DoD awards $14.9M engineering support contract to Caliola Engineering for MILSATCOM and NC3 systems

Contract Overview

Contract Amount: $14,912,117 ($14.9M)

Contractor: Caliola Engineering, LLC

Awarding Agency: Department of Defense

Start Date: 2024-09-01

End Date: 2029-03-31

Contract Duration: 1,672 days

Daily Burn Rate: $8.9K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: EXPERT MILSATCOM AND NC3 ARCHITECTURE SPECIFIC SYSTEMS ENGINEERING SUPPORT FOR THE ANALYSIS, INTEGRATION, INTEROPERABILITY, AND IMPROVEMENT OF AFNCW/NCL SUSTAINED MILSATCOM AND NC3 SYSTEMS AND ASSOCIATED TEST/LABORATORY MISSION EMULATION ENVIRONMENT

Place of Performance

Location: COLORADO SPRINGS, EL PASO County, COLORADO, 80919

State: Colorado Government Spending

Plain-Language Summary

Department of Defense obligated $14.9 million to CALIOLA ENGINEERING, LLC for work described as: EXPERT MILSATCOM AND NC3 ARCHITECTURE SPECIFIC SYSTEMS ENGINEERING SUPPORT FOR THE ANALYSIS, INTEGRATION, INTEROPERABILITY, AND IMPROVEMENT OF AFNCW/NCL SUSTAINED MILSATCOM AND NC3 SYSTEMS AND ASSOCIATED TEST/LABORATORY MISSION EMULATION ENVIRONMENT Key points: 1. Contract focuses on analysis, integration, and improvement of critical military satellite communication and nuclear command, control, and communications systems. 2. The duration of the contract is over 4.5 years, indicating a need for sustained engineering expertise. 3. Awarded under a 'full and open competition after exclusion of sources' which may warrant further investigation into the exclusion rationale. 4. The contract type is Cost Plus Fixed Fee (CPFF), which can lead to cost overruns if not carefully managed. 5. Caliola Engineering, LLC, a relatively small business, is the sole awardee, suggesting specialized capabilities. 6. The contract is a delivery order, implying it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle.

Value Assessment

Rating: fair

The contract value of $14.9 million over approximately 5.5 years (from September 2024 to March 2029) suggests a moderate annual spend of around $2.7 million. Benchmarking this value is challenging without knowing the specific scope of 'expert systems engineering support' for MILSATCOM and NC3. However, given the critical nature of these systems, the pricing may be competitive if Caliola Engineering possesses unique, highly specialized expertise. The Cost Plus Fixed Fee (CPFF) contract type introduces risk, as actual costs could exceed initial estimates, impacting overall value for money if not rigorously overseen.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'full and open competition after exclusion of sources.' This designation suggests that while the competition was intended to be broad, certain sources were excluded. The specific reasons for this exclusion are not detailed but could relate to unique qualifications, prior performance, or specific security requirements. With only one awardee, Caliola Engineering, LLC, it indicates a potentially limited pool of qualified bidders or a strategic decision to consolidate support with a single entity. This limited competition might reduce price pressure compared to a broader, unrestricted competition.

Taxpayer Impact: The limited competition and exclusion of sources mean taxpayers may not have benefited from the lowest possible price achievable through a wider bidding process. The government may have paid a premium for specialized expertise, but the lack of broad competition makes it harder to ascertain if this was the most cost-effective approach.

Public Impact

The primary beneficiaries are the Department of Defense and the Air Force, ensuring the continued operational effectiveness and modernization of vital MILSATCOM and NC3 systems. Services delivered include critical analysis, integration, interoperability assessment, and improvement recommendations for complex defense communication networks. The geographic impact is national, supporting strategic defense infrastructure, with potential implications for global military operations. Workforce implications include the employment of specialized systems engineers and technical experts within Caliola Engineering, LLC.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can incentivize contractor to increase costs to maximize profit, requiring robust oversight.
The 'exclusion of sources' in the competition method raises questions about the breadth of market engagement and potential missed opportunities for cost savings.
Sole awardee limits the potential for competitive pricing and innovation that might arise from multiple bidders.
The contract duration of over 4.5 years requires sustained monitoring to ensure performance remains aligned with evolving requirements and budget constraints.

Positive Signals

Focus on critical MILSATCOM and NC3 systems indicates a high-priority area for national security.
The contract aims to improve and integrate complex systems, suggesting a forward-looking approach to defense capabilities.
Caliola Engineering, LLC's specialization in this niche area suggests they possess the required expertise for these sensitive systems.
The contract is a delivery order, implying it is part of a potentially larger, established framework, which can streamline procurement for essential services.

Sector Analysis

This contract falls within the Engineering Services sector (NAICS 541330), specifically supporting advanced defense communications. The market for specialized systems engineering in military satellite communications and nuclear command and control is highly concentrated, requiring deep technical expertise and security clearances. Spending in this niche is driven by national security imperatives and the continuous need to upgrade and maintain aging or evolving complex systems. Comparable spending benchmarks are difficult to establish due to the unique nature of MILSATCOM and NC3, but significant government investment is consistently allocated to these areas.

Small Business Impact

Caliola Engineering, LLC, the awardee, is identified as a small business (st: CO, likely indicating a small business designation). However, this contract is not explicitly a small business set-aside. The fact that a small business won a sole-source award under a limited competition suggests they possess highly specialized capabilities that are in demand. The implications for the broader small business ecosystem are mixed; while it highlights opportunities for specialized small firms, the limited competition aspect might not foster widespread subcontracting opportunities unless mandated.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Air Force contracting and program management offices. Given the CPFF structure, rigorous financial oversight and performance monitoring will be crucial to ensure costs are reasonable and allocable, and that the contractor meets all technical requirements. Transparency may be limited due to the sensitive nature of MILSATCOM and NC3 systems. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Military Satellite Communications (MILSATCOM)
Nuclear Command, Control, and Communications (NC3)
Air Force Command and Control, and Nuclear Operations
Systems Engineering and Technical Assistance (SETA)
Defense Communications Infrastructure

Risk Flags

Potential for cost overruns due to CPFF contract type.
Limited competition may result in suboptimal pricing.
Rationale for 'exclusion of sources' requires clarification.
Dependence on a single small business for critical systems engineering.
Long contract duration necessitates sustained performance monitoring.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.9 million to CALIOLA ENGINEERING, LLC. EXPERT MILSATCOM AND NC3 ARCHITECTURE SPECIFIC SYSTEMS ENGINEERING SUPPORT FOR THE ANALYSIS, INTEGRATION, INTEROPERABILITY, AND IMPROVEMENT OF AFNCW/NCL SUSTAINED MILSATCOM AND NC3 SYSTEMS AND ASSOCIATED TEST/LABORATORY MISSION EMULATION ENVIRONMENT

Who is the contractor on this award?

The obligated recipient is CALIOLA ENGINEERING, LLC.

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 $14.9 million.

What is the period of performance?

Start: 2024-09-01. End: 2029-03-31.

What is the specific rationale behind the 'exclusion of sources' in this 'full and open competition' award?

The 'full and open competition after exclusion of sources' designation indicates that while the competition was not restricted from the outset, certain potential offerors were excluded from participating. The specific reasons for exclusion are not publicly detailed in the provided data but typically stem from requirements such as unique technical capabilities, specialized knowledge, prior performance on related systems, or specific security clearances that only a limited number of entities possess. For MILSATCOM and NC3 systems, these exclusions often relate to highly specialized engineering expertise, proprietary technology access, or established relationships with existing complex systems. Understanding the exact criteria used for exclusion would be necessary to fully assess the competitive landscape and potential impact on pricing.

How does the Cost Plus Fixed Fee (CPFF) contract type compare to other pricing arrangements for similar engineering support services in the defense sector?

Cost Plus Fixed Fee (CPFF) contracts are common in defense for research, development, and complex system engineering where the scope of work can be difficult to define precisely upfront, or where innovation and flexibility are paramount. Unlike fixed-price contracts, CPFF reimburses the contractor for allowable costs plus a predetermined fixed fee representing profit. This structure shifts some cost risk to the government compared to fixed-price contracts. However, it can incentivize contractors to incur higher costs, as the fee remains constant. For highly specialized engineering support like MILSATCOM and NC3, CPFF is often chosen to ensure access to critical expertise without stifling innovation due to rigid cost ceilings. Other arrangements like Cost Plus Incentive Fee (CPIF) or Cost Plus Award Fee (CPAF) might offer better alignment of incentives if performance metrics are clearly defined.

What is Caliola Engineering, LLC's track record with similar complex defense systems, and does it justify a sole award under limited competition?

Assessing Caliola Engineering, LLC's specific track record requires access to detailed contract performance databases and past performance reviews, which are not provided in the summary data. However, the award itself, particularly under a 'full and open competition after exclusion of sources' and for critical MILSATCOM and NC3 systems, suggests the company possesses specialized expertise deemed essential by the Department of the Air Force. The limited competition and sole award imply that Caliola Engineering likely demonstrated unique qualifications, technical capabilities, or prior successful performance on related, highly sensitive programs that set them apart from other potential bidders. Further investigation into their contract history, client feedback, and technical certifications would be needed to fully validate this justification.

What are the potential risks associated with the integration and interoperability of MILSATCOM and NC3 systems, and how does this contract aim to mitigate them?

The integration and interoperability of MILSATCOM and NC3 systems present significant risks due to their complexity, the criticality of their function for national security, and the often-heterogeneous nature of the underlying technologies and legacy systems. Risks include potential communication failures, security vulnerabilities, data synchronization issues, and difficulties in command and control during high-stress scenarios. This contract aims to mitigate these risks by providing expert systems engineering support focused specifically on analysis, integration, and improvement. The engineers will likely identify architectural flaws, develop solutions for seamless data exchange between different system components, ensure adherence to interoperability standards, and recommend upgrades or modifications to enhance overall system resilience and effectiveness, thereby reducing the likelihood of mission-critical failures.

How does the annual spending on this contract compare to overall DoD spending on MILSATCOM and NC3 systems?

The total contract value is approximately $14.9 million over roughly 5.5 years, averaging about $2.7 million per year. This figure represents a very small fraction of the Department of Defense's overall budget for MILSATCOM and NC3 systems, which typically runs into billions of dollars annually. These critical systems require substantial investment in procurement, sustainment, research, and development. Therefore, this contract likely represents highly specialized, targeted engineering support rather than broad program funding. Its annual spend is more indicative of niche technical assistance or a specific project phase within a larger MILSATCOM or NC3 initiative, rather than the overall program expenditure.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 1045 ELKTON DR, COLORADO SPRINGS, CO, 80907

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Small Business, Special Designations, U.S.-Owned Business, Woman Owned Business, Women Owned Small Business

Financial Breakdown

Contract Ceiling: $56,299,395

Exercised Options: $14,941,734

Current Obligation: $14,912,117

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 47QRAD20D1123

IDV Type: IDC

Timeline