KIHOMAC Inc. awarded $25.4M contract for ALQ-161 transmitter redesign, raising value-for-money questions

Contract Overview

Contract Amount: $25,358,648 ($25.4M)

Contractor: Kihomac Inc

Awarding Agency: Department of Defense

Start Date: 2016-07-29

End Date: 2020-07-30

Contract Duration: 1,462 days

Daily Burn Rate: $17.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: IGF::OT::IGF REDESIGN OF ALQ-161 BAND 7 TRANSMITTER

Place of Performance

Location: SPRINGFIELD, FAIRFAX County, VIRGINIA, 22151

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $25.4 million to KIHOMAC INC for work described as: IGF::OT::IGF REDESIGN OF ALQ-161 BAND 7 TRANSMITTER Key points: 1. Contract value appears high relative to the duration and scope, suggesting potential for cost efficiencies. 2. The sole-source nature of this delivery order limits competitive pressure on pricing. 3. Performance risks are moderate, given the technical nature of electronic warfare system upgrades. 4. This contract falls within the broader category of defense electronics and engineering services. 5. The Air Force's reliance on specific contractors for specialized equipment warrants scrutiny. 6. Limited public data makes a comprehensive value-for-money assessment challenging.

Value Assessment

Rating: questionable

The contract's total value of $25.4 million over approximately four years for the redesign of a transmitter component raises concerns about value for money. Without detailed breakdowns of labor hours, material costs, and profit margins, it's difficult to benchmark against similar engineering efforts. The cost-plus-fixed-fee (CPFF) contract type can sometimes lead to higher costs if not closely managed, as contractor incentives may lean towards spending rather than efficiency. Further analysis of the specific technical requirements and the complexity of the ALQ-161 system is needed to fully assess if the price reflects a fair market value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: unknown

The provided data indicates the contract was awarded as a 'Delivery Order' under a larger contract, and the competition level is listed as 'FULL AND OPEN COMPETITION'. However, the specific details of how this particular delivery order was competed are not elaborated. It's unclear if multiple proposals were solicited for this specific task or if it was awarded to an incumbent based on pre-existing contract terms. The presence of '2' under 'no' (number of offers) suggests some level of competition, but the extent and nature of this competition are not fully detailed.

Taxpayer Impact: When a contract is awarded through full and open competition with multiple bidders, taxpayers generally benefit from lower prices due to competitive pressures. However, if the competition was limited in practice for this specific delivery order, taxpayers may have paid a premium.

Public Impact

The primary beneficiaries are the Department of Defense and specifically the Air Force, which receives upgraded electronic warfare capabilities. The contract delivers engineering services for the redesign of the ALQ-161 Band 7 transmitter, crucial for aircraft survivability. Geographic impact is likely concentrated around Air Force bases where the ALQ-161 system is deployed or maintained. Workforce implications include specialized engineers and technicians employed by KIHOMAC Inc. and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contract type can incentivize higher spending if not rigorously overseen.
Lack of detailed cost breakdowns hinders independent value-for-money assessments.
Limited information on the specific competition for this delivery order makes it hard to gauge price discovery.
The technical complexity of electronic warfare systems can obscure cost drivers.
Potential for scope creep in redesign efforts without strict change control.

Positive Signals

Awarded under a 'Full and Open Competition' framework, suggesting an initial intent for broad market participation.
The contract addresses a critical defense need for electronic warfare system upgrades.
KIHOMAC Inc. is a known entity in defense contracting, implying some level of established capability.
The delivery order has a defined period of performance, providing a timeframe for completion.

Sector Analysis

This contract falls within the Defense Electronics and Engineering Services sector. The market for electronic warfare systems is highly specialized, dominated by a few large defense contractors and niche engineering firms. Spending in this area is driven by evolving threat landscapes and the need for advanced military capabilities. Comparable spending benchmarks would typically involve other contracts for radar, jamming, or communication system redesigns, often valued in the tens to hundreds of millions of dollars depending on system complexity and scale.

Small Business Impact

The provided data does not indicate any small business set-aside provisions for this contract (ss=false, sb=false). Therefore, it is unlikely that small businesses were specifically targeted for this award. KIHOMAC Inc. is likely a large business. There is no information available regarding subcontracting plans or their impact on the small business ecosystem for this specific contract.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. As a delivery order under a larger contract, existing oversight mechanisms would apply. Transparency is limited by the proprietary nature of defense contracting and the lack of detailed public cost breakdowns. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

ALQ-161 Electronic Warfare System
Defense Engineering Services
Air Force Aircraft Modernization Programs
Electronic Warfare Transmitter Redesign

Risk Flags

Cost-plus-fixed-fee contract type
Limited transparency on specific competition for delivery order
High contract value for component redesign
Technical complexity of EW systems

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $25.4 million to KIHOMAC INC. IGF::OT::IGF REDESIGN OF ALQ-161 BAND 7 TRANSMITTER

Who is the contractor on this award?

The obligated recipient is KIHOMAC 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 $25.4 million.

What is the period of performance?

Start: 2016-07-29. End: 2020-07-30.

What is KIHOMAC Inc.'s track record with the Department of Defense, particularly on similar electronic warfare contracts?

KIHOMAC Inc. has a history of contracting with the Department of Defense, primarily in engineering and technical services. While specific details on their performance for the ALQ-161 transmitter redesign are not publicly available, their presence in the defense sector suggests experience with complex military systems. Analyzing past performance reviews, contract modifications, and any past performance issues on similar projects would provide a clearer picture of their reliability and capability. However, without access to detailed contract performance databases or IG reports specific to KIHOMAC, a comprehensive assessment remains challenging. Their ability to secure this delivery order implies they met initial qualification criteria, but does not guarantee exceptional performance or value.

How does the $25.4 million cost compare to similar transmitter redesign contracts within the DoD?

Benchmarking the $25.4 million cost for the ALQ-161 transmitter redesign against similar contracts is difficult without more specific technical details and cost breakdowns. Transmitter redesigns can vary significantly in complexity, involving hardware, software, and integration efforts. Contracts for similar electronic warfare components have ranged from a few million to tens of millions of dollars. Factors like the specific frequency bands, power requirements, technological obsolescence addressed, and the required reliability levels heavily influence cost. The CPFF structure also means the final cost is tied to actual expenses plus a fixed fee, making direct comparison to fixed-price contracts less straightforward. A detailed analysis of the scope of work and the technical challenges overcome would be necessary for a robust comparison.

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

The primary risks associated with this contract likely include technical challenges in redesigning a critical electronic warfare component, potential cost overruns due to the CPFF structure, schedule delays, and integration issues with the broader ALQ-161 system. Managing these risks would typically involve rigorous technical reviews, milestone tracking, proactive risk identification by both the contractor and the government, and strong program management oversight. The Air Force's contracting officers are responsible for monitoring performance, approving expenditures, and ensuring the contractor adheres to the contract terms. The effectiveness of these management strategies is often reflected in contract performance reports and any modifications or claims filed during the contract period.

What is the historical spending pattern for the ALQ-161 system or similar electronic warfare upgrades by the Air Force?

Historical spending on the ALQ-161 system and similar electronic warfare upgrades by the Air Force indicates a consistent investment in maintaining and enhancing aircraft survivability. The ALQ-161 itself is an older system, suggesting that upgrades like this transmitter redesign are part of a lifecycle sustainment and modernization effort. Over the years, the Air Force has allocated significant budgets towards electronic warfare capabilities, often through multiple contracts for different components, software updates, and system integration. Specific figures for the ALQ-161 program are not readily available in public databases, but the overall trend shows a sustained need for such technologies, with spending fluctuating based on modernization priorities and threat assessments.

How does the 'Delivery Order' mechanism impact competition and cost for this specific contract?

A Delivery Order (DO) is typically issued against an existing indefinite-delivery, indefinite-quantity (IDIQ) contract or a similar multiple-award contract. While the underlying IDIQ contract may have been awarded competitively, individual DOs can sometimes be awarded with less direct competition, depending on the terms of the IDIQ and the specific task order. In this case, it was stated as 'FULL AND OPEN COMPETITION' for the overall contract, but the number of offers for this specific DO was '2'. This suggests some level of competition, but potentially less than what might be expected in a purely competitive bid for a standalone project. The DO mechanism can offer flexibility and speed but may not always yield the lowest possible price compared to a fully competed, standalone contract.

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

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 2100 RESTON PKWY STE 310, RESTON, VA, 20191

Business Categories: 8(a) Program Participant, Asian Pacific American Owned Business, Category Business, Corporate Entity Not Tax Exempt, DoT Certified Disadvantaged Business Enterprise, Manufacturer of Goods, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $25,358,648

Exercised Options: $25,358,648

Current Obligation: $25,358,648

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $22,355,154

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA822212D0013

IDV Type: IDC

Timeline