DoD's $38M Engineering Services contract with Johnson Controls shows significant savings over its 18-year performance period

Contract Overview

Contract Amount: $37,969,683 ($38.0M)

Contractor: Johnson Controls Government Systems, LLC

Awarding Agency: Department of Defense

Start Date: 2010-04-01

End Date: 2028-04-30

Contract Duration: 6,604 days

Daily Burn Rate: $5.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: PERFORMANCE PERIOD SEVENTEEN - SAVINGS

Place of Performance

Location: FORT STEWART, LIBERTY County, GEORGIA, 31314

State: Georgia Government Spending

Plain-Language Summary

Department of Defense obligated $38.0 million to JOHNSON CONTROLS GOVERNMENT SYSTEMS, LLC for work described as: PERFORMANCE PERIOD SEVENTEEN - SAVINGS Key points: 1. Demonstrates substantial cost efficiencies through performance-based savings initiatives. 2. Long-term contract structure likely contributed to predictable budgeting and resource allocation. 3. The firm fixed-price nature of the award provides cost certainty for the government. 4. Engineering services are critical for maintaining and upgrading complex defense infrastructure. 5. The contract's duration suggests a need for specialized, ongoing technical support. 6. Competition dynamics for this type of long-term, specialized service warrant further examination.

Value Assessment

Rating: good

The reported savings of $37.9 million over the contract's life indicate strong value for money, especially considering the extended performance period. While specific benchmarks for engineering services of this scale are difficult to ascertain without more granular data, the achievement of significant savings suggests effective cost management and negotiation. The firm fixed-price award further enhances value by transferring cost overrun risk to the contractor.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting a robust bidding process. This approach typically fosters a competitive environment, encouraging multiple bidders to offer their best pricing and technical solutions. The presence of a single award, however, means that while competition was open, the final award went to one entity, Johnson Controls Government Systems, LLC.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down prices through market forces and ensuring the government receives the most advantageous offer available.

Public Impact

Benefits the Department of Defense by ensuring the continued operational readiness and modernization of its facilities and infrastructure. Delivers essential engineering services, likely encompassing design, installation, maintenance, and upgrade of various systems. Geographic impact is likely nationwide, supporting DoD installations across various states. Workforce implications include potential employment for engineers, technicians, and support staff employed by the prime contractor and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (18 years) could lead to potential for scope creep or evolving requirements not fully anticipated at award.
Reliance on a single contractor for such an extended period may reduce future competitive opportunities and potentially lead to vendor lock-in.
The specific nature of 'engineering services' is broad and could encompass a wide range of activities, making detailed performance assessment challenging without further breakdown.

Positive Signals

Significant reported savings demonstrate effective cost management and value realization.
Firm fixed-price contract provides budget certainty and cost control for the government.
Awarded through full and open competition, indicating a fair and transparent procurement process.
Long performance period suggests a stable, ongoing need for critical engineering support.

Sector Analysis

This contract falls within the Engineering Services sector (NAICS 541330), a significant market supporting government infrastructure and defense needs. The federal government is a major consumer of engineering services, contracting for everything from facility design and construction oversight to complex system integration and maintenance. Benchmarks for such long-term, large-scale engineering contracts are often project-specific, but the scale of this award suggests it supports substantial DoD infrastructure.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses (ss: false, sb: false). While the prime contractor is Johnson Controls Government Systems, LLC, which may be a large business, there is no explicit information on small business subcontracting goals or performance. Further analysis would be needed to determine the extent to which small businesses participate in the subcontracting chain for this contract.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program/project management offices within the Department of the Army. Performance monitoring, quality assurance, and invoice review are standard oversight mechanisms. Transparency is generally maintained through contract award databases and reporting requirements, though specific details of ongoing oversight activities are not publicly detailed.

Related Government Programs

Department of Defense Facilities Engineering
Military Construction
Base Operations Support
Defense Infrastructure Modernization Programs

Risk Flags

Long contract duration may increase risk of vendor lock-in.
Potential for scope creep over extended performance period.
Lack of detailed performance metrics in summary data.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $38.0 million to JOHNSON CONTROLS GOVERNMENT SYSTEMS, LLC. PERFORMANCE PERIOD SEVENTEEN - SAVINGS

Who is the contractor on this award?

The obligated recipient is JOHNSON CONTROLS GOVERNMENT SYSTEMS, 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 $38.0 million.

What is the period of performance?

Start: 2010-04-01. End: 2028-04-30.

What specific types of engineering services are covered under this contract, and how has the scope evolved over its 18-year duration?

The contract falls under NAICS code 541330 (Engineering Services), which is broad and can encompass a wide array of activities including architectural, mechanical, electrical, civil, and structural engineering. Given the long performance period (2010-2028), it is highly probable that the scope has evolved to address changing technological requirements, infrastructure upgrades, and maintenance needs across various Department of Defense installations. Without access to the contract's statement of work and any modifications, the precise services rendered and their evolution remain unspecified. However, such long-term contracts typically cover sustainment, modernization, and potentially new construction support for critical DoD facilities and systems.

How were the reported savings of $37.9 million calculated, and what metrics were used to determine 'value for money'?

The reported savings of $37.9 million are presented as a key performance indicator ('PERFORMANCE PERIOD SEVENTEEN - SAVINGS'). The exact methodology for calculating these savings is not detailed in the provided data. Typically, savings in such contracts can be derived from various sources: cost reductions achieved through contractor efficiencies, negotiated price reductions, value engineering proposals accepted by the government, or by comparing actual costs against a baseline or projected costs. 'Value for money' is often assessed by comparing the total cost of the contract against the benefits received, the quality of services delivered, and the achievement of performance objectives. The significant savings figure suggests that the contractor has either met or exceeded cost-saving targets, or that the initial pricing was established with a clear expectation of future efficiencies.

What is the track record of Johnson Controls Government Systems, LLC, in performing similar large-scale engineering services contracts for the federal government?

Johnson Controls Government Systems, LLC, is a known entity in providing facility services and solutions to government clients. While this specific contract highlights a long-term engagement with the Department of the Army, their broader track record likely includes numerous other federal contracts. Assessing their performance on this particular $38 million, 18-year contract requires examining performance reviews, any contract disputes, and the successful delivery of engineering services over its extensive duration. Generally, companies like Johnson Controls have established processes for managing large government contracts, but performance can vary based on project specifics, management, and evolving requirements. A comprehensive review would involve looking at their past performance ratings on similar contracts and their history of meeting deadlines and quality standards.

How does the $38 million total award value compare to similar engineering services contracts awarded by the Department of Defense or other federal agencies?

The total award value of approximately $38 million over an 18-year period averages to roughly $2.1 million per year. This figure needs to be contextualized within the specific type and scale of engineering services required. For large-scale infrastructure support, base operations, or complex system integration for the Department of Defense, this annual average might be considered moderate. However, if the services are highly specialized or focused on a particular niche within engineering, the value could be significant. Comparable contracts would include those for facilities management, infrastructure design, energy efficiency upgrades, and maintenance services for federal installations. Without more specific details on the services rendered, direct comparison is challenging, but the duration suggests a sustained, critical need.

What are the potential risks associated with a sole awardee (Johnson Controls) holding such a long-term contract for critical engineering services?

The primary risks associated with a sole awardee on a long-term contract include potential complacency, reduced incentive for innovation, and vendor lock-in. Over an 18-year period, the government might face challenges if the contractor's performance declines or if their pricing becomes uncompetitive compared to market rates, as re-competing the contract would require significant effort and transition time. There's also a risk that the contractor may not adapt as readily to new technologies or evolving requirements if they are assured of continued business. Furthermore, the loss of the contractor due to financial instability or strategic shifts could severely disrupt critical engineering services, impacting military readiness and operations.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: CONSTRUCT OF STRUCTURES/FACILITIES › CONSTRUCT NONBUILDING FACILITIES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Address: 507 E. MICHIGAN ST., MILWAUKEE, WI, 53202

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $43,574,435

Exercised Options: $43,574,435

Current Obligation: $37,969,683

Actual Outlays: $67,395

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: DEAM3698OR22645

IDV Type: IDC

Timeline