$25.5M to Augment AUTEC Activities
Jan 28/08: CSC Applied Technologies, LLC in Fort Worth, TX received a $25.5 million modification under previously awarded contract (N66604-05-C-1277) to support requirements for increased base operations at the Atlantic Undersea Test and Evaluation Center (AUTEC). AUTEC is a major range and test facility base providing both deep and shallow water naval test and training. This modification will support stepped up scheduling and conduct of test operations, plus administrative and clerical support in the business operations area, and additional overtime in base operations functions such as housekeeping, facilities maintenance, utilities, vehicle maintenance, and helicopter operations.
Work will be performed in Andros Island, Bahamas (81%); West Palm Beach, FL (18%); and Cape Canaveral, FL (1%), and work is expected to be completed by Mar. 2011. Contract funds will not expire at the end of the current fiscal year. The Naval Undersea Warfare Center Division in Newport, RI issued the contract.
Contract #N66604-05-C-1277 was actually the subject of controversy in a 2006 audit report.
On Dec 27/06 the US Department of Defense’s Office of Inspector General issued its “Report on Contracting Practices at the Major Range and Test Facilities Base” (No. D-2007-036). We’ll skip ahead to the critical section that presents both sides:
“Navy Comments on Contract N66604-05-C-1277. The Program Manager disagreed with the draft report finding that contract N66604-05-C-1277 had an inadequate IGCE and that contracting officials did not use prior history. The Program Manager stated that prior price history from the Atlantic Undersea Test and Evaluation Center, Naval Undersea Warfare Center Division Newport was taken into consideration to determine contract type and to define costs. The Program Manager stated that contract type and costs were discussed at length at an October 31, 2002, Atlantic Undersea Test and Evaluation Center Contract Advisory Panel contract kickoff presentation. The discussion included a comparative analysis of the prior contract structure with other contract options along with risk factors associated with control, adaptability, management, and cost.
The Program Manager stated that the Atlantic Undersea Test and Evaluation Center used market research and appropriate quantitative techniques to develop a reliable estimate of the new contract cost in conformance with the Defense Procurement and Acquisition Policy-Contract Pricing Reference Guide. The Program Manager stated that on February 3, 2003, the contracting officer presented a review of the history of five other MRTFB contracts to help determine the most appropriate contract type. The Program Manager also stated that qualitative cost analysis was conducted early in the contract process and an IGCE was developed to project the new contract costs and accompanied the procurement request.
Audit Response. Although the Navy stated that they used discussion from the Atlantic Undersea Test and Evaluation Center Advisory Panel contract kickoff to determine contract types and costs, contract N66604-05-C-1277 contained the same performance work statement, costs, and fee structure as its predecessor. Agencies should rely on the experience gained from prior contracts to incorporate performance-based service contracting methods that facilitate the use of fixed- priced contracts. The contracting officer’s primary objective in pricing a contract is to balance the contract type, cost, and profit or fee negotiated to achieve a total result – a price that is fair and reasonable to both the Government and the contractor. The Navy stated that their comparative analysis included an analysis of the prior contract structure against the risk factors associated with control, adaptability, management, and cost. However, the Navy comparative analysis did not provide detailed information to determine what was fair and reasonable based on market conditions, alternatives for meeting the requirement, price-related evaluation factors, and non-price evaluation factors related to each service.
The IGCEs received on July 20, 2005, and July 19, 2006, projected 15-year total contract costs at $808,979,888 and $795,726,926, respectively. However, the IGCEs were inadequate because they did not include any analysis of costs associated with alternative methods of meeting Government’s minimum requirements market conditions, or potential technology advancements. Both IGCEs were unsigned, undated, and vague. Although the IGCEs included labor categories, labor hours, direct and indirect costs, and amounts for material, they did not provide a basis for the estimates or include judgmental factors applied or contingencies used to develop the cost estimates. Neither of the IGCEs nor any other document in the contract file mentioned or included any data from the October 31, 2002, or February 3, 2003, contracting officer presentations. None of the documentation mentioned prior market research applicable to the contract type or selection.”
Under a contract announced on Jan 28/05, DynCorp Technical Services LLC in Fort Worth, TX has primary responsibility for AUTEC related services They received a $137.4 million cost-plus-award fee/ cost plus incentive fee contract with award term provisions for operation and maintenance of the Atlantic Undersea Test and Evaluation Center (AUTEC). This maintenance and operations contract will support the scheduling and conduct of test programs, operation of range instrumentation, test support systems, and performance of all base operations functions. The contract contained 4 options, which if exercised, would bring the total contract value to $762.5 million.
Work will be performed on Andros Island, The Bahamas (84.83%); West Palm Beach, FL (14.48%); Cape Canaveral, FL (0.54%); and Yorktown, VA (0.15%), and is expected to be complete by April 2008. The contract was competitively procured and advertised via the Internet, with 5 offers received by The Naval Undersea Warfare Center, Newport Division in Newport, RI (N66604-05-C-1277).