DoD's $61.6M Electro-Optical Systems Contract Awarded to Amentum Services, Inc. for R&D

Contract Overview

Contract Amount: $61,634,095 ($61.6M)

Contractor: Amentum Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2020-11-06

End Date: 2027-08-31

Contract Duration: 2,489 days

Daily Burn Rate: $24.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: DEVELOPMENT AND SUSTAINMENT OF MARITIME ELECTRO-OPTIC INFRARED SYSTEMS FOR THE ELECTRO-OPTIC TECHNOLOGY DIVISION, NAVAL SURFACE WARFARE CENTER, CRANE DIVISION

Place of Performance

Location: CRANE, MARTIN County, INDIANA, 47522

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $61.6 million to AMENTUM SERVICES, INC. for work described as: DEVELOPMENT AND SUSTAINMENT OF MARITIME ELECTRO-OPTIC INFRARED SYSTEMS FOR THE ELECTRO-OPTIC TECHNOLOGY DIVISION, NAVAL SURFACE WARFARE CENTER, CRANE DIVISION Key points: 1. Contract focuses on research and development for maritime electro-optic infrared systems. 2. Amentum Services, Inc. secured the contract through full and open competition. 3. The contract duration extends over 2489 days, indicating a long-term need. 4. Performance is situated in Indiana, potentially impacting the local workforce. 5. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. 6. This award falls under the Research and Development in Physical, Engineering, and Life Sciences NAICS code. 7. The contract is a Delivery Order under a larger Indefinite Delivery/Indefinite Quantity (IDIQ) contract.

Value Assessment

Rating: fair

Benchmarking the value of this Cost Plus Fixed Fee (CPFF) contract is challenging without detailed cost breakdowns. CPFF contracts can incentivize contractors to increase costs to achieve a higher fee, potentially leading to less value for money if not rigorously overseen. However, for complex R&D efforts where costs are inherently uncertain, CPFF can be appropriate. A comparison to similar R&D contracts for electro-optical systems would be necessary to determine if the pricing is competitive.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple bidders had the opportunity to submit proposals. The presence of four bids indicates a reasonable level of competition for this specialized R&D requirement. While full and open competition generally promotes price discovery and potentially lower costs, the CPFF structure means the final price is not fixed upfront, making direct price comparisons less straightforward.

Taxpayer Impact: Taxpayers benefit from the potential for competitive pricing inherent in full and open competition, although the CPFF structure requires careful oversight to ensure costs remain reasonable.

Public Impact

The primary beneficiaries are the Naval Surface Warfare Center, Crane Division, and the broader U.S. Navy, which will receive advanced maritime electro-optic infrared systems. The contract will deliver research, development, and sustainment services for critical defense technologies. Geographic impact is concentrated in Indiana, where Amentum Services, Inc. will perform the work, potentially creating or sustaining high-skilled jobs. The contract supports the development of advanced defense capabilities, enhancing national security.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The Cost Plus Fixed Fee (CPFF) contract type carries inherent risks of cost escalation if not managed with stringent oversight.
The long duration of the contract (over 6 years) increases the potential for scope creep and evolving requirements that may not be fully captured in the initial pricing.
Lack of specific performance metrics or clear deliverables in the provided data makes it difficult to assess the contractor's performance trajectory.
The specialized nature of electro-optical systems means that technological obsolescence is a potential risk over the contract's lifespan.

Positive Signals

Awarded through full and open competition, indicating a robust bidding process and potential for competitive pricing.
The contractor, Amentum Services, Inc., likely possesses specialized expertise required for advanced R&D in electro-optics.
The contract supports critical national defense capabilities, aligning with strategic government objectives.
The long contract duration suggests a stable, long-term partnership for developing and sustaining vital systems.

Sector Analysis

This contract falls within the Research and Development (R&D) sector, specifically focusing on physical, engineering, and life sciences. The market for defense-related electro-optical and infrared systems is highly specialized, driven by government procurement. Comparable spending benchmarks would involve analyzing other R&D contracts for advanced sensor technologies and defense systems awarded by agencies like the Department of Defense, NASA, or other allied nations. The total value of $61.6 million over approximately 6.7 years positions this as a significant, albeit niche, R&D investment.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (sb: false) and did not involve small business subcontracting goals (ss: false). Therefore, this specific award does not directly contribute to small business set-aside targets. The focus is on a large prime contractor, Amentum Services, Inc., which may or may not engage small businesses as subcontractors for specialized components or services. Further analysis of subcontracting plans would be needed to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily reside with the Naval Surface Warfare Center, Crane Division, and the Department of Defense. As a Cost Plus Fixed Fee contract, rigorous financial oversight is crucial to monitor expenditures and ensure the fixed fee is justified. Accountability measures would be tied to the delivery of research and development milestones and system performance. Transparency is typically managed through contract reporting requirements and potential Freedom of Information Act (FOIA) requests, though specific R&D details may be sensitive. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Naval Surface Warfare Center Programs
Department of Defense Research and Development
Electro-Optical Systems Procurement
Defense Advanced Research Projects Agency (DARPA) Projects
Tactical Sensor Development

Risk Flags

Cost Overrun Risk (CPFF)
Technical Obsolescence
Long Contract Duration Risks
Performance Monitoring Challenges

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $61.6 million to AMENTUM SERVICES, INC.. DEVELOPMENT AND SUSTAINMENT OF MARITIME ELECTRO-OPTIC INFRARED SYSTEMS FOR THE ELECTRO-OPTIC TECHNOLOGY DIVISION, NAVAL SURFACE WARFARE CENTER, CRANE DIVISION

Who is the contractor on this award?

The obligated recipient is AMENTUM SERVICES, 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 $61.6 million.

What is the period of performance?

Start: 2020-11-06. End: 2027-08-31.

What is Amentum Services, Inc.'s track record with similar R&D contracts, particularly in electro-optics?

Amentum Services, Inc. has a significant history of performing complex R&D and sustainment services for the Department of Defense and other government agencies. While specific details on their electro-optical R&D portfolio require deeper database analysis, their general profile suggests experience in areas like aerospace, defense systems, and technology integration. Their performance on previous contracts, including any cost overruns or schedule delays, would be critical indicators. Examining past performance evaluations and contract awards within the same or adjacent technical domains would provide a clearer picture of their capabilities and reliability for this specific maritime electro-optic infrared systems contract.

How does the $61.6 million value compare to similar R&D efforts in maritime electro-optics?

The $61.6 million value for a contract spanning nearly seven years (2489 days) for the development and sustainment of maritime electro-optic infrared systems appears to be within a reasonable range for specialized defense R&D. However, a precise comparison requires benchmarking against contracts with similar technical scope, system complexity, and technological maturity. Factors such as the number of systems to be developed, the level of innovation required, and the specific performance characteristics sought (e.g., range, resolution, environmental resilience) significantly influence cost. Without access to detailed cost breakdowns or a broader dataset of comparable contracts, it's difficult to definitively state if this represents excellent or questionable value, but it does not appear to be an outlier for a multi-year, high-technology R&D effort.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for R&D?

The primary risk with a CPFF contract, especially for R&D, is the potential for cost escalation. The contractor is reimbursed for allowable costs plus a fixed fee, which is a predetermined profit amount. If costs increase beyond initial estimates, the government pays the higher costs, while the contractor's profit remains fixed. This can disincentivize cost control by the contractor. For R&D, where technical challenges and unforeseen issues are common, estimating costs accurately is difficult. This necessitates robust government oversight to scrutinize costs, ensure they are reasonable and allocable to the contract, and prevent unnecessary expenditures. Without diligent oversight, the government could end up paying significantly more than anticipated.

How effective are R&D contracts like this in delivering advanced defense capabilities?

R&D contracts are crucial for developing advanced defense capabilities, enabling military forces to maintain a technological edge. Contracts like this one, focused on specific systems like maritime electro-optic infrared, aim to enhance surveillance, targeting, and situational awareness. The effectiveness hinges on several factors: clear requirements, realistic timelines, adequate funding, strong contractor performance, and rigorous testing and evaluation. When these elements align, such contracts can lead to significant technological advancements. However, R&D is inherently uncertain; projects can face technical hurdles, delays, or fail to meet initial objectives. The success of this specific contract will depend on the execution by Amentum Services, Inc. and the oversight provided by NSWC Crane.

What are the historical spending patterns for maritime electro-optic systems within the DoD?

Historical spending patterns for maritime electro-optic systems within the DoD show a consistent and significant investment driven by the need for advanced situational awareness and targeting capabilities in naval operations. This spending typically spans research, development, procurement, and sustainment phases. Budgets are influenced by geopolitical threats, technological advancements, and platform modernization programs. Agencies like the Navy, Marine Corps, and Coast Guard are major spenders in this area. While specific figures fluctuate annually based on defense priorities and budget allocations, the trend indicates a sustained commitment to maintaining and improving these critical sensor technologies. This contract represents a portion of that ongoing investment.

What is the significance of the NAICS code 541715 (Research and Development in the Physical, Engineering, and Life Sciences)?

NAICS code 541715 signifies that the contract's primary purpose is dedicated to conducting research and development activities within the physical sciences (like optics and physics), engineering disciplines, and life sciences. This classification indicates a focus on innovation, experimentation, and the creation of new knowledge or technologies, rather than the production of existing goods or standard services. Contracts under this code often involve high levels of technical expertise, specialized facilities, and a degree of uncertainty regarding outcomes. For this specific contract, it confirms the R&D nature of developing advanced electro-optic infrared systems, distinguishing it from contracts focused solely on manufacturing or basic support.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 4

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Pae-Parsons Global Logistics Services, LLC

Address: 4800 WESTFIELDS BLVD STE 400, CHANTILLY, VA, 20151

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

Financial Breakdown

Contract Ceiling: $88,367,974

Exercised Options: $88,367,974

Current Obligation: $61,634,095

Actual Outlays: $5,135,135

Subaward Activity

Number of Subawards: 93

Total Subaward Amount: $28,196,953

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA807518D0014

IDV Type: IDC

Timeline