VSE Corporation awarded $58.5M contract for PM, Mechanics, Operators, and GFP Managers services by the Department of the Navy

Contract Overview

Contract Amount: $58,525,360 ($58.5M)

Contractor: VSE Corporation

Awarding Agency: Department of Defense

Start Date: 2020-02-28

End Date: 2025-10-15

Contract Duration: 2,056 days

Daily Burn Rate: $28.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: PM, MECHANICS, OPERATORS, GFP MGRS (PMC)

Place of Performance

Location: ALEXANDRIA, FAIRFAX County, VIRGINIA, 22310

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $58.5 million to VSE CORPORATION for work described as: PM, MECHANICS, OPERATORS, GFP MGRS (PMC) Key points: 1. Contract value represents a significant investment in specialized operational support. 2. The 'NOT COMPETED' status raises questions about potential cost efficiencies and market engagement. 3. Long contract duration (2056 days) suggests a need for sustained, specialized services. 4. The fixed-price nature of the contract aims to control costs, but requires careful scope management. 5. This contract falls within engineering services, a critical support function for naval operations. 6. The absence of small business set-asides warrants further investigation into subcontracting opportunities.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance metrics or comparable service contracts. The total award of $58.5 million over approximately 5.7 years suggests a substantial annual spend. Given the 'NOT COMPETED' nature, it's difficult to assess if the pricing reflects competitive market rates. The fixed-price contract type provides some cost certainty, but the overall value for money depends heavily on the contractor's efficiency and the precise scope of services delivered.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not openly competed among multiple vendors. This approach is typically used when a specific contractor possesses unique capabilities, proprietary technology, or when urgency dictates a rapid award. The lack of competition means that the government did not benefit from a bidding process that could have driven down prices or spurred innovation from a wider range of potential suppliers.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as the absence of competition limits price discovery and negotiation leverage.

Public Impact

Naval operations and readiness are directly supported by the personnel and services provided under this contract. Personnel in roles such as Project Managers, Mechanics, and Operators are crucial for maintaining and operating naval assets. The contract's geographic impact is likely concentrated around naval bases and operational areas where VSE CORPORATION provides support. This contract supports a workforce of skilled professionals, including mechanics and operators, contributing to specialized employment within the defense sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in suboptimal pricing and reduced incentive for cost efficiency.
Sole-source awards can limit opportunities for small businesses to participate in significant defense contracts.
Long-term contracts require robust oversight to ensure continued performance and prevent scope creep.
The specific nature of 'PM, MECHANICS, OPERATORS, GFP MGRS' requires detailed performance metrics to assess effectiveness.

Positive Signals

The fixed-price contract type provides cost predictability for the government.
VSE CORPORATION's established presence suggests a level of expertise and reliability in delivering these services.
The contract duration indicates a strategic commitment to ensuring sustained operational support for naval assets.

Sector Analysis

This contract falls within the Engineering Services sector (NAICS 541330), which is a vital component of the broader defense industrial base. The market for these services is characterized by specialized expertise and long-term relationships with government agencies. Spending in this sector is often driven by the need for technical support, maintenance, and operational management of complex systems, particularly in defense. Comparable spending benchmarks would typically involve analyzing other large, long-duration engineering support contracts awarded by the Department of Defense.

Small Business Impact

The contract data indicates that small business participation was not a primary consideration, as the 'small business set-aside' flag is false. This suggests that the contract was not specifically designed to award a portion of the work to small businesses. Consequently, there may be limited direct subcontracting opportunities for small businesses unless VSE CORPORATION voluntarily engages them. This approach could potentially limit the broader impact on the small business defense ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. Accountability measures are inherent in the fixed-price contract structure, which incentivizes the contractor to meet defined deliverables within the agreed-upon price. Transparency is generally facilitated through contract award databases, though detailed performance reports may not always be publicly available. The Inspector General for the Department of Defense would have jurisdiction to investigate any allegations of fraud, waste, or abuse related to this contract.

Related Government Programs

Naval Sea Systems Command (NAVSEA) Contracts
Department of Defense Engineering Services
Operational Support Contracts
Fleet Readiness Programs

Risk Flags

Sole-source award
Long contract duration
Lack of small business participation noted

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $58.5 million to VSE CORPORATION. PM, MECHANICS, OPERATORS, GFP MGRS (PMC)

Who is the contractor on this award?

The obligated recipient is VSE CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $58.5 million.

What is the period of performance?

Start: 2020-02-28. End: 2025-10-15.

What is VSE CORPORATION's track record with the Department of the Navy for similar services?

VSE CORPORATION has a significant history of contracting with the Department of the Navy and other Department of Defense agencies, often providing a range of technical, engineering, and operational support services. Their experience typically includes program management, logistics support, maintenance, and repair services for naval vessels and systems. Analyzing past performance on similar contracts would involve reviewing contract histories for on-time delivery, quality of service, and adherence to budget. While specific details of past performance on this exact type of service are not provided in the summary data, VSE's general profile suggests they are a capable provider within this domain. However, the lack of competition on this specific award means that direct comparisons of performance against other potential bidders are not available.

How does the $58.5 million award compare to historical spending on similar services by the Navy?

Comparing the $58.5 million award to historical spending requires access to detailed historical contract data for similar services, such as 'PM, MECHANICS, OPERATORS, GFP MGRS'. Without specific historical benchmarks for this precise service category, a direct comparison is difficult. However, the total award value over approximately 5.7 years indicates a substantial annual expenditure, likely in the range of $10 million per year. The Department of the Navy procures a vast array of support services, and this contract represents a significant, albeit specific, investment. To provide a robust comparison, one would need to analyze trends in engineering and operational support spending within the Navy over the past decade, looking at contract values, durations, and the types of services procured.

What are the primary risks associated with a sole-source award of this magnitude?

The primary risks associated with a sole-source award of this magnitude ($58.5 million) include potential overpricing due to the lack of competitive bidding, reduced incentive for the contractor to innovate or improve efficiency, and a missed opportunity to foster competition within the market. There's also a risk that the government may not be receiving the best possible value for its investment. Furthermore, sole-source awards can sometimes indicate a lack of market research or planning, or reliance on a single vendor's unique capabilities, which can create dependency. Robust oversight and performance management are critical to mitigate these risks and ensure the government receives the required services at a fair price.

How effective is the fixed-price contract type in managing costs for these types of services?

The fixed-price contract type is generally effective in managing costs for services where the scope of work is well-defined and unlikely to change significantly. For services like 'PM, MECHANICS, OPERATORS, GFP MGRS', a fixed-price contract provides cost certainty to the government, as the contractor assumes the risk of cost overruns. This incentivizes the contractor to manage their resources efficiently and control expenses to maximize profit. However, if the scope of work is not precisely defined or if unforeseen issues arise, the fixed-price nature can lead to disputes or the contractor seeking change orders, potentially increasing the overall cost. Effective management requires clear performance standards and diligent oversight to ensure the contractor meets obligations without compromising quality.

What are the implications of the contract duration (2056 days) on program stability and contractor performance?

A contract duration of 2056 days (approximately 5.7 years) provides significant program stability for both the government and the contractor. For the government, it ensures continuity of essential services without the frequent need for re-competition, which can be resource-intensive and disruptive. For the contractor, it offers a predictable revenue stream, allowing for better long-term planning, investment in personnel and equipment, and potentially fostering deeper expertise in the specific services required. However, such long durations also necessitate robust oversight mechanisms to ensure the contractor maintains performance standards throughout the contract period and to prevent complacency. It also means that any potential issues with performance or pricing may persist for an extended period if not addressed proactively.

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: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: M6785419R0030

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 6348 WALKER LANE, ALEXANDRIA, VA, 22310

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

Financial Breakdown

Contract Ceiling: $59,713,727

Exercised Options: $58,841,727

Current Obligation: $58,525,360

Actual Outlays: $19,647,131

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline