DoD's $35M Engineering Services Contract Awarded to Alliant Techsystems Operations LLC

Contract Overview

Contract Amount: $35,158,871 ($35.2M)

Contractor: Alliant Techsystems Operations LLC

Awarding Agency: Department of Defense

Start Date: 2017-11-27

End Date: 2020-09-15

Contract Duration: 1,023 days

Daily Burn Rate: $34.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: MSI SBIR REQUIREMENTS, TRADE STUDIES, DESIGN ANALYSIS

Place of Performance

Location: NORTHRIDGE, LOS ANGELES County, CALIFORNIA, 91324

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $35.2 million to ALLIANT TECHSYSTEMS OPERATIONS LLC for work described as: MSI SBIR REQUIREMENTS, TRADE STUDIES, DESIGN ANALYSIS Key points: 1. Contract focused on critical engineering services, including trade studies and design analysis. 2. Awarded as a delivery order under a larger contract vehicle. 3. Performance period spanned nearly three years, indicating a substantial project. 4. The contract type, Cost Plus Fixed Fee, suggests potential for cost overruns if not managed closely. 5. No small business set-aside was applied, raising questions about broader economic impact. 6. The specific North American Industry Classification System (NAICS) code points to specialized engineering expertise.

Value Assessment

Rating: fair

The contract's value of $35.16 million over approximately 3 years for engineering services appears within a reasonable range for complex defense projects. However, without specific benchmarks for the trade studies and design analysis performed, a precise value-for-money assessment is challenging. The Cost Plus Fixed Fee (CPFF) structure, while common for R&D and complex services, carries inherent risks of cost escalation if not rigorously monitored by the agency. Comparing this to similar large-scale engineering support contracts within the DoD would provide better context for its pricing efficiency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a sole-source delivery order, meaning it was not competed among multiple vendors. While the data indicates it was 'NOT COMPETED', the specific justification for this sole-source award is not provided. Sole-source awards can sometimes lead to higher prices due to a lack of competitive pressure. The absence of a competitive process limits the opportunity for price discovery and potentially reduces the incentive for the contractor to offer the most cost-effective solutions.

Taxpayer Impact: Taxpayers may have paid a premium for these engineering services due to the lack of competition. Without a bidding process, it's difficult to ascertain if the government secured the best possible price or if alternative, more cost-effective solutions were overlooked.

Public Impact

The Department of Defense benefits from specialized engineering expertise for critical defense systems. Services likely supported the development, analysis, and improvement of military technologies. The geographic impact is primarily tied to the contractor's operations and the DoD entities served, likely within California where the contract was managed. Workforce implications include employment for engineers and technical specialists within Alliant Techsystems Operations LLC.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases costs for taxpayers.
Cost Plus Fixed Fee contract type carries inherent risk of cost overruns if not closely managed.
Lack of transparency regarding the justification for sole-source award.
No small business participation noted, potentially limiting broader economic benefits.

Positive Signals

Awarded to a known entity (Alliant Techsystems Operations LLC) with presumed relevant expertise.
Contract duration suggests a significant and potentially impactful project for the DoD.
Focus on essential engineering services like trade studies and design analysis is crucial for defense capabilities.

Sector Analysis

The engineering services sector is a critical component of the defense industrial base, providing essential support for research, development, and sustainment of military platforms and technologies. This contract falls within the broader engineering services market, which is characterized by specialized expertise and often long-term engagements. The $35 million value is substantial, indicating a significant project scope. Comparable spending in this sector often involves complex system design, integration, and testing, with pricing influenced by labor costs, required expertise, and project complexity.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. This suggests that the primary contractor, Alliant Techsystems Operations LLC, likely performed the majority of the work internally. The lack of small business involvement means that the economic benefits typically associated with set-asides, such as fostering innovation and expanding the small business industrial base, were not realized through this specific award.

Oversight & Accountability

Oversight for this contract would have been managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The Cost Plus Fixed Fee (CPFF) structure necessitates robust oversight to control costs and ensure the fixed fee remains appropriate. Transparency regarding the specific oversight mechanisms and accountability measures employed by DCMA for this sole-source award would require further investigation into contract administration records.

Related Government Programs

Defense Engineering Services
Alliant Techsystems Contracts
Department of Defense Procurement
Cost Plus Fixed Fee Contracts
Sole Source Defense Contracts

Risk Flags

Sole-source award raises concerns about competition and potential cost efficiencies.
CPFF contract type requires diligent oversight to manage cost risks.
Lack of explicit small business participation noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $35.2 million to ALLIANT TECHSYSTEMS OPERATIONS LLC. MSI SBIR REQUIREMENTS, TRADE STUDIES, DESIGN ANALYSIS

Who is the contractor on this award?

The obligated recipient is ALLIANT TECHSYSTEMS OPERATIONS LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $35.2 million.

What is the period of performance?

Start: 2017-11-27. End: 2020-09-15.

What specific engineering services were performed under this contract, and how do they align with the stated data points like 'MSI SBIR REQUIREMENTS, TRADE STUDIES, DESIGN ANALYSIS'?

The data provided indicates that the services encompassed 'MSI SBIR REQUIREMENTS, TRADE STUDIES, DESIGN ANALYSIS'. MSI likely refers to Mission Systems Integration or a similar defense-related acronym. SBIR (Small Business Innovation Research) requirements suggest the contract may have involved managing or integrating technologies developed through the SBIR program. Trade studies are analyses comparing different technical approaches or solutions to identify the most suitable option. Design analysis involves evaluating the feasibility, performance, and reliability of engineering designs. Together, these services point to a contract focused on the technical evaluation, conceptualization, and early-stage development or integration of defense systems or technologies.

How does the $35.16 million contract value compare to similar engineering services contracts awarded by the Department of Defense?

The $35.16 million value for a nearly three-year engineering services contract is substantial but not extraordinary within the context of large defense procurements. The DoD frequently awards contracts in the tens to hundreds of millions of dollars for complex engineering, research, and development efforts. To provide a precise comparison, one would need to benchmark against contracts with similar scopes (e.g., system design, trade studies, integration support) and durations, awarded to prime contractors of similar size and capability. However, generally, this value suggests a significant project requiring specialized expertise and considerable contractor resources, consistent with the needs of major defense programs.

What are the potential risks associated with the 'Cost Plus Fixed Fee' (CPFF) contract type used for this award?

The primary risk with a CPFF contract is that the contractor's profit is fixed, but the government bears the risk of cost overruns. While the contractor is incentivized to control costs to maximize their fee relative to effort, there's less direct incentive to minimize costs compared to fixed-price contracts. If the contractor encounters unforeseen difficulties or scope creep occurs without proper modification, costs can escalate significantly, exceeding initial estimates. Effective government oversight, including detailed cost monitoring, progress reviews, and strict change control, is crucial to mitigate these risks and ensure the government receives good value.

Given this was a 'NOT COMPETED' award, what does this imply about the contractor selection process and potential impact on pricing?

A 'NOT COMPETED' or sole-source award implies that the contract was awarded to a single contractor without a competitive bidding process. This typically occurs when only one source possesses the necessary unique capabilities, or in specific emergency situations. The implication for pricing is that the government may not have achieved the most favorable price possible, as competitive pressure is absent. Without competition, the contractor has less incentive to offer aggressive pricing, and the government relies heavily on negotiation and cost analysis to ensure a fair price. This can potentially lead to higher costs for taxpayers compared to a fully competed contract.

What is the significance of the NAICS code '541330' (Engineering Services) in the context of this contract?

The North American Industry Classification System (NAICS) code 541330 specifically designates 'Engineering Services'. This classification indicates that the primary business activity and the services procured under this contract fall within the domain of professional engineering. This includes services such as designing, developing, and testing new products and processes, providing engineering consulting, and performing feasibility studies. For this contract, it confirms the focus on specialized technical and engineering expertise required by the Department of Defense, likely related to complex defense systems or technologies.

What does the contract duration of 1023 days (approximately 2.8 years) suggest about the nature of the work performed?

A contract duration of 1023 days, roughly 2.8 years, suggests that the engineering services procured were substantial in scope and likely involved complex, long-term tasks. Short-term contracts are typically for well-defined, discrete services. A duration of this length implies work that may have included phases of research, development, detailed design, analysis, testing, and potentially integration support. It indicates a sustained need for the contractor's expertise, moving beyond initial assessments to more involved technical contributions critical to a defense program's lifecycle.

Industry Classification

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

Product/Service Code: GUIDED MISSLES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Corporation

Address: 9401 CORBIN AVE, NORTHRIDGE, CA, 91324

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

Financial Breakdown

Contract Ceiling: $35,158,871

Exercised Options: $35,158,871

Current Obligation: $35,158,871

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0001917G0011

IDV Type: BOA

Timeline