DoD awards $49.6M for missile launcher modernization, with Vertex Modernization and Sustainment LLC as sole provider

Contract Overview

Contract Amount: $49,598,247 ($49.6M)

Contractor: Vertex Modernization and Sustainment LLC

Awarding Agency: Department of Defense

Start Date: 2021-09-30

End Date: 2026-06-30

Contract Duration: 1,734 days

Daily Burn Rate: $28.6K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: LAU 115 D/A AND LAU-116 B/A MISSILE LAUNCHER

Place of Performance

Location: INDIANAPOLIS, MARION County, INDIANA, 46219

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $49.6 million to VERTEX MODERNIZATION AND SUSTAINMENT LLC for work described as: LAU 115 D/A AND LAU-116 B/A MISSILE LAUNCHER Key points: 1. Contract awarded to a single vendor suggests potential lack of competitive pricing pressure. 2. Long-term sustainment contract indicates a critical need for specialized missile launcher support. 3. Fixed-price contract type aims to control costs, but may not account for unforeseen technical challenges. 4. Delivery order structure allows for phased funding and execution over the contract period. 5. The contract's duration of nearly five years points to a significant, ongoing requirement. 6. Focus on modernization and sustainment highlights the importance of maintaining aging defense assets.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without comparable sole-source awards for similar missile launcher modernization and sustainment services. The firm fixed-price structure provides cost certainty for the government, but the absence of competition raises questions about whether the pricing reflects the best possible value. Further analysis would require understanding the specific technical requirements and the market for such specialized services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Vertex Modernization and Sustainment LLC, was considered. This approach is typically used when a unique capability or proprietary technology is required, or when only one responsible source is available. The lack of competition means that price discovery through a bidding process did not occur, potentially leading to higher costs than if multiple vendors had competed.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive bidding. Without competing offers, there is less assurance that the government secured the most cost-effective solution for these critical missile launcher services.

Public Impact

The Department of the Navy benefits from the modernization and sustainment of its missile launcher systems, ensuring operational readiness. This contract supports the maintenance and upgrade of critical defense equipment, contributing to national security. The primary beneficiaries are the military personnel who rely on these systems for mission success. Workforce implications may include specialized technical roles within Vertex Modernization and Sustainment LLC, potentially in Indiana where the company is located.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
Long contract duration could lock the government into a specific vendor without ongoing market checks.
Lack of transparency in the sole-source justification process could obscure potential alternatives.
Dependence on a single provider for critical sustainment creates vendor lock-in risk.
Firm fixed-price may not adequately cover unforeseen technical complexities in modernization.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Long-term sustainment ensures continued operational capability of essential defense assets.
Focus on modernization indicates investment in upgrading aging but critical equipment.
Delivery order structure allows for phased funding and management of work.

Sector Analysis

The aerospace manufacturing sector, specifically 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' (NAICS 336413), is characterized by high technological barriers to entry and specialized production capabilities. Contracts within this sector often involve complex systems requiring extensive research, development, and sustainment. This particular award for missile launcher components fits within the broader defense industrial base, where long-term relationships and specialized expertise are common. Comparable spending benchmarks are difficult to establish due to the niche nature of missile launcher sustainment and modernization, especially under sole-source conditions.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the 'ss': false flag suggests it is not a small business prime award. The implications for small businesses are likely indirect, potentially through subcontracting opportunities if Vertex Modernization and Sustainment LLC engages them. However, without specific subcontracting plans detailed in the award, the direct impact on the small business ecosystem is uncertain.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. Accountability measures are embedded within the firm fixed-price contract terms, requiring Vertex Modernization and Sustainment LLC to deliver specified goods and services. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse related to the contract's execution.

Related Government Programs

Missile Systems
Defense Logistics
Aerospace Manufacturing
Naval Aviation Support
Weapon Systems Sustainment

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns
Vendor lock-in risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $49.6 million to VERTEX MODERNIZATION AND SUSTAINMENT LLC. LAU 115 D/A AND LAU-116 B/A MISSILE LAUNCHER

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 (Department of the Navy).

What is the total obligated amount?

The obligated amount is $49.6 million.

What is the period of performance?

Start: 2021-09-30. End: 2026-06-30.

What is the specific technical scope of the 'LAU 115 D/A AND LAU-116 B/A MISSILE LAUNCHER' modernization and sustainment?

The provided data does not detail the specific technical scope of modernization and sustainment for the LAU 115 D/A and LAU-116 B/A missile launchers. These are typically aircraft-mounted launchers for air-to-air or air-to-ground missiles. Modernization could involve upgrades to electronics, structural integrity, or compatibility with new weapon systems. Sustainment likely includes maintenance, repair, overhaul, and technical support to ensure the launchers remain operational and safe. Without further documentation, the precise nature of the work remains unspecified, making it difficult to assess the technical complexity or justify the sole-source award beyond a general need for specialized support.

How does the $49.6 million cost compare to similar missile launcher sustainment contracts?

Direct comparison of the $49.6 million cost for this sole-source contract to similar missile launcher sustainment contracts is difficult due to the limited public data available for specialized defense procurements, especially those awarded without competition. Typically, sole-source awards may carry a price premium compared to competitively bid contracts. To assess value-for-money, one would need to benchmark against historical sole-source awards for comparable systems or against industry estimates for such services. The firm fixed-price nature provides some cost control, but the absence of competitive bids prevents a definitive value assessment against market alternatives.

What are the risks associated with a sole-source award for critical defense equipment sustainment?

The primary risks associated with a sole-source award for critical defense equipment sustainment include potential overpayment due to lack of price competition, vendor lock-in limiting future flexibility, and reduced incentive for the contractor to innovate or improve efficiency. There's also a risk that the government becomes overly reliant on a single supplier, making it vulnerable to supply chain disruptions or price increases. Furthermore, the justification for a sole-source award must be robust to ensure it is truly necessary and not a result of poor planning or market research. Without competition, the government has less leverage to negotiate favorable terms.

What is Vertex Modernization and Sustainment LLC's track record with the Department of Defense, particularly for missile launcher systems?

Information regarding Vertex Modernization and Sustainment LLC's specific track record with the Department of Defense, particularly concerning missile launcher systems, is not detailed in the provided data. A comprehensive assessment would require reviewing their contract history, past performance evaluations, and any prior experience with similar weapon systems. As this is a sole-source award, it implies the Department of the Navy has determined Vertex possesses the necessary qualifications, capabilities, and potentially unique expertise required for this specific contract. Further investigation into their corporate history and previous DoD engagements would be needed for a complete picture.

How does the contract duration of 1734 days (approx. 4.75 years) impact program stability and cost management?

The contract duration of approximately 4.75 years provides significant program stability for both the Department of the Navy and Vertex Modernization and Sustainment LLC. For the Navy, it ensures a consistent provider for essential modernization and sustainment services, reducing the risk of operational gaps. For the contractor, it offers a predictable revenue stream, allowing for better resource planning and investment in specialized capabilities. From a cost management perspective, the firm fixed-price structure over this extended period aims to lock in costs, protecting the government from potential inflation or market fluctuations. However, it also means that any potential cost savings from improved efficiency or market shifts might not be realized by the government during the contract term.

What are the implications of this contract being classified under NAICS code 336413 (Other Aircraft Parts and Auxiliary Equipment Manufacturing)?

The classification under NAICS code 336413, 'Other Aircraft Parts and Auxiliary Equipment Manufacturing,' places this contract within the broader aerospace and defense manufacturing industry. This code encompasses companies that produce parts and auxiliary equipment for aircraft, missiles, and space vehicles, excluding engines, propellers, and navigation equipment. For this specific contract, it signifies that the work involves the manufacturing or modification of components related to missile launchers, which are often integrated with aircraft platforms. This classification suggests a need for specialized manufacturing processes, quality control, and adherence to stringent aerospace standards, potentially contributing to the justification for a specialized or sole-source provider.

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: N0001920R0010

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: $49,598,247

Exercised Options: $49,598,247

Current Obligation: $49,598,247

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0001921D0021

IDV Type: IDC

Timeline