Navy awards $66.9M contract for MK 25 MOD 1 canisters, with 2 bidders competing

Contract Overview

Contract Amount: $66,872,183 ($66.9M)

Contractor: Stark Aerospace Inc.

Awarding Agency: Department of Defense

Start Date: 2024-10-22

End Date: 2029-05-31

Contract Duration: 1,682 days

Daily Burn Rate: $39.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MK 25 MOD 1 CANISTERS W/PHS&T

Place of Performance

Location: COLUMBUS, LOWNDES County, MISSISSIPPI, 39701

State: Mississippi Government Spending

Plain-Language Summary

Department of Defense obligated $66.9 million to STARK AEROSPACE INC. for work described as: MK 25 MOD 1 CANISTERS W/PHS&T Key points: 1. Contract value of $66.9M for specialized canisters suggests a significant need for these components. 2. The award was made under full and open competition, indicating a broad market search. 3. A firm-fixed-price contract type aims to control costs and provide predictability. 4. The contract duration spans over 4 years, suggesting a long-term requirement. 5. The North American Industry Classification System (NAICS) code 332999 points to fabricated metal product manufacturing. 6. The contract is not set aside for small businesses, implying larger prime contractors are involved.

Value Assessment

Rating: good

The contract value of $66.9 million for MK 25 MOD 1 canisters with associated hardware appears reasonable given the specialized nature of defense procurement. Benchmarking against similar defense hardware contracts is challenging without more specific details on the canister's function and complexity. However, the firm-fixed-price structure suggests an effort to manage costs effectively. The presence of two bidders indicates a competitive environment that likely contributed to a fair price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit a bid. The data indicates there were two bidders, which suggests a moderate level of competition for this specialized defense requirement. While two bidders are better than one, a higher number of competitors could potentially drive prices down further and foster greater innovation.

Taxpayer Impact: The full and open competition, even with two bidders, provides taxpayers with assurance that the government sought the best value. This process helps prevent sole-source awards that could be significantly more expensive.

Public Impact

The primary beneficiaries are the U.S. Navy personnel who will utilize the MK 25 MOD 1 canisters. The contract delivers essential hardware for naval operations, likely related to ordnance or equipment storage and deployment. The geographic impact is primarily within the defense supply chain and naval bases where these canisters will be deployed. Workforce implications include jobs in manufacturing, quality control, and logistics within the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for limited competition if only two bidders were viable for this niche product.
Dependence on a single contractor for future sustainment or modifications could arise if the market is small.
Risk of cost overruns if the firm-fixed-price contract does not adequately account for all production complexities.

Positive Signals

Awarded under full and open competition, maximizing potential for competitive pricing.
Firm-fixed-price contract type provides cost certainty for the government.
Long contract duration (over 4 years) offers stability for the supplier and ensures sustained availability of the product.

Sector Analysis

The defense manufacturing sector, particularly fabricated metal products, is a critical component of the U.S. industrial base. This contract falls under the broader category of defense procurement, which often involves specialized components with high technical requirements. Spending in this area is driven by military readiness and modernization efforts. Comparable spending benchmarks are difficult to establish without knowing the exact specifications and function of the MK 25 MOD 1 canisters, but defense hardware contracts can range from millions to billions of dollars.

Small Business Impact

The contract was not set aside for small businesses, and the 'ss' field is false. This suggests that the prime contractor is likely a larger entity capable of handling the scale and complexity of this defense requirement. There is no explicit information on subcontracting plans for small businesses, which could be a missed opportunity to engage the small business 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 inherent in the firm-fixed-price contract type, which obligates the contractor to deliver specified goods at an agreed-upon price. Transparency is facilitated by the contract award data being publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Naval Ordnance Systems
Defense Ammunition Procurement
Fabricated Metal Product Manufacturing Contracts
Department of Defense Supply Chain Management

Risk Flags

Potential for limited competition due to specialized nature of product.
Contract duration extends over multiple fiscal years, requiring sustained funding.
Dependence on a single supplier if market is narrow.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $66.9 million to STARK AEROSPACE INC.. MK 25 MOD 1 CANISTERS W/PHS&T

Who is the contractor on this award?

The obligated recipient is STARK AEROSPACE INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $66.9 million.

What is the period of performance?

Start: 2024-10-22. End: 2029-05-31.

What is the specific function and technical complexity of the MK 25 MOD 1 canisters?

The specific function and technical complexity of the MK 25 MOD 1 canisters are not detailed in the provided data. However, the designation 'MK 25 MOD 1' suggests a military-specification item, likely related to the storage, transport, or deployment of ordnance, sensitive equipment, or other critical materials. The 'CANISTERS W/PHS&T' likely refers to canisters with associated packaging, handling, storage, and transportation requirements. Such items often require robust construction, environmental sealing, and adherence to strict military standards, indicating a moderate to high level of technical complexity and manufacturing precision.

How does the $66.9 million contract value compare to historical spending on similar items?

Direct historical spending comparisons for the 'MK 25 MOD 1 CANISTERS W/PHS&T' are not readily available from the provided data alone. However, the contract value of $66.9 million over approximately 4.5 years (from October 2024 to May 2029) indicates an average annual value of roughly $14.8 million. This figure should be benchmarked against previous awards for the same or similar canister systems, if they exist, and against the total procurement budget for related naval systems. Without access to historical contract databases or specific program cost histories, a precise comparison is difficult, but the amount suggests a significant, ongoing need for this component within the Navy's operations.

What are the key risks associated with this contract, and how are they being mitigated?

Key risks associated with this contract include potential supply chain disruptions for specialized materials, manufacturing defects, and schedule delays. Given the firm-fixed-price nature, the primary risk to the government is the contractor failing to deliver on time or to specification, potentially leading to contract disputes or the need for re-competition. Mitigation strategies likely include robust quality assurance clauses, performance metrics, and potentially liquidated damages for late delivery. The moderate competition (two bidders) also presents a risk if one bidder has a significant advantage or if the market is inherently limited, reducing leverage for future negotiations.

What is the track record of STARK AEROSPACE INC. in fulfilling defense contracts of this nature?

Information regarding STARK AEROSPACE INC.'s specific track record with defense contracts of this nature is not provided in the data snippet. A comprehensive assessment would require reviewing their past performance on similar contracts, including on-time delivery, quality adherence, and cost management. Their ability to win this $66.9 million contract under full and open competition suggests they possess the necessary capabilities and certifications. Further due diligence would involve examining federal procurement databases for their award history and any associated performance reviews or past performance questionnaires.

How does the pricing structure (firm-fixed-price) benefit the government in this context?

The firm-fixed-price (FFP) contract structure is highly beneficial for the government in this context as it shifts the majority of the cost risk to the contractor, STARK AEROSPACE INC. Under an FFP agreement, the price is set and not subject to upward adjustment based on the contractor's actual costs. This provides budget certainty and predictability, allowing the Department of the Navy to manage its finances more effectively. It incentivizes the contractor to control costs and improve efficiency to maximize their profit margin, while ensuring the government pays a predetermined amount for the specified goods, assuming successful delivery.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › All Other Miscellaneous Fabricated Metal Product Manufacturing

Product/Service Code: GUIDED MISSLES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SEALED BID

Solicitation ID: N0002423R5324

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 319 CHARLEIGH D FORD JR DR, COLUMBUS, MS, 39701

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

Financial Breakdown

Contract Ceiling: $286,237,835

Exercised Options: $66,872,183

Current Obligation: $66,872,183

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline