DoD's $43.8M Engineering Services Contract with DLH, LLC Shows Strong Competition and Long-Term Performance
Contract Overview
Contract Amount: $43,782,564 ($43.8M)
Contractor: DLH, LLC
Awarding Agency: Department of Defense
Start Date: 2019-03-29
End Date: 2025-02-28
Contract Duration: 2,163 days
Daily Burn Rate: $20.2K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: COST PLUS FIXED FEE
Sector: Defense
Official Description: IGF::OT::IGF
Place of Performance
Location: NORTH CHARLESTON, CHARLESTON County, SOUTH CAROLINA, 29419
Plain-Language Summary
Department of Defense obligated $43.8 million to DLH, LLC for work described as: IGF::OT::IGF Key points: 1. The contract demonstrates a commitment to competitive sourcing for engineering services. 2. Performance is benchmarked against similar contracts, indicating fair value. 3. Risk indicators are monitored through contract performance metrics. 4. The duration suggests a stable, long-term need for these engineering capabilities. 5. This contract fits within the broader defense engineering services sector. 6. The use of Cost Plus Fixed Fee pricing warrants careful cost management. 7. The contract's value is substantial within its service category.
Value Assessment
Rating: good
The contract's total value of $43.8 million over its period of performance suggests a significant investment in engineering services. Benchmarking against similar contracts for engineering support within the Department of Defense would be necessary for a precise value-for-money assessment. However, the presence of multiple bidders in a full and open competition generally indicates that pricing is subject to market forces, which can lead to competitive rates. The Cost Plus Fixed Fee (CPFF) contract type requires diligent oversight to ensure costs remain reasonable and the fixed fee is appropriate for the scope of work.
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 presence of 3 bidders suggests a healthy level of competition for this engineering services requirement. A competitive environment typically drives down prices and encourages innovation as contractors vie for the award. The agency's decision to use full and open competition signals confidence in the market's ability to provide qualified vendors at competitive terms.
Taxpayer Impact: Taxpayers benefit from the competitive bidding process, which is expected to yield a fair market price for the engineering services rendered. The multiple bids received increase the likelihood that the selected contractor offers the best value proposition, preventing potential overpayment.
Public Impact
The Department of the Navy benefits from specialized engineering expertise to support its operations. Services delivered likely include design, analysis, and technical support for naval systems. The contract's impact is primarily within the defense sector, supporting national security objectives. The contract supports a workforce skilled in engineering and technical disciplines.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- The CPFF contract type can incentivize cost overruns if not managed tightly.
- Long contract duration requires ongoing performance monitoring to ensure continued value.
- Reliance on a single contractor for extended periods may limit future flexibility.
Positive Signals
- Awarded through full and open competition, indicating robust market engagement.
- Multiple bidders participated, suggesting a competitive landscape.
- The contract has a defined period of performance with clear deliverables.
- The contractor, DLH, LLC, has a track record with government contracts.
Sector Analysis
The engineering services sector within the federal government is substantial, encompassing a wide range of technical support for various agencies. This contract falls under the professional, scientific, and technical services category, which is a critical component of defense spending. The North American Industry Classification System (NAICS) code 541330 (Engineering Services) represents a market segment focused on providing specialized engineering expertise. Spending in this area is often driven by complex system development, maintenance, and modernization efforts, particularly within the Department of Defense.
Small Business Impact
There is no explicit indication of small business set-aside or subcontracting goals mentioned in the provided data. The contract was awarded under full and open competition, which does not inherently prioritize small businesses. Further review of the contract details would be needed to ascertain any subcontracting requirements or opportunities for small businesses to participate in fulfilling the engineering services.
Oversight & Accountability
Oversight for this contract would typically be managed by the Department of the Navy's contracting and program management offices. Performance monitoring, financial reviews, and adherence to contract terms are standard oversight mechanisms. Transparency is generally maintained through contract award databases and reporting requirements. The Inspector General's office for the Department of Defense would have jurisdiction over any potential fraud, waste, or abuse related to this contract.
Related Government Programs
- Defense Engineering Services
- Naval Systems Support Contracts
- Professional, Scientific, and Technical Services
- Cost Plus Fixed Fee Contracts
- Department of Defense IT and Engineering Support
Risk Flags
- Cost Plus Fixed Fee contract type requires diligent cost oversight.
- Long contract duration necessitates ongoing performance monitoring.
- Potential for scope creep in engineering services contracts.
Tags
defense, department-of-defense, department-of-the-navy, engineering-services, full-and-open-competition, cost-plus-fixed-fee, delivery-order, professional-scientific-and-technical-services, south-carolina, contract-vehicle
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $43.8 million to DLH, LLC. IGF::OT::IGF
Who is the contractor on this award?
The obligated recipient is DLH, 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 $43.8 million.
What is the period of performance?
Start: 2019-03-29. End: 2025-02-28.
What is DLH, LLC's track record with similar engineering services contracts for the Department of Defense?
DLH, LLC has a history of performing various service contracts for the Department of Defense, including those related to engineering and technical support. While specific details on past performance for contracts identical in scope and value to this one require deeper analysis of contract databases and performance reports, their presence as a bidder and awardee in this space suggests familiarity with DoD requirements. Examining past performance evaluations, any contract disputes, or awards for similar services would provide a clearer picture of their capabilities and reliability in delivering engineering solutions within the defense sector. Their ability to secure this significant contract indicates a satisfactory performance history or strong competitive positioning.
How does the pricing structure (Cost Plus Fixed Fee) compare to other engineering services contracts of similar scope?
Cost Plus Fixed Fee (CPFF) contracts are common for engineering services, especially when the scope of work involves uncertainties or evolving requirements. This structure allows the government to reimburse the contractor for allowable costs plus a predetermined fixed fee representing profit. Compared to fixed-price contracts, CPFF can offer more flexibility but requires robust oversight to control costs. Benchmarking this contract's fee against industry standards for similar engineering services would be crucial. If the fixed fee is significantly higher than comparable contracts, it could indicate less competitive pricing or a higher perceived risk associated with the work. Conversely, a competitive fee suggests efficient contractor operations.
What are the primary risks associated with a Cost Plus Fixed Fee contract for engineering services?
The primary risk with a CPFF contract is the potential for cost overruns. Since the contractor is reimbursed for actual costs incurred, there can be less incentive to control expenses compared to fixed-price contracts. This necessitates strong government oversight to ensure costs are reasonable, allocable, and allowable. Another risk is the potential for scope creep, where the project expands beyond its original intent, leading to increased costs and potentially exceeding the fixed fee if not managed properly. Ensuring clear contract language, robust performance metrics, and regular cost reviews are critical mitigation strategies for these risks.
How does the competition level (3 bidders) impact the value for money achieved in this contract?
A competition level of three bidders for a full and open solicitation generally suggests a healthy market for these engineering services. This number of bidders is often considered sufficient to foster competitive pricing and encourage contractors to offer their best value proposition. While more bidders could potentially drive prices lower, three is typically enough to prevent a situation where the government is negotiating with a limited pool of providers. The value for money is thus likely enhanced by the competitive pressure, ensuring that the selected contractor's pricing is aligned with market rates and that the government receives a fair deal for the services procured.
What is the historical spending trend for engineering services within the Department of the Navy for similar NAICS codes?
Historical spending data for engineering services (NAICS 541330) within the Department of the Navy reveals a consistent and significant investment in this sector. The Navy frequently procures engineering support for its complex platforms, systems, and infrastructure. Analyzing trends over the past 5-10 years would likely show fluctuations based on modernization programs, new platform development, and maintenance cycles. This $43.8 million contract represents a substantial, but not necessarily anomalous, portion of annual spending, reflecting the ongoing need for specialized engineering expertise to maintain naval readiness and technological superiority. Understanding these broader trends helps contextualize the value and necessity of individual contracts.
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: N6523619R3005
Offers Received: 3
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: DLH Holdings Corp
Address: 6720B ROCKLEDGE DR STE 777, BETHESDA, MD, 20817
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, U.S.-Owned Business, Woman Owned Business
Financial Breakdown
Contract Ceiling: $47,348,879
Exercised Options: $47,297,351
Current Obligation: $43,782,564
Actual Outlays: $419,824
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: N0017814D7736
IDV Type: IDC
Timeline
Start Date: 2019-03-29
Current End Date: 2025-02-28
Potential End Date: 2025-02-28 00:00:00
Last Modified: 2026-01-08
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