DoD's $41.8M Engineering Services Contract with The Mil Corporation Shows Fair Value Amidst Full Competition

Contract Overview

Contract Amount: $41,774,136 ($41.8M)

Contractor: THE MIL Corporation

Awarding Agency: Department of Defense

Start Date: 2020-02-11

End Date: 2024-02-29

Contract Duration: 1,479 days

Daily Burn Rate: $28.2K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: LABOR - SAIW TASKING - RDT&E

Place of Performance

Location: SAINT INIGOES, SAINT MARYS County, MARYLAND, 20684

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $41.8 million to THE MIL CORPORATION for work described as: LABOR - SAIW TASKING - RDT&E Key points: 1. Contract awarded through full and open competition, suggesting a competitive pricing environment. 2. The Mil Corporation, a significant player in engineering services, holds this contract. 3. Performance period spans nearly four years, indicating a substantial and ongoing need for services. 4. The contract type (Cost Plus Fixed Fee) allows for flexibility but requires careful oversight of costs. 5. Engineering services are critical for defense readiness and technological advancement. 6. The contract is a delivery order under a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle, common for long-term needs.

Value Assessment

Rating: good

The contract's value of approximately $41.8 million over nearly four years for engineering services appears reasonable given the scope and duration. While specific cost breakdowns are not provided, the use of Cost Plus Fixed Fee (CPFF) suggests that the government pays for allowable costs plus a negotiated fixed fee for profit. Benchmarking against similar large-scale engineering support contracts within the Department of Defense would be necessary for a definitive value assessment. However, the competitive award process likely contributed to achieving a fair price.

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 offers. The specific number of bidders is not detailed, but this procurement method generally fosters robust price discovery and encourages multiple companies to vie for the work. The competitive nature of the award suggests that the government received proposals from various qualified engineering firms, leading to a more advantageous outcome for the taxpayer.

Taxpayer Impact: Full and open competition typically results in better pricing for taxpayers by leveraging market forces to drive down costs and encourage innovation among bidders.

Public Impact

The Department of the Navy benefits from specialized engineering expertise to support its missions. Services likely contribute to the design, development, and maintenance of naval systems and infrastructure. The contract supports skilled engineering jobs, primarily in Maryland where the contractor is based. This contract is crucial for maintaining the technological edge and operational readiness of naval forces.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts require diligent monitoring to ensure costs remain within reasonable bounds and the fixed fee is justified.
The long duration of the contract necessitates ongoing performance evaluation to ensure continued value.
Reliance on a single delivery order under an IDIQ could concentrate risk if the prime contractor faces significant challenges.

Positive Signals

Awarded through full and open competition, indicating a competitive process that likely yielded fair pricing.
The Mil Corporation has a track record in providing engineering services, suggesting experience relevant to the contract's needs.
The contract supports critical defense engineering functions, aligning with national security objectives.

Sector Analysis

The engineering services sector is a vital component of the broader professional services market, supporting government and private industry with specialized technical expertise. Within the defense sector, engineering services are crucial for research, development, testing, and evaluation (R&DTE) of complex military systems. The market is characterized by a mix of large, established firms and smaller, specialized companies. Spending in this category is often driven by defense modernization efforts and the need for advanced technological solutions.

Small Business Impact

This contract does not appear to have a specific small business set-aside. The prime contractor, The Mil Corporation, is not identified as a small business. There is no explicit information regarding subcontracting plans for small businesses within the provided data. Further investigation into the contract's subcontracting goals would be needed to assess its impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. As a Cost Plus Fixed Fee contract, rigorous financial oversight is expected to monitor allowable costs and the reasonableness of the fixed fee. Transparency is facilitated through contract reporting mechanisms. The Inspector General for the Department of Defense would have jurisdiction to investigate any potential fraud, waste, or abuse related to this award.

Related Government Programs

Department of Defense Engineering Services
Naval Sea Systems Command (NAVSEA) Contracts
Research, Development, Test, and Evaluation (RDT&E) Contracts
Indefinite Delivery/Indefinite Quantity (IDIQ) Vehicles

Risk Flags

Cost Plus Fixed Fee contract type requires diligent oversight to manage costs.
Long contract duration necessitates ongoing performance monitoring.
Potential for scope creep if requirements are not well-defined.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $41.8 million to THE MIL CORPORATION. LABOR - SAIW TASKING - RDT&E

Who is the contractor on this award?

The obligated recipient is THE MIL 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 $41.8 million.

What is the period of performance?

Start: 2020-02-11. End: 2024-02-29.

What is The Mil Corporation's past performance record with the Department of Defense, particularly on similar engineering services contracts?

The Mil Corporation has a history of performing engineering and technical services for the Department of Defense. While specific details of past performance on contracts of this magnitude are not provided in the summary data, their ability to secure this $41.8 million delivery order suggests a satisfactory track record. A comprehensive review would involve examining past performance evaluations, any documented issues or commendations, and the successful completion of prior relevant projects. Generally, contractors are assessed on their ability to meet technical requirements, manage schedules, control costs, and maintain quality. The continued award of contracts indicates a level of trust and proven capability by the agency.

How does the estimated cost per year for this contract compare to industry benchmarks for similar engineering services?

The contract's total value is approximately $41.8 million over a period of 1479 days (roughly 4 years), equating to an average annual spend of about $10.45 million. Benchmarking this against industry standards for large-scale defense engineering services requires detailed analysis of the specific tasks performed (e.g., RDT&E, system design, technical support). However, for complex engineering support requiring specialized expertise, this annual figure is within a plausible range for significant government contracts. Factors influencing benchmarks include the level of security clearance required, the criticality of the systems supported, and the specific technical disciplines involved. Without a detailed work breakdown structure, a precise comparison is difficult, but the competitive award suggests the pricing was deemed fair at the time of negotiation.

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

The primary risks associated with a CPFF contract of this magnitude and duration revolve around cost control and contractor performance. For the government, the risk is that the contractor may not be sufficiently incentivized to control costs, potentially leading to expenditures exceeding initial estimates, even with a fixed fee. Scope creep is another significant risk; if the requirements are not clearly defined or if changes occur without proper modification control, costs can escalate. For the contractor, the risk lies in accurately estimating the fixed fee to cover all potential costs and achieve a reasonable profit margin, especially given the long performance period and potential for unforeseen technical challenges or market fluctuations. Effective government oversight, clear contract terms, and robust communication are crucial to mitigate these risks.

What is the historical spending trend for engineering services by the Department of the Navy in this specific NAICS code (541330)?

The provided data indicates this contract falls under NAICS code 541330 (Engineering Services). Historical spending by the Department of the Navy (DoN) within this category is substantial, reflecting the extensive engineering requirements for naval platforms, systems, and infrastructure. While specific year-over-year trends for DoN's spending on 541330 are not detailed here, the overall defense budget consistently allocates significant resources to engineering and technical services. This contract represents one component of that broader spending. Trends are often influenced by modernization programs, new platform development, maintenance cycles, and geopolitical factors driving defense readiness needs. Analyzing historical data would reveal fluctuations based on these strategic priorities and budget allocations.

How does the geographic concentration of this contract (Maryland) impact workforce availability and potential competition?

The contract's designation of Maryland (SN: MARYLAND) as its place of performance suggests a concentration of work in that region. Maryland has a significant presence of defense contractors and a skilled engineering workforce, particularly in areas surrounding major naval commands and research facilities. This concentration can be advantageous, providing access to experienced personnel and established support infrastructure. However, it could also lead to increased competition for talent among contractors and potentially higher labor costs due to regional demand. For future procurements, this geographic focus might influence the pool of potential bidders, potentially favoring companies with a strong presence or established operations in the Maryland area.

Industry Classification

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

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0042118R0003

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 4000 MITCHELLVILLE RD STE A210, BOWIE, MD, 20716

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: $51,564,045

Exercised Options: $51,564,045

Current Obligation: $41,774,136

Actual Outlays: $719,068

Subaward Activity

Number of Subawards: 90

Total Subaward Amount: $25,216,964

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0042119D0002

IDV Type: IDC

Timeline