Air Force awards $20.6M for targeting and effects software, with a significant portion for ammunition manufacturing

Contract Overview

Contract Amount: $20,557,630 ($20.6M)

Contractor: Applied Research Associates, Inc.

Awarding Agency: Department of Defense

Start Date: 2023-01-01

End Date: 2024-08-20

Contract Duration: 597 days

Daily Burn Rate: $34.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: AIR FORCE TARGETING AND EFFECTS SOFTWARE

Place of Performance

Location: ALBUQUERQUE, BERNALILLO County, NEW MEXICO, 87110

State: New Mexico Government Spending

Plain-Language Summary

Department of Defense obligated $20.6 million to APPLIED RESEARCH ASSOCIATES, INC. for work described as: AIR FORCE TARGETING AND EFFECTS SOFTWARE Key points: 1. Contract value represents a substantial investment in specialized software for Air Force targeting. 2. The contract's focus on ammunition manufacturing suggests a critical need for advanced simulation or design tools. 3. The use of Cost Plus Fixed Fee (CPFF) pricing indicates potential for cost overruns if not closely managed. 4. The single award for this delivery order suggests a specific capability or solution was sought. 5. The contract duration of nearly two years points to a complex development or integration effort. 6. Geographic location of the contractor in New Mexico may have implications for regional economic impact.

Value Assessment

Rating: fair

The contract value of $20.6 million for targeting and effects software is significant, but without specific performance metrics or deliverables, a direct value-for-money assessment is challenging. The CPFF pricing structure introduces inherent risk, as costs can escalate beyond initial estimates. Benchmarking against similar software development contracts for military applications would be necessary to determine if the pricing is competitive. The lack of detailed cost breakdowns makes it difficult to ascertain if the fixed fee adequately compensates the contractor for the scope of work.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The fact that it resulted in a single delivery order suggests that Applied Research Associates, Inc. was selected as the most advantageous offer based on the government's evaluation criteria. The level of competition at the bid stage is positive for price discovery, but the single award outcome means the government secured a specific solution rather than potentially fostering broader market competition for ongoing needs.

Taxpayer Impact: Full and open competition generally benefits taxpayers by encouraging competitive pricing. However, the single award means taxpayers are relying on the government's evaluation to ensure the best value was obtained.

Public Impact

The primary beneficiaries are the U.S. Air Force personnel who will utilize the targeting and effects software. The software is intended to enhance capabilities related to ammunition development and potentially targeting systems. The contract supports the Department of Defense's broader mission in national security and defense readiness. The contract may have implications for the defense industrial base, particularly in areas related to software development and ammunition manufacturing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) pricing can lead to cost overruns if not managed diligently.
The specific nature of 'targeting and effects software' may limit its applicability or transferability to other programs.
Reliance on a single contractor for this critical software could pose a risk if performance issues arise.

Positive Signals

Awarded under full and open competition, suggesting a robust bidding process.
The contract addresses a specialized need within the Air Force, indicating a focused investment.
The contractor, Applied Research Associates, Inc., likely possesses specific expertise required for this complex software.

Sector Analysis

This contract falls within the defense sector, specifically related to software development and its application in ammunition manufacturing. The defense software market is highly specialized, with significant government investment driven by evolving technological needs and national security priorities. Comparable spending benchmarks would typically involve other contracts for simulation, modeling, targeting systems, or specialized defense software. The market is characterized by a mix of large prime contractors and specialized small businesses, with a strong emphasis on security clearances and technical expertise.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses (ss: false, sb: false). Therefore, the primary impact on small businesses would be through potential subcontracting opportunities, which are not detailed in this award notice. Without specific subcontracting plans or goals, it's difficult to assess the direct impact on the small business ecosystem. However, large prime contractors often utilize small businesses for specialized components or services.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force and the Department of Defense. Mechanisms likely include contract performance reviews, financial audits, and potentially oversight from the Government Accountability Office (GAO) or the Inspector General (IG) if performance or cost issues arise. Transparency is facilitated through contract award databases, but detailed cost breakdowns and performance reports are typically not publicly available.

Related Government Programs

Air Force Software Development Contracts
Department of Defense Ammunition Procurement
Targeting and Simulation Systems
Defense Research and Development

Risk Flags

Cost Overrun Risk (CPFF Pricing)
Performance Dependency (Single Award)
Technology Sensitivity/Security

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.6 million to APPLIED RESEARCH ASSOCIATES, INC.. AIR FORCE TARGETING AND EFFECTS SOFTWARE

Who is the contractor on this award?

The obligated recipient is APPLIED RESEARCH ASSOCIATES, INC..

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 $20.6 million.

What is the period of performance?

Start: 2023-01-01. End: 2024-08-20.

What is the specific functionality of the 'targeting and effects software' being procured?

The provided data does not detail the specific functionalities of the 'targeting and effects software.' However, given its association with 'Ammunition (except Small Arms) Manufacturing' and the Air Force's mission, it likely pertains to software used for simulating munition trajectories, blast effects, target acquisition, or mission planning. This could involve advanced modeling and simulation tools to test and refine weapon systems, optimize targeting solutions, or train personnel in realistic combat scenarios. Further details would typically be found in the contract's Statement of Work (SOW) or technical exhibits, which are not publicly available in this summary.

How does the Cost Plus Fixed Fee (CPFF) pricing structure compare to other contract types for similar defense software development?

Cost Plus Fixed Fee (CPFF) is a common contract type in defense acquisition, particularly for research and development or services where the scope is not fully defined at the outset. It allows the contractor to recover all allowable costs plus a predetermined fixed fee representing profit. Compared to Firm-Fixed-Price (FFP) contracts, CPFF offers more flexibility for evolving requirements but carries a higher risk of cost growth for the government if cost controls are not robust. Other contract types like Cost Plus Incentive Fee (CPIF) or Cost Plus Award Fee (CPAF) introduce performance incentives. For well-defined software development, FFP is often preferred for cost certainty, but for novel or complex systems like advanced targeting software, CPFF or incentive-based cost-plus contracts are frequently employed.

What is Applied Research Associates, Inc.'s track record with the Department of Defense, particularly in software development?

Applied Research Associates, Inc. (ARA) has a history of contracting with the Department of Defense. While specific details on their software development track record for targeting and effects software are not provided in this summary, ARA is known for its work in areas such as defense research, engineering, and scientific services. They have been involved in various projects, including those related to simulation, modeling, and advanced technologies. A comprehensive review of their past performance, including contract awards, past performance evaluations, and any reported issues, would be necessary to fully assess their suitability and reliability for this specific contract.

What are the potential risks associated with the 'Ammunition (except Small Arms) Manufacturing' classification for this software contract?

The classification 'Ammunition (except Small Arms) Manufacturing' suggests the software is directly linked to the development, testing, simulation, or production oversight of munitions. Potential risks include the sensitive nature of the technology, which may involve export controls or require stringent security protocols. Furthermore, if the software is intended for manufacturing processes, any defects or inaccuracies could lead to production errors, safety concerns, or compromised munition performance. The government bears the risk of ensuring the software accurately models or supports the intended munition characteristics and manufacturing standards.

How does the $20.6 million award compare to historical Air Force spending on similar targeting or effects software?

Without access to historical spending databases or specific program details, it is difficult to provide a precise comparison. However, $20.6 million is a substantial investment for a single software development contract, even within the defense sector. The Air Force, like other branches of the DoD, invests heavily in advanced technologies, including sophisticated software for command and control, intelligence, surveillance, reconnaissance (ISR), and weapon systems. The cost is influenced by factors such as complexity, novelty, required security clearances, and the specific capabilities being developed. This award likely represents a significant upgrade or new capability in targeting and effects analysis for the Air Force.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Ammunition (except Small Arms) Manufacturing

Product/Service Code: SPECIAL STUDIES/ANALYSIS, NOT R&D › SPECIAL STUDIES - NOT R and D

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 4300 SAN MATEO BLVD NE STE A-220, ALBUQUERQUE, NM, 87110

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $20,557,630

Exercised Options: $20,557,630

Current Obligation: $20,557,630

Subaward Activity

Number of Subawards: 21

Total Subaward Amount: $6,718,384

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA865621DA007

IDV Type: IDC

Timeline