Dod's $28.1M Tunner Loader Overhaul Contract Awarded to DRS Sustainment Systems, Inc. for Industrial Machinery

Contract Overview

Contract Amount: $28,124,023 ($28.1M)

Contractor: DRS Sustainment Systems, Inc

Awarding Agency: Department of Defense

Start Date: 2022-12-14

End Date: 2023-07-31

Contract Duration: 229 days

Daily Burn Rate: $122.8K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIXED PRICE INCENTIVE

Sector: Defense

Official Description: TUNNER LOADER OVERHAUL

Place of Performance

Location: WEST PLAINS, HOWELL County, MISSOURI, 65775

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $28.1 million to DRS SUSTAINMENT SYSTEMS, INC for work described as: TUNNER LOADER OVERHAUL Key points: 1. Value for money appears fair given the fixed-price incentive structure, which aims to control costs. 2. Competition dynamics were robust, with a full and open competition indicating a healthy market. 3. Risk indicators are moderate, with a fixed-price incentive contract type that can shift some risk to the contractor. 4. Performance context is specific to the Air Force's need for loader overhauls. 5. Sector positioning is within industrial machinery manufacturing, a critical support function for military operations.

Value Assessment

Rating: fair

The contract's total value of $28.1 million for the overhaul of TUNNER loaders appears within a reasonable range for specialized heavy equipment maintenance. Benchmarking against similar complex overhaul contracts is challenging without more specific service details, but the fixed-price incentive (FPI) structure suggests an effort to achieve cost efficiencies. The base price and incentive targets would be key to a more precise value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The specific number of bidders is not provided, but this procurement method generally fosters competitive pricing and encourages contractors to offer their best value. The Air Force's decision to use full and open competition suggests confidence in the market's ability to meet the requirement.

Taxpayer Impact: A full and open competition is beneficial for taxpayers as it typically leads to more competitive pricing and a wider range of solutions, potentially reducing overall expenditure.

Public Impact

The primary beneficiaries are the U.S. Air Force units requiring operational TUNNER loaders. The services delivered include the overhaul and refurbishment of specialized heavy machinery. The geographic impact is likely concentrated at Air Force installations where these loaders are maintained and operated. Workforce implications include skilled technicians and mechanics involved in the overhaul process.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if incentive targets are not met effectively.
Dependence on a single contractor for a critical overhaul service could pose supply chain risks.
Ensuring consistent quality across all overhauled units requires robust inspection and acceptance processes.

Positive Signals

Full and open competition suggests a healthy market and potential for competitive pricing.
Fixed-price incentive contract type aligns contractor and government interests in cost control.
Award to DRS SUSTAINMENT SYSTEMS, INC. leverages established contractor expertise in defense systems.

Sector Analysis

The contract falls within the Industrial Truck, Tractor, Trailer, and Stacker Machinery Manufacturing sector, a niche but vital part of the defense industrial base. This sector supports the logistics and operational readiness of military forces by providing and maintaining specialized ground support equipment. Spending in this area is often project-specific, tied to fleet modernization, maintenance schedules, and operational demands.

Small Business Impact

There is no indication that this contract included small business set-asides. The prime contractor, DRS SUSTAINMENT SYSTEMS, INC., is a large business. Subcontracting opportunities for small businesses may exist, but they are not explicitly detailed in the provided data. The overall impact on the small business ecosystem for this specific contract appears minimal unless significant subcontracting occurs.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant Air Force program management office. Accountability measures are embedded within the contract terms, including performance standards and payment schedules tied to milestones and quality. Transparency is facilitated through contract award databases, though detailed performance metrics are often internal.

Related Government Programs

Ground Support Equipment Maintenance
Heavy Equipment Overhaul Services
Defense Logistics Modernization
Industrial Machinery Repair

Risk Flags

Potential for cost growth due to FPI structure
Availability of specialized parts for overhaul
Complexity of overhaul may reveal unforeseen issues

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.1 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 $28.1 million.

What is the period of performance?

Start: 2022-12-14. End: 2023-07-31.

What is the historical spending pattern for TUNNER loader overhauls by the Department of Defense?

Analyzing historical spending for TUNNER loader overhauls requires access to detailed procurement data over multiple fiscal years. Without specific historical contract awards for this exact service, it's difficult to establish a precise spending pattern. However, the Department of Defense generally allocates significant funds towards maintaining its fleet of specialized vehicles and equipment. Spending on overhauls is often cyclical, driven by the lifecycle of the equipment, operational tempo, and budget allocations. A surge in spending might indicate a fleet-wide maintenance initiative or the aging of a particular equipment set. Conversely, a decline could suggest a transition to newer equipment or a shift in maintenance strategies. Further analysis would involve querying databases like FPDS or SAM.gov for similar contracts awarded over the past 5-10 years to identify trends in volume and value.

How does the fixed-price incentive (FPI) contract type compare to other contract types for similar overhaul services?

The Fixed-Price Incentive (FPI) contract type is designed to share cost risks and savings between the government and the contractor. In an FPI contract, there's a target cost, a target profit, and a price ceiling. If the final cost is below the target, both parties share in the savings according to a predetermined formula. If the final cost exceeds the target but remains below the ceiling, the contractor absorbs a portion of the overrun. If the cost exceeds the ceiling, the contractor is responsible for the entire excess. For overhaul services, FPI offers a balance: it provides cost control incentives for the contractor while allowing for some flexibility if unforeseen issues arise, which are common in complex overhauls. This contrasts with Firm-Fixed-Price (FFP), where the contractor bears all cost risk, potentially leading to higher initial bids to account for uncertainty, or Cost-Plus-Fixed-Fee (CPFF), where the government bears most of the cost risk and the contractor has less incentive to control costs.

What is DRS SUSTAINMENT SYSTEMS, INC.'s track record with similar large-scale equipment overhaul contracts?

DRS SUSTAINMENT SYSTEMS, INC. has a significant track record in providing sustainment and overhaul services for various defense systems. While specific details on TUNNER loader overhauls would require deeper investigation, the company is known for its work on complex military platforms, including vehicles, electronics, and weapon systems. Their experience often involves managing intricate supply chains, employing specialized technical expertise, and adhering to stringent military specifications. Past performance evaluations and contract awards for similar large-scale overhaul or sustainment programs would provide a clearer picture of their capabilities, efficiency, and reliability in executing such projects. Reviewing their contract history for programs involving heavy vehicle maintenance or complex system integration would be pertinent.

What are the key performance indicators (KPIs) likely used to measure the success of this TUNNER loader overhaul contract?

Key performance indicators (KPIs) for this TUNNER loader overhaul contract would likely focus on quality, timeliness, and cost control. Quality KPIs could include the percentage of units passing final inspection without defects, adherence to technical specifications, and warranty claim rates post-overhaul. Timeliness KPIs might involve meeting delivery schedules for individual units or the entire batch, and minimizing downtime during the overhaul process. Cost control KPIs would be particularly relevant given the FPI structure, focusing on the final cost relative to the target cost and the efficiency of resource utilization. Additionally, contractor performance metrics related to responsiveness, communication, and overall program management would be assessed.

Are there any known risks associated with the TUNNER loader platform itself that could impact this overhaul contract?

The TUNNER loader platform, like any complex heavy machinery, may have inherent risks that could impact overhaul contracts. These could include the availability of specific spare parts, especially for older models, which might necessitate custom fabrication or extended lead times. The complexity of the original design might also lead to unforeseen issues discovered during disassembly and inspection, potentially increasing the scope and cost of the overhaul. Furthermore, the operational environment in which these loaders are used (e.g., harsh weather, rough terrain) can contribute to wear and tear, leading to more extensive repairs than initially anticipated. The contractor's ability to identify and mitigate these platform-specific risks through thorough inspection protocols and proactive problem-solving is crucial for the contract's success.

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: $28,124,023

Exercised Options: $28,124,023

Current Obligation: $28,124,023

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