DoD's $48.9M SETA contract to Sev1Tech for radar systems engineering shows fair competition and good value

Contract Overview

Contract Amount: $48,882,789 ($48.9M)

Contractor: Sev1tech, LLC

Awarding Agency: Department of Defense

Start Date: 2017-05-24

End Date: 2022-01-20

Contract Duration: 1,702 days

Daily Burn Rate: $28.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: IGF::OT::IGF CONTRACT FOR SYSTEMS ENGINEERING AND TECHNICAL ASSISTANCE (SETA) SUPPORT SERVICES FOR PRODUCT MANAGER (PDM) RADARS.

Place of Performance

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

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $48.9 million to SEV1TECH, LLC for work described as: IGF::OT::IGF CONTRACT FOR SYSTEMS ENGINEERING AND TECHNICAL ASSISTANCE (SETA) SUPPORT SERVICES FOR PRODUCT MANAGER (PDM) RADARS. Key points: 1. The contract achieved a competitive price, indicating good value for taxpayer dollars. 2. Full and open competition suggests a healthy market for these specialized engineering services. 3. The contract duration and cost structure warrant monitoring for potential cost overruns. 4. Performance context is crucial, as SETA support directly impacts critical defense systems. 5. This contract positions Sev1Tech as a key provider in the defense engineering services sector. 6. The relatively low number of bids for a full and open competition may warrant further investigation.

Value Assessment

Rating: good

The contract's total value of approximately $48.9 million over its period of performance suggests a significant investment in specialized engineering support. Benchmarking against similar SETA contracts within the Department of Defense is essential to fully assess value for money. However, the fact that it was awarded under full and open competition and resulted in a definitive contract implies a degree of price negotiation and market validation. The cost-plus-fixed-fee structure necessitates careful oversight to ensure costs remain reasonable and aligned with the fixed fee.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified vendors were allowed to bid. The solicitation received six bids, which is a moderate level of competition for a specialized engineering services contract of this nature. While six bidders suggest some market interest, a higher number could potentially drive prices down further. The process implies that the government sought the best value through a competitive bidding environment.

Taxpayer Impact: The full and open competition process is beneficial for taxpayers as it encourages multiple companies to offer their services, potentially leading to more competitive pricing and a wider range of innovative solutions.

Public Impact

The primary beneficiaries are the Department of the Army and the specific product management office responsible for radar systems, receiving critical technical expertise. The services delivered include systems engineering and technical assistance, crucial for the development, integration, and sustainment of radar technologies. The geographic impact is primarily within the defense sector, supporting national security objectives, with potential implications for personnel in Maryland. Workforce implications include the employment of skilled engineers and technical specialists by Sev1Tech, contributing to the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contracts can incentivize contractors to incur costs, requiring robust oversight to prevent unnecessary expenditures.
The duration of the contract (1702 days) is substantial, increasing the risk of scope creep or evolving requirements that may not be adequately captured in the initial pricing.
While six bids were received, a deeper analysis of the bidding landscape could reveal if the competition was truly robust or if certain market segments were underrepresented.

Positive Signals

Awarded under full and open competition, suggesting a fair and accessible bidding process.
The definitive contract award indicates a structured and formalized agreement with clear terms and conditions.
The contract supports critical defense systems, aligning with national security priorities and demonstrating a commitment to technological advancement.

Sector Analysis

The engineering services sector, particularly within defense, is characterized by high specialization and significant government investment. This contract falls under NAICS code 541330 (Engineering Services), a broad category encompassing a wide range of technical expertise. The market for Systems Engineering and Technical Assistance (SETA) support is competitive, with a mix of large prime contractors and specialized small businesses. Spending in this area is driven by the need for advanced technological solutions and lifecycle support for complex defense systems, such as radar.

Small Business Impact

This contract was not set aside for small businesses, and the data does not indicate any specific subcontracting requirements for small businesses. As a result, the direct impact on the small business ecosystem is likely minimal unless Sev1Tech voluntarily engages small businesses for specialized support. The focus appears to be on securing the necessary technical expertise from a capable prime contractor, rather than specifically fostering small business participation through this particular award.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program executive office within the Department of the Army. The cost-plus-fixed-fee structure necessitates diligent monitoring of incurred costs against the fixed fee to ensure financial accountability. Transparency is generally maintained through contract reporting mechanisms, and while specific IG jurisdiction isn't detailed here, the Inspector General's office would have oversight authority for potential fraud, waste, or abuse.

Related Government Programs

Defense Systems Engineering Support
Radar Systems Development
Technical Assistance Contracts
Product Management Support Services
Department of Defense IT and Engineering Services

Risk Flags

Cost-Plus-Fixed-Fee contract type requires diligent oversight to manage costs.
Long contract duration increases potential for scope creep and requirement changes.
Moderate number of bids in a full and open competition may warrant further market analysis.
Dependence on a single contractor for critical SETA support can pose a risk if performance falters.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $48.9 million to SEV1TECH, LLC. IGF::OT::IGF CONTRACT FOR SYSTEMS ENGINEERING AND TECHNICAL ASSISTANCE (SETA) SUPPORT SERVICES FOR PRODUCT MANAGER (PDM) RADARS.

Who is the contractor on this award?

The obligated recipient is SEV1TECH, 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 $48.9 million.

What is the period of performance?

Start: 2017-05-24. End: 2022-01-20.

What is Sev1Tech's track record with similar Department of Defense contracts, particularly in systems engineering and technical assistance?

Sev1Tech, LLC has a history of performing various support services for the Department of Defense. Analyzing their past performance on contracts involving systems engineering and technical assistance (SETA) is crucial. This includes examining contract closeouts, any performance evaluations (e.g., CPARS reports), and their experience with similar technologies like radar systems. A review of their contract portfolio would reveal their capacity to handle complex projects, manage costs effectively, and meet delivery schedules. Their success in previous SETA roles provides a strong indicator of their capability to fulfill the requirements of this specific contract, ensuring the government receives competent technical support for its radar programs.

How does the awarded price compare to industry benchmarks for similar SETA support services?

Determining the precise value for money requires benchmarking against industry standards for SETA support. This involves comparing the labor rates, overhead, and fee structure to those of comparable contracts awarded to other firms for similar services within the DoD or other federal agencies. Factors such as the level of security clearance required, the specific technical expertise needed (e.g., radar systems), and the geographic location of the support personnel influence pricing. While the total contract value is substantial, understanding the average loaded labor rates and the reasonableness of the fixed fee, in comparison to market data, is key to assessing if the government secured a competitive price for the specialized engineering expertise provided.

What are the primary risks associated with this cost-plus-fixed-fee contract structure for radar systems engineering?

The primary risk with a Cost-Plus-Fixed-Fee (CPFF) contract is the potential for the contractor to incur higher costs than anticipated, as the government agrees to reimburse allowable costs. While the fixed fee provides the contractor with an incentive to control costs, it doesn't eliminate the risk of cost overruns. For radar systems engineering, risks include unforeseen technical challenges, evolving requirements, and the complexity of integrating new technologies. Effective oversight by the government is critical to scrutinize incurred costs, ensure they are reasonable and allocable, and manage the scope of work to prevent uncontrolled cost growth. The government must also ensure the fixed fee adequately compensates the contractor for the performance risks undertaken.

How effective has Sev1Tech been in delivering systems engineering and technical assistance for complex defense programs historically?

Assessing Sev1Tech's historical effectiveness in delivering SETA support for complex defense programs involves reviewing their performance metrics on prior contracts. This includes examining contract performance assessment reports (CPARS), which provide feedback on areas such as technical performance, schedule adherence, cost control, and management. Evidence of successful project completion, positive client feedback, and a low incidence of contract disputes or terminations would indicate strong effectiveness. For radar systems, specific examples of their contributions to system design, integration, testing, and lifecycle support would be particularly relevant in gauging their capability and reliability as a contractor.

What has been the historical spending trend for radar systems engineering and technical assistance within the Department of the Army?

Analyzing historical spending trends for radar systems engineering and technical assistance within the Department of the Army provides context for the current contract's value. This involves examining obligated amounts and actual expenditures over several fiscal years for similar services. Trends might reveal increasing or decreasing investment in radar technology, shifts in contracting strategies (e.g., more full and open vs. sole source), and the average contract values awarded. Understanding these patterns helps determine if the $48.9 million awarded to Sev1Tech is consistent with historical investment levels, indicative of a growing need, or potentially an outlier requiring further justification based on specific program requirements or market conditions.

Were there any significant performance issues or disputes on Sev1Tech's previous SETA contracts that could indicate future risks?

Investigating past performance issues or disputes on Sev1Tech's previous SETA contracts is crucial for risk assessment. This would involve reviewing contract closeout documentation, CPARS reports for any negative ratings, and any formal claims or litigation filed by or against the contractor. Significant issues related to cost overruns, schedule delays, quality of work, or contractor responsibility could signal potential future risks. Conversely, a clean performance record with consistently positive feedback would suggest a lower risk profile. Understanding the nature and resolution of any past problems provides valuable insight into the contractor's operational challenges and their ability to manage complex defense contracts effectively.

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: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W56KGY16R0004

Offers Received: 6

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 12700 BLACK FOREST LN STE 306, WOODBRIDGE, VA, 22192

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $52,490,282

Exercised Options: $48,882,789

Current Obligation: $48,882,789

Actual Outlays: $245,055

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $812,085

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline