DoD's $151M Engility contract for IT services awarded in 1996, spanning over 12 years
Contract Overview
Contract Amount: $15,138,318 ($15.1M)
Contractor: Engility Corporation
Awarding Agency: Department of Defense
Start Date: 1996-02-15
End Date: 2008-09-30
Contract Duration: 4,611 days
Daily Burn Rate: $3.3K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: COST PLUS FIXED FEE
Sector: IT
Place of Performance
Location: CHANTILLY, FAIRFAX County, VIRGINIA, 20151
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $15.1 million to ENGILITY CORPORATION for work described as: Key points: 1. Contract awarded under full and open competition, suggesting a competitive bidding process. 2. The contract's duration of over 12 years is exceptionally long, potentially indicating a need for sustained services. 3. Awarded as a Cost Plus Fixed Fee (CPFF) type, which can incentivize cost control but also carries risk. 4. The contract was awarded to Engility Corporation, a significant player in the federal IT services market. 5. The contract's value of $151 million over its lifespan suggests a substantial investment in IT support. 6. The absence of small business set-aside flags indicates it was not specifically targeted for small business participation.
Value Assessment
Rating: fair
Benchmarking the value of this contract is challenging without specific deliverables or performance metrics. However, a $151 million award over more than 12 years averages to approximately $12.6 million annually. This figure needs to be compared against the scope and complexity of the IT services provided. The CPFF structure requires careful monitoring to ensure costs remain reasonable and fixed fees are justified by performance. Without more granular data on the services rendered and their market rates, a definitive value-for-money assessment is difficult.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under 'FULL AND OPEN COMPETITION,' indicating that all responsible sources were permitted to submit bids. The presence of 2 bids suggests a moderate level of competition for this significant IT services contract. While two bidders participated, a higher number would typically be expected for a contract of this magnitude and duration to ensure optimal price discovery and value for the government.
Taxpayer Impact: A competitive award process, even with two bidders, generally benefits taxpayers by encouraging more favorable pricing and service offerings compared to sole-source or limited competition scenarios.
Public Impact
The Department of the Navy benefits from sustained IT support services, crucial for its operational readiness and administrative functions. This contract likely supported a wide range of IT services, including system maintenance, development, and potentially cybersecurity, impacting naval operations. The geographic impact is primarily within the Department of the Navy's operational areas, likely supporting bases and facilities where naval personnel are stationed. The contract's duration and value suggest a significant workforce, both within Engility Corporation and potentially its subcontractors, involved in delivering these IT services.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration (over 12 years) can lead to vendor lock-in and reduced flexibility for the agency to adapt to new technologies or requirements.
- Cost Plus Fixed Fee (CPFF) contracts can sometimes lead to cost overruns if not managed diligently, as the contractor is reimbursed for costs plus a fixed fee.
- Limited competition (2 bidders) might have resulted in a higher price than if more vendors had participated.
- Lack of specific performance metrics makes it difficult to assess the contractor's effectiveness and value delivered over the contract's life.
Positive Signals
- Awarded through full and open competition, ensuring a broad range of potential vendors could compete.
- The contract provided sustained IT support, likely contributing to the stability and continuity of critical naval IT systems.
- The fixed fee component of the CPFF contract provides some level of cost predictability for the government, assuming costs are managed effectively.
Sector Analysis
This contract falls within the Information Technology (IT) services sector, a critical area for all branches of the federal government. The IT services market is vast and highly competitive, encompassing everything from software development and system integration to cloud computing and cybersecurity. Federal spending in this sector is substantial, driven by the need to modernize legacy systems, enhance digital capabilities, and maintain secure networks. This specific contract, awarded to Engility Corporation, represents a significant portion of IT service spending for the Department of the Navy over a prolonged period.
Small Business Impact
The data indicates this contract was not awarded as a small business set-aside (ss: false, sb: false). This suggests that the primary focus was on obtaining the best value from the broader market rather than specifically targeting small businesses. Consequently, there are no direct subcontracting implications for small businesses mandated by this award. However, the prime contractor, Engility Corporation, may have engaged small businesses as subcontractors at its discretion, contributing indirectly to the small business ecosystem.
Oversight & Accountability
Oversight for this contract would have been managed by the Department of the Navy's contracting and program management offices. As a Cost Plus Fixed Fee contract, rigorous oversight of incurred costs and contractor performance would be essential to ensure compliance with the contract terms and prevent cost overruns. Transparency would be facilitated through regular reporting requirements and audits. While specific Inspector General (IG) involvement isn't detailed, the DoD IG typically has jurisdiction over defense contracts, providing an additional layer of accountability.
Related Government Programs
- Department of Defense IT Services Contracts
- Naval IT Modernization Programs
- Information Technology Support Services
- Cost Plus Fixed Fee Contracts
- Engility Corporation Federal Contracts
Risk Flags
- Long contract duration may limit flexibility.
- CPFF structure requires diligent cost oversight.
- Limited competition could impact price optimization.
Tags
it-services, department-of-defense, department-of-the-navy, cost-plus-fixed-fee, full-and-open-competition, large-contract, long-duration, engility-corporation, information-technology, defense-contracting, virginia
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $15.1 million to ENGILITY CORPORATION. See the official description on USAspending.
Who is the contractor on this award?
The obligated recipient is ENGILITY 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 $15.1 million.
What is the period of performance?
Start: 1996-02-15. End: 2008-09-30.
What specific IT services were delivered under this contract?
The provided data does not specify the exact IT services rendered under this $151 million contract awarded to Engility Corporation by the Department of the Navy. Typically, contracts of this nature and duration for the Navy would encompass a broad spectrum of IT support. This could include areas such as network infrastructure management, system administration, software development and maintenance, cybersecurity operations, help desk support, and potentially IT strategy and planning. The Cost Plus Fixed Fee (CPFF) award type suggests that the scope might have involved evolving requirements or complex projects where defining all future tasks precisely at the outset was challenging. Further details would likely be found in the contract's Statement of Work (SOW) or Performance Work Statement (PWS).
How does the $151 million value compare to similar IT contracts awarded by the DoD during that period?
Comparing the $151 million value of this contract requires context regarding the specific IT services provided and the time frame. Awarded in 1996 and spanning over 12 years, it represents an average annual value of approximately $12.6 million. In the mid-to-late 1990s, federal IT spending was increasing significantly as agencies modernized. Large-scale IT support contracts for major commands like the Department of the Navy could easily reach tens or hundreds of millions of dollars. Without knowing the precise scope (e.g., enterprise-wide network support vs. specialized software development), a direct comparison is difficult. However, for a multi-year, comprehensive IT services contract supporting a major military branch, $151 million over its lifespan is substantial but not necessarily an outlier, reflecting the significant IT needs of the DoD.
What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract of this duration?
The primary risks associated with a CPFF contract of this 12+ year duration include potential cost escalation and contractor complacency. While the fixed fee provides some cost certainty, the 'cost plus' element means the government reimburses the contractor's actual costs. If the contractor is not diligent in controlling expenses, costs can rise significantly, increasing the total contract value beyond initial projections. For long-duration contracts, there's also a risk that the contractor may become complacent, relying on the established relationship and fixed fee rather than actively seeking efficiencies or innovating. Furthermore, the government bears the risk of cost overruns if the initial estimates or the contractor's cost management are inadequate. Effective oversight and robust auditing are crucial to mitigate these risks.
What does the limited competition (2 bidders) imply for the Department of the Navy and taxpayers?
The fact that only two bids were received for this significant IT services contract suggests a potentially limited competitive landscape for the specific requirements. For the Department of the Navy, this could mean they did not receive the full benefit of a highly competitive market, potentially leading to less aggressive pricing or fewer innovative solutions compared to a scenario with numerous bidders. For taxpayers, limited competition can translate to higher costs, as the government may have paid more than it would have in a more robustly contested procurement. While 'full and open competition' was advertised, the low number of actual bidders indicates that perhaps only a few large companies possessed the necessary qualifications, experience, and capacity to bid, or that the contract's structure or perceived profitability limited broader interest.
How has Engility Corporation's performance on this contract potentially influenced its track record?
Engility Corporation's performance on this extensive 12-year contract would have significantly shaped its track record within the federal IT services sector. Successfully delivering complex IT services over such a long period, especially for a major client like the Department of the Navy, would demonstrate capability, reliability, and the ability to manage large-scale, long-term engagements. Conversely, any significant issues, cost overruns, or performance failures could have negatively impacted its reputation and future contracting opportunities. Without specific performance reviews or contract termination data, it's assumed that the contract's renewal or completion without major incident reflects a generally satisfactory performance, bolstering Engility's standing as a capable federal contractor during that era.
What were the likely workforce implications of a $151M IT contract over 12 years?
A $151 million IT contract spanning over 12 years would have substantial workforce implications. It implies the creation and sustained employment of a significant number of personnel, likely numbering in the hundreds, both directly by Engility Corporation and potentially through its subcontractors. These roles would span various IT disciplines, including project managers, systems administrators, network engineers, software developers, cybersecurity analysts, and support staff. The long duration suggests a stable employment base for those individuals, contributing to the IT workforce within the contractor community supporting the Department of Defense. It also signifies a considerable investment in human capital to meet the Navy's ongoing IT needs.
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Offers Received: 2
Pricing Type: COST PLUS FIXED FEE (U)
Contractor Details
Parent Company: L-3 Communications Holdings, Inc. (UEI: 008898843)
Address: 3750 CENTERVIEW DR, CHANTILLY, VA, 90
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Federally Funded Research and Development Corp, Small Business, Special Designations, U.S.-Owned Business
Timeline
Start Date: 1996-02-15
Current End Date: 2008-09-30
Potential End Date: 2008-09-30 00:00:00
Last Modified: 2010-09-20
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