Naval Sea Systems Command awarded $497.7M for missile and space systems, with a 1998 start date

Contract Overview

Contract Amount: $730,738,895 ($730.7M)

Contractor: Thomas W.A. Hoffmann

Awarding Agency: Department of Defense

Start Date: 1998-01-09

End Date: 2010-10-01

Contract Duration: 4,648 days

Daily Burn Rate: $157.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: 199804!1700!0964!BZ005!NAVAL SEA SYSTEMS COMMAND !N0002498C5364 !A!*!* !19980109!20010331!497684415!497684415!497684415!N!038E6!THOMAS W.A. HOFFMANN !GRENZSTR. 2 !RIESA !GM!01587!48376!059!51!MCLEAN !FAIRFAX !VIRGINIA !0001!+000074712047!N!N!000000000000!1338!GUIDE MSL AND SP VEH INERT UN, FUEL, COMP !A2 !MISSILE AND SPACE SYSTEMS !2CMP!RIM-67 STANDARD MISSILE(EXT) !3764!3!*!*!*!B!A!*!D !U!R!1!001!N!1G!Z!Y!Z!* !* !N!C!*!A!A!A!A!A!*!* !*!N!A!C!N!*!*!*!*!*!

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85756

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $730.7 million to THOMAS W.A. HOFFMANN for work described as: 199804!1700!0964!BZ005!NAVAL SEA SYSTEMS COMMAND !N0002498C5364 !A!*!* !19980109!20010331!497684415!497684415!497684415!N!038E6!THOMAS W.A. HOFFMANN !GRENZSTR. 2 !RIESA !GM!01587!48376!059!51!MCLEAN !FAIRFA… Key points: 1. Contract awarded for missile and space systems, indicating a focus on strategic defense capabilities. 2. The contract's duration of over 12 years suggests a long-term need for these specialized systems. 3. Awarded as a definitive contract, implying a structured and comprehensive agreement. 4. The contract type is Cost Plus Award Fee, which incentivizes contractor performance. 5. The significant dollar value points to a high-priority program within the Navy's procurement. 6. The contract was not competed, raising questions about potential cost efficiencies and market engagement.

Value Assessment

Rating: questionable

The total award amount of $497.7 million over its extended period is substantial. Without comparable contract data for similar missile and space systems, it is difficult to definitively benchmark the value. The Cost Plus Award Fee (CPAF) structure allows for flexibility but can also lead to higher costs if not managed rigorously. The lack of competition further complicates a value assessment, as there was no market pressure to drive down prices.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one source can provide the required goods or services, or in cases of urgent need. The lack of competition means that the government did not benefit from the price discovery and innovation that typically arises from a competitive bidding process.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. Without bids from other companies, it's harder to ensure the price reflects the best possible value.

Public Impact

The primary beneficiaries are likely the U.S. Navy and potentially other branches of the military requiring advanced missile and space systems. The services delivered involve the supply and support of guided missile and space vehicle inert units, fuels, and components. The geographic impact is national, supporting defense infrastructure and readiness across the United States. Workforce implications include specialized engineering, manufacturing, and logistics roles within the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may have led to higher costs for taxpayers.
Long contract duration without re-competition could reduce incentives for ongoing cost optimization.
Sole-source awards require strong justification and oversight to ensure fair pricing.

Positive Signals

Cost Plus Award Fee structure can incentivize contractor performance and efficiency.
The contract addresses critical defense needs for advanced missile and space systems.
The definitive contract type suggests a well-defined scope of work and agreement.

Sector Analysis

This contract falls within the Defense sector, specifically focusing on missile and space systems. This is a highly specialized and technologically advanced area of defense procurement. The market for such systems is typically dominated by a few large defense contractors due to the high barriers to entry, including R&D costs, specialized manufacturing capabilities, and security clearances. Comparable spending benchmarks would be difficult to establish without access to proprietary data on similar sole-source awards for advanced weapon systems.

Small Business Impact

There is no indication that this contract included small business set-asides. Given the specialized nature of missile and space systems, it is likely that the prime contractor is a large defense corporation. Subcontracting opportunities for small businesses may exist, but they would be dependent on the prime contractor's procurement strategy and the specific components or services required.

Oversight & Accountability

Oversight for this contract would typically be managed by the Naval Sea Systems Command (NAVSEA) and potentially the Defense Contract Management Agency (DCMA). As a Cost Plus Award Fee contract, performance metrics and award fee criteria would be subject to review. Transparency is often limited for sole-source defense contracts due to national security considerations. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse.

Related Government Programs

Naval Sea Systems Command Procurement
Missile Systems Procurement
Space Systems Procurement
Department of Defense Contracts
Cost Plus Award Fee Contracts
Sole Source Defense Contracts

Risk Flags

Sole-source award lacks competitive pricing.
Extended contract duration may reduce cost-saving incentives.
Cost Plus Award Fee requires diligent oversight to manage costs effectively.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $730.7 million to THOMAS W.A. HOFFMANN. 199804!1700!0964!BZ005!NAVAL SEA SYSTEMS COMMAND !N0002498C5364 !A!*!* !19980109!20010331!497684415!497684415!497684415!N!038E6!THOMAS W.A. HOFFMANN !GRENZSTR. 2 !RIESA !GM!01587!48376!059!51!MCLEAN !FAIRFAX !VIRGINIA !0001!+000074712047!N!N!000000000000!1338!GUIDE MSL AND SP VEH INERT UN, FUEL, COMP !A2 !MISSILE AND SPACE SYSTEMS !2CMP!RIM-67 STANDARD MISSILE(EXT) !3764!3!*!*!*!B!A!*!D !U!R!1!0

Who is the contractor on this award?

The obligated recipient is THOMAS W.A. HOFFMANN.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $730.7 million.

What is the period of performance?

Start: 1998-01-09. End: 2010-10-01.

What was the specific justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was 'NOT COMPETED' and awarded as a 'DEFINITIVE CONTRACT'. Specific justifications for sole-source awards are typically documented by the procuring agency and can include factors such as the urgency of the need, the unavailability of other sources, or the existence of unique capabilities held by a single contractor. Without access to the contract's justification documentation (e.g., a Justification for Other Than Full and Open Competition - JOFOC), the precise reasons remain unknown. However, for complex defense systems like missile and space components, it is common for a single contractor to possess the necessary intellectual property, specialized manufacturing facilities, and technical expertise, leading to sole-source awards.

How did the final cost compare to the initial estimated cost, considering the Cost Plus Award Fee structure?

The provided data shows a total award amount of $497,684,415. This figure represents the total obligated amount or ceiling price for the contract. The Cost Plus Award Fee (CPAF) structure means the contractor is reimbursed for allowable costs plus a fee that is composed of a base fee plus a potential award amount, determined by meeting or exceeding performance objectives. The data does not explicitly state the initial estimated cost or break down the final fee structure. To assess how the final cost compared to estimates, one would need access to the contract's funding history, baseline estimates, and the contractor's performance evaluations that determined the award fee payout. Without this detailed financial and performance data, a direct comparison is not possible.

What were the key performance objectives that determined the award fee for this contract?

The specific performance objectives that determined the award fee for this contract are not detailed in the provided summary data. For a Cost Plus Award Fee (CPAF) contract, these objectives are typically outlined in the contract's Performance Work Statement (PWS) or a separate Award Fee Plan. They are designed to incentivize the contractor to go beyond minimum requirements and achieve superior performance in areas critical to the program's success. Common areas for award fees in defense contracts include meeting or exceeding delivery schedules, maintaining high quality standards, demonstrating effective cost management, successful system integration, and providing exceptional technical support or innovation.

What is the historical spending trend for this specific missile and space system or similar systems procured by NAVAL SEA SYSTEMS COMMAND?

The provided data pertains to a single contract awarded in 1998 with an end date of 2010. It does not offer historical spending trends for this specific system or similar systems. To analyze historical spending, one would need to query federal procurement databases for all contracts related to 'GUIDE MSL AND SP VEH INERT UN, FUEL, COMP' or the 'RIM-67 STANDARD MISSILE(EXT)' under NAVAL SEA SYSTEMS COMMAND (NAVSEA) or related agencies over a longer period. This would involve identifying all relevant contract awards, their values, durations, and types. Such an analysis could reveal patterns of increasing or decreasing investment, shifts in procurement strategies (e.g., from sole-source to competed), and the overall lifecycle cost of these systems.

What is the track record of the contractor, THOMAS W.A. HOFFMANN, on similar defense contracts?

The provided data identifies 'THOMAS W.A. HOFFMANN' as the contractor. However, the data does not offer insights into the contractor's track record, past performance ratings, or history on similar defense contracts. To assess the contractor's track record, one would need to research their performance on other government contracts, looking for information on contract completions, any disputes or terminations, quality of work, and adherence to schedules and budgets. Publicly available contract databases might offer some historical contract awards to this entity, but detailed performance evaluations are often internal to the government agency or require specific access.

Competition & Pricing

Extent Competed: NOT COMPETED

Offers Received: 1

Pricing Type: COST PLUS AWARD FEE (R)

Contractor Details

Address: GRENZSTR. 2, RIESA

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline