DoD awards $65.4M for missile launchers, with limited competition and a 5-year duration

Contract Overview

Contract Amount: $65,420,258 ($65.4M)

Contractor: Vertex Modernization and Sustainment LLC

Awarding Agency: Department of Defense

Start Date: 2019-04-09

End Date: 2024-03-31

Contract Duration: 1,818 days

Daily Burn Rate: $36.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: LAU-115 D/A MISSILE LAUNCHERS

Place of Performance

Location: INDIANAPOLIS, MARION County, INDIANA, 46219

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $65.4 million to VERTEX MODERNIZATION AND SUSTAINMENT LLC for work described as: LAU-115 D/A MISSILE LAUNCHERS Key points: 1. The contract's value of $65.4 million over five years suggests a significant investment in missile launcher modernization and sustainment. 2. The 'NOT COMPETED' status raises questions about the extent of market research and potential for cost savings through broader competition. 3. The firm fixed-price contract type offers cost certainty for the government, but may limit flexibility if requirements evolve. 4. The contract is managed by the Defense Contract Management Agency, indicating a focus on defense-specific procurement oversight. 5. The duration of 1818 days (approximately 5 years) points to a long-term need for these missile launcher components. 6. The North American Industry Classification System (NAICS) code 336413 suggests a focus on aircraft parts manufacturing, potentially for integration into aerial platforms.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without more specific details on the missile launchers and their intended use. However, the absence of competition for a contract of this magnitude warrants scrutiny. The firm fixed-price structure provides predictability, but the overall value proposition is difficult to assess without comparative pricing data or a clear understanding of the market alternatives that were considered. Further analysis into the justification for sole-sourcing would be beneficial.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not openly competed. The justification for this approach is not provided in the data. Sole-source awards can sometimes be necessary for highly specialized or proprietary systems, but they typically result in higher prices and reduced innovation due to a lack of competitive pressure. The absence of multiple bidders means the government did not benefit from a range of proposals and pricing strategies.

Taxpayer Impact: Taxpayers may have paid a premium for these missile launchers due to the lack of competition. Without a competitive bidding process, there is less assurance that the government secured the best possible price and value for its investment.

Public Impact

The primary beneficiaries are likely components of the Department of Defense requiring advanced missile launcher systems for aerial or ground platforms. The contract delivers critical components for missile launchers, essential for national defense capabilities. The geographic impact is primarily within the defense sector, with potential implications for military readiness across various operational theaters. Workforce implications may include specialized manufacturing roles within the contractor's organization and potentially within the supply chain supporting this contract.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition for a significant contract value raises concerns about potential overpayment and missed opportunities for cost savings.
The sole-source nature of the award limits transparency into the pricing structure and the justification for selecting a single vendor.
Without competitive benchmarking, it's difficult to ascertain if the awarded price reflects fair market value for the missile launcher components.

Positive Signals

The firm fixed-price contract type provides budget certainty for the Department of Defense, mitigating the risk of cost overruns.
The contract's long duration suggests a stable, long-term need for these components, indicating strategic planning by the agency.
The award to VERTEX MODERNIZATION AND SUSTAINMENT LLC suggests a reliance on established expertise for critical defense systems.

Sector Analysis

The defense manufacturing sector, particularly for aerospace and missile systems, is characterized by high barriers to entry, significant R&D investment, and stringent regulatory requirements. Contracts like this are crucial for maintaining national security capabilities. Spending in this area is often driven by geopolitical factors and technological advancements. Comparable spending benchmarks would typically involve other contracts for similar missile systems or defense electronics, often awarded through competitive processes.

Small Business Impact

The data indicates that small business participation was not a stated factor in this contract award (sb: false). As a sole-source award, there are likely no subcontracting requirements specifically set aside for small businesses unless voluntarily implemented by the prime contractor. This contract does not appear to directly support the small business ecosystem through set-aside provisions.

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. The firm fixed-price nature of the award provides a degree of accountability for the contractor to deliver the specified goods within the agreed-upon price. Transparency is limited due to the sole-source nature, but contract modifications and performance reports would be subject to internal agency review and potentially Inspector General oversight if issues arise.

Related Government Programs

Missile Systems Procurement
Aerospace Component Manufacturing
Defense Logistics and Sustainment
Aircraft Parts Manufacturing
Department of Defense Contracts

Risk Flags

Sole-source award raises concerns about competition and potential value.
Lack of detailed justification for sole-sourcing.
Limited public information on specific missile launcher type and application.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $65.4 million to VERTEX MODERNIZATION AND SUSTAINMENT LLC. LAU-115 D/A MISSILE LAUNCHERS

Who is the contractor on this award?

The obligated recipient is VERTEX MODERNIZATION AND SUSTAINMENT 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 $65.4 million.

What is the period of performance?

Start: 2019-04-09. End: 2024-03-31.

What specific type of missile launchers are these components for, and what is their intended operational platform?

The provided data identifies the item as 'LAU-115 D/A MISSILE LAUNCHERS' and the NAICS code as '336413 - Other Aircraft Parts and Auxiliary Equipment Manufacturing'. This suggests the components are related to missile launcher systems, likely for integration into aircraft or aerial platforms. The 'D/A' designation might refer to specific variants or applications, such as 'Defense/Air'. Without further details from the contracting agency or the contractor, the precise model and intended platform (e.g., specific fighter jet, bomber, or drone) remain unspecified. This information is crucial for understanding the strategic importance and technical requirements of the contract.

What is the justification for awarding this contract on a sole-source basis, and what market research was conducted?

The contract was awarded under a 'NOT COMPETED' basis, indicating a sole-source procurement. The specific justification for this decision is not detailed in the provided data. Typically, sole-source awards require a formal justification, such as the existence of only one responsible source capable of providing the required goods or services, or in cases of urgent and compelling need where competition is not feasible. The extent of market research conducted to confirm the lack of alternatives or to explore potential competitive options would be documented in the contract file. Without this documentation, it is difficult to assess whether the government fully explored competitive avenues or if this was a necessary procurement strategy.

How does the awarded price of $65.4 million compare to similar missile launcher component contracts, either historically or with other agencies?

Directly comparing the $65.4 million award for LAU-115 D/A missile launcher components is challenging without more granular data on the specific items procured, their quantities, and the technical specifications. However, the contract's duration of approximately five years suggests an average annual value of around $13 million. Benchmarking would ideally involve analyzing historical data for similar missile launcher systems or components, considering factors like technological complexity, production volume, and inflation. Given the sole-source nature, it is plausible that the price may be higher than if the contract had been competitively bid. A comprehensive value analysis would require access to the contractor's cost breakdown and comparisons with other defense procurements in the aerospace parts manufacturing sector.

What are the key performance indicators (KPIs) or metrics used to evaluate the contractor's performance under this contract?

The provided data does not specify the key performance indicators (KPIs) or metrics for evaluating VERTEX MODERNIZATION AND SUSTAINMENT LLC's performance. However, for a firm fixed-price contract of this nature, performance evaluation typically focuses on adherence to delivery schedules, quality of the manufactured components, and compliance with technical specifications. The Defense Contract Management Agency (DCMA) would likely be responsible for monitoring these aspects. Specific metrics might include on-time delivery rates, defect rates, adherence to engineering drawings, and successful integration testing if applicable. Formal performance reviews and quality assurance checks would be standard procedures.

What is the historical spending pattern for LAU-115 D/A missile launchers or similar components by the Department of Defense?

The provided data only includes information for this specific contract awarded on April 9, 2019, with an end date of March 31, 2024, valued at $65.4 million. It does not offer historical spending patterns for LAU-115 D/A missile launchers or similar components. To establish historical spending, one would need to access broader federal procurement databases and search for previous contracts related to these specific missile launchers or their predecessors, potentially across different fiscal years and agencies within the Department of Defense. Analyzing past awards, competition levels, and pricing trends would provide valuable context for the current contract's value and necessity.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: GUIDED MISSLES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0001918R0012

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 6125 E 21ST ST, INDIANAPOLIS, IN, 46219

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: $65,420,258

Exercised Options: $65,420,258

Current Obligation: $65,420,258

Subaward Activity

Number of Subawards: 35

Total Subaward Amount: $16,172,853

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline