Naval Air Warfare Center contract awarded to KUCHERA DEFENSE SYSTEMS, INC. for $82.5M over 6 years

Contract Overview

Contract Amount: $13,576,366 ($13.6M)

Contractor: Kuchera Defense Systems, Inc

Awarding Agency: Department of Defense

Start Date: 2005-08-16

End Date: 2011-09-30

Contract Duration: 2,236 days

Daily Burn Rate: $6.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 200511!359396!1700!N00421!NAVAL AIR WARFARE CENTER AIR DIV!N0042104D0088 !A!N! !N!0002 ! !20050816!20080815!825071632!825071632!825071632!N!KUCHERA DEFENSE SYSTEMS, INC !345 POMROYS DR !WINDBER !PA!15963!85632!111!42!WINDBER !SOMERSET !PENN !+000000840000!N!N!000000000000!AC62!RDTE/ELECTRONICS & COMMUNICATION EQ-APPLIED RESEA !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !* !334511!E! !5!B!S! ! ! !20200930!B! ! !A! !A!N!U!2!001!B! !Z!N!Z! ! !N!B!N!N! ! !A! !A!A!000!A!B!Y!G! ! !Y!1719!N00421!0001! !

Place of Performance

Location: WINDBER, SOMERSET County, PENNSYLVANIA, 15963

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $13.6 million to KUCHERA DEFENSE SYSTEMS, INC for work described as: 200511!359396!1700!N00421!NAVAL AIR WARFARE CENTER AIR DIV!N0042104D0088 !A!N! !N!0002 ! !20050816!20080815!825071632!825071632!825071632!N!KUCHERA DEFENSE SYSTEMS, INC !345 POMROYS DR !WINDBER !PA!15963!85632!111!42!WINDBER !SOME… Key points: 1. Contract value of $82.5 million represents a significant investment in applied research and development. 2. The contract was awarded under full and open competition, suggesting a competitive bidding process. 3. The duration of the contract (over 6 years) indicates a long-term need for the services or products. 4. The contract type (Cost Plus Fixed Fee) can lead to cost overruns if not managed carefully. 5. The primary focus on electronics and communication equipment suggests a specialized area of defense technology. 6. The geographic location of the contractor in Pennsylvania may have implications for local economic impact.

Value Assessment

Rating: fair

The total contract value of $82.5 million over approximately six years averages to about $13.75 million per year. Without specific benchmarks for similar applied research and development contracts in electronics and communication equipment, it is difficult to definitively assess value for money. The Cost Plus Fixed Fee (CPFF) contract type, while allowing for flexibility in research, carries inherent risks of cost escalation if the contractor's costs exceed initial estimates significantly. Further analysis would require comparing the contractor's performance and cost efficiency against other contracts for similar R&D services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit a bid. The specific number of bidders is not provided in the data, but the designation suggests a robust competitive environment. This level of competition is generally expected to drive down prices and encourage innovation as contractors vie for the award.

Taxpayer Impact: A full and open competition is favorable for taxpayers as it increases the likelihood of obtaining the best possible price and quality through market forces.

Public Impact

The primary beneficiaries are likely the U.S. Navy and potentially other branches of the Department of Defense requiring advanced electronics and communication systems. The contract supports the development and acquisition of specialized electronics and communication equipment for defense applications. The geographic impact is centered around the contractor's location in Windber, Pennsylvania, potentially creating or sustaining jobs in that region. The contract supports a workforce skilled in research and development, engineering, and manufacturing within the defense sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type introduces risk of cost overruns if not closely monitored.
Limited information on the number of bidders in the full and open competition makes it hard to gauge the true extent of competition.
The contract duration is long, increasing the potential for scope creep or changes in technological requirements over time.

Positive Signals

Awarded under full and open competition, suggesting a fair and competitive process.
The contract addresses a critical need for advanced electronics and communication equipment within the Naval Air Warfare Center.
The contractor, KUCHERA DEFENSE SYSTEMS, INC., has secured a significant contract, indicating a level of trust and capability.

Sector Analysis

This contract falls within the broader defense electronics and communication equipment sector, a critical component of national security spending. The market for such specialized R&D is often characterized by high barriers to entry due to technological expertise and security clearances required. Comparable spending benchmarks would typically involve analyzing other contracts for applied research in similar technological domains awarded by the Department of Defense or other federal agencies.

Small Business Impact

The data indicates that this contract was not specifically set aside for small businesses, nor does it explicitly mention subcontracting plans for small businesses. The contractor, KUCHERA DEFENSE SYSTEMS, INC., is likely a mid-to-large-sized entity given the contract value. Without specific subcontracting goals or reporting, the direct impact on the small business ecosystem is unclear, though larger prime contractors often engage small businesses for specialized components or services.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy and the Naval Air Warfare Center. As a Cost Plus Fixed Fee contract, rigorous financial oversight and auditing would be expected to monitor costs and ensure the fixed fee is justified. Transparency is facilitated by the contract award data being publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Naval Air Systems Command (NAVAIR) Contracts
Department of Defense Research and Development Contracts
Electronics and Communication Equipment Procurement
Applied Research and Development Services
Defense Contractor Performance Monitoring

Risk Flags

Cost Plus Fixed Fee contract type carries inherent risk of cost escalation.
Long contract duration may increase exposure to changing technological requirements or market conditions.
Limited data on the number of bidders hinders a full assessment of competitive intensity.
Potential for scope creep in R&D contracts if not tightly managed.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $13.6 million to KUCHERA DEFENSE SYSTEMS, INC. 200511!359396!1700!N00421!NAVAL AIR WARFARE CENTER AIR DIV!N0042104D0088 !A!N! !N!0002 ! !20050816!20080815!825071632!825071632!825071632!N!KUCHERA DEFENSE SYSTEMS, INC !345 POMROYS DR !WINDBER !PA!15963!85632!111!42!WINDBER !SOMERSET !PENN !+000000840000!N!N!000000000000!AC62!RDTE/ELECTRONICS & COMMUNICATION EQ-APPLIED RESEA !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !* !334511!E! !5!B!S! ! ! !202

Who is the contractor on this award?

The obligated recipient is KUCHERA DEFENSE SYSTEMS, INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $13.6 million.

What is the period of performance?

Start: 2005-08-16. End: 2011-09-30.

What is the track record of KUCHERA DEFENSE SYSTEMS, INC. with federal contracts, particularly within the Department of Defense?

KUCHERA DEFENSE SYSTEMS, INC. has been awarded this specific contract valued at $82.5 million by the Naval Air Warfare Center. Further investigation into federal contract databases (like FPDS or SAM.gov) would be necessary to ascertain the full scope of their federal contracting history. This would include examining past awards, contract types, performance ratings, and any reported issues or successes. Understanding their historical performance, especially on similar R&D or electronics-focused contracts, is crucial for assessing their reliability and capability in fulfilling the current contract's objectives. Without this broader context, it's difficult to make a definitive judgment on their overall track record.

How does the awarded amount of $82.5 million compare to similar applied research contracts for electronics and communication equipment?

Benchmarking the $82.5 million award requires access to detailed data on comparable contracts. Factors such as the specific technological advancements sought, the complexity of the research, the duration of the contract (over 6 years in this case), and the specific agency issuing the award all influence pricing. Contracts for applied research in cutting-edge defense electronics can vary widely. A comprehensive comparison would involve analyzing contracts with similar scopes of work, technical requirements, and performance periods awarded by the Department of Defense or other agencies. Without such comparative data, it's challenging to definitively state whether $82.5 million represents a high, low, or average value for this type of specialized R&D.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for applied research and development?

The primary risk with a Cost Plus Fixed Fee (CPFF) contract, especially in R&D, is the potential for cost overruns. While the contractor is reimbursed for allowable costs, the fixed fee provides a set profit margin. If the contractor's actual costs significantly exceed projections, the government bears the brunt of these overruns, potentially leading to a higher final price than initially anticipated. Effective oversight is critical to ensure costs are reasonable and allocable. For the contractor, the risk lies in underestimating costs, which could erode their profit margin. For applied research, where the path to success is often uncertain, CPFF contracts can incentivize the contractor to control costs to protect their fee, but they also require robust government monitoring to prevent inefficiencies from being passed on.

What is the expected impact of this contract on technological advancement in defense electronics and communication?

This contract is expected to drive technological advancement by funding applied research and development in electronics and communication equipment for the Naval Air Warfare Center. The specific focus areas within this broad category will determine the precise nature of the advancements. Such contracts often lead to innovations in areas like radar systems, communication security, electronic warfare capabilities, or sensor technology. The success of these advancements will depend on the contractor's expertise, the clarity of the requirements, and the effectiveness of the government's oversight. Ultimately, the goal is to equip naval aviation with superior technological capabilities, enhancing operational effectiveness and national security.

How has federal spending in the defense electronics and communication equipment sector evolved over the past decade?

Federal spending in the defense electronics and communication equipment sector has generally remained substantial, reflecting its critical importance to national security. While specific figures fluctuate based on geopolitical events, technological shifts, and budget priorities, there has been a consistent demand for advanced systems. Trends include increased investment in areas like cybersecurity, artificial intelligence integration, networked warfare capabilities, and modernized communication platforms. Budgetary pressures and a focus on efficiency may also drive shifts towards more competitive contracting and potentially longer-term sustainment contracts. Analyzing historical spending patterns within this specific PSC code (or similar ones) would reveal trends in contract values, types, and the distribution of awards among prime contractors.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: API Technologies Corp (UEI: 790065564)

Address: 345 HILLSIDE DR, WINDBER, PA, 15963

Business Categories: Category Business, Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0042104D0088

IDV Type: IDC

Timeline