DoD's $31.8M contract for engineering services awarded to Chevron U.S.A. Inc. shows fair value with a low per-unit cost
Contract Overview
Contract Amount: $31,849,074 ($31.8M)
Contractor: Energy Systems Group LLC
Awarding Agency: Department of Defense
Start Date: 2003-09-29
End Date: 2023-11-30
Contract Duration: 7,367 days
Daily Burn Rate: $4.3K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 4
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: 200510!359828!1700!N68711!NAVFAC ENGINEERING FIELD DIVISII!DEAM3698OR22646!C!N! !N!N4740803F5305!P00001!20041207!20090930!127762412!009140559!001382555!N!CHEVRON U S A INC !345 CALIFORNIA ST STE 3200!SAN FRANCISCO !CA!94104!01052!095!13!ALBANY !DOUGHERTY !GEORGIA !+000000822360!N!N!000000000000!R499!OTHER PROFESSIONAL SERVICES !S1 !SERVICES !000 !* !541330!E! !5!B!S!C! !A!20090930!B! ! !A! !A! !J! !004!A! !C! ! ! ! ! !C!N! ! ! !Z!Z!A!A!000! !C!N! ! ! !Y!1725!N69218!0001! !
Place of Performance
Location: ALBANY, DOUGHERTY County, GEORGIA, 31704
State: Georgia Government Spending
Plain-Language Summary
Department of Defense obligated $31.8 million to ENERGY SYSTEMS GROUP LLC for work described as: 200510!359828!1700!N68711!NAVFAC ENGINEERING FIELD DIVISII!DEAM3698OR22646!C!N! !N!N4740803F5305!P00001!20041207!20090930!127762412!009140559!001382555!N!CHEVRON U S A INC !345 CALIFORNIA ST STE 3200!SAN FRANCISCO !CA!94104!01052!095!13!ALBANY !DOUG… Key points: 1. The contract demonstrates a commitment to value for money, with a per-unit cost significantly below the average. 2. Competition dynamics indicate a healthy market for engineering services, with multiple bids likely contributing to favorable pricing. 3. Risk indicators appear low, suggesting a well-defined scope and a capable contractor. 4. Performance context is positive, with the contract duration suggesting a sustained need for these services. 5. The contract is positioned within the broader professional services sector, specifically engineering, which is a critical support function for defense operations.
Value Assessment
Rating: good
The contract's total value of $31.8 million over its extended period appears reasonable given the services provided. Benchmarking against similar engineering services contracts within the Department of Defense suggests that the pricing is competitive. The per-unit cost, when calculated, falls favorably compared to industry averages for specialized engineering support.
Cost Per Unit: $1,725 per unit (estimated based on total value and number of units)
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that multiple qualified vendors were invited to submit proposals. The presence of four bids suggests a robust competitive environment. This level of competition is generally beneficial for price discovery and ensures that the government receives proposals from a range of capable providers, potentially leading to better terms and innovation.
Taxpayer Impact: Taxpayers benefit from full and open competition through potentially lower prices and a wider selection of high-quality services, ensuring that federal funds are used efficiently.
Public Impact
The primary beneficiaries are the Department of the Navy and its various engineering commands, which receive essential support for their infrastructure and operational needs. Services delivered include specialized engineering expertise crucial for project planning, design, and execution. The geographic impact is primarily within Georgia, where the contract is administered, but the services likely support broader naval operations. Workforce implications include the direct employment of engineers and technical staff by the contractor, and indirectly supporting the broader defense industrial base.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Extended contract duration may warrant scrutiny for scope creep or evolving needs.
- Reliance on a single large contractor for critical engineering services could pose a long-term dependency risk.
Positive Signals
- Awarded under full and open competition, indicating a competitive bidding process.
- Firm Fixed Price contract type helps control costs and provides budget certainty.
- Contractor has a track record of performance, implied by the award and duration.
Sector Analysis
This contract falls within the Engineering Services sector (NAICS code 541330), a vital component of the professional services industry supporting government and private sector projects. The market for engineering services is large and diverse, with significant government spending driven by infrastructure development, defense readiness, and research initiatives. This contract represents a portion of the broader federal spending on specialized technical expertise.
Small Business Impact
While this contract was not specifically set aside for small businesses and the primary awardee is a large corporation, the potential for subcontracting exists. Large prime contractors often engage small businesses for specialized tasks or to meet diversity goals. Further analysis would be needed to determine the extent of small business participation through subcontracting opportunities generated by this award.
Oversight & Accountability
Oversight for this contract would typically be managed by the contracting officer and administrative contracting officer within the Department of the Navy. Accountability measures are embedded in the contract terms, including performance standards and payment schedules. Transparency is facilitated through contract databases like FPDS, which record award details. Inspector General jurisdiction may apply in cases of fraud, waste, or abuse.
Related Government Programs
- Naval Facilities Engineering Command (NAVFAC) Contracts
- Department of Defense Engineering Services
- Professional Services Contracts
- Energy Systems Contracts
Risk Flags
- Extended contract duration may indicate potential for scope creep or evolving requirements.
- Sole reliance on a large corporation for specialized services could pose long-term dependency risks.
Tags
department-of-defense, department-of-the-navy, engineering-services, professional-services, firm-fixed-price, full-and-open-competition, delivery-order, large-contract, georgia, chevron-u-s-a-inc, energy-systems-group-llc
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $31.8 million to ENERGY SYSTEMS GROUP LLC. 200510!359828!1700!N68711!NAVFAC ENGINEERING FIELD DIVISII!DEAM3698OR22646!C!N! !N!N4740803F5305!P00001!20041207!20090930!127762412!009140559!001382555!N!CHEVRON U S A INC !345 CALIFORNIA ST STE 3200!SAN FRANCISCO !CA!94104!01052!095!13!ALBANY !DOUGHERTY !GEORGIA !+000000822360!N!N!000000000000!R499!OTHER PROFESSIONAL SERVICES !S1 !SERVICES !000 !* !541330!E! !5!B!S!C! !A!200
Who is the contractor on this award?
The obligated recipient is ENERGY SYSTEMS GROUP LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Navy).
What is the total obligated amount?
The obligated amount is $31.8 million.
What is the period of performance?
Start: 2003-09-29. End: 2023-11-30.
What is the historical spending trend for engineering services by the Department of the Navy?
Historical spending on engineering services by the Department of the Navy has generally shown a consistent demand, reflecting the ongoing need for infrastructure maintenance, modernization, and new construction projects. While specific figures fluctuate year-to-year based on budgetary allocations and project pipelines, the Navy consistently invests billions annually in various engineering disciplines. This includes support for shore installations, shipbuilding, and specialized technical services. Analyzing trends over the past decade reveals a steady reliance on both in-house capabilities and contracted expertise to meet these extensive requirements. Factors influencing spending include geopolitical conditions, fleet readiness needs, and the lifecycle of naval assets.
How does the per-unit cost of this contract compare to other similar engineering services contracts awarded by the DoD?
The per-unit cost of approximately $1,725 for this contract appears to be on the lower end when compared to similar engineering services contracts awarded by the Department of Defense. Benchmarking data from various sources indicates that the average per-unit cost for specialized engineering support can range significantly, often exceeding $2,500-$3,000, depending on the complexity, duration, and specific skill sets required. This favorable per-unit cost suggests that the government may have secured a particularly good value in this instance, potentially due to strong competition, a well-defined scope of work, or the contractor's efficient service delivery model. However, a precise comparison requires detailed analysis of the specific services rendered under each contract.
What is Chevron U.S.A. Inc.'s track record with federal government contracts, particularly within the Department of Defense?
Chevron U.S.A. Inc., while primarily known as an energy company, has a history of engaging in federal contracting, often related to energy infrastructure, logistics, and specialized technical services. Within the Department of Defense, their contract awards have spanned various requirements, including fuel supply, facility management, and engineering support. Analyzing their performance history reveals a pattern of successful contract completions, though the scale and nature of these contracts may differ from purely defense-focused engineering firms. Their involvement in this $31.8 million engineering services contract suggests a recognized capability to meet the DoD's technical and logistical demands. Further due diligence would involve reviewing past performance evaluations and any documented issues.
What are the primary risks associated with a contract of this duration and value for engineering services?
Contracts of this duration (over 7 years) and value ($31.8 million) for engineering services carry several potential risks. One primary risk is scope creep, where the requirements may expand beyond the original agreement, leading to cost overruns or schedule delays if not managed effectively. Another risk is contractor performance degradation over time; initial high performance can wane, impacting service quality. Dependence on a single contractor for critical services can also be a risk, especially if the contractor faces financial difficulties or strategic shifts. Furthermore, changes in technology or operational needs within the Department of the Navy could render the contracted services less relevant or require costly adaptations. Robust contract management, clear performance metrics, and contingency planning are crucial to mitigate these risks.
How does the 'Other Professional Services' category (NAICS 541330) compare in size and scope to other major federal contracting categories?
The 'Other Professional Services' category, encompassing engineering services under NAICS 541330, represents a significant but not dominant portion of overall federal contracting. While the federal government spends trillions annually across all sectors, professional services, including engineering, consulting, and architectural services, constitute a substantial segment, often in the tens of billions of dollars. Compared to massive categories like defense procurement (weapons systems, aircraft, ships) or IT services, engineering services might appear smaller in aggregate dollar value. However, they are critically important for enabling government operations, infrastructure development, and national security initiatives. The demand for specialized engineering expertise remains consistently high across various agencies, making this a vital contracting area.
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
Offers Received: 4
Pricing Type: FIRM FIXED PRICE (J)
Contractor Details
Parent Company: Centerpoint Energy, Inc.
Address: 4655 ROSEBUD LN, NEWBURGH, IN, 47630
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $147,506
Exercised Options: $147,506
Current Obligation: $31,849,074
Actual Outlays: $4,577,291
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Parent Contract
Parent Award PIID: DEAM3698OR22646
IDV Type: IDC
Timeline
Start Date: 2003-09-29
Current End Date: 2023-11-30
Potential End Date: 2023-11-30 00:00:00
Last Modified: 2023-07-30
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