DoD's $2.39B Engineering Services Contract Awarded to National Aerospace Solutions, LLC

Contract Overview

Contract Amount: $2,391,544,528 ($2.4B)

Contractor: National Aerospace Solutions, LLC

Awarding Agency: Department of Defense

Start Date: 2015-06-10

End Date: 2024-09-30

Contract Duration: 3,400 days

Daily Burn Rate: $703.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: IGF::CL::IGF TEST OPERATIONS AND SUSTAINMENT

Place of Performance

Location: ARNOLD AFB, COFFEE County, TENNESSEE, 37389

State: Tennessee Government Spending

Plain-Language Summary

Department of Defense obligated $2.39 billion to NATIONAL AEROSPACE SOLUTIONS, LLC for work described as: IGF::CL::IGF TEST OPERATIONS AND SUSTAINMENT Key points: 1. Contract awarded through full and open competition, suggesting a robust market. 2. Significant contract value indicates a critical need for engineering services. 3. Cost Plus Award Fee (CPA) structure incentivizes performance but requires careful oversight. 4. Long duration (3400 days) suggests a long-term strategic requirement. 5. Contractor's performance will be key to achieving value for money. 6. Geographic concentration in Tennessee may have local economic implications.

Value Assessment

Rating: good

The contract's value of $2.39 billion over its duration is substantial. Benchmarking against similar large-scale engineering services contracts is challenging without more specific service details. However, the Cost Plus Award Fee (CPA) structure, while common for complex services, necessitates diligent oversight to ensure the award fees are justified by exceptional performance and do not inflate costs unnecessarily. The base contract value and potential award fees need to be monitored to confirm value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple capable vendors were likely solicited. The presence of four bidders (no) suggests a competitive environment, which typically drives better pricing and innovation. The specific details of the bidding process, including the number of proposals received and the evaluation criteria, would provide further insight into the strength of the competition.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to more cost-effective solutions and prevent price gouging.

Public Impact

The primary beneficiaries are the Department of Defense and the Air Force, receiving critical engineering support. Services delivered likely encompass a wide range of engineering disciplines essential for aerospace and defense operations. Geographic impact is concentrated in Tennessee, where the contractor is based, potentially creating local jobs and economic activity. Workforce implications include the potential for skilled engineering jobs, both directly with the contractor and indirectly through subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in Cost Plus Award Fee contracts if not managed tightly.
Long contract duration may lead to vendor lock-in or reduced flexibility for future technological shifts.
Dependence on a single contractor for critical engineering services poses a risk if performance degrades.

Positive Signals

Awarded through full and open competition, indicating a competitive process.
Contractor National Aerospace Solutions, LLC, likely possesses specialized expertise for this significant award.
The award fee structure incentivizes high performance, which can lead to better outcomes.

Sector Analysis

This contract falls within the Engineering Services sector, a critical component of the broader aerospace and defense industry. The market for specialized engineering services supporting government defense contracts is substantial, characterized by high barriers to entry due to technical expertise and security requirements. National Aerospace Solutions, LLC, operates in a segment that demands deep technical knowledge and a proven track record. Comparable spending benchmarks would typically be found within large-scale defense procurement data for similar engineering support functions.

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 small business set-aside benefits. However, the prime contractor, National Aerospace Solutions, LLC, may engage small businesses as subcontractors to fulfill portions of the contract requirements. The extent of small business subcontracting will be a key factor in assessing the broader impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract will primarily reside with the Department of the Air Force contracting and program management offices. The Cost Plus Award Fee structure necessitates rigorous monitoring of performance metrics and cost expenditures to ensure that award fees are earned appropriately. Transparency will depend on the agency's reporting practices and the availability of contract performance data. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Aerospace Engineering Services
Defense Research and Development Support
Military Systems Engineering
Air Force Logistics and Sustainment Contracts
National Defense Contracts

Risk Flags

Cost Plus Award Fee structure requires diligent oversight to manage costs.
Long contract duration poses risks of technological obsolescence and performance degradation.
Dependence on a single contractor for critical services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $2.39 billion to NATIONAL AEROSPACE SOLUTIONS, LLC. IGF::CL::IGF TEST OPERATIONS AND SUSTAINMENT

Who is the contractor on this award?

The obligated recipient is NATIONAL AEROSPACE SOLUTIONS, 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 $2.39 billion.

What is the period of performance?

Start: 2015-06-10. End: 2024-09-30.

What is the track record of National Aerospace Solutions, LLC with the Department of Defense?

Assessing the track record of National Aerospace Solutions, LLC requires a detailed review of their past performance on federal contracts, particularly with the Department of Defense and the Air Force. This would involve examining contract histories for on-time delivery, adherence to budget, quality of work, and any past performance issues or disputes. Information from sources like the Contractor Performance Assessment Reporting System (CPARS) would be crucial. Without specific historical data on this contractor, it's difficult to definitively assess their reliability and expertise for a contract of this magnitude and duration. However, winning a large, competitively bid contract suggests they have met certain performance and capability thresholds.

How does the Cost Plus Award Fee (CPA) structure compare to other contract types for similar services?

The Cost Plus Award Fee (CPA) structure is often used for complex services where performance outcomes are difficult to define precisely upfront or where innovation and exceptional performance are highly valued. Compared to fixed-price contracts, CPA offers more flexibility for the contractor to incur costs while incentivizing them to exceed baseline performance through award fees. However, it also places a greater burden on the government to meticulously monitor performance and justify award fee payments to ensure fair value. Other common structures include Cost Plus Incentive Fee (CPIF), which shares cost variances, and various fixed-price arrangements (FP, FFP, FP-EPA) that offer more cost certainty but less flexibility. The choice of CPA suggests the Air Force prioritized performance incentives over strict cost predictability for this engineering services requirement.

What are the primary risks associated with a contract of this duration and value?

A contract valued at $2.39 billion and spanning approximately 9 years (3400 days) carries significant risks. Firstly, there's the risk of cost escalation beyond initial projections, especially with a CPA structure, if performance targets are not met efficiently or if unforeseen technical challenges arise. Secondly, technological obsolescence is a concern; over such a long period, the required engineering services might evolve, potentially making the current contract scope less relevant or requiring costly modifications. Thirdly, contractor performance degradation over time is a risk, as motivation can wane or key personnel may depart. Finally, there's the strategic risk of over-reliance on a single entity for critical functions, which could impact national security if the contractor fails to deliver or faces financial instability.

What are the potential implications of the 'Engineering Services' classification (NAICS 541330) for this contract?

The NAICS code 541330, 'Engineering Services,' indicates that the primary purpose of this contract is to procure professional engineering expertise. This typically includes services such as design, development, consulting, and analysis across various engineering disciplines. For this specific contract with the Department of Defense, it likely involves complex technical support for aerospace systems, weapons platforms, or related infrastructure. The classification suggests that the contractor must employ licensed professional engineers and adhere to industry standards and best practices. It implies a focus on technical solutions, problem-solving, and potentially research and development activities, rather than the manufacturing or direct provision of hardware.

How does the contract's performance period (2015-2024) align with typical defense procurement cycles?

The contract's performance period, starting June 10, 2015, and ending September 30, 2024, covers a substantial duration of over nine years. This aligns with the reality of many large-scale defense procurement cycles, which often involve long-term sustainment, development, and support contracts due to the complexity and lifespan of military systems. Such extended periods are necessary for programs that require continuous engineering support, upgrades, and maintenance. While shorter-term contracts might be used for specific project phases, longer durations like this one are common for ensuring continuity of essential services and fostering stable relationships with specialized contractors, though they also necessitate careful management to mitigate risks of obsolescence and cost overruns.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: RESEARCH AND DEVELOPMENT › OTHER RESEARCH/DEVELOPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: FA910113R0100

Offers Received: 4

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Address: 12021 SUNSET HILLS RD ST 600, RESTON, VA, 20190

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

Financial Breakdown

Contract Ceiling: $2,957,036,622

Exercised Options: $2,627,238,223

Current Obligation: $2,391,544,528

Actual Outlays: $10,371,204

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline