DoD's $23.5M Naval Systems Contract for MMH Program Support Faces Scrutiny Over Value and Competition

Contract Overview

Contract Amount: $23,469,178 ($23.5M)

Contractor: Naval Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2014-03-19

End Date: 2019-03-18

Contract Duration: 1,825 days

Daily Burn Rate: $12.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: ENGINEERING AND PROGRAM SUPPORT SERVICES IN DEVELOPMENT, PRODUCTION AND POST-PRODUCTION PROGRAM MANAGEMENT SUPPORT TO THE PMA 299 MULTI-MISSION HELICOPTER (MMH) FOREIGN MILITARY SALES PROGRAM OFFICE

Place of Performance

Location: PATUXENT RIVER, SAINT MARYS County, MARYLAND, 20670

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $23.5 million to NAVAL SYSTEMS, INC. for work described as: ENGINEERING AND PROGRAM SUPPORT SERVICES IN DEVELOPMENT, PRODUCTION AND POST-PRODUCTION PROGRAM MANAGEMENT SUPPORT TO THE PMA 299 MULTI-MISSION HELICOPTER (MMH) FOREIGN MILITARY SALES PROGRAM OFFICE Key points: 1. Contract awarded via full and open competition, suggesting potential for competitive pricing. 2. The Cost Plus Fixed Fee (CPFF) structure may incentivize cost overruns. 3. Lack of small business participation is noted. 4. Engineering services sector is critical for defense program management.

Value Assessment

Rating: fair

The contract's Cost Plus Fixed Fee (CPFF) pricing structure can lead to higher costs compared to fixed-price contracts, especially if not tightly managed. Benchmarking against similar program management support contracts is difficult without more detailed cost breakdowns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

Awarded under full and open competition, this method theoretically allows for the best price discovery. However, the CPFF structure might limit the full benefit of competition if costs escalate.

Taxpayer Impact: Taxpayer funds are utilized for essential defense program support. The CPFF structure necessitates robust oversight to ensure cost efficiency and prevent unnecessary expenditure.

Public Impact

Supports the Multi-Mission Helicopter (MMH) Foreign Military Sales Program, impacting international defense partnerships. Ensures critical program management for defense acquisition, affecting readiness and capability. The contract's duration and value represent a significant investment in defense infrastructure.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee structure
No small business participation
Potential for cost escalation without strict oversight

Positive Signals

Full and open competition
Supports critical defense program

Sector Analysis

This contract falls within the engineering services sector, crucial for supporting complex defense programs like the MMH. Spending in this area is benchmarked against the overall DoD acquisition budget, with efficiency being a key performance indicator.

Small Business Impact

The contract did not involve small businesses, which represents a missed opportunity for economic inclusion and potentially leveraging specialized small business capabilities in program support.

Oversight & Accountability

Oversight is critical for CPFF contracts to manage costs effectively. The Department of the Navy's contracting activity suggests established oversight mechanisms, but their effectiveness in controlling costs for this specific contract needs continuous evaluation.

Related Government Programs

Engineering Services
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Potential for cost overruns due to CPFF structure
Lack of small business participation
Limited transparency on specific cost drivers
Long contract duration may mask inefficiencies

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.5 million to NAVAL SYSTEMS, INC.. ENGINEERING AND PROGRAM SUPPORT SERVICES IN DEVELOPMENT, PRODUCTION AND POST-PRODUCTION PROGRAM MANAGEMENT SUPPORT TO THE PMA 299 MULTI-MISSION HELICOPTER (MMH) FOREIGN MILITARY SALES PROGRAM OFFICE

Who is the contractor on this award?

The obligated recipient is NAVAL SYSTEMS, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $23.5 million.

What is the period of performance?

Start: 2014-03-19. End: 2019-03-18.

What specific program management efficiencies were achieved through this contract that justify the CPFF structure?

The CPFF structure is often used when the scope of work is not precisely defined or is subject to change, common in developmental programs. Efficiencies would typically be measured by meeting program milestones on time and within projected cost ranges, despite the inherent flexibility of the contract type. Detailed performance reports and program reviews would be necessary to assess these efficiencies.

How does the cost performance of this contract compare to similar engineering support contracts awarded under full and open competition?

Direct comparison is challenging without access to detailed cost breakdowns and performance metrics for similar contracts. However, CPFF contracts generally carry a higher risk of cost overruns than fixed-price contracts. A thorough review would involve analyzing the contractor's actual costs against the fixed fee and comparing the overall expenditure to industry benchmarks for comparable program support services.

What measures are in place to ensure the effectiveness of program management support and prevent scope creep within the CPFF framework?

Effective measures include rigorous contract surveillance, detailed performance work statements, regular progress reviews, and clear communication channels between the government and contractor. Establishing specific, measurable, achievable, relevant, and time-bound (SMART) objectives for the contractor, alongside robust change control processes, helps mitigate scope creep and ensures the program's objectives are met efficiently.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N0002413R3281

Offers Received: 4

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 44114 WOODMONT DR, LEONARDTOWN, MD, 20650

Business Categories: Category Business, Small Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $29,330,315

Exercised Options: $26,196,197

Current Obligation: $23,469,178

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017805D4466

IDV Type: IDC

Timeline