DoD's $26M contract for AAV maintenance and testing services awarded to VSE Corporation

Contract Overview

Contract Amount: $25,992,100 ($26.0M)

Contractor: VSE Corporation

Awarding Agency: Department of Defense

Start Date: 2015-08-31

End Date: 2020-04-15

Contract Duration: 1,689 days

Daily Burn Rate: $15.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: IGF::OT::IGF THE PROGRAM MANAGER, ADVANCED AMPHIBIOUS ASSAULT (PM AAA) HAS A SUPPORT REQUIREMENT TO MAINTAIN MASTER VEHICLE CONFIGURATION ASSAULT AMPHIBIOUS VEHICLES (AAVS) WITHIN LOCAL TRAVEL DISTANCE OF MARINE CORPS BASE QUANTICO, VA. THESE VEHICLES ARE USED FOR TEST AND EVALUATION PURPOSES TO SUPPORT OBSOLESCENCE AND FACT-OF-LIFE CHANGES. THIS EFFORT INCLUDES: PROGRAM/PROJECT MANAGEMENT, MAINTENANCE SERVICES, PROTOTYPE FABRICATION AND INSTALLATION AS WELL AS TEST AND EVALUATION CAPABILITIES.

Place of Performance

Location: ALEXANDRIA, FAIRFAX County, VIRGINIA, 22310

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $26.0 million to VSE CORPORATION for work described as: IGF::OT::IGF THE PROGRAM MANAGER, ADVANCED AMPHIBIOUS ASSAULT (PM AAA) HAS A SUPPORT REQUIREMENT TO MAINTAIN MASTER VEHICLE CONFIGURATION ASSAULT AMPHIBIOUS VEHICLES (AAVS) WITHIN LOCAL TRAVEL DISTANCE OF MARINE CORPS BASE QUANTICO, VA. THESE VEHICLES ARE USED FOR TEST AND EVALUA… Key points: 1. Contract supports critical test and evaluation needs for Amphibious Assault Vehicles (AAVs). 2. Services include program management, maintenance, fabrication, installation, and test capabilities. 3. VSE Corporation, the sole awardee, has a significant role in defense contracting. 4. The contract duration spans nearly five years, indicating a long-term support requirement. 5. Fixed-price contract type aims to control costs for the government. 6. Focus on maintaining vehicle configuration for local testing near Marine Corps Base Quantico.

Value Assessment

Rating: good

The contract value of approximately $26 million over nearly five years for specialized engineering and maintenance services appears reasonable given the critical nature of supporting advanced amphibious assault vehicles for test and evaluation. Benchmarking against similar complex vehicle support contracts is challenging without more specific service details, but the fixed-price nature suggests an effort to ensure predictable costs. The value aligns with the scope of program management, fabrication, and testing required for such specialized military assets.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of a single award does not necessarily imply a lack of competition, as the government selects the best value proposal. However, further details on the number of proposals received would provide a clearer picture of the competitive landscape and its potential impact on pricing.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to better pricing and innovative solutions, ensuring the government receives optimal value for its investment.

Public Impact

The primary beneficiaries are the U.S. Marine Corps, ensuring the operational readiness and test capabilities of their Amphibious Assault Vehicles. Services delivered include essential maintenance, program management, and specialized fabrication for vehicle upgrades and testing. The geographic impact is localized to the vicinity of Marine Corps Base Quantico, Virginia, supporting local testing operations. Workforce implications include employment for engineers, technicians, and support staff involved in vehicle maintenance and testing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if specialized knowledge is highly concentrated with VSE Corporation.
Reliance on a single contractor for critical maintenance and testing could pose risks if performance falters.
Ensuring continued innovation and cost-efficiency over the contract's duration requires ongoing oversight.

Positive Signals

Awarded through full and open competition, suggesting a robust bidding process.
Fixed-price contract type helps manage cost predictability for the government.
Long-term nature of the contract indicates a stable and reliable support provider for essential assets.
Focus on test and evaluation supports future vehicle development and modernization.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting defense-related equipment. The market for specialized vehicle maintenance, prototyping, and testing services for military applications is a niche but critical segment of the broader aerospace and defense industry. Spending in this area is driven by the need to maintain aging fleets, incorporate technological upgrades, and ensure readiness for complex operational environments. Comparable spending benchmarks would typically involve other large-scale maintenance and support contracts for major defense platforms.

Small Business Impact

The provided data does not indicate any specific small business set-asides or subcontracting requirements for this contract. As a sole-source award to VSE Corporation, the direct impact on small businesses is not explicitly detailed. However, VSE Corporation, as a large prime contractor, may engage small businesses for subcontracting opportunities, which would be a factor in assessing the broader impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract is likely managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance with contract terms. Accountability measures would include performance reviews, milestone tracking, and adherence to the fixed-price agreement. Transparency is generally maintained through contract databases and reporting, though specific details of day-to-day oversight are not publicly detailed.

Related Government Programs

Amphibious Assault Vehicle (AAV) Program
Marine Corps Logistics and Maintenance Programs
Defense Engineering Services Contracts
Vehicle Prototyping and Testing Services

Risk Flags

Potential for performance issues due to complexity of vehicle systems.
Risk of cost escalation if scope changes significantly.
Dependence on a single contractor for critical support functions.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.0 million to VSE CORPORATION. IGF::OT::IGF THE PROGRAM MANAGER, ADVANCED AMPHIBIOUS ASSAULT (PM AAA) HAS A SUPPORT REQUIREMENT TO MAINTAIN MASTER VEHICLE CONFIGURATION ASSAULT AMPHIBIOUS VEHICLES (AAVS) WITHIN LOCAL TRAVEL DISTANCE OF MARINE CORPS BASE QUANTICO, VA. THESE VEHICLES ARE USED FOR TEST AND EVALUATION PURPOSES TO SUPPORT OBSOLESCENCE AND FACT-OF-LIFE CHANGES. THIS EFFORT INCLUDES: PROGRAM/PROJECT MANAGEMENT, MAINTENANCE SERVICES, PROTOTYPE FABRICATION AND INSTALLATION AS WELL AS TEST AND EVALUATION CAPABILITIES.

Who is the contractor on this award?

The obligated recipient is VSE 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 $26.0 million.

What is the period of performance?

Start: 2015-08-31. End: 2020-04-15.

What is VSE Corporation's track record with similar defense maintenance and engineering contracts?

VSE Corporation has a substantial history of providing engineering, technical, and logistics services to the U.S. military, including extensive work with naval and marine corps platforms. Their portfolio includes maintenance, repair, and overhaul (MRO) services, as well as program management and systems engineering support for various defense assets. This experience suggests a strong capability to handle complex requirements like those for the Amphibious Assault Vehicles (AAVs). Their past performance on similar contracts, often involving fixed-price arrangements, indicates a capacity to manage costs and deliver specialized technical solutions within defined parameters. Analyzing specific past performance metrics, such as on-time delivery, quality of work, and cost control on prior DoD contracts, would further validate their suitability for this role.

How does the pricing structure of this contract compare to industry benchmarks for similar engineering services?

The contract is a Firm Fixed Price (FFP) award, which is generally favorable for the government as it shifts cost risk to the contractor. Benchmarking the overall $26 million value against industry standards for specialized engineering and maintenance of military vehicles is complex due to the unique nature of AAVs and the specific scope of services (program management, fabrication, testing). However, FFP contracts typically aim for competitive pricing during the bidding phase. Without detailed breakdowns of labor rates, material costs, and overhead, a precise per-unit cost comparison is difficult. Generally, FFP contracts for complex defense systems are expected to be higher than commercial equivalents due to stringent quality, security, and performance requirements. The value appears aligned with the multi-year, comprehensive support required for critical, specialized military assets.

What are the primary risks associated with VSE Corporation's performance on this contract?

Key risks include potential performance shortfalls in maintaining the complex AAV systems, leading to delays in testing and evaluation schedules. There's also a risk of cost overruns if unforeseen technical challenges arise, although the FFP structure mitigates this for the government. Dependence on a single contractor for critical maintenance and fabrication could create vulnerabilities if VSE experiences internal issues (e.g., workforce shortages, financial instability) or if their specialized knowledge becomes a bottleneck. Ensuring consistent quality and adherence to strict military specifications throughout the contract's duration is paramount. Furthermore, the obsolescence and 'fact-of-life' changes mentioned suggest evolving technical requirements, posing a risk of scope creep or the need for significant contract modifications if not managed carefully.

How effective is the fixed-price contract type in ensuring value for money for this specific requirement?

The Firm Fixed Price (FFP) contract type is generally effective in ensuring value for money when the scope of work is well-defined and risks are understood. For this contract, supporting AAV maintenance and testing, the FFP structure incentivizes VSE Corporation to manage costs efficiently and deliver services within the agreed-upon budget. This shifts the financial risk of cost overruns to the contractor, protecting the government from unexpected expenses. The effectiveness hinges on the initial accuracy of the government's cost estimates and the contractor's ability to execute the defined scope. If unforeseen technical complexities or scope changes emerge, the FFP nature might make modifications more contentious or lead to contractor reluctance to absorb necessary adjustments, potentially impacting long-term program goals if not managed through contract modifications.

What is the historical spending pattern for AAV maintenance and support services by the Department of Defense?

Historical spending on Amphibious Assault Vehicle (AAV) maintenance and support services by the Department of Defense (DoD) reflects the ongoing need to sustain aging platforms while integrating new technologies. While specific aggregate figures for AAV-specific maintenance are not readily available in public databases, the overall budget for Marine Corps ground vehicle modernization and sustainment runs into billions of dollars annually. Contracts for vehicle maintenance, upgrades, and associated engineering services are common across various platforms. Spending patterns are influenced by factors such as the operational tempo, the age of the fleet, planned upgrades, and the introduction of new vehicle systems. This $26 million contract represents a portion of the broader sustainment costs for critical Marine Corps assets, fitting within a consistent pattern of investment in platform readiness and technological advancement.

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: N0002415R3149

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Address: 6348 WALKER LANE, ALEXANDRIA, VA, 22310

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

Financial Breakdown

Contract Ceiling: $36,515,180

Exercised Options: $36,515,180

Current Obligation: $25,992,100

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017804D4149

IDV Type: IDC

Timeline