DoD's $62M contract for training services awarded to NCI Information Systems, Inc. shows potential value concerns

Contract Overview

Contract Amount: $40,147,153 ($40.1M)

Contractor: Empower AI, Inc.

Awarding Agency: Department of Defense

Start Date: 2004-09-01

End Date: 2008-08-08

Contract Duration: 1,437 days

Daily Burn Rate: $27.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: TAS::17 1804::TAS 200412!000425!1700!A8303 !NAVAL AIR WARFARE CENTER TRAININ!W91QUZ04D0001 !A!N! !N!HT01 ! !20040901!20090831!620864504!620864504!620864504!N!NCI INFORMATION SYSTEMS, INC !11730 PLAZA AMERICA DRIVE !RESTON !VA!20190!53000!095!12!ORLANDO !ORANGE !FLORIDA !+000000762818!N!N!000000000000!AD26!RDTE/SERVICES-MANAGEMENT SUPPORT !S1 !SERVICES !000 !* !541330!E! !5!B!S! ! ! !99990909!B! ! !A! !A!N!J!2!004!K! !Z!N!Z! ! !Y!A!N!N!Z! ! ! !C!A!00 !A!B!N! ! ! ! ! ! !0001! !

Place of Performance

Location: RESTON, FAIRFAX County, VIRGINIA, 20190

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $40.1 million to EMPOWER AI, INC. for work described as: TAS::17 1804::TAS 200412!000425!1700!A8303 !NAVAL AIR WARFARE CENTER TRAININ!W91QUZ04D0001 !A!N! !N!HT01 ! !20040901!20090831!620864504!620864504!620864504!N!NCI INFORMATION SYSTEMS, INC !11730 PLAZA AMERICA DRIVE !RESTON !VA!20190!53000!095!12!ORLANDO… Key points: 1. The contract's value of over $62 million for training services raises questions about cost-effectiveness. 2. Competition dynamics appear favorable with a full and open competition, suggesting potential for competitive pricing. 3. Risk indicators are moderate, with a long performance period and a single award, warranting close monitoring. 4. Performance context is within the Naval Air Warfare Center Training, indicating a specialized defense training requirement. 5. Sector positioning is in IT services, specifically supporting training and simulation for defense applications.

Value Assessment

Rating: fair

The total value of $62,086,450.04 for this contract appears substantial for training services. Benchmarking against similar contracts for IT and training support within the Department of Defense is necessary to determine if the pricing is competitive. The duration of the contract (over 4 years) also means that the annual cost needs to be evaluated in context. Without specific per-unit cost data or comparison points, it's difficult to definitively assess value for money, but the overall expenditure warrants scrutiny.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The data shows 4 bids were received. This level of competition is generally positive for price discovery and can lead to more favorable pricing for the government. However, the specific details of the bidding process and the number of technically acceptable proposals would provide a clearer picture of the competitive intensity.

Taxpayer Impact: A full and open competition suggests that taxpayers benefited from a process designed to solicit the best possible pricing and technical solutions from a wide range of potential providers.

Public Impact

Naval personnel and trainees are the primary beneficiaries, receiving enhanced training capabilities. Services delivered include training and simulation support, crucial for military readiness. Geographic impact is primarily within the Naval Air Warfare Center's operational areas, likely Orlando, Florida. Workforce implications include support for specialized IT and training professionals employed by the contractor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 4 years) could lead to potential cost overruns if not managed effectively.
Reliance on a single awardee for critical training services may pose a risk if performance issues arise.
The specific nature of 'Services Management Support' within training needs further clarification to ensure alignment with evolving military needs.

Positive Signals

Awarded under full and open competition, indicating a robust and fair bidding process.
Contractor NCI Information Systems, Inc. has a track record in government contracting, suggesting some level of established capability.
The contract specifies a Firm Fixed Price (FFP) type, which helps in cost control and predictability.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on IT services for training and simulation. The market for defense IT services is substantial, with significant government spending allocated to maintaining technological superiority and operational readiness. Comparable spending benchmarks would involve analyzing other large-scale IT support contracts within the Department of Defense, particularly those related to training systems and readiness support, to gauge the relative cost and scope of this award.

Small Business Impact

The provided data does not indicate any specific small business set-aside or subcontracting requirements for this contract. Therefore, the direct impact on the small business ecosystem is likely minimal unless NCI Information Systems, Inc. voluntarily engages small businesses as subcontractors. Further investigation into subcontracting plans would be needed to assess any indirect effects.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. Accountability measures are inherent in the Firm Fixed Price contract type, which places the financial risk on the contractor. Transparency is generally facilitated through contract databases like FPDS, though detailed performance reports are often internal.

Related Government Programs

Naval Training Systems
Defense IT Services
Simulation and Training Technology
IT Support Services
Federal IT Contracts

Risk Flags

Potential for cost overruns due to long performance period.
Need for detailed performance assessment to confirm value for money.
Limited insight into specific services provided beyond 'management support'.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $40.1 million to EMPOWER AI, INC.. TAS::17 1804::TAS 200412!000425!1700!A8303 !NAVAL AIR WARFARE CENTER TRAININ!W91QUZ04D0001 !A!N! !N!HT01 ! !20040901!20090831!620864504!620864504!620864504!N!NCI INFORMATION SYSTEMS, INC !11730 PLAZA AMERICA DRIVE !RESTON !VA!20190!53000!095!12!ORLANDO !ORANGE !FLORIDA !+000000762818!N!N!000000000000!AD26!RDTE/SERVICES-MANAGEMENT SUPPORT !S1 !SERVICES !000 !* !541330!E

Who is the contractor on this award?

The obligated recipient is EMPOWER AI, 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 $40.1 million.

What is the period of performance?

Start: 2004-09-01. End: 2008-08-08.

What is the specific nature of the 'Services Management Support' provided under this contract, and how does it align with current Naval training requirements?

The contract specifies 'RDTE/SERVICES-MANAGEMENT SUPPORT' as the service type. This broadly suggests support for research, development, testing, and evaluation related to the management of training services. In the context of the Naval Air Warfare Center Training, this likely involves the IT infrastructure, software, and potentially curriculum development or maintenance necessary to deliver effective training programs. Given the contract's award date in 2004 and end date in 2009, it would have supported training methodologies and technologies prevalent during that period. Modern naval training requirements may have evolved significantly, potentially impacting the direct applicability of the support provided under this specific contract to current needs without updates or modifications.

How does the per-unit cost of training or simulation hours compare to industry benchmarks for the period of performance (2004-2009)?

The provided data does not include specific per-unit cost breakdowns for training or simulation hours. The total contract value is $62,086,450.04 over approximately five years (September 1, 2004, to August 31, 2009). To perform a per-unit cost analysis, we would need data on the quantity of services delivered, such as the number of training hours, simulation sessions, or specific support tasks performed. Without this granular data, a direct comparison to industry benchmarks for per-unit costs during that period is not feasible. The overall contract value suggests a significant investment, but its cost-effectiveness at a unit level remains undetermined from the available information.

What was the track record of NCI Information Systems, Inc. with similar government contracts prior to and during the performance of this contract?

NCI Information Systems, Inc. has a history of performing government contracts, including those within the Department of Defense. Prior to this contract, the company likely had experience in IT services and potentially training support. During the performance of this $62 million contract, their track record would be assessed by the Naval Air Warfare Center Training and the Defense Contract Management Agency (DCMA). While the data doesn't detail specific performance reviews or past performance ratings for NCI on this contract, their continued presence in the government contracting space suggests a generally acceptable performance level. A deeper dive into contract award histories and performance evaluations (like CPARS reports, if available) would provide a more comprehensive view of their track record.

Were there any significant challenges or disputes encountered during the performance of this contract that impacted its value or effectiveness?

The provided summary data does not contain information regarding specific challenges, disputes, or contract modifications that may have occurred during the performance of this contract. Such details are typically found in contract line item details, modification histories, or performance review documentation, which are not included here. Without access to these records, it is impossible to determine if the contract experienced significant issues that affected its overall value or effectiveness. The fact that it was completed within its performance period (2004-2009) suggests no catastrophic failures, but minor issues or disputes could have occurred without fundamentally derailing the contract.

How does the total spending on training and simulation services by the Naval Air Warfare Center Training compare to other Naval commands or DoD branches during the contract period?

This specific contract represents a $62 million investment in training and simulation services for the Naval Air Warfare Center Training. To compare this spending to other Naval commands or DoD branches during the 2004-2009 period, one would need access to comprehensive historical spending data across the Department of Defense. Such data would allow for an analysis of relative investment in training technologies and services. Without that broader dataset, it's difficult to contextualize this single contract's value within the larger DoD training budget. However, given the significant role of aviation training, this level of expenditure is plausible for a major command like NAWC Training.

Industry Classification

NAICS: Information › Wired and Wireless Telecommunications (except Satellite) › Wired Telecommunications Carriers

Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: HIG Capital Management, Inc.

Address: 11730 PLAZA AMERICA DR STE 400, RESTON, VA, 20190

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Minority Owned Business, Small Business, Indian (Subcontinent) American Owned Business

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W91QUZ04D0001

IDV Type: IDC

Timeline