DoD's $19.5M R&D contract for flight system development awarded to North Wind Systems LLC

Contract Overview

Contract Amount: $19,482,763 ($19.5M)

Contractor: North Wind Systems LLC

Awarding Agency: Department of Defense

Start Date: 2021-06-23

End Date: 2026-06-30

Contract Duration: 1,833 days

Daily Burn Rate: $10.6K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: HIFIRE FLIGHT CONTROLS (HF2-C) FLIGHT SYSTEM DEVELOPMENT AND TEST

Place of Performance

Location: NEWPORT NEWS, NEWPORT NEWS CITY County, VIRGINIA, 23606

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $19.5 million to NORTH WIND SYSTEMS LLC for work described as: HIFIRE FLIGHT CONTROLS (HF2-C) FLIGHT SYSTEM DEVELOPMENT AND TEST Key points: 1. Contract awarded for research and development in physical, engineering, and life sciences. 2. North Wind Systems LLC, a contractor with a significant presence in government contracting, secured this award. 3. The contract's cost-plus-fixed-fee structure indicates potential for cost overruns, requiring close monitoring. 4. The definitive contract type suggests a long-term relationship for a complex project. 5. The contract duration of approximately 5 years points to a substantial development effort. 6. The contract was awarded under full and open competition after exclusion of sources, suggesting a competitive process with specific justifications.

Value Assessment

Rating: fair

Benchmarking the value of this R&D contract is challenging due to its specialized nature and the lack of directly comparable public data. The cost-plus-fixed-fee (CPFF) pricing structure, while common for R&D, can lead to costs exceeding initial estimates if not managed diligently. The fixed fee component provides some predictability for the contractor's profit, but the overall cost is variable. Without specific performance metrics or detailed cost breakdowns, a definitive value-for-money assessment is difficult, but the duration and scope suggest a significant investment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This indicates that while the competition was intended to be broad, specific sources may have been excluded based on certain criteria or justifications. The exact number of bidders and the rationale for excluding other sources are not detailed in the provided data, making it difficult to fully assess the breadth of competition. However, the 'full and open' designation suggests an effort to solicit proposals from a wide range of qualified offerors.

Taxpayer Impact: The 'full and open' competition, even with exclusions, generally aims to achieve competitive pricing by allowing multiple vendors to bid. This process should, in theory, lead to a more favorable price for taxpayers compared to sole-source awards.

Public Impact

The primary beneficiaries are the Department of Defense and the Air Force, who will receive the developed flight system. The contract supports advancements in aerospace technology and potentially enhances national security capabilities. The geographic impact is primarily within Virginia, where the contractor is located, and potentially at Air Force testing facilities. The contract implies a need for specialized engineering and technical expertise, potentially creating or sustaining jobs in the R&D sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contracts can lead to cost overruns if not closely monitored.
The 'exclusion of sources' in the competition warrants further investigation into the justification and impact on price.
The specialized nature of R&D makes it difficult to benchmark costs and ensure optimal value for money.
Long contract durations can sometimes indicate project complexity but also increase the risk of scope creep or changing requirements.

Positive Signals

Awarded under full and open competition, suggesting a structured procurement process.
The contractor, North Wind Systems LLC, likely possesses relevant expertise for this specialized R&D.
The definitive contract type implies a commitment to a specific project outcome.
The contract supports critical research and development for the Department of Defense.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. This is a critical area for defense innovation, enabling the development of advanced technologies. The market for such specialized R&D services is competitive, with a mix of large defense contractors and niche research firms. Spending in this area is often driven by evolving threats and the need for technological superiority. Comparable spending benchmarks are difficult to establish without knowing the specific technological advancements sought.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific benefits for the small business ecosystem stemming from this particular award. The focus appears to be on larger, potentially more specialized entities capable of undertaking complex R&D projects.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program management office within the Department of the Air Force. Accountability measures would be tied to the cost-plus-fixed-fee structure, requiring detailed reporting on costs incurred and progress towards milestones. Transparency is generally maintained through contract award databases and reporting requirements, though specific project details might be sensitive. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Aerospace Research and Development
Defense Technology Innovation
Advanced Flight Systems
Department of Defense Research Contracts
Air Force Science and Technology Programs

Risk Flags

Cost Overrun Risk (CPFF)
Limited Competition Transparency
Specialized R&D Scope

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.5 million to NORTH WIND SYSTEMS LLC. HIFIRE FLIGHT CONTROLS (HF2-C) FLIGHT SYSTEM DEVELOPMENT AND TEST

Who is the contractor on this award?

The obligated recipient is NORTH WIND SYSTEMS LLC.

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 $19.5 million.

What is the period of performance?

Start: 2021-06-23. End: 2026-06-30.

What is the specific nature of the 'HIFIRE FLIGHT CONTROLS (HF2-C) FLIGHT SYSTEM DEVELOPMENT AND TEST' being researched?

The provided data does not detail the specific technological advancements or functionalities of the 'HIFIRE FLIGHT CONTROLS (HF2-C) FLIGHT SYSTEM DEVELOPMENT AND TEST.' This designation likely refers to a particular program or project within the Air Force's research and development portfolio, possibly related to advanced control systems for aircraft or unmanned aerial vehicles. Further investigation into Air Force R&D programs or specific solicitations would be required to understand the precise objectives and technical scope of this contract. The 'development and test' phases suggest a progression from initial design and prototyping to rigorous validation and verification of the system's performance and reliability under various conditions.

How does the $19.5 million contract value compare to similar R&D contracts in the aerospace sector?

Directly comparing the $19.5 million value of this contract to similar R&D efforts in the aerospace sector is challenging without more specific details about the project's scope, technological maturity, and duration. However, R&D contracts for advanced aerospace systems can range from a few million dollars for early-stage research to hundreds of millions or even billions for full-scale development and testing of complex platforms. Given that this is a definitive contract with a duration of approximately five years, the $19.5 million figure suggests a significant, but not exceptionally large, investment for a specific system development and testing phase. It is likely within the typical range for specialized component or subsystem development within a larger aerospace program.

What are the key risks associated with a Cost Plus Fixed Fee (CPFF) contract for R&D?

The primary risk associated with a Cost Plus Fixed Fee (CPFF) contract, like the one awarded to North Wind Systems LLC, is the potential for cost overruns. While the contractor's profit is fixed, the government bears the risk of all allowable costs incurred. If the project encounters unforeseen technical challenges, requires more resources than initially estimated, or experiences scope creep, the total cost to the government can significantly exceed initial projections. Effective oversight, rigorous cost tracking, and clear milestone definitions are crucial to mitigate these risks. The contractor also has an incentive to control costs to ensure their fixed fee is profitable, but the government ultimately absorbs the variable cost.

What does 'Full and Open Competition After Exclusion of Sources' imply for the procurement process?

'Full and Open Competition After Exclusion of Sources' implies that the procurement process began with the intent to solicit offers from all responsible sources, but specific sources were subsequently excluded based on documented justifications. This could be due to factors such as the need for proprietary technology, specific security clearances, or unique capabilities possessed by only a limited number of entities. While it aims for broad competition, the exclusion of certain sources might limit the range of innovative solutions or potentially impact the final price if the remaining pool of bidders is smaller or less competitive. The justification for exclusion is critical for understanding the rationale behind this procurement approach.

What is North Wind Systems LLC's track record with government R&D contracts?

North Wind Systems LLC is a government contractor that has secured various contracts across different agencies. While the provided data does not detail their specific track record in R&D or aerospace, their ability to win this contract suggests they possess the necessary qualifications and experience. A deeper dive into federal procurement databases (like SAM.gov or FPDS) would reveal the extent and nature of their past performance, including the types of R&D projects they have undertaken, their performance ratings on previous contracts, and their overall financial stability. This information is crucial for assessing their reliability and capability in executing complex R&D initiatives.

How might this contract impact the broader aerospace R&D landscape?

This contract contributes to the ongoing advancement of aerospace technology within the United States. By funding the development and testing of new flight control systems, it supports innovation and potentially leads to next-generation capabilities for the Department of Defense. Such investments can stimulate further research in related fields, encourage collaboration between industry and government, and potentially create a demand for specialized skills and expertise. The success of this project could also influence future R&D priorities and funding allocations within the aerospace sector, driving further technological progress and maintaining a competitive edge.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Calspan Technology Holding Corporation

Address: 703 CITY CENTER BLVD, NEWPORT NEWS, VA, 23606

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

Financial Breakdown

Contract Ceiling: $20,482,569

Exercised Options: $20,482,569

Current Obligation: $19,482,763

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline