Air Force awards $7.4M for life support oxygen systems, with limited competition

Contract Overview

Contract Amount: $7,408,169 ($7.4M)

Contractor: Mission Systems Orchard Park Inc

Awarding Agency: Department of Defense

Start Date: 2024-09-30

End Date: 2027-04-29

Contract Duration: 941 days

Daily Burn Rate: $7.9K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: U2 LIFE SUPPORT OXYGEN SYSTEMS

Place of Performance

Location: ORCHARD PARK, ERIE County, NEW YORK, 14127

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $7.4 million to MISSION SYSTEMS ORCHARD PARK INC for work described as: U2 LIFE SUPPORT OXYGEN SYSTEMS Key points: 1. The contract's value of $7.4 million appears reasonable for specialized life support systems, but a direct comparison is difficult without more detailed cost breakdowns. 2. The 'NOT COMPETED' award type suggests a lack of competitive pressure, potentially leading to higher prices than a fully competed contract. 3. The duration of 941 days (approximately 2.5 years) indicates a medium-term need for these critical systems. 4. The contract is for engineering services, suggesting a focus on design, development, or modification rather than just procurement of off-the-shelf items. 5. The contractor, MISSION SYSTEMS ORCHARD PARK INC, has a track record that warrants further investigation to assess performance and pricing history on similar contracts. 6. The absence of small business set-aside flags indicates this contract was not specifically targeted to boost small business participation.

Value Assessment

Rating: fair

Benchmarking the value of this $7.4 million contract for life support oxygen systems is challenging due to the specialized nature of the equipment and the 'NOT COMPETED' award. Without comparable bids or detailed cost breakdowns, it's difficult to definitively assess if the price represents excellent value. However, the fixed fee component suggests some cost control, but the lack of competition is a primary concern for price discovery. Further analysis of the contractor's historical pricing on similar sole-source or limited-competition contracts would be beneficial.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a 'NOT COMPETED' procedure, indicating that the Department of the Air Force did not solicit bids from multiple sources. This typically occurs when only one source is capable of meeting the requirement, or in situations where urgency or specific technical expertise is paramount. The lack of competition means there was no direct price comparison from multiple vendors, which can limit the government's ability to secure the lowest possible price.

Taxpayer Impact: Taxpayers may not benefit from the cost savings typically achieved through competitive bidding. The absence of multiple bids means the government could be paying a premium for these life support oxygen systems.

Public Impact

Personnel within the Department of the Air Force, particularly aircrews and ground support staff requiring specialized life support, are the primary beneficiaries. The contract delivers essential life support oxygen systems, crucial for operational readiness and safety in various Air Force missions. The geographic impact is centered in New York, where the contractor is located, but the systems will be deployed across Air Force installations. This contract supports specialized engineering roles and potentially manufacturing jobs within the defense sector, particularly at the contractor's facility.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpricing and reduced value for taxpayer dollars.
The 'NOT COMPETED' status requires thorough justification to ensure it was indeed the only viable option.
Limited transparency into the cost build-up for specialized life support systems can obscure true value.
The fixed fee structure, while providing some cost certainty, might not incentivize the most aggressive cost reductions without competition.

Positive Signals

The contract addresses a critical need for life support systems, ensuring operational safety and effectiveness for Air Force personnel.
The contractor's specialization in this niche area suggests a high level of technical expertise required for these systems.
The fixed fee element provides a degree of cost predictability for the government over the contract's duration.

Sector Analysis

The defense sector, particularly aerospace and life support systems, is characterized by high technical barriers to entry and specialized engineering requirements. Contracts like this, often awarded on a sole-source or limited-competition basis, reflect the unique capabilities needed for mission-critical equipment. The market for such specialized life support systems is relatively small, dominated by a few key suppliers with proven track records. Spending in this area is driven by stringent safety regulations and the demanding operational environments faced by military personnel.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by the 'sb' flag being false. Consequently, there are no direct subcontracting requirements mandated for small businesses under this specific award. The lack of a set-aside means that larger, established defense contractors are the primary recipients, with limited direct opportunities for small businesses to participate in this particular contract's execution.

Oversight & Accountability

Oversight for this contract will primarily fall under the Department of the Air Force's contracting and program management offices. Accountability measures will be tied to the delivery of the specified life support oxygen systems and adherence to the contract's technical requirements and schedule. Transparency may be limited due to the sole-source nature of the award, but contract performance data and payment information are typically available through federal procurement databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Air Force Life Support Equipment Procurement
Defense Engineering Services Contracts
Aerospace Life Support Systems
Sole-Source Defense Contracts
Mission Systems Procurement

Risk Flags

Sole-source award requires strong justification.
Potential for inflated pricing due to lack of competition.
Need for robust oversight to ensure value and performance.
Dependency on a single contractor for critical life support systems.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $7.4 million to MISSION SYSTEMS ORCHARD PARK INC. U2 LIFE SUPPORT OXYGEN SYSTEMS

Who is the contractor on this award?

The obligated recipient is MISSION SYSTEMS ORCHARD PARK 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 $7.4 million.

What is the period of performance?

Start: 2024-09-30. End: 2027-04-29.

What is the track record of MISSION SYSTEMS ORCHARD PARK INC on similar government contracts, particularly sole-source or limited-competition awards?

Assessing the track record of MISSION SYSTEMS ORCHARD PARK INC is crucial given this 'NOT COMPETED' award. While specific past performance data for this exact contract is not provided, a review of federal procurement databases (like FPDS or SAM.gov) would reveal previous awards to this contractor. Key areas to investigate would include their history with life support systems, engineering services, and any prior sole-source awards. Examining past performance ratings, on-time delivery rates, and any documented disputes or contract modifications would provide insight into their reliability and capability. Understanding their pricing trends on similar sole-source contracts is also vital for assessing the current award's value.

How does the pricing structure (Cost Plus Fixed Fee) for this contract compare to industry standards for specialized life support systems?

The Cost Plus Fixed Fee (CPFF) contract type means the contractor is reimbursed for allowable costs plus a fixed fee representing profit. For specialized life support systems, CPFF is often used when the scope of work is not fully defined or involves significant research and development. While CPFF provides flexibility, it can lead to higher costs for the government compared to fixed-price contracts if costs escalate significantly. Benchmarking this specific contract's fee against similar CPFF contracts for comparable defense systems is necessary. Without detailed cost breakdowns and market data for these highly specialized oxygen systems, a definitive comparison is difficult, but the lack of competition inherently limits price pressure.

What are the specific risks associated with awarding a life support system contract on a sole-source basis?

Awarding a life support system contract on a sole-source basis carries several risks. Primarily, there is a significant risk of overpayment due to the absence of competitive bidding, which typically drives down prices. This lack of competition can also reduce the incentive for the contractor to innovate or improve efficiency, as they face no direct market pressure. Furthermore, sole-source awards can create a dependency on a single supplier, making the government vulnerable to supply chain disruptions or price increases in the future. Ensuring the sole-source justification is robust and that stringent oversight is applied is critical to mitigating these risks.

What is the historical spending pattern for life support oxygen systems within the Department of the Air Force, and how does this contract fit?

Historical spending on life support oxygen systems within the Department of the Air Force likely fluctuates based on fleet modernization, new aircraft acquisitions, and replacement cycles for aging equipment. Without specific historical data for this category, it's presumed that such systems represent a consistent, albeit niche, expenditure due to their critical safety function. This $7.4 million contract for engineering services related to these systems appears to be a medium-sized award within this category. Understanding the total annual spend on similar systems and the frequency of such awards would provide context for whether this contract represents a typical investment or an outlier.

What are the implications of the 941-day duration for the delivery and sustainment of these life support oxygen systems?

A contract duration of 941 days (approximately 2.5 years) for life support oxygen systems suggests a medium-term project. This timeframe likely encompasses design, development, testing, initial production, and delivery phases. For the Air Force, this duration implies a planned integration into specific aircraft or operational platforms over this period. It also means that sustainment and maintenance planning will need to commence towards the end of this period to ensure continuous availability of these critical systems. The extended duration, coupled with sole-source award, necessitates careful monitoring to ensure timely progress and prevent cost overruns.

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: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: FA852820R0003

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: AI Convoy Topco & CY S.C.A.

Address: 10 COBHAM DR, ORCHARD PARK, NY, 14127

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $7,408,169

Exercised Options: $7,408,169

Current Obligation: $7,408,169

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA852821D0003

IDV Type: IDC

Timeline