DoD awards $14.6M R&D contract to Konaiag Management Solutions for engineering services

Contract Overview

Contract Amount: $14,643,248 ($14.6M)

Contractor: Koniag Management Solutions LLC

Awarding Agency: Department of Defense

Start Date: 2022-01-31

End Date: 2026-07-30

Contract Duration: 1,641 days

Daily Burn Rate: $8.9K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: AWARD AN 8(A) ARAT SETA R&D

Place of Performance

Location: ABERDEEN PROVING GROUND, HARFORD County, MARYLAND, 21005

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $14.6 million to KONIAG MANAGEMENT SOLUTIONS LLC for work described as: AWARD AN 8(A) ARAT SETA R&D Key points: 1. Contract awarded through a competitive process, suggesting potential for fair pricing. 2. The contract type is Cost Plus Fixed Fee, which can incentivize cost control. 3. Performance period extends over 4 years, indicating a significant, ongoing need. 4. The specific NAICS code (541330) points to a specialized engineering services market. 5. The contract is not set aside for small businesses, implying larger prime contractors are involved. 6. The award is a definitive contract, suggesting a clear scope of work. 7. The contract is for Research and Development, a critical area for defense innovation.

Value Assessment

Rating: good

The contract's value of $14.6 million over approximately four years for R&D engineering services appears reasonable within the context of defense contracts. Benchmarking against similar R&D contracts for engineering services would provide a more precise value-for-money assessment. The Cost Plus Fixed Fee structure, while common, requires careful monitoring to ensure costs remain within acceptable parameters and that the fixed fee adequately compensates the contractor for their efforts without excessive profit.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES.' This indicates that while the competition was intended to be open, certain sources were excluded, leading to a limited competition. The exact reasons for exclusion are not detailed, but it suggests that the pool of eligible bidders was narrowed from the outset. The number of bidders is not specified, making it difficult to fully assess the impact on price discovery.

Taxpayer Impact: The limited competition may have resulted in a higher price than if the contract had been fully and openly competed among all eligible sources. Taxpayers may not have received the most competitive pricing possible.

Public Impact

The Department of Defense benefits from advanced engineering and R&D services to support its technological advancements. The contract supports the development of new technologies and solutions crucial for national security. The geographic impact is primarily within the United States, supporting federal defense initiatives. The contract likely supports a specialized workforce of engineers and researchers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'limited' competition raises concerns about whether the most cost-effective solution was secured for taxpayers.
The Cost Plus Fixed Fee contract type necessitates robust oversight to prevent cost overruns and ensure efficient resource utilization.

Positive Signals

The contract is for R&D, indicating investment in future capabilities and innovation.
The award to a specific company suggests a recognized capability in engineering services.
The definitive contract structure implies a well-defined project scope.

Sector Analysis

This contract falls within the Engineering Services sector, a critical component of the broader Defense industry. The market for specialized R&D engineering services for the Department of Defense is substantial, driven by the need for continuous technological superiority. Comparable spending benchmarks would typically be found within the Department of Defense's R&D budget allocations for similar engineering support contracts, often measured in the millions to tens of millions of dollars annually.

Small Business Impact

This contract was not set aside for small businesses, and the data indicates no subcontracting goals were specified. This suggests that the prime contractor, Konaiag Management Solutions LLC, is expected to perform the majority of the work. The absence of small business set-asides means that opportunities for small businesses to participate in this specific contract as prime contractors are limited, though they may still have opportunities as subcontractors if the prime contractor chooses to engage them.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program office within the Department of the Army. Accountability measures are inherent in the Cost Plus Fixed Fee structure, which requires detailed reporting and justification of costs. Transparency is generally maintained through contract databases, though specific project details and performance metrics may be sensitive. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense Research and Development Programs
Army Engineering Services Contracts
Cost Plus Fixed Fee Contracts
Definitive Contracts
8(a) Set-Aside Contracts (Note: Data indicates 'AW AN 8(A) ARAT SETA R&D' which might imply an 8(a) origin or related program, but the award itself is not explicitly an 8(a) set-aside based on 'ss:false')
Engineering and Technical Services

Risk Flags

Limited Competition
Cost Plus Fixed Fee Contract Type
Potential for Cost Overruns
Need for Robust Oversight

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.6 million to KONIAG MANAGEMENT SOLUTIONS LLC. AWARD AN 8(A) ARAT SETA R&D

Who is the contractor on this award?

The obligated recipient is KONIAG MANAGEMENT SOLUTIONS LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $14.6 million.

What is the period of performance?

Start: 2022-01-31. End: 2026-07-30.

What is the track record of Konaiag Management Solutions LLC with the Department of Defense, particularly in R&D and engineering services?

Konaiag Management Solutions LLC has a history of contracting with the federal government, including the Department of Defense. Analyzing their past performance on similar R&D and engineering services contracts is crucial. This would involve reviewing contract awards, performance evaluations (if publicly available), and any history of contract disputes or modifications. A strong track record with successful delivery on time and within budget for comparable projects would indicate a lower performance risk for this current contract. Conversely, a history of issues could signal potential challenges ahead. Specific data on their past performance metrics, such as on-time delivery rates and cost performance on previous DoD contracts, would provide a more concrete assessment.

How does the awarded amount of $14.6 million compare to similar R&D engineering services contracts awarded by the DoD?

The $14.6 million award for R&D engineering services over approximately four years needs to be benchmarked against similar contracts to assess its value. The Department of Defense frequently awards contracts for engineering and R&D support, with values varying significantly based on scope, duration, and complexity. Contracts for specialized R&D can range from a few million to hundreds of millions of dollars. To provide a precise comparison, one would look at contracts with similar NAICS codes (e.g., 541330), contract types (Cost Plus Fixed Fee), and performance periods. If this contract's value per year or per deliverable falls within the typical range for comparable services, it suggests fair pricing. Significant deviations, either higher or lower, would warrant further investigation into the specific requirements and market conditions.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for R&D services?

The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for R&D services revolve around cost control and contractor incentive. For the government, the main risk is that the contractor may not be sufficiently incentivized to control costs, as their allowable costs are reimbursed, and they receive a fixed fee for their effort. This can lead to cost overruns if not managed diligently. For the contractor, the risk lies in accurately estimating the costs associated with R&D, which is inherently uncertain. If actual costs exceed estimates significantly, the fixed fee might not adequately compensate them, potentially leading to disputes or reduced profit margins. Robust oversight, detailed cost tracking, and clear performance metrics are essential to mitigate these risks for both parties.

What is the significance of the competition level ('FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES') for this contract?

The competition level, described as 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicates a process that aimed for broad participation but ultimately narrowed the field. This suggests that while the initial intent was open competition, specific criteria or circumstances led to the exclusion of certain potential bidders. The significance lies in its potential impact on price and innovation. A truly open competition typically yields the most competitive pricing due to a larger pool of bidders vying for the contract. When sources are excluded, the competition is inherently limited, which could result in less aggressive pricing. The specific reasons for exclusion are critical to understanding whether this limitation was justified (e.g., due to specialized capabilities required) or potentially detrimental to achieving the best value for the government.

How does the contract's duration (ending July 2026) align with typical R&D project lifecycles in the defense sector?

The contract's duration, ending in July 2026, provides a performance period of approximately 4.5 years from the award date (January 2022). This timeframe is generally consistent with many Research and Development (R&D) projects within the defense sector, which often require extended periods for conceptualization, design, prototyping, testing, and refinement. R&D lifecycles can be lengthy due to the inherent uncertainties and iterative nature of innovation, especially in complex fields like defense technology. A duration of this length suggests that the project is likely substantial and involves multiple phases, allowing for thorough development and evaluation. Shorter durations might be suitable for more defined, incremental improvements, while longer periods are common for foundational research or the development of entirely new systems.

What are the potential implications of this contract being a 'DEFINITIVE CONTRACT' for the Department of the Army?

A 'DEFINITIVE CONTRACT' is a contract that contains all the essential elements of a binding agreement, including a clear description of the work to be performed, the price, and the quantity. For the Department of the Army, this signifies a contract with a well-defined scope of work and terms. Unlike indefinite-delivery/indefinite-quantity (IDIQ) contracts, which offer flexibility but may have less defined initial scopes, a definitive contract implies that the requirements are known and agreed upon upfront. This can lead to more predictable budgeting and execution. It suggests that the Army has a clear understanding of the engineering services needed and has established the parameters for their delivery, reducing ambiguity and potential for disputes regarding the scope of work.

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 AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 3800 CENTERPOINT DR STE 502, ANCHORAGE, AK, 99503

Business Categories: 8(a) Program Participant, Alaskan Native Corporation Owned Firm, Category Business, Corporate Entity Not Tax Exempt, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $27,309,057

Exercised Options: $16,233,387

Current Obligation: $14,643,248

Actual Outlays: $1,004,477

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline