DoD's $157M AAV Survivability Upgrade contract awarded to Science Applications International Corp. faces scrutiny over value

Contract Overview

Contract Amount: $156,784,851 ($156.8M)

Contractor: Science Applications International Corporation

Awarding Agency: Department of Defense

Start Date: 2014-05-09

End Date: 2025-03-15

Contract Duration: 3,963 days

Daily Burn Rate: $39.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: AAV SURVIVABILITY UPGRADE (AAV SU)

Place of Performance

Location: RESTON, FAIRFAX County, VIRGINIA, 20190

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $156.8 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION for work described as: AAV SURVIVABILITY UPGRADE (AAV SU) Key points: 1. Contract awarded through full and open competition, suggesting a potentially competitive pricing environment. 2. The contract's duration of over 10 years raises questions about long-term cost-effectiveness and potential for scope creep. 3. Fixed-price contract type aims to mitigate cost overruns, but initial award value is substantial. 4. Performance context is critical given the nature of military vehicle upgrades and operational demands. 5. Sector positioning within Defense Contract Management Agency's oversight highlights a critical area of military readiness. 6. No small business set-aside indicates a focus on large prime contractors for this specialized upgrade.

Value Assessment

Rating: fair

The total award of $156.8 million for the AAV Survivability Upgrade is a significant investment. Benchmarking this against similar vehicle upgrade programs is challenging without more specific details on the scope of work and technological advancements. The firm fixed-price nature provides some cost certainty, but the long duration of the contract (over 10 years) necessitates careful monitoring to ensure value for money is maintained throughout its lifecycle. Without comparative data on per-unit upgrade costs or the specific improvements delivered, a definitive assessment of value is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely considered. This method typically fosters a competitive environment, which can lead to more favorable pricing and innovative solutions. The presence of four bidders, as suggested by the 'no' field, implies a reasonable level of competition for this specialized defense contract. The agency's choice of this procurement method suggests confidence in the market's ability to meet the requirements.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down costs through market forces and encouraging a wider range of potential suppliers, leading to better overall value.

Public Impact

The primary beneficiaries are the U.S. Marine Corps, receiving upgraded Amphibious Assault Vehicles (AAVs) with enhanced survivability. Services delivered include the modernization and upgrade of existing AAV platforms to meet current and future combat environment requirements. Geographic impact is national, supporting military readiness across various operational theaters, with specific deployment locations determined by the Marine Corps. Workforce implications include specialized engineering, manufacturing, and technical support roles within Science Applications International Corporation and its potential subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 10 years) increases risk of cost escalation or obsolescence if not managed proactively.
Complexity of military vehicle upgrades can lead to unforeseen technical challenges and delays.
Dependence on a single prime contractor for a critical survivability upgrade warrants close oversight.

Positive Signals

Firm fixed-price contract type provides cost certainty for the government.
Awarded through full and open competition, suggesting a robust market response and potential for competitive pricing.
The contract addresses a critical need for enhanced survivability in aging military platforms.

Sector Analysis

The defense sector, particularly military vehicle modernization, is characterized by long procurement cycles and high technological demands. This contract falls within the 'Military Armored Vehicle, Tank, and Tank Component Manufacturing' industry. Spending in this area is driven by the need to maintain a technological edge and ensure the safety of personnel in active combat zones. Comparable spending benchmarks would involve analyzing other major vehicle upgrade programs within the DoD, which often run into hundreds of millions of dollars over their lifecycle.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (sb: false) and did not involve a small business set-aside (ss: false). This suggests that the prime contractor, Science Applications International Corporation, is expected to handle the majority of the work, potentially utilizing its own resources or large-scale subcontractors. While this may limit direct opportunities for small businesses as prime contractors on this specific award, it is common for large defense contracts to have subcontracting plans that may include small business participation, though this is not explicitly detailed here.

Oversight & Accountability

Oversight for this contract is likely managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractors meet performance, quality, and delivery requirements. Accountability measures are inherent in the firm fixed-price contract type, which places the financial risk of cost overruns on the contractor. Transparency is typically facilitated through contract award databases and reporting requirements, though detailed operational oversight specifics are often classified. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Amphibious Assault Vehicle (AAV) Program
Marine Corps Vehicle Modernization Initiatives
Defense Contract Management Agency (DCMA) Oversight
Military Armored Vehicle Manufacturing

Risk Flags

Long contract duration may lead to technological obsolescence.
Potential for scope creep over the extended performance period.
Complexity of survivability upgrades requires rigorous oversight.
Dependence on a single prime contractor for critical systems.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $156.8 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION. AAV SURVIVABILITY UPGRADE (AAV SU)

Who is the contractor on this award?

The obligated recipient is SCIENCE APPLICATIONS INTERNATIONAL CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $156.8 million.

What is the period of performance?

Start: 2014-05-09. End: 2025-03-15.

What is the specific scope of the 'AAV Survivability Upgrade' and what new capabilities will it provide?

The specific scope of the AAV Survivability Upgrade (AAV SU) contract awarded to Science Applications International Corporation (SAIC) involves enhancing the protection and operational effectiveness of the U.S. Marine Corps' Amphibious Assault Vehicles. While detailed technical specifications are often sensitive, survivability upgrades typically include improvements to armor protection against ballistic threats and improvised explosive devices (IEDs), enhanced mine resistance, and potentially upgraded fire suppression systems. Furthermore, survivability enhancements can encompass improved situational awareness systems, better communication suites, and potentially upgraded power trains or suspension systems to handle increased weight and operational stresses. The goal is to extend the service life of the AAV fleet and ensure Marines can operate safely in increasingly complex threat environments. The $156.8 million award over a period extending to March 2025 suggests a comprehensive modernization effort rather than a minor component upgrade.

How does the $156.8 million total award value compare to historical spending on AAV upgrades or similar vehicle modernization programs?

Comparing the $156.8 million total award value for the AAV Survivability Upgrade requires context regarding the program's scope and duration. This figure represents the total contract value, including all potential options and task orders over its lifecycle, which extends to March 2025. Historical spending on major vehicle modernization programs within the Department of Defense can vary significantly. For instance, upgrades to other armored vehicles or aircraft can range from tens of millions to billions of dollars, depending on the platform's complexity, the extent of the upgrades, and the number of units being modified. Without specific data on the number of AAVs being upgraded under this contract and the granular cost breakdown per vehicle, a direct comparison is difficult. However, given the extended duration and the critical nature of survivability enhancements for a key Marine Corps asset, the $156.8 million figure appears to be within the expected range for a large-scale, multi-year defense modernization effort.

What are the key performance indicators (KPIs) being used to measure the success of this AAV Survivability Upgrade contract?

Key Performance Indicators (KPIs) for a contract like the AAV Survivability Upgrade are typically established within the contract's Statement of Work (SOW) and Performance Work Statement (PWS). While specific KPIs are not publicly detailed in the provided data, common metrics for such defense contracts include: On-time delivery of upgraded vehicles, adherence to technical specifications and quality standards (e.g., successful integration of new armor, functioning of upgraded systems), meeting survivability enhancement targets (e.g., resistance to specific threat levels), and contractor performance ratings. For a firm fixed-price contract, meeting cost targets is also implicitly a KPI, though the primary focus is on delivering the specified capabilities within the agreed-upon price. The Defense Contract Management Agency (DCMA) would likely monitor these KPIs closely throughout the contract's duration.

What is the track record of Science Applications International Corporation (SAIC) in delivering similar defense modernization contracts?

Science Applications International Corporation (SAIC) has a substantial track record in delivering complex technology solutions and engineering services to the U.S. Department of Defense and other government agencies. They are a major defense contractor frequently involved in large-scale programs, including vehicle modernization, IT services, C4ISR systems, and simulation and training. SAIC has previously been involved in upgrades and sustainment for various military platforms. Their experience in systems integration, engineering, and program management positions them well for contracts like the AAV Survivability Upgrade. However, as with any large contractor, performance can vary across different programs. A thorough assessment would involve reviewing specific past performance evaluations and contract histories related to vehicle upgrades and survivability enhancements.

Are there any identified risks associated with the long duration (over 10 years) of this contract?

Yes, the long duration of this contract, spanning from May 2014 to March 2025 (over 10 years), presents several potential risks. Firstly, technological obsolescence is a significant concern; the threat landscape and available technologies can evolve rapidly, potentially rendering the 'upgraded' survivability features outdated before the contract's end. Secondly, managing scope creep over such an extended period can be challenging. Without rigorous change control processes, the scope of work could expand beyond the original intent, leading to cost increases or delays. Thirdly, maintaining consistent contractor performance and quality assurance over a decade requires sustained oversight and effective contract management. Finally, economic uncertainties and shifting defense priorities could impact funding or the relevance of the upgrade over the long term. Proactive risk mitigation strategies, including regular reviews and adaptive management, are crucial.

What is the significance of the 'Military Armored Vehicle, Tank, and Tank Component Manufacturing' NAICS code for this contract?

The North American Industry Classification System (NAICS) code 336992, 'Military Armored Vehicle, Tank, and Tank Component Manufacturing,' signifies that this contract is directly related to the production, modification, or manufacturing of specialized military ground vehicles and their associated components. This classification indicates a high degree of specialization and technical expertise required from the contractor. Companies operating under this NAICS code are typically involved in advanced manufacturing processes, stringent quality control, and adherence to specific military standards and specifications. For the AAV Survivability Upgrade, this code confirms the contract's focus on enhancing the physical protection, operational capabilities, and potentially the structural integrity of armored vehicles, placing it within a critical segment of the defense industrial base.

Industry Classification

NAICS: Manufacturing › Other Transportation Equipment Manufacturing › Military Armored Vehicle, Tank, and Tank Component Manufacturing

Product/Service Code: MOTOR VEHICLES, CYCLES, TRAILERS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: M6785414R0001

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 12010 SUNSET HILLS RD, 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: $233,727,088

Exercised Options: $159,066,894

Current Obligation: $156,784,851

Actual Outlays: $19,989,995

Subaward Activity

Number of Subawards: 162

Total Subaward Amount: $252,967,379

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline