DoD's $32.5M Engineering Support Services Contract Awarded to McLaughlin Research Corp

Contract Overview

Contract Amount: $32,477,488 ($32.5M)

Contractor: Mclaughlin Research Corporation

Awarding Agency: Department of Defense

Start Date: 2021-04-05

End Date: 2026-04-04

Contract Duration: 1,825 days

Daily Burn Rate: $17.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: ENGINEERING SUPPORT SERVICES

Place of Performance

Location: WILLISTON, CHITTENDEN County, VERMONT, 05495

State: Vermont Government Spending

Plain-Language Summary

Department of Defense obligated $32.5 million to MCLAUGHLIN RESEARCH CORPORATION for work described as: ENGINEERING SUPPORT SERVICES Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. 3. The duration of 1825 days (5 years) indicates a long-term need for these engineering services. 4. The award was a delivery order, implying it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract. 5. No small business set-aside was noted, potentially limiting opportunities for smaller firms. 6. The contract is for engineering services, a critical component for defense operations and development.

Value Assessment

Rating: fair

Benchmarking the value of this $32.5 million contract requires comparison to similar engineering support services contracts. Without specific details on the scope of work, it's challenging to definitively assess value for money. The Cost Plus Fixed Fee (CPFF) contract type introduces inherent risk for cost control, as the government bears the cost of performance plus a fixed fee. This necessitates robust oversight to ensure costs remain reasonable and the fee is justified by the services rendered. Compared to fixed-price contracts, CPFF can be less cost-effective if not managed diligently.

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 fact that there were two bidders suggests a moderate level of competition for this specific delivery order. While full and open competition is generally preferred for maximizing price discovery and ensuring fair access, the low number of bidders might warrant further investigation into potential barriers to entry or market concentration within this specialized engineering support sector.

Taxpayer Impact: The full and open competition, despite only two bidders, aims to secure the best possible pricing for taxpayers by allowing multiple companies to vie for the contract. However, a limited number of bidders could potentially lead to higher prices than if more firms had participated.

Public Impact

The Department of the Navy benefits from specialized engineering support services crucial for its operations and technological advancements. This contract supports the development, testing, and maintenance of defense systems and platforms. The services delivered are likely to impact national security by ensuring the readiness and effectiveness of naval assets. The contract may have implications for the specialized engineering workforce, potentially creating or sustaining jobs in this sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type can incentivize cost overruns if not closely monitored.
Limited competition (2 bidders) may indicate potential market concentration or barriers to entry.
Lack of small business set-aside may limit opportunities for smaller, specialized engineering firms.

Positive Signals

Awarded through full and open competition, promoting a fair and accessible bidding process.
Long-term contract duration (5 years) suggests a stable and ongoing need for critical engineering services.
Contractor has secured a significant award, indicating a level of trust and capability from the DoD.

Sector Analysis

Engineering Services (NAICS 541330) is a vital sector supporting various industries, particularly defense, aerospace, and infrastructure. The market is characterized by specialized expertise and often requires significant R&D investment. Federal spending in this area is substantial, driven by the need for complex system design, analysis, and integration. This contract fits within the broader defense engineering support landscape, where companies provide critical technical expertise to government agencies for the development and sustainment of military systems. Comparable spending benchmarks would typically look at the average cost per hour or per project for similar engineering tasks within the DoD.

Small Business Impact

This contract was not set aside for small businesses, and the data indicates the contractor is not a small business. This means opportunities for small businesses to directly participate in this specific contract are limited unless they are part of a subcontracting plan. The absence of a small business set-aside could mean that the government determined the scope of work required large-scale capabilities or that the market analysis did not identify sufficient small business capacity for this particular requirement. Further review of subcontracting goals would be necessary to understand the indirect impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy's contracting and program management offices. Accountability measures would be embedded in the contract's terms and conditions, including performance metrics, reporting requirements, and payment schedules tied to deliverables. Transparency is typically facilitated through contract award databases and public reporting mechanisms. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract's execution.

Related Government Programs

Defense Engineering Services
Naval Systems Support Contracts
Cost Plus Fixed Fee Contracts
Indefinite Delivery/Indefinite Quantity (IDIQ) Contracts

Risk Flags

Potential for cost overruns due to CPFF contract type.
Limited competition may impact price competitiveness.
Lack of small business participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.5 million to MCLAUGHLIN RESEARCH CORPORATION. ENGINEERING SUPPORT SERVICES

Who is the contractor on this award?

The obligated recipient is MCLAUGHLIN RESEARCH 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 $32.5 million.

What is the period of performance?

Start: 2021-04-05. End: 2026-04-04.

What is the specific scope of engineering services provided under this contract?

The provided data indicates the contract is for 'ENGINEERING SUPPORT SERVICES' under NAICS code 541330. While the specific scope is not detailed in the summary data, engineering services typically encompass a wide range of activities including design, analysis, testing, integration, and technical support for complex systems. For the Department of the Navy, this could involve support for naval vessels, aircraft, weapons systems, or command and control systems. The Cost Plus Fixed Fee (CPFF) structure suggests that the contractor will be reimbursed for allowable costs incurred, plus a predetermined fixed fee representing profit. The exact nature of the engineering tasks, deliverables, and performance standards would be detailed in the contract's Statement of Work (SOW).

How does the $32.5 million value compare to similar engineering support contracts within the Department of the Navy?

Comparing the $32.5 million value requires access to a broader dataset of similar contracts. However, for a 5-year delivery order (1825 days), this value averages approximately $6.5 million per year. This figure is moderate for specialized engineering support within a large organization like the Department of the Navy, which procures a vast array of services. Contracts for major platform development or sustainment can run into hundreds of millions or even billions. This particular contract likely supports a specific program element or a set of related technical tasks rather than an entire system's lifecycle. Benchmarking would involve looking at contracts with similar durations, service types (e.g., systems engineering, software engineering, mechanical engineering), and agency sub-components.

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

The primary risk with a CPFF contract is the potential for cost growth beyond initial estimates, as the government assumes the cost of performance. While the fixed fee provides the contractor with a defined profit margin, it doesn't cap the total contract cost. This necessitates stringent government oversight to monitor costs, ensure efficiency, and validate the necessity of all expenditures. Ineffective oversight can lead to the government paying significantly more than anticipated for the services rendered. Another risk is the contractor potentially having less incentive to control costs compared to fixed-price contracts, although the fixed fee does provide a ceiling on profit. Robust auditing and progress tracking are crucial mitigation strategies.

What does the limited competition (2 bidders) suggest about the market for these specific engineering services?

The fact that only two bidders participated in this full and open competition suggests a potentially concentrated market for these specific engineering support services. This could be due to several factors: the highly specialized nature of the required expertise, high barriers to entry (e.g., security clearances, specialized facilities, intellectual property), or the specific requirements of the solicitation that may have favored only a few incumbent or highly capable firms. While full and open competition is ideal, a low number of bidders can sometimes indicate that the government did not receive the full benefit of market competition, potentially leading to less competitive pricing than if more firms had bid. It might also suggest that the market is adequately served by these two providers for this particular niche.

What is McLaughlin Research Corporation's track record with the Department of Defense?

McLaughlin Research Corporation has a history of contracting with the Department of Defense. While the provided data only shows this specific award, a deeper analysis would involve reviewing their contract history across various DoD agencies (Navy, Army, Air Force, etc.). This would reveal the types of services they have provided, their performance history (if available through past performance evaluations), and the total value of contracts awarded to them over time. Understanding their past performance, particularly on similar engineering support or defense-related contracts, is crucial for assessing their capability and reliability in fulfilling the current award.

Are there any indications of potential cost overruns or inefficiencies in past contracts of this type?

The provided summary data does not contain information on past cost overruns or inefficiencies. However, the choice of a Cost Plus Fixed Fee (CPFF) contract type inherently carries a risk of cost growth if not managed diligently. To assess this risk specifically for McLaughlin Research Corporation or this type of service, one would need to examine historical contract performance data, audit reports, or any available past performance reviews. CPFF contracts require robust government oversight mechanisms, including regular cost reviews and audits, to identify and mitigate potential inefficiencies or cost escalations early in the contract lifecycle.

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: N0025319R3504

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 130 EUGENE O'NEILL DR, NEW LONDON, CT, 06320

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: $63,544,112

Exercised Options: $57,241,432

Current Obligation: $32,477,488

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017819D8089

IDV Type: IDC

Timeline