Air Force awards $20.6M for Halvorsen Loader Overhaul to DRS Sustainment Systems, Inc

Contract Overview

Contract Amount: $20,640,557 ($20.6M)

Contractor: DRS Sustainment Systems, Inc

Awarding Agency: Department of Defense

Start Date: 2025-09-15

End Date: 2027-02-18

Contract Duration: 521 days

Daily Burn Rate: $39.6K/day

Competition Type: NOT COMPETED

Pricing Type: FIXED PRICE INCENTIVE

Sector: Defense

Official Description: HALVORSEN LOADER OVERHAUL

Place of Performance

Location: BRIDGETON, SAINT LOUIS County, MISSOURI, 63044

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $20.6 million to DRS SUSTAINMENT SYSTEMS, INC for work described as: HALVORSEN LOADER OVERHAUL Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. The contract type is Fixed Price Incentive, which can shift risk to the contractor but may lead to higher costs if targets are missed. 3. The duration of 521 days suggests a significant overhaul or modernization effort. 4. The award is a Delivery Order under an existing contract, indicating a pre-existing relationship and potentially streamlined procurement. 5. The industrial equipment manufacturing sector is characterized by specialized needs and often limited supplier bases. 6. No small business set-aside was applied, suggesting the contractor was selected based on specific capabilities.

Value Assessment

Rating: fair

Benchmarking the value of this specific contract is challenging without comparable sole-source awards for Halvorsen Loader overhauls. The Fixed Price Incentive (FPI) contract type introduces complexity; while it aims to incentivize contractor performance, it also carries the risk of cost overruns if performance targets are not met. The total obligated amount of $20.6 million for a 521-day period requires careful monitoring to ensure cost efficiency throughout the performance period.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning that competition was not sought from multiple vendors. This approach is typically used when a specific contractor possesses unique capabilities, proprietary technology, or when urgency dictates a rapid award. The lack of competition means that the government did not benefit from the price discovery mechanisms inherent in a competitive bidding process, potentially leading to higher costs than if multiple offers had been solicited.

Taxpayer Impact: Taxpayers may face higher costs due to the absence of competitive pressure. Without competing bids, there is less assurance that the price reflects the best possible value achievable in the market.

Public Impact

The primary beneficiaries are the U.S. Air Force units requiring operational Halvorsen loaders. The services delivered involve the overhaul and maintenance of critical ground support equipment. The geographic impact is likely concentrated at Air Force bases where these loaders are utilized. Workforce implications may include specialized technicians for the overhaul process, potentially within DRS Sustainment Systems or its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing.
Fixed Price Incentive contract type carries risk of cost overruns.
Lack of transparency in pricing due to limited competition.

Positive Signals

Award to an established contractor (DRS Sustainment Systems) may indicate reliability.
Delivery Order under an existing contract suggests a streamlined process.
Focus on overhauling essential equipment ensures operational readiness.

Sector Analysis

The industrial truck, tractor, trailer, and stacker machinery manufacturing sector is a niche within broader industrial manufacturing. Companies in this space often produce specialized equipment for logistics, material handling, and defense applications. The market size for such specialized overhaul services is difficult to quantify but is directly tied to the operational fleets of military and industrial users. This contract fits within the defense segment of this sector, focusing on maintaining critical assets for the Air Force.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses indicated in the provided data. The award to DRS Sustainment Systems, Inc., a large defense contractor, suggests that the primary focus was on specialized capabilities rather than small business participation. This could mean limited opportunities for small businesses to participate directly in this specific contract, though they may be involved further down the supply chain.

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 an existing contract, some oversight mechanisms may already be in place. Transparency regarding the specific performance metrics and cost controls within the Fixed Price Incentive structure will be crucial for effective accountability. The Inspector General's office for the Department of Defense would have jurisdiction for audits and investigations if any irregularities were suspected.

Related Government Programs

Ground Support Equipment Maintenance
Air Force Logistics Modernization
Defense Industrial Equipment Procurement
Specialized Machinery Overhaul Contracts

Risk Flags

Sole-source award raises concerns about potential lack of competition and price optimization.
Fixed Price Incentive contract type introduces risk of cost overruns if performance targets are not met.
Limited public data on specific performance metrics and cost controls for this contract.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.6 million to DRS SUSTAINMENT SYSTEMS, INC. HALVORSEN 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 $20.6 million.

What is the period of performance?

Start: 2025-09-15. End: 2027-02-18.

What is the historical spending pattern for Halvorsen Loader overhauls by the Department of the Air Force?

Analyzing historical spending for Halvorsen Loader overhauls requires access to detailed procurement data beyond this single award. Typically, such maintenance and overhaul contracts are awarded periodically based on the lifecycle of the equipment and operational tempo. Without specific historical data, it's difficult to establish a trend or benchmark this $20.6 million award against past expenditures. However, the Air Force generally maintains a significant fleet of ground support equipment, suggesting recurring needs for maintenance and overhaul services across various equipment types. The frequency and cost of these overhauls are influenced by factors such as usage intensity, environmental conditions, and technological upgrades.

How does the Fixed Price Incentive (FPI) contract type typically perform in terms of cost control compared to other contract types for equipment overhauls?

Fixed Price Incentive (FPI) contracts aim to balance cost control with performance by establishing target costs, target profits, and sharing arrangements for costs that deviate from the target. If the contractor's final cost is below the target, both the government and contractor share in the savings. Conversely, if costs exceed the target, both share in the overrun, up to a ceiling price. While FPI can incentivize efficiency, it carries a higher risk of cost escalation for the government compared to Firm-Fixed-Price (FFP) contracts if the contractor struggles to meet performance targets or manage costs effectively. It generally offers better cost control than Cost-Plus-Fixed-Fee (CPFF) contracts, as the contractor has a greater financial stake in managing expenses.

What are the specific performance metrics and incentives tied to this Halvorsen Loader overhaul contract?

The provided data indicates the contract type is Fixed Price Incentive (FPI), which inherently includes performance incentives tied to cost and schedule. However, the specific performance metrics (e.g., quality of overhaul, turnaround time, specific technical standards met) and the precise incentive structure (e.g., cost sharing ratios, profit adjustments based on performance) are not detailed in the summary data. These details would typically be found within the contract's statement of work and special provisions. The Air Force would have established criteria to measure the success of the overhaul, and the contractor's profit would be adjusted based on meeting or exceeding these criteria, within the defined sharing formula.

What is the track record of DRS Sustainment Systems, Inc. in performing similar overhaul contracts for the Department of Defense?

DRS Sustainment Systems, Inc. is a known entity within the defense contracting landscape, often involved in providing sustainment, maintenance, and overhaul services for various military platforms and equipment. While specific details on their track record for Halvorsen Loader overhauls are not provided here, their general experience suggests a capability to handle complex sustainment tasks. A thorough assessment would involve reviewing their past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), any past disputes or contract terminations, and the scale and complexity of previously awarded similar contracts to gauge their reliability and expertise in this domain.

What is the estimated market size for Halvorsen Loader overhaul and maintenance services within the U.S. military?

Estimating the precise market size for Halvorsen Loader overhaul and maintenance services is challenging without specific fleet data and maintenance schedules. Halvorsen loaders are a type of specialized ground support equipment (GSE) used extensively by the Air Force and potentially other branches for cargo handling. The market size would be a function of the total number of operational loaders, their age, usage rates, and the mandated overhaul intervals. Given the Air Force's significant global operations, the demand for maintaining such critical equipment is substantial and recurring, likely representing a multi-million dollar annual market segment within the broader GSE sustainment sector.

Industry Classification

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

Product/Service Code: MATERIALS HANDLING EQPT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: FA853424R0007

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: $20,640,557

Exercised Options: $20,640,557

Current Obligation: $20,640,557

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA853425D0016

IDV Type: IDC

Timeline