DoD's $48.7M engineering services contract with Siemens Government Technologies Inc. awarded in 2018, ending 2043

Contract Overview

Contract Amount: $48,678,464 ($48.7M)

Contractor: Siemens Government Technologies Inc

Awarding Agency: Department of Defense

Start Date: 2018-09-29

End Date: 2043-09-25

Contract Duration: 9,127 days

Daily Burn Rate: $5.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 8

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: PERFORMANCE PERIOD

Plain-Language Summary

Department of Defense obligated $48.7 million to SIEMENS GOVERNMENT TECHNOLOGIES INC for work described as: PERFORMANCE PERIOD Key points: 1. Contract value appears reasonable given the long performance period and specialized nature of engineering services. 2. Full and open competition suggests a healthy market for these services, potentially leading to better pricing. 3. Long contract duration (over 20 years) may introduce risks related to technological obsolescence and changing requirements. 4. Performance period spans over 9,000 days, indicating a need for sustained and consistent service delivery. 5. The contract is for engineering services, a critical component for complex defense projects. 6. No small business set-aside was utilized, suggesting the primary contractor is not a small business.

Value Assessment

Rating: good

The contract's total value of $48.7 million over a 20-year period averages approximately $2.4 million per year. This appears to be a fair valuation for specialized engineering services required by the Department of the Navy. Benchmarking against similar long-term, high-value engineering contracts within the defense sector would provide a more precise value-for-money assessment, but the initial figures do not raise immediate concerns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely considered. This competitive process is generally favorable for price discovery and ensuring the government receives competitive pricing. The presence of 8 bids (no) suggests a robust level of interest from the market, which further supports the likelihood of a well-priced award.

Taxpayer Impact: Full and open competition typically benefits taxpayers by driving down costs through market forces, ensuring that the awarded price reflects the best value achievable.

Public Impact

The Department of the Navy benefits from access to specialized engineering expertise for its projects. Services delivered likely include design, analysis, and technical support for naval systems and infrastructure. Geographic impact is likely concentrated around naval facilities and operational areas. Workforce implications may involve skilled engineers and technical specialists employed by the prime contractor and potentially subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 20 years) increases the risk of cost overruns due to unforeseen technological advancements or changes in requirements.
Reliance on a single large contractor for such an extended period could limit flexibility and innovation.
Potential for scope creep over the long performance period, leading to increased costs if not managed tightly.

Positive Signals

Awarded under full and open competition, suggesting a competitive pricing environment.
Long-term nature of the contract provides stability and predictability for both the agency and the contractor.
Engineering services are critical for complex defense needs, indicating a strategic investment.

Sector Analysis

This contract falls within the Engineering Services sector, a critical component of the broader professional, scientific, and technical services industry. The defense sector heavily relies on such services for the design, development, and maintenance of complex military systems and infrastructure. The total contract value of $48.7 million over its extended period is significant, reflecting the specialized nature and scale of the requirements. Comparable spending benchmarks would involve analyzing other large-scale engineering support contracts awarded by the Department of Defense or other federal agencies for similar technical capabilities.

Small Business Impact

The contract was not awarded as a small business set-aside, and the 'sb' field is false, indicating no specific provisions for small businesses in the primary award. This suggests that the prime contractor, Siemens Government Technologies Inc., is likely a large business. There is no explicit information on subcontracting plans for small businesses, which could be a missed opportunity to leverage the small business industrial base.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Navy's contracting and program management offices. Accountability measures would be embedded in the contract's performance work statement, requiring adherence to specified deliverables and quality standards. Transparency is generally facilitated through contract award databases, though detailed performance metrics and financial breakdowns may be less publicly accessible. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Naval Sea Systems Command (NAVSEA) Contracts
Department of Defense Engineering Support Services
Professional, Scientific, and Technical Services Contracts
Long-Term Defense Contracts
Siemens Government Technologies Inc. Contracts

Risk Flags

Long contract duration may lead to technological obsolescence.
Potential for requirements creep over the extended performance period.
Sustained oversight needed to ensure value for money over 20+ years.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $48.7 million to SIEMENS GOVERNMENT TECHNOLOGIES INC. PERFORMANCE PERIOD

Who is the contractor on this award?

The obligated recipient is SIEMENS GOVERNMENT TECHNOLOGIES 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 $48.7 million.

What is the period of performance?

Start: 2018-09-29. End: 2043-09-25.

What is the historical spending pattern for engineering services by the Department of the Navy over the last five years?

Analyzing the historical spending patterns for engineering services by the Department of the Navy over the last five years reveals a consistent and significant investment in this area. While specific figures for each year fluctuate based on program needs and budget allocations, the overall trend indicates a sustained demand for specialized engineering expertise. This demand is driven by the continuous modernization of naval platforms, infrastructure development, and research and development initiatives. The average annual expenditure often falls in the multi-billion dollar range, with engineering services forming a crucial subset of the Navy's overall procurement budget. Factors influencing these patterns include geopolitical shifts, technological advancements, and the lifecycle management of existing assets. The contract in question, with its long duration and substantial value, aligns with this broader pattern of significant and ongoing investment in engineering capabilities.

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

The awarded price per year for this contract, approximately $2.4 million ($48.7 million / ~20 years), needs to be benchmarked against industry standards for specialized engineering services within the defense sector. Such benchmarks are typically derived from market research, analysis of similar government contracts, and industry cost data. Factors influencing these benchmarks include the complexity of the engineering tasks, the required security clearances, the specific technical expertise needed, and the geographic location of services. Given that this is a long-term contract with Siemens Government Technologies Inc., a known entity in the defense contracting space, the pricing is likely influenced by established rates for their specialized services. A detailed comparison would require access to proprietary cost data or comprehensive market analysis reports, but the annual average does not appear immediately excessive for the scope of work implied by a major defense engineering contract.

What are the key performance indicators (KPIs) used to measure the success of this contract?

Key Performance Indicators (KPIs) for a contract of this nature, focused on engineering services for the Department of the Navy, would typically be defined within the Performance Work Statement (PWS). These KPIs are designed to ensure the contractor meets the technical, schedule, and cost objectives. Common KPIs might include adherence to project timelines, quality of engineering deliverables (e.g., design accuracy, technical report completeness), responsiveness to technical queries, successful integration of systems or components, and compliance with safety and environmental regulations. For a long-term contract, KPIs might also track the contractor's ability to adapt to evolving technological requirements and maintain a skilled workforce. Performance evaluations would likely occur at regular intervals, with potential for award fees or penalties tied to KPI achievement, ensuring accountability and value for taxpayer money.

What is the track record of Siemens Government Technologies Inc. in delivering similar engineering services to the federal government?

Siemens Government Technologies Inc. has a substantial track record of delivering a wide range of engineering and technical services to the federal government, including the Department of Defense. Their experience spans various domains, such as complex system integration, infrastructure modernization, cybersecurity solutions, and specialized engineering support for defense platforms. Historically, they have been awarded numerous contracts across different agencies, demonstrating their capacity to handle large-scale and technically demanding projects. While specific performance metrics for past contracts are not detailed here, their continued presence and success in securing significant government contracts suggest a generally positive performance history. However, as with any large contractor, a thorough review of past performance evaluations, including any past issues or disputes, would be necessary for a complete assessment.

What are the potential risks associated with the long duration (over 20 years) of this contract?

The extended duration of this contract, spanning over two decades, presents several potential risks. Firstly, technological obsolescence is a significant concern; the engineering solutions and systems supported today may be outdated by the time the contract concludes. This necessitates flexibility and adaptability from both the contractor and the agency to incorporate new technologies. Secondly, requirements drift is likely; the Navy's needs and priorities may evolve considerably over 20 years due to changing strategic environments or operational demands. Managing scope changes effectively without incurring excessive cost increases will be crucial. Thirdly, contractor performance stability over such a long period can be a risk; key personnel may change, corporate priorities might shift, or the contractor's financial health could be impacted. Finally, maintaining consistent oversight and ensuring continued value for money over two decades requires sustained effort and robust contract management from the agency.

Industry Classification

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

Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR NONBUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 8

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Altair Engineering Inc.

Address: 2231 CRYSTAL DR STE 700, ARLINGTON, VA, 22202

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

Financial Breakdown

Contract Ceiling: $235,800,315

Exercised Options: $235,800,315

Current Obligation: $48,678,464

Actual Outlays: $-106,549

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: DEAM3609GO29041

IDV Type: IDC

Timeline