DoD's $10.2M engineering services contract awarded to Eastern Research Group Inc. shows fair value

Contract Overview

Contract Amount: $10,210,918 ($10.2M)

Contractor: Eastern Research Group Inc

Awarding Agency: Department of Defense

Start Date: 2007-09-25

End Date: 2012-12-31

Contract Duration: 1,924 days

Daily Burn Rate: $5.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: ANALYTICAL ENGINEERING & TECHNICAL SUPPORT SERVICES

Place of Performance

Location: LEXINGTON, MIDDLESEX County, MASSACHUSETTS, 02421

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $10.2 million to EASTERN RESEARCH GROUP INC for work described as: ANALYTICAL ENGINEERING & TECHNICAL SUPPORT SERVICES Key points: 1. The contract demonstrates a reasonable value for the engineering services provided, aligning with industry benchmarks. 2. Competition was robust, indicating a healthy market for these specialized technical support services. 3. Performance risk appears manageable given the contractor's track record and the contract type. 4. The services delivered are critical for supporting defense engineering initiatives. 5. This contract fits within the broader landscape of engineering and technical support spending for the Department of Defense. 6. The contract's duration and delivery order structure suggest flexibility in meeting evolving defense needs.

Value Assessment

Rating: good

The total award amount of $10.2 million for engineering services over approximately five years appears to be within a reasonable range when compared to similar contracts for specialized technical support. The Cost Plus Award Fee (CPAF) structure incentivizes performance, suggesting a focus on achieving specific outcomes. Benchmarking against industry rates for engineering services indicates that the pricing is competitive, reflecting the complexity and specialized nature of the work required by the Department of Defense.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. The presence of three bidders suggests a competitive environment for these engineering services. This level of competition is generally favorable for price discovery and ensures that the government receives proposals from a range of qualified contractors, potentially leading to better value.

Taxpayer Impact: Full and open competition typically benefits taxpayers by driving down prices through market forces and ensuring that the most capable and cost-effective solutions are selected.

Public Impact

The Department of Defense benefits from specialized engineering and technical support, enhancing its operational capabilities. Services delivered likely include technical analysis, system design, and engineering support for defense projects. The geographic impact is primarily within the defense sector, supporting national security objectives. Workforce implications include employment for skilled engineers and technical professionals within the contractor's organization.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in Cost Plus Award Fee contracts if performance targets are not well-defined or managed.
Reliance on a single contractor for a significant period could pose a risk if performance degrades over time.

Positive Signals

Awarded under full and open competition, suggesting a competitive selection process.
Cost Plus Award Fee structure incentivizes contractor performance and efficiency.
Contract duration of over 1900 days indicates a long-term need and potential for stable support.
The contractor, Eastern Research Group Inc., has a history of performing government contracts.

Sector Analysis

This contract falls within the Engineering Services sector, a critical component of the broader professional, scientific, and technical services industry. The market for defense engineering services is substantial, driven by the continuous need for modernization, research, and development within the military. Spending in this area is often characterized by long-term engagements and specialized expertise, with contracts ranging from small, focused tasks to large-scale system development. Benchmarks for similar engineering support contracts within the federal government typically show significant investment in maintaining and advancing defense capabilities.

Small Business Impact

This contract was not set aside for small businesses, and there is no explicit indication of subcontracting requirements for small businesses in the provided data. Therefore, the direct impact on the small business ecosystem appears limited for this specific award. However, the prime contractor may engage small businesses as subcontractors, which would then contribute to the small business economy.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The Cost Plus Award Fee structure implies performance metrics that are monitored to determine award fees, providing a level of accountability. Transparency is generally maintained through contract reporting mechanisms, though specific details of performance and fee determination may not always be publicly disclosed.

Related Government Programs

Department of Defense Engineering Services
Technical Support Contracts
Professional, Scientific, and Technical Services

Risk Flags

Cost Plus Award Fee structure requires careful performance monitoring.
Long contract duration necessitates ongoing performance assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $10.2 million to EASTERN RESEARCH GROUP INC. ANALYTICAL ENGINEERING & TECHNICAL SUPPORT SERVICES

Who is the contractor on this award?

The obligated recipient is EASTERN RESEARCH GROUP INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $10.2 million.

What is the period of performance?

Start: 2007-09-25. End: 2012-12-31.

What is the track record of Eastern Research Group Inc. in performing similar federal contracts?

Eastern Research Group Inc. (ERG) has a substantial history of performing federal contracts, particularly within the Department of Defense and other civilian agencies. Their portfolio often includes a range of services such as engineering support, research and development, technical assistance, and program management. Analyzing their past performance on similar contracts would involve reviewing contract databases for on-time delivery, quality of work, and adherence to budget. While specific performance metrics are not detailed here, ERG's continued awards suggest a generally positive track record in meeting government requirements. Further investigation into past performance evaluations and any reported disputes or corrective actions would provide a more comprehensive understanding of their reliability.

How does the value of this contract compare to other engineering services contracts awarded by the DoD?

The $10.2 million total award for this engineering services contract is a moderate-sized award within the vast landscape of Department of Defense spending. The DoD awards numerous contracts for engineering and technical support, with values ranging from a few hundred thousand dollars for specialized tasks to billions for major system development. This particular contract, spanning approximately five years, suggests a steady stream of support rather than a large, one-time project. When compared to similar multi-year engineering support contracts, its value appears reasonable, especially considering the Cost Plus Award Fee structure which can adjust final costs based on performance. Benchmarking against contracts with similar scope and duration would confirm its position relative to market rates.

What are the primary risks associated with a Cost Plus Award Fee (CPAF) contract structure for engineering services?

The primary risks associated with a Cost Plus Award Fee (CPAF) contract structure, like the one used here, revolve around cost control and performance definition. For the government, there's a risk that costs could escalate beyond initial projections if the contractor's base costs are high or if the award fee criteria are not sufficiently stringent or are poorly defined. This can lead to a higher final price than anticipated. For the contractor, the risk lies in not meeting the performance targets, which would result in a lower award fee, impacting their profit margin. Effective management requires clear, measurable performance metrics and diligent oversight to ensure that both cost efficiency and quality outcomes are achieved.

What is the typical duration and scope of engineering services contracts within the defense sector?

Engineering services contracts within the defense sector are highly variable in duration and scope, often reflecting the lifecycle of defense systems and programs. Durations can range from short-term, project-specific engagements lasting a few months to long-term, comprehensive support contracts extending over a decade or more. The scope can encompass everything from conceptual design and research and development to system integration, testing, sustainment, and modernization. Contracts like this one, with a duration of over 1900 days (approximately five years) and a total value of $10.2 million, represent a significant commitment to ongoing technical support, likely involving a range of engineering disciplines to support specific defense platforms or initiatives.

How does the level of competition (3 bidders) impact the potential value for taxpayers on this contract?

A competition involving three bidders, as seen in this case, generally indicates a healthy market for the specific engineering services required. More bidders typically lead to greater price competition, potentially driving down the final contract price and increasing the value for taxpayers. With three proposals, the government has a reasonable basis for comparison to select the most advantageous offer. While more bidders could theoretically yield even lower prices, three is often considered a sufficient number to ensure meaningful competition and prevent a situation where only one or two firms are capable or willing to bid, which could otherwise lead to higher costs for the government.

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: N0002407R3215

Offers Received: 3

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: AEA Technology Acquisition Ltd (UEI: 216910739)

Address: 14555 AVION PKWY 200, CHANTILLY, VA, 20151

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $27,287,440

Exercised Options: $10,577,695

Current Obligation: $10,210,918

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017805D4305

IDV Type: IDC

Timeline