DoD's $347M radar contract to Vertex Aerospace LLC shows fair value, but limited competition raises concerns

Contract Overview

Contract Amount: $34,701,635 ($34.7M)

Contractor: Vertex Aerospace LLC

Awarding Agency: Department of Defense

Start Date: 2017-11-01

End Date: 2018-10-31

Contract Duration: 364 days

Daily Burn Rate: $95.3K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST NO FEE

Sector: Defense

Official Description: THESE RADARS ARE COMPLEX, MULTI-MISSION SYSTEMS WITH ELABORATE COMMAND, CONTROL, COMPUTER, AND COMMUNICATIONS INTERFACES AND SUPPORT SUB-SYSTEMS. THEY ARE FORWARD DEPLOYED ASSETS THAT DO NOT HAVE TRADITIONAL "HOMEPORTS" AND DO NOT VISIT, NOR RETURN TO, US PORTS.

Place of Performance

Location: PATRICK AFB, BREVARD County, FLORIDA, 32925

State: Florida Government Spending

Plain-Language Summary

Department of Defense obligated $34.7 million to VERTEX AEROSPACE LLC for work described as: THESE RADARS ARE COMPLEX, MULTI-MISSION SYSTEMS WITH ELABORATE COMMAND, CONTROL, COMPUTER, AND COMMUNICATIONS INTERFACES AND SUPPORT SUB-SYSTEMS. THEY ARE FORWARD DEPLOYED ASSETS THAT DO NOT HAVE TRADITIONAL "HOMEPORTS" AND DO NOT VISIT, NOR RETURN TO, US PORTS. Key points: 1. The contract's value appears reasonable given the complex nature of multi-mission radar systems. 2. Limited competition may have impacted price discovery and potentially increased costs for taxpayers. 3. The forward-deployed nature of these assets suggests unique operational and logistical considerations. 4. Performance context is difficult to assess without specific metrics on radar system readiness and effectiveness. 5. This contract falls within the 'Other Scientific and Technical Consulting Services' category, indicating a focus on specialized support. 6. The absence of small business set-asides warrants further investigation into subcontracting opportunities.

Value Assessment

Rating: fair

The total contract value of $347 million for advanced radar systems and support is substantial. Benchmarking this against similar complex defense procurements is challenging due to the unique nature of forward-deployed, multi-mission radar assets. However, the Cost No Fee (CNF) contract type suggests that the contractor bears the financial risk for cost overruns, which can be a positive indicator of value if managed effectively. Without detailed performance metrics, a definitive assessment of value-for-money is difficult, but the price appears within a plausible range for such specialized technology.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. However, the provided data does not specify the number of bidders that participated in the competition. A high level of competition typically leads to better pricing and innovation. The absence of this detail limits a thorough assessment of how effectively competition drove value in this instance.

Taxpayer Impact: While full and open competition is generally beneficial for taxpayers, the lack of information on the number of bidders prevents a precise assessment of the competitive intensity and its impact on cost savings.

Public Impact

The primary beneficiaries are the Department of Defense, specifically the Air Force, through the provision of advanced radar capabilities. The services delivered likely include the maintenance, sustainment, and potentially upgrade of complex radar systems essential for national security. Geographic impact is global, as these are forward-deployed assets operating in various theaters of operation. Workforce implications include the need for highly skilled technical personnel to operate, maintain, and support these sophisticated systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific performance metrics makes it hard to gauge true value for money.
Limited information on the number of bidders hinders assessment of competitive pressure on pricing.
The 'Other Scientific and Technical Consulting Services' NAICS code is broad and may obscure the specific technical nature of the work.
No small business participation noted, potentially limiting opportunities for smaller firms in the defense industrial base.

Positive Signals

Awarded under full and open competition, theoretically allowing for broad market participation.
Cost No Fee (CNF) contract type places financial risk on the contractor, potentially protecting taxpayer funds.
Vertex Aerospace LLC is a known entity in aerospace services, suggesting some level of established capability.
The contract supports critical, forward-deployed defense assets, indicating strategic importance.

Sector Analysis

The defense sector, particularly within aerospace and advanced technology, is characterized by high R&D costs, long procurement cycles, and significant government investment. Contracts for complex systems like multi-mission radars are often awarded through competitive processes, but specialized capabilities can sometimes lead to fewer bidders. The market size for such advanced defense systems is substantial, driven by evolving geopolitical landscapes and technological advancements. This contract fits within the broader category of defense readiness and sustainment, ensuring critical operational capabilities are maintained.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss=false, sb=false). This suggests that the primary award was made to a large business, Vertex Aerospace LLC. While full and open competition was utilized, the lack of specific small business set-asides or reported subcontracting plans means that opportunities for small businesses to participate in this significant contract may be limited. Further analysis would be needed to determine if subcontracting goals were established or met.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. Accountability measures are typically embedded within the contract terms, including performance standards and reporting requirements. Transparency is facilitated through contract databases like FPDS. Inspector General (IG) jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract's execution.

Related Government Programs

Air Force Radar Modernization Programs
DoD Command, Control, Communications, Computers, and Intelligence (C4I) Systems
Advanced Surveillance and Reconnaissance Systems
Defense Logistics and Sustainment Contracts
Aerospace Engineering and Technical Services

Risk Flags

Potential for cost overruns despite CNF structure if scope creep occurs.
Risk of performance issues due to complexity and forward deployment.
Limited competition may have led to suboptimal pricing.
Lack of transparency on number of bidders.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $34.7 million to VERTEX AEROSPACE LLC. THESE RADARS ARE COMPLEX, MULTI-MISSION SYSTEMS WITH ELABORATE COMMAND, CONTROL, COMPUTER, AND COMMUNICATIONS INTERFACES AND SUPPORT SUB-SYSTEMS. THEY ARE FORWARD DEPLOYED ASSETS THAT DO NOT HAVE TRADITIONAL "HOMEPORTS" AND DO NOT VISIT, NOR RETURN TO, US PORTS.

Who is the contractor on this award?

The obligated recipient is VERTEX AEROSPACE 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 $34.7 million.

What is the period of performance?

Start: 2017-11-01. End: 2018-10-31.

What is Vertex Aerospace LLC's track record with similar complex defense systems contracts?

Vertex Aerospace LLC has a history of providing aviation and aerospace services to the Department of Defense. While specific details on their experience with multi-mission radar systems of this complexity are not immediately available from the provided data, their general involvement in defense contracting suggests a baseline understanding of military procurement processes and operational requirements. Further investigation into their past performance on contracts involving advanced electronic systems, command and control, or communication interfaces would be necessary to fully assess their capability and reliability for this specific radar contract. Reviewing past performance evaluations and any contract awards for similar technical services would provide a clearer picture of their track record.

How does the $347 million contract value compare to similar multi-mission radar procurements?

Directly comparing the $347 million contract value for these specific forward-deployed, multi-mission radar systems is challenging without access to detailed specifications and scope of work for comparable contracts. Radar systems vary significantly in complexity, capability (e.g., surveillance, targeting, weather), and associated support requirements. However, for advanced, complex defense systems, a multi-hundred-million-dollar value is not uncommon, especially when encompassing acquisition, integration, and long-term sustainment. Benchmarking would ideally involve comparing unit costs, total system costs, and lifecycle costs of radars with similar operational profiles and technological sophistication. The 'Other Scientific and Technical Consulting Services' NAICS code is broad, making precise comparisons difficult without further detail on the specific services rendered.

What are the primary risks associated with this contract, and how are they mitigated?

Key risks associated with this contract include technological obsolescence, integration challenges with existing command and control systems, performance degradation of forward-deployed assets, and potential cost overruns if the Cost No Fee (CNF) structure is not managed effectively by the contractor. Mitigation strategies likely involve rigorous testing and validation protocols, clear performance metrics defined in the contract, robust oversight from the Department of the Air Force, and potentially phased delivery schedules. The CNF structure itself acts as a risk mitigation tool for the government by placing financial responsibility for cost overruns on Vertex Aerospace. However, the complexity of the systems and their forward deployment could introduce unique logistical and operational risks.

What is the expected program effectiveness or return on investment for these radar systems?

The provided data does not contain specific metrics to quantify the program's effectiveness or return on investment (ROI). However, the strategic importance of multi-mission radar systems for national defense implies a high expected return in terms of enhanced situational awareness, improved threat detection, and overall operational capability for the Air Force. Effectiveness would be measured by factors such as radar uptime, accuracy, range, resistance to countermeasures, and successful integration into the broader defense network. A formal ROI calculation would likely consider the cost of the systems against the value of missions enabled, potential threat mitigation, and contribution to strategic objectives, which are qualitative rather than strictly financial measures in this context.

What have been historical spending patterns for similar radar systems or technical support services by the DoD?

Historical spending patterns for similar radar systems and technical support by the DoD are substantial and varied. The Department of Defense consistently invests billions annually in advanced sensor technologies, including radar, to maintain technological superiority. Spending on complex systems often involves large, multi-year contracts that can run into hundreds of millions or even billions of dollars, encompassing research, development, procurement, and sustainment. Contracts for technical support services, often categorized under scientific and technical consulting, also represent a significant portion of the defense budget, reflecting the need for specialized expertise to maintain and operate sophisticated military equipment. Analyzing historical data for radar programs within the Air Force or other branches would reveal trends in contract values, competition levels, and duration.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Other Scientific and Technical Consulting Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: FA702215R0006

Pricing Type: COST NO FEE (S)

Evaluated Preference: NONE

Contractor Details

Address: 555 INDUSTRIAL DR S, MADISON, MS, 39110

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $34,701,635

Exercised Options: $34,701,635

Current Obligation: $34,701,635

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA702217D0001

IDV Type: IDC

Timeline