DoD's $37.9M Engineering Services Contract Awarded to Eastern Research Group Inc. for Naval Support

Contract Overview

Contract Amount: $37,927,283 ($37.9M)

Contractor: Eastern Research Group Inc

Awarding Agency: Department of Defense

Start Date: 2021-09-11

End Date: 2026-04-30

Contract Duration: 1,692 days

Daily Burn Rate: $22.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: ENGINEERING AND TECHNICAL SERVICES IN SUPPORT OF NSWC IHD ENERGETICS DEPARTMENT M MISSION EXECUTION.

Place of Performance

Location: WOBURN, MIDDLESEX County, MASSACHUSETTS, 01801

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $37.9 million to EASTERN RESEARCH GROUP INC for work described as: ENGINEERING AND TECHNICAL SERVICES IN SUPPORT OF NSWC IHD ENERGETICS DEPARTMENT M MISSION EXECUTION. Key points: 1. Contract provides essential engineering and technical services for the NSWC IHD Energetics Department. 2. Eastern Research Group Inc. secured this contract through full and open competition. 3. The contract duration spans over 1600 days, indicating a long-term need for these services. 4. The award type is a delivery order, suggesting it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract. 5. The contract's focus on energetics supports critical naval defense capabilities. 6. Performance is located in Massachusetts, impacting the regional workforce and economy.

Value Assessment

Rating: good

The contract value of $37.9 million over approximately 4.7 years suggests a significant investment in specialized engineering support. Benchmarking this against similar contracts for naval energetics support is challenging without more specific service details. However, the cost-plus-fixed-fee (CPFF) pricing structure implies that while direct costs are reimbursed, the contractor's profit is fixed, which can incentivize efficiency. Further analysis would require comparing the labor rates and overhead applied to industry standards for comparable engineering services within the defense sector.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified vendors had the opportunity to bid. The specific number of bidders is not provided, but this competitive process generally leads to better price discovery and potentially more favorable terms for the government compared to sole-source or limited competition awards. The government likely sought proposals that best met technical requirements and offered competitive pricing.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it maximizes the potential for cost savings by encouraging a wide range of contractors to offer their best pricing and technical solutions.

Public Impact

The primary beneficiaries are the Naval Surface Warfare Center Indian Head (NSWC IHD) Energetics Department, which receives critical technical and engineering support. Services delivered include engineering and technical support crucial for the execution of the department's mission, likely related to explosives, propellants, and energetic materials. The geographic impact is concentrated in Massachusetts, where the contractor is based and where the services are likely performed, potentially supporting local jobs and businesses. Workforce implications include the employment of skilled engineers and technical personnel by Eastern Research Group Inc. to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific performance metrics makes it difficult to assess the effectiveness and efficiency of the engineering services provided.
The cost-plus-fixed-fee structure, while common, requires diligent oversight to ensure costs remain reasonable and the fixed fee is justified.
Limited transparency on the specific tasks and deliverables within this delivery order makes it hard to gauge the full scope of work and associated risks.
Dependence on a single contractor for specialized energetics support could pose a risk if the contractor faces performance issues or financial instability.

Positive Signals

Awarded through full and open competition, suggesting a robust selection process and potential for competitive pricing.
The contractor, Eastern Research Group Inc., has a track record of performing government contracts, implying experience and established processes.
The long contract duration indicates a stable, ongoing need for these critical services, suggesting a well-defined requirement.
The contract supports a vital national defense mission within the Naval Surface Warfare Center.

Sector Analysis

This contract falls within the Engineering Services sector, a critical component of the broader professional, scientific, and technical services industry. This sector supports various government functions, particularly in defense, by providing specialized expertise. The market for defense engineering services is substantial, driven by the need for advanced technological development and sustainment of military platforms. Comparable spending benchmarks would typically involve analyzing other contracts for similar engineering support to naval ordnance or energetic materials research and development.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Eastern Research Group Inc. is likely a large business. There is no explicit information regarding subcontracting plans for small businesses within this specific award. Therefore, the direct impact on the small business ecosystem from this particular contract appears minimal, though the prime contractor may engage small businesses in their supply chain.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Navy and the Naval Surface Warfare Center Indian Head (NSWC IHD). As a cost-plus-fixed-fee contract awarded under full and open competition, it is subject to standard government contract administration and auditing procedures. Transparency is facilitated through contract award databases, but detailed performance reports and specific task orders are typically internal. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Naval Sea Systems Command (NAVSEA) Contracts
Naval Air Systems Command (NAVAIR) Engineering Support
Defense Contract Management Agency (DCMA) Oversight
Research, Development, Test, and Evaluation (RDT&E) Funding
Naval Ordnance Programs

Risk Flags

Potential for cost overruns inherent in CPFF contracts.
Reliance on contractor expertise for critical defense capabilities.
Need for stringent safety protocols in energetics work.
Ensuring continued availability of specialized technical skills.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $37.9 million to EASTERN RESEARCH GROUP INC. ENGINEERING AND TECHNICAL SERVICES IN SUPPORT OF NSWC IHD ENERGETICS DEPARTMENT M MISSION EXECUTION.

Who is the contractor on this award?

The obligated recipient is EASTERN RESEARCH GROUP 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 $37.9 million.

What is the period of performance?

Start: 2021-09-11. End: 2026-04-30.

What is Eastern Research Group Inc.'s past performance record with the Department of Defense, particularly in similar engineering services contracts?

Eastern Research Group Inc. (ERG) has a history of performing contracts for the Department of Defense, including various agencies within the Navy and Air Force. Their past performance often involves scientific research, engineering support, and technical services. While specific details on past performance ratings for this particular contract are not publicly available, ERG's sustained presence in the federal contracting space suggests a generally acceptable performance record. Analyzing their contract history for similar scopes of work, such as energetics support or specialized engineering for naval applications, would provide a clearer picture of their capabilities and reliability in this domain. Government contract databases and past performance evaluations, where accessible, are key resources for this assessment.

How does the $37.9 million contract value compare to similar engineering support contracts for naval energetics departments?

The $37.9 million contract value for engineering and technical services supporting the NSWC IHD Energetics Department is substantial, reflecting the specialized and critical nature of energetics work. To benchmark this value, one would typically compare it against contracts awarded to other firms for similar services, such as research, development, testing, and sustainment of energetic materials and systems for the Navy or other defense branches. Factors like contract duration (approximately 4.7 years here), scope of work (e.g., R&D, lifecycle support, safety analysis), and the specific technical expertise required heavily influence pricing. Without access to detailed scope-of-work comparisons and specific task orders, a precise value-for-money assessment is difficult. However, the full and open competition suggests the government sought competitive pricing for these essential services.

What are the primary risks associated with this contract, and what mitigation strategies are likely in place?

Primary risks associated with this contract include potential cost overruns (despite the fixed fee component, underlying costs can escalate), performance deficiencies (failure to meet technical requirements or deadlines), and contractor personnel issues (loss of key personnel, security clearances). Given the specialized nature of energetics, safety risks during testing or handling of materials are also a concern. Mitigation strategies likely involve robust government oversight, including regular progress reviews, technical inspections, and audits. The contract's cost-plus-fixed-fee structure incentivizes the contractor to manage costs efficiently to protect their fixed profit margin. Clear performance work statements (PWS) and defined deliverables help manage performance expectations, and security protocols are critical for handling sensitive energetic materials.

How effective is the cost-plus-fixed-fee (CPFF) pricing structure in ensuring value for money for this specific contract?

The Cost-Plus-Fixed-Fee (CPFF) pricing structure aims to balance risk and reward between the government and the contractor. For this contract, it means the government reimburses ERG for allowable costs incurred, plus a predetermined fixed fee representing profit. This structure is often used when the scope of work involves research and development or is subject to uncertainties, making it difficult to estimate costs precisely upfront. CPFF incentivizes the contractor to control costs, as the fixed fee remains constant regardless of the actual costs incurred; exceeding costs reduces the contractor's overall profit percentage. However, it requires diligent government oversight to ensure costs are reasonable, allocable, and allowable. Value for money is achieved if the contractor delivers the required technical outcomes efficiently within a reasonable cost structure, which is then validated through contract administration and performance monitoring.

What is the historical spending trend for engineering and technical services within the NSWC IHD Energetics Department?

Analyzing historical spending trends for the NSWC IHD Energetics Department requires access to detailed budget and contract data over multiple fiscal years. This specific $37.9 million award represents a significant investment, but its context within the department's overall budget and prior spending patterns is crucial. Typically, departments like NSWC IHD have consistent needs for specialized engineering and technical support due to the ongoing nature of research, development, testing, and sustainment of naval weapon systems and energetic materials. Spending can fluctuate based on program priorities, congressional appropriations, and the lifecycle stage of various projects. A trend analysis would involve examining the total obligated amounts for similar service contracts awarded by NSWC IHD over the past 5-10 years to identify patterns, average contract values, and the prevalence of different contract types and competition levels.

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: N0017421R3001

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 561 VIRGINIA RD, CONCORD, MA, 01742

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

Financial Breakdown

Contract Ceiling: $38,669,908

Exercised Options: $38,669,908

Current Obligation: $37,927,283

Subaward Activity

Number of Subawards: 11

Total Subaward Amount: $1,751,999

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017819D7559

IDV Type: IDC

Timeline