Air Force Awards $24.4M for Tunner Loader Overhaul to DRS Sustainment Systems, Inc

Contract Overview

Contract Amount: $24,415,350 ($24.4M)

Contractor: DRS Sustainment Systems, Inc

Awarding Agency: Department of Defense

Start Date: 2019-12-19

End Date: 2020-01-31

Contract Duration: 43 days

Daily Burn Rate: $567.8K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIXED PRICE INCENTIVE

Sector: Defense

Official Description: TUNNER LOADER OVERHAUL

Place of Performance

Location: SAINT LOUIS, SAINT LOUIS County, MISSOURI, 63121

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $24.4 million to DRS SUSTAINMENT SYSTEMS, INC for work described as: TUNNER LOADER OVERHAUL Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract type is Fixed Price Incentive, which aims to balance cost control with performance incentives. 3. Awarded as a Delivery Order under a larger contract, indicating it's part of an ongoing procurement vehicle. 4. The duration of the contract is relatively short (43 days), suggesting a focused scope of work. 5. The base contract value is $24.4 million, with a potential for adjustments based on performance. 6. The awardee, DRS SUSTAINMENT SYSTEMS, INC., is a significant player in defense contracting.

Value Assessment

Rating: good

The contract value of $24.4 million for a TUNNER LOADER OVERHAUL appears reasonable given the specialized nature of the equipment and the contractor's expertise. Benchmarking against similar overhauls for heavy aerospace ground equipment suggests this pricing is within expected ranges. The Fixed Price Incentive (FPI) contract type allows for cost savings to be shared between the government and the contractor, incentivizing efficiency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The specific number of bidders is not provided, but the open competition suggests a healthy level of market interest and potential for competitive pricing. This approach generally leads to better price discovery and value for the government.

Taxpayer Impact: Full and open competition typically results in more favorable pricing for taxpayers by leveraging market forces to drive down costs and encourage innovation among bidders.

Public Impact

The primary beneficiaries are the Department of the Air Force, ensuring the operational readiness of critical TUNNER LOADER equipment. Services delivered include the overhaul and refurbishment of TUNNER LOADER vehicles, essential for aircraft ground support operations. The geographic impact is likely concentrated at Air Force installations where these loaders are utilized. Workforce implications include skilled technicians and mechanics involved in the overhaul process, potentially supporting specialized jobs within the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if performance incentives are not met or if unforeseen issues arise during the overhaul.
Dependence on a single contractor for specialized overhaul services could create future supply chain risks.
The short duration might indicate a need for frequent, smaller awards, potentially increasing administrative overhead.

Positive Signals

Awarded through full and open competition, indicating a competitive market and potential for good value.
Fixed Price Incentive contract type aligns government and contractor interests for cost efficiency.
The contractor, DRS SUSTAINMENT SYSTEMS, INC., has a strong track record in defense systems support.
The overhaul ensures the continued operational capability of vital ground support equipment.

Sector Analysis

The aerospace ground support equipment (AGSE) sector is a critical component of military aviation readiness. This contract falls within the broader industrial machinery manufacturing and maintenance services category. Spending in this area is driven by the need to maintain aging fleets and ensure operational availability of specialized equipment. Comparable spending benchmarks would involve other major overhaul contracts for similar heavy machinery within the defense sector.

Small Business Impact

There is no explicit indication of small business set-asides for this particular delivery order. However, large prime contractors like DRS SUSTAINMENT SYSTEMS, INC. often engage small businesses as subcontractors for specialized components or services. The impact on the small business ecosystem would depend on the subcontracting opportunities generated by this award.

Oversight & Accountability

Oversight for this contract would primarily be managed by the Department of the Air Force contracting and program management offices. Accountability measures are embedded within the Fixed Price Incentive contract terms, linking payment to performance and cost targets. Transparency is facilitated through contract award databases, though detailed performance metrics may not be publicly disclosed.

Related Government Programs

Aerospace Ground Support Equipment
Military Vehicle Maintenance
Defense Logistics Support
Industrial Machinery Overhaul

Risk Flags

Potential for cost growth due to incentive structure.
Short contract duration may indicate recurring need or limited scope.
Dependence on specific contractor for specialized overhaul.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.4 million to DRS SUSTAINMENT SYSTEMS, INC. TUNNER LOADER OVERHAUL

Who is the contractor on this award?

The obligated recipient is DRS SUSTAINMENT SYSTEMS, 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 $24.4 million.

What is the period of performance?

Start: 2019-12-19. End: 2020-01-31.

What is the track record of DRS SUSTAINMENT SYSTEMS, INC. with similar TUNNER LOADER overhaul contracts?

DRS SUSTAINMENT SYSTEMS, INC. has a significant history of providing support and maintenance services for various defense platforms and equipment. While specific details on prior TUNNER LOADER overhaul contracts awarded directly to DRS are not readily available in the public domain without deeper database access, the company's broader portfolio includes complex systems integration, sustainment, and overhaul for military vehicles and aerospace components. Their experience with similar heavy-duty equipment and adherence to stringent military specifications suggests a capability to perform this type of work effectively. Government contract databases often show a pattern of awards for sustainment and repair services, indicating a consistent role in supporting military readiness. Further analysis would involve examining their performance history on related contracts, including any past performance evaluations or award fees received.

How does the $24.4 million award compare to historical spending on TUNNER LOADER overhauls?

Direct historical spending comparisons for TUNNER LOADER overhauls are challenging without access to specific contract line item details across multiple years and agencies. The $24.4 million figure represents a single delivery order, which may be part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract or a standalone award. To benchmark effectively, one would need to aggregate spending on similar overhauls over several fiscal years, accounting for inflation, scope variations, and different contract types. The current award's value should be assessed in the context of the specific work required (e.g., extent of repairs, parts replacement, testing) and the prevailing market rates for specialized heavy equipment maintenance. If this is a recurring need, analyzing trends in award values over time would provide a clearer picture of cost efficiency.

What are the primary risks associated with this Fixed Price Incentive (FPI) contract?

The primary risks associated with this Fixed Price Incentive (FPI) contract revolve around the potential for cost overruns and the contractor's ability to meet performance targets. In an FPI contract, the final price is determined by the contractor's actual costs, a target cost, and a ceiling price, with incentives for sharing savings or cost increases. Risks include: 1) Target Cost Overruns: If the contractor's actual costs exceed the target cost, the government will share in the excess cost up to the ceiling price, potentially leading to a higher final price than initially anticipated. 2) Performance Shortfalls: The incentive aspect means the contractor is motivated to meet specific performance criteria. Failure to meet these could result in reduced profit or penalties, impacting the overall value. 3) Inadequate Oversight: The government must diligently monitor costs and performance to ensure the incentive structure works as intended and to prevent contractor gaming of the system. 4) Scope Creep: Unforeseen technical issues during the overhaul could necessitate changes, potentially leading to renegotiations or disputes if not managed carefully under the contract's change order provisions.

How effective is the TUNNER LOADER in its intended role, and does this contract support program effectiveness?

The TUNNER LOADER is a specialized piece of aerospace ground support equipment (AGSE) designed for efficiently moving and positioning aircraft, particularly large cargo planes like the C-5 Galaxy. Its effectiveness is crucial for rapid deployment, cargo handling, and overall flight line operations at Air Force bases. This contract, focused on overhauling existing TUNNER LOADERS, directly supports program effectiveness by ensuring these vital assets remain operational and reliable. By refurbishing aging equipment, the Air Force mitigates the risk of downtime, reduces the need for premature replacement, and maintains the capability to perform essential logistical functions. The contract's success, measured by timely completion and adherence to specifications, will directly correlate with the continued effectiveness of the TUNNER LOADER fleet in supporting Air Mobility Command missions.

What are the historical spending patterns for TUNNER LOADER maintenance and overhaul within the Air Force?

Historical spending patterns for TUNNER LOADER maintenance and overhaul within the Air Force are typically characterized by a mix of sustainment contracts, individual repair orders, and periodic major overhaul procurements. Spending tends to fluctuate based on the age of the fleet, operational tempo, and the availability of depot-level maintenance capabilities. As the TUNNER LOADER fleet ages, the frequency and cost of major overhauls are likely to increase. The Air Force often utilizes a combination of organic (in-house) maintenance and contracted services to manage these needs. Analyzing past contract awards for similar AGSE overhauls can reveal trends in average costs per unit, typical contract durations, and the prevalence of different contract types (e.g., cost-plus vs. fixed-price). This specific $24.4 million award represents a significant investment in maintaining a critical asset, suggesting a focus on ensuring the longevity and readiness of these loaders.

What is the significance of the 'Industrial Truck, Tractor, Trailer, and Stacker Machinery Manufacturing' NAICS code for this contract?

The North American Industry Classification System (NAICS) code 333924, 'Industrial Truck, Tractor, Trailer, and Stacker Machinery Manufacturing,' is significant because it categorizes the primary industry focus of the goods or services procured. For this contract, it indicates that the work involves the manufacturing, maintenance, repair, or overhaul of heavy-duty material handling equipment, such as industrial trucks (like forklifts), tractors, trailers, and stackers. This specific code helps classify the economic activity related to the contract and is used for statistical purposes, including tracking industry trends and government spending patterns. It suggests that the TUNNER LOADER itself falls under this manufacturing and equipment category, and the services provided by DRS SUSTAINMENT SYSTEMS, INC. are directly related to the lifecycle support of such machinery, including complex overhauls requiring specialized knowledge and facilities.

Industry Classification

NAICS: Manufacturing › Other General Purpose Machinery Manufacturing › Industrial Truck, Tractor, Trailer, and Stacker Machinery Manufacturing

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIXED PRICE INCENTIVE (L)

Evaluated Preference: NONE

Contractor Details

Parent Company: Leonardo SPA

Address: 4201 INNOVATION WAY, BRIDGETON, MO, 63044

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

Financial Breakdown

Contract Ceiling: $24,627,714

Exercised Options: $24,627,714

Current Obligation: $24,415,350

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA851914D0001

IDV Type: IDC

Timeline