VSE Corporation awarded $29.3M for Romanian Navy sonar system, highlighting shipbuilding and repair sector activity

Contract Overview

Contract Amount: $29,337,501 ($29.3M)

Contractor: VSE Corporation

Awarding Agency: Department of Defense

Start Date: 2020-07-07

End Date: 2023-09-30

Contract Duration: 1,180 days

Daily Burn Rate: $24.9K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: PROCUREMENT, STAGING INSTALLATION AND TRAINING OF THE LOW FREQUENCY ACTIVE TOWER SONAR (LFATS) SYSTEM AND SPARES TO SUPPORT THE ROMANIAN NAVY UNDER FMS CASES QE-P-LCM AND DB-P-LBK

Place of Performance

Location: ALEXANDRIA, FAIRFAX County, VIRGINIA, 22310

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $29.3 million to VSE CORPORATION for work described as: PROCUREMENT, STAGING INSTALLATION AND TRAINING OF THE LOW FREQUENCY ACTIVE TOWER SONAR (LFATS) SYSTEM AND SPARES TO SUPPORT THE ROMANIAN NAVY UNDER FMS CASES QE-P-LCM AND DB-P-LBK Key points: 1. Contract supports foreign military sales, indicating international defense cooperation. 2. Full and open competition suggests a robust bidding process. 3. Firm-fixed-price contract type shifts cost risk to the contractor. 4. Delivery order structure implies phased execution and potential for follow-on work. 5. The contract falls within the shipbuilding and repair NAICS code, a key defense industrial base sector. 6. Long duration (1180 days) suggests a complex, multi-phase project.

Value Assessment

Rating: good

The contract value of $29.3 million for a sonar system and spares appears reasonable given the scope and duration. Benchmarking against similar Foreign Military Sales (FMS) procurements for complex naval systems is challenging without more specific data on system capabilities and quantities. However, the firm-fixed-price nature of the contract suggests that the government has negotiated a price that includes contractor risk, which is generally favorable for value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. This competitive environment is expected to drive price discovery and potentially lead to more favorable pricing for the government. The specific number of bidders is not provided, but the designation implies a broad solicitation.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a market that encourages competitive pricing and innovation, leading to better value for money on defense procurements.

Public Impact

The Romanian Navy is the primary beneficiary, receiving advanced sonar technology to enhance its maritime capabilities. The contract delivers a Low Frequency Active Tower Sonar (LFATS) system and associated spares. Geographic impact is primarily focused on Romania, supporting a key NATO ally. Workforce implications include specialized technical support, installation, and training personnel, likely within the defense contracting sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if initial requirements are not clearly defined.
Reliance on a single contractor (VSE Corporation) for delivery and training could pose risks if performance issues arise.
Foreign Military Sales can introduce complexities related to international regulations and coordination.

Positive Signals

Firm-fixed-price contract mitigates cost overrun risk for the government.
Full and open competition suggests a well-defined requirement and a competitive market.
Delivery order structure allows for phased funding and oversight.
Contractor (VSE Corporation) has experience in defense contracting and logistics support.

Sector Analysis

This contract operates within the defense sector, specifically focusing on naval systems and shipbuilding/repair. The market for advanced sonar systems is specialized, often dominated by a few key players. Spending in this area is driven by national security needs, modernization efforts, and international defense partnerships. Comparable spending benchmarks would involve other FMS procurements of similar naval electronic systems or upgrades.

Small Business Impact

The data indicates that small business participation was not a primary focus for this specific contract, as the 'sb' (small business set-aside) field is false. There is no explicit mention of subcontracting plans for small businesses. This suggests that the prime contractor, VSE Corporation, is likely responsible for fulfilling the majority of the contract requirements, and opportunities for small businesses may be limited unless they are direct suppliers or subcontractors to VSE.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy, which awarded the contract. As a Foreign Military Sales case, there are likely additional layers of oversight involving both the U.S. Department of State and the recipient nation's defense authorities. Transparency is facilitated through contract award databases, but detailed performance metrics and specific oversight activities are typically not publicly disclosed.

Related Government Programs

Foreign Military Sales Program
Naval Ship Systems
Sonar and Acoustic Systems
Department of Defense Procurement

Risk Flags

Foreign Military Sales Complexity
Technical Training and Support Requirements
Long-Term System Sustainment

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $29.3 million to VSE CORPORATION. PROCUREMENT, STAGING INSTALLATION AND TRAINING OF THE LOW FREQUENCY ACTIVE TOWER SONAR (LFATS) SYSTEM AND SPARES TO SUPPORT THE ROMANIAN NAVY UNDER FMS CASES QE-P-LCM AND DB-P-LBK

Who is the contractor on this award?

The obligated recipient is VSE CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $29.3 million.

What is the period of performance?

Start: 2020-07-07. End: 2023-09-30.

What is VSE Corporation's track record with similar Foreign Military Sales contracts, particularly involving sonar systems?

VSE Corporation has a significant history of supporting U.S. military and international defense customers, including numerous Foreign Military Sales (FMS) contracts. While specific details on their experience with sonar systems for the Romanian Navy are not publicly detailed in this award notice, VSE's core competencies include program management, logistics, engineering, and technical services for naval platforms. They have been involved in various aspects of naval modernization and sustainment for allied nations. Their broader experience suggests a capability to manage complex procurements like the LFATS system, which involves integration, training, and sustainment, often requiring close coordination with both the U.S. government and the partner nation's defense apparatus.

How does the $29.3 million contract value compare to other procurements of similar low-frequency active sonar systems?

Directly comparing the $29.3 million value for the LFATS system and spares to other procurements is challenging without knowing the exact system specifications, quantity, and the specific competitive landscape at the time of those other awards. Low-frequency active sonar systems are complex and can vary significantly in capability and cost. However, for major naval electronic systems procured under FMS, this value falls within a range that suggests a significant but not exceptionally large system acquisition. Factors like the inclusion of installation, training, and long-term spares support can substantially influence the total contract value. Benchmarking would ideally involve comparing it to other FMS sonar procurements or similar advanced naval sensor suites awarded through competitive processes.

What are the primary risks associated with the 'full and open competition' award type for this specific contract?

While 'full and open competition' is generally preferred for maximizing value, potential risks for this specific contract include the possibility that the lowest-priced, technically acceptable offer may not represent the best long-term value if contractor performance or sustainment capabilities are not thoroughly vetted. If the competition was intense, there's a risk that bidders may have underestimated the true costs or complexities, potentially leading to performance issues or requests for modification later. Furthermore, the complexity of integrating and training on a sophisticated system like LFATS means that even with competition, ensuring the selected contractor possesses the deep, specialized expertise required for successful execution and long-term support is critical. The government must ensure robust source selection criteria beyond just price.

What is the expected program effectiveness and impact of the LFATS system for the Romanian Navy?

The Low Frequency Active Tower Sonar (LFATS) system is designed to enhance a vessel's anti-submarine warfare (ASW) capabilities by providing improved detection, classification, and tracking of submarines. For the Romanian Navy, a key NATO ally operating in the Black Sea, this system is expected to significantly bolster its maritime situational awareness and defensive posture. Improved sonar performance, particularly at lower frequencies which can offer longer detection ranges and better performance in certain water conditions, will enable more effective monitoring of underwater threats. This contributes to regional security and NATO's collective defense efforts by enhancing the Romanian Navy's ability to detect and counter potential submarine incursions.

How has spending on naval sonar systems and related FMS procurements evolved over the past five years?

Spending on naval sonar systems and related Foreign Military Sales (FMS) procurements has generally remained robust, driven by ongoing naval modernization efforts globally and a persistent focus on anti-submarine warfare (ASW) capabilities. While specific aggregate data for 'sonar systems' can be difficult to isolate, the broader defense electronics and naval systems market has seen consistent investment. FMS procurements, in particular, reflect the security assistance priorities of the U.S. and the defense needs of allied nations. Trends indicate a move towards more advanced, integrated systems, including passive and active sonar arrays, acoustic processing, and data fusion capabilities. The demand for upgrades to existing platforms and new builds incorporating state-of-the-art sonar technology continues to be a significant driver of spending in this defense sub-sector.

Industry Classification

NAICS: Manufacturing › Ship and Boat Building › Ship Building and Repairing

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › NON-NUCLEAR SHIP REPAIR

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0002410R4204

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

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: $29,337,501

Exercised Options: $29,337,501

Current Obligation: $29,337,501

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0002411D4229

IDV Type: IDC

Timeline