DoD's $91.5M Engineering Services Contract Awarded to Amentum Services, Inc. with No Competition

Contract Overview

Contract Amount: $91,456,121 ($91.5M)

Contractor: Amentum Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2010-11-30

End Date: 2012-12-30

Contract Duration: 761 days

Daily Burn Rate: $120.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: PROFESSIONAL SUPPORT SERVICES

Place of Performance

Location: GERMANTOWN, MONTGOMERY County, MARYLAND, 20876

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $91.5 million to AMENTUM SERVICES, INC. for work described as: PROFESSIONAL SUPPORT SERVICES Key points: 1. Contract awarded on a non-competitive basis, raising questions about potential cost efficiencies and market fairness. 2. Significant duration of 761 days suggests a long-term need for these engineering services. 3. The Cost Plus Fixed Fee (CPFF) contract type can incentivize cost overruns if not closely monitored. 4. Engineering services are critical for defense operations, indicating a high-stakes requirement. 5. The contract's value places it in the upper tier of professional support services spending. 6. Lack of competition limits opportunities for other capable firms and potentially higher value for the government.

Value Assessment

Rating: questionable

The contract's value of $91.5 million over approximately two years for engineering services is substantial. Without competitive bidding, it is difficult to benchmark the value for money. The CPFF structure, while allowing flexibility, carries inherent risks of cost escalation. A comparison to similar engineering support contracts, especially those competed, would be necessary to assess if the pricing is reasonable and if the government is receiving good value. The lack of competition is a primary driver for this assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning it was not competed. This approach is typically reserved for situations where only one responsible source can provide the required services. The absence of multiple bidders means there was no price discovery through competition, potentially leading to higher costs for the government than if multiple firms had vied for the contract. The rationale for sole-sourcing needs to be thoroughly reviewed to ensure it was indeed the only viable option.

Taxpayer Impact: Taxpayers may have paid a premium due to the lack of competitive pressure. Without a competitive process, there is less assurance that the most cost-effective solution was secured.

Public Impact

The Department of Defense benefits from specialized engineering expertise to support its complex operations. Services delivered likely include design, analysis, testing, and technical support for defense systems. The geographic impact is likely concentrated around the contractor's facilities and DoD installations where services are rendered, primarily in Maryland. Workforce implications include employment for engineers and technical specialists at Amentum Services, Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive opportunities and potentially increases costs.
Cost Plus Fixed Fee contract type can lead to cost overruns if not managed stringently.
Lack of transparency in pricing due to non-competitive award.
Long contract duration (761 days) requires sustained oversight to ensure performance and value.
Potential for contractor lock-in given the specialized nature of engineering services.

Positive Signals

Award to an established entity (Amentum Services, Inc.) may indicate a known capability.
Engineering services are crucial for national defense, suggesting a critical need being met.
Fixed fee component in CPFF provides some level of cost predictability.
Contract awarded by Defense Contract Management Agency suggests established oversight processes.

Sector Analysis

This contract falls within the Professional, Scientific, and Technical Services sector, specifically engineering services. This sector is vital for supporting government functions, particularly in defense, where complex systems require specialized expertise. The market for defense engineering services is substantial, with numerous firms capable of providing such support. However, sole-source awards, like this one, can distort market dynamics by limiting opportunities for smaller or emerging competitors and potentially consolidating market share among fewer large contractors.

Small Business Impact

The contract details indicate that small business participation was not a stated requirement or outcome ('sb': false, 'ss': false). This suggests that small businesses were not specifically targeted for this award, nor were there explicit subcontracting goals mentioned. Consequently, the direct impact on the small business ecosystem is likely minimal, with no dedicated set-aside provisions. Opportunities for small businesses would primarily arise if Amentum Services, Inc. voluntarily subcontracted portions of the work.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), given its role in overseeing defense contracts. Accountability measures would stem from the contract's terms and conditions, including performance metrics and reporting requirements. Transparency is limited due to the sole-source nature of the award, making public scrutiny of pricing and selection rationale more challenging. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Defense Engineering Services
Professional Support Services
Cost-Plus Contracts
Sole-Source Acquisitions
Department of Defense Contracts

Risk Flags

Sole-source award
Cost Plus Fixed Fee contract type
Lack of competitive bidding
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $91.5 million to AMENTUM SERVICES, INC.. PROFESSIONAL SUPPORT SERVICES

Who is the contractor on this award?

The obligated recipient is AMENTUM SERVICES, 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 $91.5 million.

What is the period of performance?

Start: 2010-11-30. End: 2012-12-30.

What is the specific justification for awarding this $91.5 million engineering services contract on a sole-source basis to Amentum Services, Inc.?

The provided data indicates the contract was awarded as 'NOT COMPETED' (ct: NOT COMPETED), implying a sole-source justification was used. Typically, such justifications are based on factors like the urgency of the requirement, the unavailability of other sources, or the existence of unique capabilities possessed by a single contractor. For a contract of this magnitude and duration (761 days), the specific rationale would likely involve a detailed analysis by the Department of Defense (DoD) demonstrating why Amentum Services, Inc. was the only responsible source capable of meeting the essential needs of the government. This could be due to proprietary technology, specialized expertise developed over years of supporting specific defense systems, or critical infrastructure dependencies. Without access to the official justification document (e.g., a Justification and Approval - J&A), the precise reasons remain speculative but would center on the inability to obtain the required services from other sources through competitive means.

How does the Cost Plus Fixed Fee (CPFF) contract type for this $91.5M award compare to other contract types used for similar engineering services within the DoD?

The Cost Plus Fixed Fee (CPFF) contract type is often used when the scope of work is not precisely defined at the outset, or when there is significant uncertainty regarding the costs involved, as is common in complex engineering projects. For this $91.5 million contract, CPFF allows Amentum Services, Inc. to be reimbursed for its actual costs plus a predetermined fixed fee representing profit. Compared to other contract types like Firm-Fixed-Price (FFP), CPFF shifts more cost risk to the government. FFP contracts offer greater price certainty for the government but require a well-defined scope. Other cost-reimbursement types, like Cost Plus Incentive Fee (CPIF), incorporate target costs and fee adjustments based on performance, potentially offering better cost control than CPFF. Within the DoD, the choice of contract type depends heavily on the project's risk profile and the level of definition. For well-defined engineering tasks, FFP might be preferred. However, for research, development, or highly complex system integration where uncertainty is high, CPFF or CPIF are frequently employed, though they necessitate robust government oversight to manage costs effectively.

What are the potential risks associated with a 761-day contract duration for engineering services, especially when awarded non-competitively?

A contract duration of 761 days (approximately two years) for engineering services, particularly when awarded non-competitively, presents several potential risks. Firstly, it increases the government's exposure to cost escalation over a longer period, especially with a CPFF structure. Without periodic re-competition, the incentive for the contractor to maintain cost efficiency may diminish. Secondly, it can lead to contractor 'lock-in,' where the government becomes heavily reliant on the incumbent provider, making it difficult and costly to switch providers even if performance or pricing becomes unsatisfactory. Thirdly, the lack of competition means that advancements in technology or alternative solutions that may emerge during the contract period might not be considered or incorporated. Finally, sustained oversight is critical; a long duration requires consistent monitoring of performance, costs, and adherence to contract terms to mitigate risks and ensure continued value for taxpayer money.

Given the $91.5M value and sole-source nature, what level of oversight is typically expected for this type of DoD contract?

For a $91.5 million DoD contract awarded on a sole-source basis with a CPFF structure and a duration of 761 days, a high level of oversight is expected. The Defense Contract Management Agency (DCMA) would likely be responsible for day-to-day contract administration, including monitoring contractor performance, verifying costs incurred, ensuring compliance with contract terms, and managing payments. This oversight would involve regular audits of contractor financial records, performance reviews against established milestones and deliverables, and close management of the fixed fee. Given the CPFF type, particular attention would be paid to the 'cost' component to ensure that expenditures are reasonable, allocable, and allowable. The lack of competition amplifies the need for robust oversight to ensure the government is receiving fair value and that the contractor is performing diligently and efficiently throughout the contract's life.

How does the PSC code '541330' (Engineering Services) typically align with the $91.5M contract value and the 'NOT COMPETED' status?

The Product Service Code (PSC) '541330' specifically denotes Engineering Services, which is a broad category encompassing design, consulting, and development related to engineering disciplines. A contract value of $91.5 million for these services is substantial, indicating a significant scope of work, likely involving complex projects, extensive research and development, or long-term support for major defense systems. The 'NOT COMPETED' status (sole-source) for such a high-value engineering contract suggests that the DoD identified a unique requirement or a single provider with specialized capabilities deemed essential and irreplaceable through competition. This could be due to proprietary technology, specialized knowledge of legacy systems, or critical national security considerations that preclude open competition. While engineering services can be competed, high-value, specialized requirements often lead to sole-source awards if stringent justification criteria are met.

Industry Classification

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

Product/Service Code: SHIPS, SMALL CRAFT, PONTOON, DOCKS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: AECOM (UEI: 153561212)

Address: 20501 SENECA MEADOWS PKWY STE 300, GERMANTOWN, MD, 20876

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

Financial Breakdown

Contract Ceiling: $111,834,475

Exercised Options: $104,781,636

Current Obligation: $91,456,121

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline