, indicating a robust and fair bidding process.
- The contractor, SAIC, is a well-established entity with a track record in defense contracting.
- The contract's focus on R&D aligns with the need for technological advancement in defense.
Sector Analysis
This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences (excluding biotechnology). This is a critical area for the Department of Defense, driving innovation and maintaining technological superiority. The market for systems engineering and integration services is substantial, with numerous large and small businesses competing for government contracts. Comparable spending benchmarks would typically be found within broader R&D or professional services categories for defense agencies, often running into billions of dollars annually across the sector.
Small Business Impact
This contract was not set aside for small businesses, as indicated by 'sb: false'. The prime contractor, SAIC, is a large business. While there is no explicit small business set-aside, large prime contractors are often required to subcontract a portion of the work to small businesses. The extent to which small businesses will participate as subcontractors is not detailed here but is a common practice in contracts of this magnitude to foster broader industry participation and leverage specialized capabilities.
Oversight & Accountability
Oversight for this Cost Plus Award Fee contract would typically involve program managers and contracting officers within the Department of the Air Force. Accountability measures are built into the CPAF structure, where award fees are contingent on meeting defined performance objectives. Transparency is generally maintained through contract reporting requirements and potential reviews by oversight bodies like the Government Accountability Office (GAO) or the Inspector General, especially concerning cost and performance metrics.
Related Government Programs
- Department of Defense Research and Development Programs
- Systems Engineering and Technical Assistance (SETA) Contracts
- Air Force Science and Technology Investments
- Advanced Technology Development Contracts
Risk Flags
- Potential for cost overruns due to CPAF structure if not closely managed.
- Risk of technological obsolescence over the contract's long duration.
- Scope creep is a possibility in R&D contracts, requiring diligent management.
- Dependence on a single large contractor may limit future flexibility.
Tags
department-of-defense, department-of-the-air-force, science-applications-international-corporation, research-and-development, systems-engineering, cost-plus-award-fee, full-and-open-competition, definitive-contract, virginia, large-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $198.6 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION. SYSTEMS ENGINEERING AND INTEGRATION CONTRACT
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 (Department of the Air Force).
What is the total obligated amount?
The obligated amount is $198.6 million.
What is the period of performance?
Start: 2010-07-28. End: 2018-12-31.
What is Science Applications International Corporation's (SAIC) track record with similar large-scale R&D contracts for the Department of Defense?
SAIC has a long and extensive history of performing large-scale research, development, and systems engineering contracts for the Department of Defense and other federal agencies. They are a major prime contractor known for their expertise in areas such as command and control, intelligence, surveillance, reconnaissance, and cyber warfare. Their track record includes numerous complex programs requiring integration of advanced technologies and scientific research. While specific performance metrics for past contracts are not detailed here, SAIC's sustained presence and significant contract awards indicate a generally positive standing and capability to execute demanding R&D efforts. Their experience likely encompasses managing large teams, complex supply chains, and stringent security requirements inherent in defense R&D.
How does the Cost Plus Award Fee (CPAF) structure compare to other contract types for R&D services in terms of value for money?
The Cost Plus Award Fee (CPAF) contract type is often used for complex R&D efforts where the scope may evolve and performance outcomes are critical but difficult to define precisely upfront. Compared to a Cost Plus Fixed Fee (CPFF) contract, CPAF offers greater incentive for the contractor to exceed minimum performance standards by providing award fees for exceptional performance, potentially leading to better value. However, it also requires more robust government oversight to ensure that award fees are objectively justified and that the 'cost' component remains controlled. In contrast, Fixed-Price contracts offer more cost certainty but can be less suitable for R&D where requirements are uncertain, potentially leading to contractor risk aversion or change order disputes. For R&D, CPAF can strike a balance, encouraging innovation and high performance while maintaining some cost control, provided the government effectively manages the performance metrics and award fee determination.
What are the primary risks associated with a long-duration (3078 days) systems engineering contract like this?
Long-duration contracts, such as this 3078-day (over 8 years) systems engineering effort, carry several inherent risks. Firstly, technological obsolescence is a significant concern; the technologies and systems being engineered today might be outdated by the contract's end, requiring substantial adaptation or rework. Secondly, requirements creep is a common issue, where evolving mission needs lead to scope changes that can inflate costs and extend timelines beyond initial projections if not managed rigorously. Thirdly, contractor performance can degrade over time due to personnel turnover, loss of institutional knowledge, or shifts in company priorities. Finally, market conditions and funding stability can change, potentially impacting the program's continuity or the availability of necessary resources. Effective risk mitigation requires proactive contract management, regular performance reviews, and mechanisms for adapting to technological and programmatic changes.
How does the 'Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)' classification influence the type of services expected under this contract?
The NAICS code 541712, 'Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology),' indicates that the contract focuses on scientific inquiry and experimentation in fields like physics, chemistry, materials science, mechanical engineering, electrical engineering, aerospace engineering, and biological sciences (excluding biotech). This means the services likely involve theoretical analysis, laboratory experiments, prototype development, simulation, modeling, and testing of physical systems, materials, or processes. It excludes work primarily focused on genetic engineering, pharmaceutical development, or other biotechnology applications. The emphasis is on advancing fundamental knowledge and applying engineering principles to solve complex technical challenges relevant to defense capabilities.
What is the typical annual spending for systems engineering and integration contracts within the Department of Defense?
Annual spending on systems engineering and integration (SE&I) contracts within the Department of Defense (DoD) can vary significantly but is generally in the tens of billions of dollars across all services and agencies. SE&I is a critical function supporting nearly all major defense acquisition programs, from aircraft and ships to satellites and ground systems. This includes activities like requirements definition, architecture development, interface management, technical risk assessment, and overall system integration. While this specific contract represents approximately $25 million per year on average, the DoD's total outlay for SE&I services encompasses numerous contracts, including larger, more complex efforts supporting major weapon system development and sustainment. Benchmarking requires looking at aggregated spending data for SE&I or related professional services categories within the DoD budget.
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: 4
Pricing Type: COST PLUS AWARD FEE (R)
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: $289,857,988
Exercised Options: $201,801,431
Current Obligation: $198,589,700
Actual Outlays: $235,175
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2010-07-28
Current End Date: 2018-12-31
Potential End Date: 2018-12-31 00:00:00
Last Modified: 2024-09-30
More Contracts from Science Applications International Corporation
- Task Order to Provide Project Management Support, Transition Support, Engineering and Design Support, Securing the Infrastructure Support and O&M Support for the Department's IT Consolidation Program — $2.1B (Department of State)
- Software Life Cycle Development — $1.4B (General Services Administration)
- Unified Nasa Information Technology Services (unites) — $1.4B (National Aeronautics and Space Administration)
- THE Scope of the to IS to Provide Enterprise IT Services for the Usace — $1.1B (General Services Administration)
- This Effort IS for a Follow on Procurement Requirement. the Name of This Procurement IS the Omnibus Multidiscipline Engineering Services (omes) II. the Principal Purpose of This Contract IS to Provide Multidiscipline Engineering Support Services and Related Work to EED, Istd, SED, MSD, Mesa, Jpss, Ssco, and Related Organizations, AS Required, for the Study, Design, Systems Engineering, Development, Fabrication, Integration, Testing, Verification, and Operations of Space Flight, Airborne, and Ground System Hardware and Software, Including Development and Validation of NEW Technologies to Enable Future Space and Science Missions. to This END, the Contractor Shall Provide On/Off-Site Multidiscipline Engineering Services, Pursuant to Task Orders Issued by the Contracting Officer. These Services Shall Include the Personnel, Facilities, and Materials (unless Otherwise Provided by the Government) to Accomplish the Tasks. Travel MAY BE Required by the Contractor to Support Certain Task Orders, These Travel Requirements Will BE Identified on a Task by Task Basis — $1.0B (National Aeronautics and Space Administration)
View all Science Applications International Corporation federal contracts →
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)