DoD's Missile Defense Agency awards $31.1M sole-source contract to ECS Federal for strategic planning and financial system support

Contract Overview

Contract Amount: $31,147,381 ($31.1M)

Contractor: ECS Federal, LLC

Awarding Agency: Department of Defense

Start Date: 2017-03-07

End Date: 2018-10-20

Contract Duration: 592 days

Daily Burn Rate: $52.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: IGF::OT::IGF AWARD OF SOLE SOURCE CONTRACT FOR STRATEGIC PLANNING AND FINANCIAL MANAGEMENT AND FINANCIAL SYSTEM AND SUPPORT INTEGRATION.

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35898

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $31.1 million to ECS FEDERAL, LLC for work described as: IGF::OT::IGF AWARD OF SOLE SOURCE CONTRACT FOR STRATEGIC PLANNING AND FINANCIAL MANAGEMENT AND FINANCIAL SYSTEM AND SUPPORT INTEGRATION. Key points: 1. Contract awarded on a sole-source basis, limiting competitive opportunities and potentially impacting price discovery. 2. The contract's cost-plus-fixed-fee structure may incentivize cost overruns, requiring close oversight. 3. Performance period spans over 592 days, indicating a significant duration for the services provided. 4. The contract falls under Engineering Services (NAICS 541330), a sector often characterized by specialized expertise. 5. No small business set-aside was applied, suggesting a focus on large prime contractors. 6. The award value of $31.1M warrants scrutiny for value for money given the sole-source nature.

Value Assessment

Rating: questionable

Assessing the value for money on this sole-source contract is challenging without comparable bids. The cost-plus-fixed-fee (CPFF) pricing structure, while common for complex services, carries inherent risks of cost escalation. Benchmarking this contract's pricing against similar strategic planning and financial system support contracts awarded competitively would be necessary for a definitive value assessment. Given the lack of competition, it's difficult to ascertain if the government secured the most favorable pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. The Missile Defense Agency likely justified this approach based on specific circumstances, such as the unique capabilities of ECS Federal or the urgent need for specialized support. The absence of multiple bidders means there was no direct price competition, which can sometimes lead to higher costs for the government compared to fully competed contracts.

Taxpayer Impact: Taxpayers may have paid a premium due to the lack of competition. Without a competitive bidding process, there is less pressure on the contractor to offer the lowest possible price.

Public Impact

The primary beneficiaries are the Department of Defense and its Missile Defense Agency, receiving support for critical strategic planning and financial management systems. Services delivered include strategic planning, financial management, and financial system support integration, crucial for the agency's operational efficiency. The geographic impact is primarily within the Department of Defense's operational sphere, with potential implications for its Alabama-based activities. Workforce implications may involve specialized personnel within ECS Federal supporting the agency's complex technological and financial infrastructure.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially leading to higher costs.
Cost-plus-fixed-fee contract type can incentivize cost overruns if not managed tightly.
Lack of transparency in the sole-source justification process.
Potential for contractor lock-in due to specialized knowledge gained.
Limited visibility into alternative solutions or pricing structures.

Positive Signals

Contract addresses critical strategic planning and financial system needs for a key defense agency.
ECS Federal likely possesses specialized expertise required for this unique support role.
Defined performance period and fixed fee component provide some cost predictability.
Contract supports a vital national security mission (Missile Defense).

Sector Analysis

This contract falls within the Engineering Services sector (NAICS 541330), which encompasses firms providing engineering, research, and development services. This sector is characterized by high technical expertise and often involves complex, long-term projects. Spending in this area by defense agencies is substantial, reflecting the need for specialized support in areas like missile defense systems. Comparable spending benchmarks would typically involve other large, sole-source or competitively awarded engineering support contracts for defense programs.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses indicated in the provided data. This suggests that the primary contractor, ECS Federal, is expected to perform the majority of the work, and opportunities for small businesses may be limited unless they are direct subcontractors to ECS Federal. The absence of a small business focus in this award means it does not directly contribute to the government's small business contracting goals.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and program management offices. The Missile Defense Agency is responsible for ensuring performance and adherence to contract terms. Given the CPFF structure, rigorous financial oversight and auditing by the agency and potentially the Defense Contract Audit Agency (DCAA) would be expected to monitor costs. Transparency regarding the sole-source justification and performance metrics would be key accountability measures.

Related Government Programs

Missile Defense Systems Support
Strategic Planning Services
Financial Management Systems
Defense Agency IT Support
Engineering Services Contracts

Risk Flags

Sole-source award
Cost-plus contract type
Lack of small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $31.1 million to ECS FEDERAL, LLC. IGF::OT::IGF AWARD OF SOLE SOURCE CONTRACT FOR STRATEGIC PLANNING AND FINANCIAL MANAGEMENT AND FINANCIAL SYSTEM AND SUPPORT INTEGRATION.

Who is the contractor on this award?

The obligated recipient is ECS FEDERAL, LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Missile Defense Agency).

What is the total obligated amount?

The obligated amount is $31.1 million.

What is the period of performance?

Start: 2017-03-07. End: 2018-10-20.

What specific capabilities does ECS Federal possess that justified a sole-source award for this contract?

The justification for a sole-source award typically rests on the contractor possessing unique capabilities, specialized knowledge, or proprietary technology essential for the contract's requirements. For ECS Federal, this could involve deep institutional knowledge of the Missile Defense Agency's specific strategic planning processes, existing financial systems, or unique integration challenges that other firms would find difficult or time-consuming to replicate. Without the official sole-source justification document, it's speculative, but common reasons include prior performance on related systems, specific security clearances, or highly specialized technical expertise directly aligned with the agency's immediate needs.

How does the Cost Plus Fixed Fee (CPFF) structure compare to other contract types for similar services, and what are the implications for cost control?

The Cost Plus Fixed Fee (CPFF) contract type is often used when the scope of work is not precisely defined or involves significant uncertainty, such as research and development or complex system integration. It reimburses the contractor for allowable costs plus a fixed fee representing profit. Compared to Firm-Fixed-Price (FFP) contracts, CPFF offers more flexibility for the government if requirements change but shifts more cost risk to the government. FFP contracts provide greater cost certainty but require a well-defined scope. For cost control under CPFF, rigorous oversight, detailed cost tracking, and strong program management are crucial to prevent cost overruns and ensure the fixed fee remains appropriate for the effort.

What is the historical spending pattern for strategic planning and financial system support within the Missile Defense Agency?

Analyzing historical spending patterns for strategic planning and financial system support within the Missile Defense Agency (MDA) requires access to detailed MDA budget and contract data over several fiscal years. Generally, defense agencies like the MDA allocate significant resources to these areas due to the complexity of their missions and the critical nature of financial integrity and strategic alignment. Spending can fluctuate based on specific program phases, system modernization efforts, and evolving strategic priorities. Without specific historical data for the MDA, it's difficult to provide precise figures, but such support is a consistent requirement, often involving multi-year contracts and substantial investment.

What are the potential risks associated with a sole-source award of this magnitude ($31.1M)?

A sole-source award of $31.1 million carries several potential risks. Primarily, the lack of competition means the government may not achieve the best possible price or value, as there's no market pressure to drive down costs. There's also a risk of contractor complacency or 'contractor lock-in,' where the incumbent contractor may leverage their established position and knowledge to secure future contracts without facing robust competition. Furthermore, without a competitive process to vet multiple potential solutions, the chosen approach might not be the most innovative or efficient available. Effective oversight becomes paramount to mitigate these risks and ensure the government receives adequate value.

How does the 'Engineering Services' classification (NAICS 541330) typically influence contract performance and oversight?

The 'Engineering Services' classification (NAICS 541330) generally implies contracts requiring specialized technical expertise, problem-solving, and often involve complex systems or infrastructure. This classification typically leads to contracts with higher dollar values and longer performance periods. Oversight for these contracts often requires personnel with technical backgrounds who can understand the engineering challenges and evaluate the contractor's technical approach and deliverables effectively. Performance metrics are usually tied to technical milestones, system performance, and adherence to engineering standards, demanding a more technically sophisticated oversight approach compared to simpler service contracts.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: HQ014717R0009

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Asgn Incorporated

Address: 2750 PROSPERITY AVE STE 600, FAIRFAX, VA, 22031

Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $45,153,361

Exercised Options: $34,118,471

Current Obligation: $31,147,381

Subaward Activity

Number of Subawards: 10

Total Subaward Amount: $3,555,344

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline