Department of Defense awarded $372M for maintenance and repair of equipment, with Bionetics Corp. as the primary contractor

Contract Overview

Contract Amount: $371,961,478 ($372.0M)

Contractor: Bionetics Corp

Awarding Agency: Department of Defense

Start Date: 2002-02-18

End Date: 2023-05-31

Contract Duration: 7,772 days

Daily Burn Rate: $47.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS AWARD FEE

Sector: Other

Official Description: 200207!000028!5700!GL10 !AGMC/PK !F0965001C0267 !A!N! !Y! !20020218!20040930!062363619!062363619!062363619!N!THE BIONETICS CORPORATION !11833 CANON BLVD STE 100 !NEWPORT NEWS !VA!23606!54040!089!39!NEWARK !LICKING !OHIO !+000000216935!N!N!000000000000!J066!MAINT & REPAIR OF EQ/INSTRUMENTS & LAB EQUIPMENT !S1 !SERVICES !3000!NOT DISCERNABLE OR CLASSIFIED !541380!E! !3! ! ! ! ! !99990909!B!F!N!A! !A!U!R!2!003!B! !C!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! !Y! ! !0001!

Place of Performance

Location: HEATH, LICKING County, OHIO, 43056

State: Ohio Government Spending

Plain-Language Summary

Department of Defense obligated $372.0 million to BIONETICS CORP for work described as: 200207!000028!5700!GL10 !AGMC/PK !F0965001C0267 !A!N! !Y! !20020218!20040930!062363619!062363619!062363619!N!THE BIONETICS CORPORATION !11833 CANON BLVD STE 100 !NEWPORT NEWS !VA!23606!54040!089!39!NEWARK !LICKI… Key points: 1. The contract value of $372M over its duration suggests a significant investment in maintaining critical equipment. 2. The award to Bionetics Corp. indicates a reliance on established contractors for specialized maintenance services. 3. The 'Cost Plus Award Fee' contract type suggests performance incentives, but also potential for cost overruns if not managed closely. 4. The duration of the contract (over 21 years) points to long-term needs for equipment upkeep. 5. The primary service category, 'Maintenance & Repair of Equipment/Instruments & Lab Equipment', highlights the importance of operational readiness. 6. The contract's geographic scope appears to be national, given the nature of defense equipment maintenance.

Value Assessment

Rating: fair

The total award of $372M over more than 21 years averages to approximately $17.5M annually. Benchmarking this against similar large-scale maintenance contracts for defense equipment is challenging without more specific service details. However, the 'Cost Plus Award Fee' structure implies that the final cost is tied to performance, which can be a variable factor in value assessment. The sheer scale and duration suggest a critical need, but the value proposition depends heavily on the efficiency and effectiveness of the services rendered.

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 3 bids suggests a competitive environment, which theoretically should drive better pricing and service quality. However, the long duration and specialized nature of the services might limit the pool of qualified bidders.

Taxpayer Impact: A full and open competition is generally favorable for taxpayers as it encourages multiple companies to bid, potentially leading to lower prices and better value.

Public Impact

The primary beneficiaries are the various branches of the Department of Defense, ensuring their equipment and laboratory instruments are operational. Services delivered include essential maintenance, repair, and potentially calibration of a wide range of equipment. The geographic impact is likely nationwide, supporting military installations and facilities across the United States. Workforce implications include employment opportunities for skilled technicians and support staff within Bionetics Corporation and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 21 years) increases the risk of price escalation and potential for contractor complacency.
Cost Plus Award Fee (CPAF) contracts can lead to higher costs if performance metrics are not tightly defined and monitored.
Lack of specific details on the types of equipment serviced makes it difficult to assess the true scope and complexity of the maintenance required.
The contract's primary focus on maintenance and repair might indicate a reactive rather than proactive approach to equipment lifecycle management.

Positive Signals

Awarded through Full and Open Competition, suggesting a robust bidding process.
The contract's significant value indicates a critical and sustained need for these services within the Department of Defense.
The contractor, Bionetics Corp., has a substantial contract award, implying a level of trust and proven capability.
The inclusion of award fees incentivizes the contractor to meet or exceed performance expectations.

Sector Analysis

This contract falls within the broader 'Professional, Scientific, and Technical Services' sector, specifically focusing on testing laboratories and services. The market for defense maintenance and repair is substantial, driven by the need to maintain a high level of operational readiness for complex military assets. Comparable spending benchmarks would typically involve analyzing other large-scale service contracts for equipment maintenance across various government agencies, particularly within the Department of Defense.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a set-aside provision. However, the large prime contract value could present opportunities for small businesses to participate as subcontractors to Bionetics Corporation, depending on the prime contractor's subcontracting plan and the specific needs of the services required.

Oversight & Accountability

Oversight for this contract would primarily reside within the Department of the Air Force, given its role as the servicing agency. The 'Cost Plus Award Fee' structure necessitates rigorous oversight of performance metrics and cost reporting to ensure value for money. Transparency is facilitated by the contract's award under full and open competition, with details likely available through federal procurement databases. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense Logistics Agency (DLA) Maintenance Support
Naval Sea Systems Command (NAVSEA) Maintenance Contracts
Army Materiel Command (AMC) Sustainment Services
General Services Administration (GSA) Professional Services Schedules

Risk Flags

Long contract duration may lead to cost overruns or obsolescence.
Cost Plus Award Fee structure requires diligent oversight to ensure value.
Scope of 'equipment/instruments/lab equipment' is broad and may lack specificity.
Potential for contractor complacency over extended performance period.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $372.0 million to BIONETICS CORP. 200207!000028!5700!GL10 !AGMC/PK !F0965001C0267 !A!N! !Y! !20020218!20040930!062363619!062363619!062363619!N!THE BIONETICS CORPORATION !11833 CANON BLVD STE 100 !NEWPORT NEWS !VA!23606!54040!089!39!NEWARK !LICKING !OHIO !+000000216935!N!N!000000000000!J066!MAINT & REPAIR OF EQ/INSTRUMENTS & LAB EQUIPMENT !S1 !SERVICES !3000!NOT DISCERNABLE OR CLASSIFIED !541380!E! !3! ! ! ! ! !99990909!B

Who is the contractor on this award?

The obligated recipient is BIONETICS CORP.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $372.0 million.

What is the period of performance?

Start: 2002-02-18. End: 2023-05-31.

What is the historical spending pattern for Bionetics Corporation with the Department of Defense, particularly for maintenance and repair services?

Analyzing the historical spending for Bionetics Corporation with the Department of Defense requires access to comprehensive federal procurement data beyond this single award. This $372M contract represents a significant single award. To understand the broader pattern, one would need to aggregate all contracts awarded to Bionetics Corp. by the DoD over several fiscal years. This would reveal trends in contract types (e.g., fixed-price, cost-plus), service categories, and the overall volume of business. Without this broader dataset, it's difficult to ascertain if this award is an anomaly, a consistent level of business, or a significant increase/decrease in their DoD portfolio. However, the existence of such a large, long-term contract suggests a sustained relationship and proven capability in delivering services valued by the DoD.

How does the annual average cost of this contract compare to industry benchmarks for similar equipment maintenance services?

The annual average cost for this contract is approximately $17.5 million ($372M / ~21 years). Benchmarking this figure against industry standards for similar equipment maintenance services is complex due to the specialized nature of defense equipment and the broad scope implied by 'Maintenance & Repair of Equipment/Instruments & Lab Equipment'. Industry benchmarks often vary significantly based on the type of equipment (e.g., avionics, IT hardware, scientific instruments), the level of service required (e.g., routine maintenance, complex repairs, calibration), and the specific service provider's overhead and profit margins. A direct comparison would require detailed knowledge of the specific equipment covered and the service level agreements. However, for large-scale, long-term government contracts of this nature, costs are often scrutinized against established government cost-estimating guides and competitive bidding outcomes to ensure reasonableness.

What are the key performance indicators (KPIs) used in the 'Cost Plus Award Fee' structure for this contract, and how are they measured?

The specific Key Performance Indicators (KPIs) for this 'Cost Plus Award Fee' (CPAF) contract are not detailed in the provided data. Typically, for maintenance and repair contracts, KPIs might include metrics such as equipment uptime/availability rates, mean time between failures (MTBF), mean time to repair (MTTR), response times for service calls, adherence to maintenance schedules, and quality of repair work (e.g., low repeat failure rates). The 'Award Fee' component means that Bionetics Corporation can earn additional profit (the award fee) based on exceeding certain performance targets defined in the contract's performance plan. These targets and the methodology for evaluating performance against them are crucial for ensuring accountability and value for money under a CPAF arrangement. Oversight bodies would closely monitor the contractor's performance reports against these KPIs.

What is the risk profile associated with a contract of this duration (over 21 years) for maintenance and repair services?

A contract duration exceeding 21 years carries several inherent risks. Firstly, there's a significant risk of cost escalation due to inflation, technological obsolescence of equipment, and potential changes in labor costs over such an extended period. Secondly, long-term contracts can sometimes lead to contractor complacency, where the incentive to innovate or improve efficiency diminishes due to the guaranteed business stream. Thirdly, the specific equipment being maintained may evolve or be replaced over two decades, requiring contract modifications or potentially rendering the original scope of work less relevant. Finally, changes in government priorities, budget constraints, or strategic shifts could impact the necessity or funding of such a long-term commitment. Robust contract management, regular performance reviews, and mechanisms for renegotiation or termination are essential to mitigate these risks.

How does the 'Testing Laboratories and Services' (NAICS 541380) category typically contribute to the Department of Defense's overall operational readiness?

The 'Testing Laboratories and Services' category, under NAICS code 541380, plays a critical role in the Department of Defense's (DoD) operational readiness by ensuring the reliability, safety, and performance of a vast array of military equipment, systems, and materials. This includes everything from testing newly developed technologies and components to certifying the airworthiness of aircraft, the seaworthiness of vessels, and the functionality of weapons systems. Laboratories provide essential services for quality assurance, failure analysis, environmental testing (e.g., resistance to extreme temperatures or humidity), and calibration of sensitive instruments. By validating that equipment meets stringent military specifications and will perform as expected under demanding operational conditions, these services directly underpin the DoD's ability to deploy and sustain effective military operations globally.

Industry Classification

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

Product/Service Code: QUALITY CONTROL, TEST, INSPECTION › EQUIPMENT AND MATERIALS TESTING

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Address: 813 IRVING WICK DR W, HEATH, OH, 43056

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $374,522,697

Exercised Options: $374,522,697

Current Obligation: $371,961,478

Actual Outlays: $7,001,110

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline