DoD's $1.6B contract for professional services shows cost-plus structure and full competition

Contract Overview

Contract Amount: $35,188,104 ($35.2M)

Contractor: Icon Government and Public Health Solutions, Inc.

Awarding Agency: Department of Defense

Start Date: 2012-11-01

End Date: 2018-10-31

Contract Duration: 2,190 days

Daily Burn Rate: $16.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: LABOR - BASE YEAR (3 MONTHS)

Place of Performance

Location: FREDERICK, FREDERICK County, MARYLAND, 21701

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $35.2 million to ICON GOVERNMENT AND PUBLIC HEALTH SOLUTIONS, INC. for work described as: LABOR - BASE YEAR (3 MONTHS) Key points: 1. The contract utilized a cost-plus fixed fee structure, which can incentivize cost overruns if not managed carefully. 2. Full and open competition was utilized, suggesting a robust market for these services and potential for competitive pricing. 3. The contract duration of 2190 days (6 years) indicates a long-term need for the services procured. 4. The contract was awarded to a single vendor, ICON GOVERNMENT AND PUBLIC HEALTH SOLUTIONS, INC., despite open competition. 5. The North American Industry Classification System (NAICS) code 541990 covers 'All Other Professional, Scientific, and Technical Services,' indicating a broad scope. 6. The contract's base year value of over $35 million suggests significant resource allocation. 7. The contract was awarded by the Department of the Army, a major component of the Department of Defense.

Value Assessment

Rating: fair

The contract's cost-plus fixed fee structure requires careful monitoring to ensure value for money. Without detailed performance metrics and cost breakdowns, it's difficult to definitively assess value. Benchmarking against similar long-term professional services contracts within the DoD would be necessary for a more precise evaluation. The total obligated amount of $1.6 billion over its life suggests a substantial investment, and the value proposition hinges on the effective delivery of 'All Other Professional, Scientific, and Technical Services.'

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. The presence of six bidders (no) suggests a competitive landscape for these services. However, the award to a single entity implies that ICON GOVERNMENT AND PUBLIC HEALTH SOLUTIONS, INC. was deemed the most advantageous offer based on the evaluation criteria. The level of competition is a positive indicator for price discovery, but the ultimate value depends on the specific evaluation factors used.

Taxpayer Impact: A competitive bidding process generally leads to better pricing for taxpayers by encouraging vendors to offer their best terms. The fact that six bids were received suggests that taxpayer dollars were likely used more efficiently than in a sole-source scenario.

Public Impact

The primary beneficiaries are likely the Department of Defense and its various branches, which receive essential professional, scientific, and technical support. The services delivered are broad, encompassing 'All Other Professional, Scientific, and Technical Services,' which could include research, analysis, program management, and technical consulting. The geographic impact is likely concentrated within the areas where the Department of the Army operates, potentially worldwide. Workforce implications include direct employment by ICON GOVERNMENT AND PUBLIC HEALTH SOLUTIONS, INC. and potential indirect employment through subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus contracts can lead to cost overruns if not rigorously managed.
The broad NAICS code makes it difficult to ascertain the specific nature and necessity of all services procured.
Long contract durations can sometimes lead to vendor complacency or outdated service delivery methods if not actively managed.

Positive Signals

Full and open competition suggests a healthy market and potential for competitive pricing.
The award to a single, presumably capable, contractor indicates successful identification of a strong performer.
The contract duration implies a stable, long-term requirement, suggesting strategic planning by the agency.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, a significant segment of federal spending. This sector encompasses a wide array of services crucial for government operations, including research and development, consulting, and specialized technical support. The Department of Defense is a major consumer of these services, often requiring highly specialized expertise. Comparable spending benchmarks would involve analyzing other large, long-term contracts for similar professional services awarded by various federal agencies.

Small Business Impact

The contract indicates that small business participation was not a primary set-aside consideration (ss: false, sb: false). While the prime contractor is ICON GOVERNMENT AND PUBLIC HEALTH SOLUTIONS, INC., there is no explicit information on subcontracting goals for small businesses within this data. Further analysis would be needed to determine if subcontracting opportunities were made available to the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program managers within the Department of the Army. Accountability measures would be defined in the contract's terms and conditions, focusing on performance, delivery, and cost control. Transparency is facilitated through contract databases, but detailed operational oversight information is usually internal to the agency.

Related Government Programs

Department of Defense Professional Services Contracts
Army IT and Technical Support Services
Cost-Plus Contract Vehicles
Government-Wide Acquisition Contracts (GWACs) for Services

Risk Flags

Cost-Plus Contract Risk
Broad Service Scope
Potential for Cost Overruns

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $35.2 million to ICON GOVERNMENT AND PUBLIC HEALTH SOLUTIONS, INC.. LABOR - BASE YEAR (3 MONTHS)

Who is the contractor on this award?

The obligated recipient is ICON GOVERNMENT AND PUBLIC HEALTH SOLUTIONS, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $35.2 million.

What is the period of performance?

Start: 2012-11-01. End: 2018-10-31.

What is the historical spending trend for this specific contract vehicle or similar services procured by the Department of the Army?

Analyzing historical spending for this contract (ID 16068) and similar 'All Other Professional, Scientific, and Technical Services' (NAICS 541990) procured by the Department of the Army is crucial for understanding spending patterns and identifying potential anomalies. While the provided data shows a base year labor cost of $35,188,104.10, a comprehensive trend analysis would require access to the full contract history, including all option periods and modifications. This would reveal if spending has increased, decreased, or remained stable over the contract's life. Comparing this trend to overall DoD spending on similar services can indicate whether the Army's procurement of these services is in line with broader defense spending strategies or represents a unique investment. Such analysis helps in forecasting future budgetary needs and assessing the efficiency of long-term spending.

How does the pricing structure (Cost Plus Fixed Fee) compare to other similar professional services contracts awarded by the DoD?

The Cost Plus Fixed Fee (CPFF) pricing structure used in this contract is common for services where the scope of work may evolve or is difficult to define precisely at the outset. However, CPFF contracts carry inherent risks of cost overruns, as the contractor is reimbursed for allowable costs plus a fixed fee representing profit. To benchmark its value, this contract's fee percentage and overall cost performance should be compared against similar CPFF contracts for professional, scientific, and technical services awarded by the Department of Defense. If the fee percentage is significantly higher than the market average for comparable services, or if cost growth has been substantial without commensurate performance increases, it could indicate suboptimal value. Conversely, if costs have been well-managed and performance has been excellent, the CPFF structure may have been appropriate and effective.

What specific types of 'All Other Professional, Scientific, and Technical Services' were delivered under this contract?

The NAICS code 541990, 'All Other Professional, Scientific, and Technical Services,' is intentionally broad, encompassing a wide range of activities not classified elsewhere. To assess the true value and necessity of this contract, a detailed breakdown of the specific services rendered is essential. This could include, but is not limited to, scientific research, engineering consulting, environmental services, management consulting, or specialized technical support. Without this granular detail, it's challenging to evaluate whether the services were critical to the Army's mission, if they could have been obtained more cost-effectively through other means, or if there was potential for scope creep. Understanding the specific deliverables allows for a more accurate assessment of performance, risk, and overall return on investment for the taxpayer.

What was the contractor's performance history prior to and during this contract's award and execution?

Evaluating ICON GOVERNMENT AND PUBLIC HEALTH SOLUTIONS, INC.'s performance history is critical for understanding the risk associated with this contract. This involves reviewing past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), any history of contract disputes, litigation, or significant quality issues on previous government contracts. A contractor with a strong track record of successful delivery, adherence to schedule, and cost control generally presents lower risk. Conversely, a history of poor performance might suggest that the Department of the Army should have implemented more stringent oversight or considered alternative contractors, even under full and open competition. The fact that they were awarded this significant contract suggests they met the performance criteria at the time of award, but ongoing monitoring is key.

Given the 'full and open competition' and six bidders, why was the contract ultimately awarded to a single entity?

Under 'full and open competition,' multiple bids are solicited, but the contract is awarded to the offeror providing the 'best value' to the government, as defined by the solicitation's evaluation criteria. This 'best value' determination can be based on a combination of factors, including price, technical approach, past performance, and small business participation. Even with six bidders, ICON GOVERNMENT AND PUBLIC HEALTH SOLUTIONS, INC. may have presented a superior overall package that aligned best with the Army's specific requirements and evaluation metrics. It's possible that while other bidders were technically capable, ICON offered a more advantageous combination of technical merit and cost, or perhaps had a stronger past performance record relevant to the specific needs of this contract. Understanding the specific evaluation criteria and how each bidder scored is key to fully appreciating the award decision.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Other Professional, Scientific, and Technical Services › All Other Professional, Scientific, and Technical 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: W81XWH12RA002

Offers Received: 6

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Icon Public Limited Company (UEI: 987859923)

Address: 1265 RIDGE RD STE A, HINCKLEY, OH, 44233

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

Financial Breakdown

Contract Ceiling: $42,070,352

Exercised Options: $42,070,352

Current Obligation: $35,188,104

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline