Navy awards $510M contract for MK 48 MOD 7 torpedo components to Science Applications International Corporation

Contract Overview

Contract Amount: $509,638,060 ($509.6M)

Contractor: Science Applications International Corporation

Awarding Agency: Department of Defense

Start Date: 2021-11-23

End Date: 2032-12-31

Contract Duration: 4,056 days

Daily Burn Rate: $125.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MK 48 MOD 7 AB/TC AND FUEL TANK SECTION

Place of Performance

Location: RESTON, FAIRFAX County, VIRGINIA, 20190

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $509.6 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION for work described as: MK 48 MOD 7 AB/TC AND FUEL TANK SECTION Key points: 1. Contract value represents a significant investment in naval defense capabilities. 2. The award to a single, established contractor suggests a focus on specialized expertise. 3. Long contract duration indicates a sustained need for these critical components. 4. Fixed-price contract type aims to control costs and provide budget predictability. 5. The specific nature of the components points to a niche but vital segment of defense manufacturing. 6. This award is part of a broader pattern of sustained investment in undersea warfare systems.

Value Assessment

Rating: good

The total contract value of approximately $510 million over its lifespan suggests a substantial investment. Benchmarking this against similar complex defense component contracts is challenging without more granular data on specific sub-components and labor hours. However, the fixed-price nature of the contract provides a degree of cost certainty for the Navy. The contractor's established role in defense systems implies a level of expertise that may justify the investment, though ongoing performance monitoring will be key to ensuring 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 vendors had the opportunity to bid. The specific number of bidders is not provided, but the fact that it was competed openly suggests a healthy market for these specialized components. This process is designed to foster price discovery and ensure the government receives competitive offers, potentially leading to better pricing than a sole-source award.

Taxpayer Impact: Taxpayers benefit from the competitive process, which aims to secure the best possible price for these critical defense components and prevent cost overruns associated with less competitive procurements.

Public Impact

The primary beneficiaries are the U.S. Navy's submarine fleet, which relies on these components for operational readiness. The contract ensures the continued supply of essential parts for the MK 48 MOD 7 torpedo system. The geographic impact is primarily centered around the contractor's facilities, likely in Virginia, and naval bases where these torpedoes are deployed. This contract supports a specialized segment of the defense manufacturing workforce, requiring skilled engineers and technicians.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost creep if unforeseen technical challenges arise during the long contract period.
Reliance on a single contractor for critical components could pose supply chain risks if the contractor faces operational issues.
Ensuring ongoing technological relevance of the components throughout the contract's extended duration.

Positive Signals

Fixed-price contract structure provides cost predictability.
Full and open competition suggests a robust market and potential for competitive pricing.
Long-term award signals stability and sustained support for a critical defense system.
Contractor's established presence in defense manufacturing implies technical capability.

Sector Analysis

This contract falls within the defense manufacturing sector, specifically focusing on advanced weapon systems components. The market for such specialized naval ordnance is relatively concentrated, with a few key players possessing the necessary technical expertise and security clearances. Spending in this area is driven by national security priorities and the ongoing modernization of naval fleets. Comparable spending benchmarks would typically involve other large, complex defense system procurements, often running into hundreds of millions or billions of dollars.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). While the prime contractor, Science Applications International Corporation, is a large entity, there may be opportunities for small businesses to participate as subcontractors. The extent of small business subcontracting will depend on SAIC's procurement strategy and the availability of specialized small business suppliers within the defense industrial base.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy's contracting and program management offices. Accountability measures are embedded in the contract terms, including performance standards and payment schedules tied to delivery. Transparency is facilitated through contract databases like FPDS, though detailed technical specifications and performance metrics may be sensitive. The Inspector General for the Department of Defense would have jurisdiction over any allegations of fraud or mismanagement.

Related Government Programs

MK 48 Torpedo Program
Naval Undersea Warfare Systems
Defense Contract Management Agency (DCMA) oversight
Department of Defense Procurement

Risk Flags

Long contract duration may increase risk of technological obsolescence.
Potential supply chain vulnerabilities for specialized components.
Need for sustained oversight to ensure performance and value over time.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $509.6 million to SCIENCE APPLICATIONS INTERNATIONAL CORPORATION. MK 48 MOD 7 AB/TC AND FUEL TANK SECTION

Who is the contractor on this award?

The obligated recipient is SCIENCE APPLICATIONS INTERNATIONAL 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 $509.6 million.

What is the period of performance?

Start: 2021-11-23. End: 2032-12-31.

What is the historical spending trend for MK 48 MOD 7 components or similar naval ordnance by the Department of the Navy?

Analyzing historical spending trends for specific components like the MK 48 MOD 7 requires deep dives into historical contract awards databases. Generally, the Department of the Navy exhibits consistent, significant investment in undersea warfare capabilities, including torpedo systems. Spending fluctuates based on modernization cycles, fleet readiness requirements, and geopolitical factors. For instance, periods of increased geopolitical tension or the introduction of new submarine classes often correlate with higher spending on advanced ordnance. The total value of this $510 million contract over its multi-year duration suggests a sustained procurement effort, aligning with long-term naval modernization plans. Without specific historical data points for this exact component, comparisons are broad, but the overall trend indicates a stable, albeit substantial, budget allocation for such critical systems.

How does the per-unit cost of the MK 48 MOD 7 components compare to industry benchmarks or previous contract awards?

Determining a precise per-unit cost for the MK 48 MOD 7 components is complex without access to the detailed breakdown of the contract's pricing structure, including labor, materials, overhead, and profit margins. The provided data aggregates the total contract value ($510M) over a duration of approximately 11 years (Nov 2021 - Dec 2032), with a contract duration of 4056 days. This suggests a significant but not necessarily exorbitant cost per unit, given the highly specialized and technologically advanced nature of torpedo components. Industry benchmarks for such defense-critical items are often proprietary or classified. However, the fixed-price nature of the contract implies that the contractor, Science Applications International Corporation, has committed to a specific price, which is subject to negotiation and competitive pressures. Any deviation from expected cost efficiency would likely be flagged during performance reviews.

What is Science Applications International Corporation's track record with similar defense contracts, particularly for naval systems?

Science Applications International Corporation (SAIC) has a substantial and long-standing track record in providing a wide array of products and services to the U.S. military, including the Department of the Navy. They are a major defense contractor frequently involved in complex systems integration, engineering, and technical support for naval platforms and weapon systems. Their portfolio often includes work on command, control, communications, computers, and intelligence (C4I) systems, as well as platforms and weapon systems support. SAIC has historically secured large, multi-year contracts for various defense needs. Their experience with naval systems, including sonar, combat systems, and potentially components for ordnance, is extensive. This background suggests they possess the necessary technical expertise, manufacturing capabilities, and security clearances required for a contract of this nature, indicating a generally reliable performance history in this domain.

What are the primary risks associated with a long-duration contract for specialized defense components like the MK 48 MOD 7 parts?

Long-duration contracts for specialized defense components, such as those for the MK 48 MOD 7 torpedo, present several key risks. Firstly, technological obsolescence is a significant concern; the technology landscape can evolve rapidly over an 11-year period, potentially rendering components outdated or less effective against emerging threats. Secondly, cost escalation risk, despite the fixed-price nature, can materialize through unforeseen manufacturing challenges, material price volatility, or changes in regulatory requirements, potentially leading to contract modifications or disputes. Thirdly, supply chain disruptions are a risk, especially for highly specialized components that may rely on a limited number of suppliers. Finally, contractor performance degradation over time is possible, where initial high performance may wane due to shifts in management, workforce stability, or evolving priorities within the contracting company. Ensuring sustained quality and delivery throughout the contract's life requires robust oversight.

How does the 'full and open competition' classification impact the overall value and taxpayer cost for this contract?

The classification of 'full and open competition' is a critical factor in assessing the value and taxpayer cost for this $510 million contract. This procurement method signifies that all responsible sources were permitted to submit a bid, fostering a competitive environment. In theory, competition drives down prices as contractors vie for the award by offering their best terms. This process allows the government to leverage market forces to achieve better price discovery and potentially secure the components at a more economical rate compared to sole-source or limited competition scenarios. While the exact number of bidders isn't specified, the open nature of the competition suggests that taxpayers benefit from a process designed to prevent monopolies and ensure that the selected contractor, Science Applications International Corporation, is offering terms deemed most advantageous after a thorough evaluation of technical merit and price.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

Product/Service Code: AMMUNITION AND EXPLOSIVES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0002420R6419

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 12010 SUNSET HILLS RD, RESTON, VA, 20190

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

Financial Breakdown

Contract Ceiling: $1,042,159,855

Exercised Options: $525,350,000

Current Obligation: $509,638,060

Subaward Activity

Number of Subawards: 53

Total Subaward Amount: $277,467,005

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline