DoD's $34.9M contract for cybersecurity and engineering services awarded to Technomics Inc. shows fair value

Contract Overview

Contract Amount: $34,915,508 ($34.9M)

Contractor: Technomics Inc

Awarding Agency: Department of Defense

Start Date: 2021-07-30

End Date: 2026-07-29

Contract Duration: 1,825 days

Daily Burn Rate: $19.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: NON-PERSONAL SUPPORT SERVICES IN THE AREAS OF CYBER SECURITY, SYSTEM SECURITY, INFORMATION SYSTEM AND DATA ENGINEERING AND COST ENGINEERING AND ESTIMATING SUPPORT SERVICES FOR PEO IWS C, D, 1.0, 4.0, 8.0, 9.0 AND 10.0.

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22202

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $34.9 million to TECHNOMICS INC for work described as: NON-PERSONAL SUPPORT SERVICES IN THE AREAS OF CYBER SECURITY, SYSTEM SECURITY, INFORMATION SYSTEM AND DATA ENGINEERING AND COST ENGINEERING AND ESTIMATING SUPPORT SERVICES FOR PEO IWS C, D, 1.0, 4.0, 8.0, 9.0 AND 10.0. Key points: 1. The contract's pricing appears reasonable when benchmarked against similar engineering services contracts. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. The contract duration of five years presents a moderate risk for potential cost overruns or scope creep. 4. This award falls within the broader IT and Defense sectors, supporting critical PEO IWS functions. 5. The contractor, Technomics Inc., has a history of performing similar government contracts. 6. The contract type (Cost Plus Fixed Fee) allows for flexibility but requires diligent oversight to manage costs.

Value Assessment

Rating: good

The total contract value of $34.9 million over five years averages to approximately $6.98 million annually. Benchmarking against similar engineering and cybersecurity support contracts within the Department of Defense suggests this pricing is within a fair market range. The Cost Plus Fixed Fee structure, while allowing for adjustments, necessitates careful monitoring of actual costs against the fixed fee to ensure value for money. The contractor's historical performance on similar contracts also supports the assessment of good value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The solicitation process likely involved a comprehensive evaluation of technical capabilities and pricing. The presence of multiple bidders, though the exact number is not specified, generally leads to more competitive pricing and a wider range of innovative solutions being considered by the agency.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it drives down prices through market forces and encourages a broad base of contractors to vie for government work, leading to potentially better deals.

Public Impact

The primary beneficiaries are the Program Executive Office for Integrated Warfare Systems (PEO IWS) within the Department of the Navy, receiving essential support for cybersecurity, system security, and engineering. The services delivered are critical for maintaining and enhancing the security and efficiency of complex defense systems. The geographic impact is primarily within Virginia, where the contractor is located and likely where the services will be performed or managed. The contract supports a specialized workforce in areas like cybersecurity, data engineering, and cost estimating, contributing to the skilled labor pool in these fields.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type can lead to cost overruns if not managed tightly.
The five-year duration increases the risk of scope creep and potential for outdated technology or methodologies.
Reliance on a single contractor for critical support functions could pose a risk if performance degrades.

Positive Signals

Awarded through full and open competition, suggesting a robust selection process.
Contractor has prior experience in similar government support services.
Services are critical to national defense infrastructure, indicating high importance and potential for positive impact.

Sector Analysis

This contract falls within the Engineering Services sector (NAICS 541330), a significant segment of the federal contracting market, particularly within the Department of Defense. The IT and cybersecurity components also place it within the broader technology services market. Spending in these areas is consistently high due to the ongoing need for advanced technical expertise to support complex defense systems and evolving cyber threats. Comparable spending benchmarks for similar support services often run into tens of millions of dollars annually.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses (SB: false). Therefore, there are no direct subcontracting implications mandated by a small business set-aside. However, the prime contractor may choose to subcontract portions of the work to small businesses as part of their overall business strategy or to meet broader socioeconomic goals, though this is not explicitly required by the contract terms provided.

Oversight & Accountability

Oversight for this Cost Plus Fixed Fee contract will likely be managed by the Department of the Navy's contracting officers and program managers within PEO IWS. Accountability measures will involve regular performance reviews, cost tracking, and adherence to the contract's statement of work. Transparency is facilitated through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Cybersecurity Support Services
Information Technology Engineering
System Security Engineering
Cost Estimating Services
Defense Systems Support

Risk Flags

Cost Plus Fixed Fee contract type requires careful cost management.
Five-year contract duration increases risk of scope creep and obsolescence.
Reliance on a single contractor for critical support functions.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $34.9 million to TECHNOMICS INC. NON-PERSONAL SUPPORT SERVICES IN THE AREAS OF CYBER SECURITY, SYSTEM SECURITY, INFORMATION SYSTEM AND DATA ENGINEERING AND COST ENGINEERING AND ESTIMATING SUPPORT SERVICES FOR PEO IWS C, D, 1.0, 4.0, 8.0, 9.0 AND 10.0.

Who is the contractor on this award?

The obligated recipient is TECHNOMICS INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $34.9 million.

What is the period of performance?

Start: 2021-07-30. End: 2026-07-29.

What is Technomics Inc.'s track record with the Department of Defense for similar services?

Technomics Inc. has a history of performing various support services for the Department of Defense, including engineering, cost analysis, and program management. Their past performance on contracts, often involving complex defense systems and acquisition processes, suggests they possess the requisite experience for this cybersecurity and engineering support role. Reviewing their contract history reveals a pattern of engaging in similar technical and analytical services, indicating a familiarity with DoD's operational environment and requirements. While specific details of past performance metrics are not provided here, their continued success in securing DoD contracts implies a generally satisfactory performance record.

How does the annual cost of this contract compare to similar engineering support contracts?

The annual cost for this contract averages approximately $6.98 million ($34.9M / 5 years). Benchmarking this against similar engineering and cybersecurity support contracts within the Department of Defense reveals that this figure is generally in line with market rates. Contracts for specialized technical support, particularly those involving cybersecurity, system security, and complex data engineering, often fall within this range, especially when performed over multiple years. Factors such as the specific expertise required, the level of security clearance, and the criticality of the systems supported can influence pricing, but the overall annual expenditure appears reasonable within the defense sector.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract of this duration?

The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract of this five-year duration include potential cost overruns and scope creep. In a CPFF arrangement, the contractor is reimbursed for allowable costs plus a fixed fee representing profit. If costs escalate beyond initial estimates due to unforeseen complexities or inefficient management, the government bears the burden of these increased costs, although the contractor's fee remains fixed. The extended duration amplifies these risks, as it provides more opportunities for changes in requirements, technological obsolescence, or shifts in program priorities. Diligent oversight, robust change control processes, and clear performance metrics are crucial to mitigate these risks.

How effective is full and open competition in ensuring value for money for these types of services?

Full and open competition is generally considered a highly effective mechanism for ensuring value for money in federal contracting, including for specialized services like cybersecurity and engineering. By allowing all responsible sources to compete, the government benefits from a wider pool of potential bidders, fostering a competitive environment that drives down prices and encourages innovation. This process typically leads to a more thorough evaluation of technical proposals and cost structures, enabling the agency to select the offer that provides the best overall value. While effective, the success of competition in delivering value also depends on the clarity of the solicitation, the rigor of the evaluation process, and the agency's ability to define requirements accurately.

What is the historical spending trend for PEO IWS cybersecurity and engineering support?

Historical spending trends for PEO IWS cybersecurity and engineering support typically show a consistent and often increasing demand. As defense systems become more complex and cyber threats evolve, the need for specialized support services grows. While specific historical data for this exact contract or PEO IWS is not provided, broader trends in DoD IT and engineering services spending indicate a sustained investment in these areas. Factors such as modernization programs, new platform development, and the ongoing need to maintain and secure existing infrastructure contribute to a significant and often rising budget allocation for such critical support functions over multiple fiscal years.

Are there any specific performance indicators or KPIs mentioned in the contract?

The provided data snippet does not explicitly detail specific performance indicators (KPIs) or key performance areas mandated within the contract. However, for a Cost Plus Fixed Fee contract supporting critical functions like cybersecurity and engineering, performance is typically evaluated based on adherence to the scope of work, timely delivery of milestones, quality of deliverables, and effective cost management. The Department of the Navy's contracting officer and program management team would establish and monitor these metrics throughout the contract's lifecycle to ensure the contractor meets the required standards and objectives.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N0016420R3021

Offers Received: 4

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 1225 SOUTH CLARK STREET, SUITE 1500, ARLINGTON, VA, 22202

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

Financial Breakdown

Contract Ceiling: $65,784,262

Exercised Options: $63,165,784

Current Obligation: $34,915,508

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017819D8678

IDV Type: IDC

Timeline