DoD's $33.5M Space Segment Contract Awarded to AIS Engineering Inc. for Electronic Computer Manufacturing

Contract Overview

Contract Amount: $33,486,428 ($33.5M)

Contractor: AIS Engineering Inc

Awarding Agency: Department of Defense

Start Date: 2017-04-15

End Date: 2022-10-14

Contract Duration: 2,008 days

Daily Burn Rate: $16.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 7

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: IGF::OT::IGF CONUS, ALASKA, HAWAII SPACE SEGMENT

Place of Performance

Location: FORT BELVOIR, FAIRFAX County, VIRGINIA, 22060

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $33.5 million to AIS ENGINEERING INC for work described as: IGF::OT::IGF CONUS, ALASKA, HAWAII SPACE SEGMENT Key points: 1. The contract value of $33.5 million represents a significant investment in the space segment infrastructure. 2. Competition dynamics indicate a full and open competition, suggesting a robust market for these services. 3. The contract duration of approximately 5.5 years allows for sustained support and development. 4. The fixed-price contract type shifts performance risk to the contractor, potentially stabilizing costs. 5. The award to AIS Engineering Inc. highlights their established presence in the defense IT sector. 6. The primary service area covers CONUS, Alaska, and Hawaii, indicating broad geographic application.

Value Assessment

Rating: good

Benchmarking this contract's value requires specific data on comparable space segment contracts. However, the $33.5 million over roughly five years suggests a moderate annual spend. The firm fixed-price nature implies that the contractor bears the risk of cost overruns, which is generally favorable for the government. Without detailed cost breakdowns or comparisons to similar sole-source or competed contracts for similar services, a precise value-for-money assessment is challenging, but the competitive award process is a positive indicator.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 7 bidders suggests a healthy level of competition for this requirement. A higher number of bidders generally leads to more competitive pricing and a wider range of technical solutions, benefiting the government.

Taxpayer Impact: The full and open competition likely resulted in a more favorable price for taxpayers compared to a sole-source or limited competition award. The multiple bids provided a strong basis for price negotiation and selection of the best value.

Public Impact

The Department of Defense benefits from enhanced space segment capabilities, crucial for communication and intelligence. Services delivered are related to electronic computer manufacturing, supporting critical defense systems. The geographic impact extends across CONUS, Alaska, and Hawaii, ensuring nationwide operational support. The contract supports a specialized segment of the defense industrial base, potentially impacting a skilled workforce in electronic manufacturing and IT.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if AIS Engineering Inc. becomes the sole provider for future upgrades.
Reliance on a single contractor for critical space segment components could pose supply chain risks.
The long-term nature of the contract might limit opportunities for newer, potentially more innovative technologies to be integrated.

Positive Signals

The firm fixed-price contract structure provides cost certainty for the government.
The full and open competition process suggests a competitive market and potentially better pricing.
The award to an established contractor like AIS Engineering Inc. may indicate a reliable performance history.

Sector Analysis

The contract falls within the broader Information Technology and Defense sectors, specifically focusing on electronic computer manufacturing for space segment applications. This niche area is critical for national security and communication infrastructure. The market size for such specialized defense IT services is substantial, driven by continuous modernization needs. Comparable spending benchmarks would likely involve other large-scale defense IT procurements and satellite communication system contracts.

Small Business Impact

The data indicates this contract was not set aside for small businesses, and the prime contractor, AIS Engineering Inc., is likely a large business. There is no explicit information on subcontracting plans for small businesses within this award. The impact on the small business ecosystem would depend on whether AIS Engineering Inc. actively seeks small business subcontractors for specialized components or services.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Information Systems Agency (DISA) and potentially the Department of Defense's Inspector General. Accountability measures are inherent in the firm fixed-price contract, requiring the contractor to deliver specified goods and services. Transparency is facilitated by the contract award being made through a full and open competition, with the details publicly available through federal procurement databases.

Related Government Programs

Defense Information Systems Agency (DISA) Contracts
Space Segment Procurement
Electronic Computer Manufacturing Services
Department of Defense IT Infrastructure
Firm Fixed Price Contracts
Full and Open Competition Awards

Risk Flags

Potential for quality compromises in fixed-price contracts
Long-term reliance on a single vendor
Supply chain vulnerabilities for critical components

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $33.5 million to AIS ENGINEERING INC. IGF::OT::IGF CONUS, ALASKA, HAWAII SPACE SEGMENT

Who is the contractor on this award?

The obligated recipient is AIS ENGINEERING INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Information Systems Agency).

What is the total obligated amount?

The obligated amount is $33.5 million.

What is the period of performance?

Start: 2017-04-15. End: 2022-10-14.

What is the historical spending pattern of the Defense Information Systems Agency (DISA) on space segment contracts?

Analyzing DISA's historical spending on space segment contracts requires access to detailed procurement data over several fiscal years. Generally, DISA, as the primary IT and communications provider for the DoD, allocates significant resources to maintaining and upgrading its space-based assets. This includes funding for satellite manufacturing, launch services, ground station operations, and related support services. Spending can fluctuate based on major program milestones, technology refresh cycles, and evolving national security requirements. For instance, periods of rapid satellite constellation expansion or the need to replace aging assets would likely show increased spending. Conversely, periods of stable operations or budget constraints might see lower investment. Without specific data for this contract's category, it's difficult to pinpoint exact trends, but the overall trend for DISA is towards sustained, substantial investment in secure and resilient space communications.

How does the number of bidders (7) on this contract compare to similar full and open competition awards for space segment services?

A full and open competition attracting 7 bidders for a space segment contract of this nature is a moderately competitive outcome. The level of competition can vary significantly based on the specificity of the requirement, the technological complexity, the number of qualified vendors in the market, and the contract's total value. For highly specialized or niche requirements, fewer bidders might be expected. Conversely, for more standardized IT services or manufacturing, a higher number of bidders could be common. Seven bidders suggest that the requirement was well-defined and accessible to a reasonable pool of companies, but perhaps not so broad as to attract dozens of offers. This number generally indicates sufficient competition to drive reasonable pricing and encourage the selection of a capable contractor, avoiding the pitfalls of a limited or sole-source award.

What are the primary risks associated with a firm fixed-price contract for electronic computer manufacturing in the space segment?

The primary risk with a firm fixed-price (FFP) contract for complex manufacturing like space segment components lies in the potential for the contractor to cut corners on quality or performance to maintain profitability if unforeseen cost increases arise. While FFP shifts cost overrun risk to the contractor, it doesn't eliminate performance risk. If the contractor faces unexpected material shortages, labor cost increases, or technical challenges during manufacturing, they might be tempted to reduce quality control measures or use less robust components to meet the fixed price. For space segment applications, where reliability and longevity are paramount, any compromise in quality can have severe consequences, including mission failure. The government's oversight and stringent acceptance testing become critical to mitigate these risks and ensure the delivered product meets all performance specifications.

What is AIS Engineering Inc.'s track record with the Department of Defense, particularly in IT and space segment contracts?

Assessing AIS Engineering Inc.'s track record requires a deep dive into their contract history with the Department of Defense (DoD). Information available through federal procurement databases (like FPDS or SAM.gov) would detail their past awards, including contract types, values, agencies served, and performance ratings if available. Companies that secure contracts like this $33.5 million award for space segment services typically have a demonstrated history of successful performance in relevant areas. This might include prior work on IT infrastructure, electronic manufacturing, or specific defense systems. Positive performance indicators would include consistent contract renewals, positive past performance reviews, and a history of meeting delivery schedules and technical requirements. Conversely, any history of contract disputes, performance failures, or significant cost overruns on previous DoD contracts would be a red flag.

How does the $33.5 million contract value compare to the overall annual spending of the Defense Information Systems Agency (DISA)?

The $33.5 million contract value represents a specific investment within DISA's broader budget. DISA manages a vast portfolio of IT and communications services for the DoD, with annual budgets often running into the billions of dollars. Therefore, this single contract, while substantial in absolute terms, is likely a component of a larger program or initiative. To contextualize its significance, one would need to compare it to DISA's total annual IT spending, its spending on similar space segment or electronic manufacturing contracts, and the specific program it supports. For example, if this contract is for a critical, long-term upgrade or sustainment of a key space asset, its value might be considered proportionate to its strategic importance. If it represents a smaller, more focused procurement, its relative impact on DISA's overall budget would be less pronounced.

What are the potential implications of this contract award for future technology insertion in the DoD's space segment?

The implications for future technology insertion depend heavily on the contract's terms and the contractor's approach. A firm fixed-price contract, especially one awarded through full and open competition, might prioritize delivering the specified requirements within budget and schedule, potentially making it less flexible for incorporating cutting-edge technologies mid-contract unless explicitly allowed for in change orders. However, the competitive nature of the initial award suggests that AIS Engineering Inc. likely proposed a solution that met current needs effectively. Future technology insertion would ideally be managed through subsequent contract vehicles, competitive follow-on procurements, or specific R&D clauses within this contract. The DoD's strategy for technology modernization, including provisions for innovation and upgrades, will dictate how effectively new technologies can be integrated into the space segment supported by this award.

Industry Classification

NAICS: Manufacturing › Computer and Peripheral Equipment Manufacturing › Electronic Computer Manufacturing

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 7

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 804 PERSHING DR STE 208, SILVER SPRING, MD, 20910

Business Categories: 8(a) Program Participant, Black American Owned Business, Category Business, Corporate Entity Not Tax Exempt, DoT Certified Disadvantaged Business Enterprise, HUBZone Firm, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Small Disadvantaged Business, Special Designations, U.S.-Owned Business, Woman Owned Business

Financial Breakdown

Contract Ceiling: $39,988,847

Exercised Options: $33,486,428

Current Obligation: $33,486,428

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Parent Contract

Parent Award PIID: GS35F0454X

IDV Type: FSS

Timeline