Navy awards $16.3M for advanced propulsor and propeller technical support services

Contract Overview

Contract Amount: $16,263,506 ($16.3M)

Contractor: Propulsor Technology Inc

Awarding Agency: Department of Defense

Start Date: 2023-01-26

End Date: 2026-01-18

Contract Duration: 1,088 days

Daily Burn Rate: $14.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: THE CONTRACTOR SHALL PROVIDE TECHNICAL SUPPORT SERVICES FOR THE DESIGN, DEVELOPMENT, MANUFACTURE, INSTALLATION, INSPECTION, AND INTEGRATED LIBRARY SYSTEM (ILS) OF ADVANCED PROPULSORS AND STANDARD NAVY PROPELLERS.

Place of Performance

Location: BRIDGEVILLE, ALLEGHENY County, PENNSYLVANIA, 15017

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $16.3 million to PROPULSOR TECHNOLOGY INC for work described as: THE CONTRACTOR SHALL PROVIDE TECHNICAL SUPPORT SERVICES FOR THE DESIGN, DEVELOPMENT, MANUFACTURE, INSTALLATION, INSPECTION, AND INTEGRATED LIBRARY SYSTEM (ILS) OF ADVANCED PROPULSORS AND STANDARD NAVY PROPELLERS. Key points: 1. Contract focuses on comprehensive technical support for advanced propulsors and Navy propellers. 2. Services include design, development, manufacture, installation, and inspection. 3. The contract is a delivery order under a larger indefinite-delivery/indefinite-quantity (IDIQ) contract. 4. The contractor has a history of providing similar engineering services. 5. The contract type is Cost Plus Fixed Fee, which can carry higher risk for cost overruns. 6. The duration of the contract is approximately 3 years.

Value Assessment

Rating: good

The contract value of $16.3 million for three years of technical support for advanced propulsors and Navy propellers appears reasonable given the specialized nature of the services. Benchmarking against similar complex engineering support contracts for naval systems is challenging due to the unique requirements. However, the Cost Plus Fixed Fee (CPFF) contract type suggests that the government is willing to cover actual costs plus a negotiated fee, which can be less cost-effective than fixed-price contracts if not managed carefully. The contractor's experience in this niche area is a positive indicator of potential value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. The specific number of bidders is not provided, but full and open competition generally fosters a competitive environment that can lead to better pricing and innovation. This approach ensures that the government selects the best value offering from a wide pool of qualified contractors.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it maximizes the potential for competitive pricing and ensures that government funds are used efficiently by selecting the most capable and cost-effective solution.

Public Impact

The U.S. Navy benefits from enhanced technical support for critical propulsion systems. Services ensure the design, development, and maintenance of advanced propulsors and propellers. This contract supports the operational readiness and technological advancement of naval vessels. The contract is expected to support specialized engineering and technical roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can lead to cost overruns if not closely monitored.
The specialized nature of propulsor technology may limit the pool of qualified competitors in the future.
Dependence on a single delivery order for this scope of work could pose a risk if the contractor underperforms.

Positive Signals

Awarded under full and open competition, suggesting a competitive bidding process.
The contractor has prior experience in providing similar engineering services.
The contract duration of approximately three years allows for sustained support and development.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting naval defense systems. The market for advanced naval propulsion technology is highly specialized, with a limited number of firms possessing the requisite expertise. Spending in this area is driven by the need for technological superiority and platform modernization within defense budgets. Comparable spending benchmarks are difficult to establish due to the unique nature of propulsor technology.

Small Business Impact

There is no indication that this contract includes a small business set-aside. Given the specialized technical requirements for advanced propulsor and propeller systems, it is likely that larger, more specialized defense contractors are best positioned to compete. Subcontracting opportunities for small businesses may exist if the prime contractor identifies specific needs that can be met by smaller, specialized firms within their supply chain.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy's contracting and program management offices. Accountability measures will be tied to the performance metrics outlined in the contract and the Cost Plus Fixed Fee structure, requiring detailed cost reporting and justification. Transparency is generally maintained through contract awards databases and reporting requirements, though specific technical details may be sensitive.

Related Government Programs

Naval Ship Systems Engineering
Advanced Propulsion Systems Development
Defense Engineering Services
Naval Surface Warfare Center Contracts

Risk Flags

Cost Plus Fixed Fee contract type requires diligent cost oversight.
Specialized nature of technology may limit future competition.
Scope includes design, development, manufacture, installation, and inspection, increasing complexity.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $16.3 million to PROPULSOR TECHNOLOGY INC. THE CONTRACTOR SHALL PROVIDE TECHNICAL SUPPORT SERVICES FOR THE DESIGN, DEVELOPMENT, MANUFACTURE, INSTALLATION, INSPECTION, AND INTEGRATED LIBRARY SYSTEM (ILS) OF ADVANCED PROPULSORS AND STANDARD NAVY PROPELLERS.

Who is the contractor on this award?

The obligated recipient is PROPULSOR TECHNOLOGY 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 $16.3 million.

What is the period of performance?

Start: 2023-01-26. End: 2026-01-18.

What is the track record of Propulsor Technology Inc. in delivering similar technical support services for naval propulsion systems?

Propulsor Technology Inc. has a documented history of providing engineering and technical support services, including those related to propulsion systems. While specific details on past performance for advanced propulsors and Navy propellers are not fully elaborated in the provided data, their engagement in this sector suggests a foundational capability. Further analysis would involve reviewing past performance evaluations, contract histories, and any reported issues or successes on previous naval contracts to fully assess their track record. The fact that they were awarded this contract under full and open competition implies they met the necessary qualifications and demonstrated past performance relevant to the Navy's requirements.

How does the $16.3 million contract value compare to similar contracts for advanced naval propulsion technical support?

Direct comparisons for contracts of this specific nature are challenging due to the highly specialized and often proprietary aspects of advanced naval propulsion technology. The $16.3 million value over approximately three years for comprehensive technical support (design, development, manufacture, installation, inspection) suggests a significant investment in maintaining and advancing critical naval capabilities. Benchmarking would ideally involve looking at other contracts awarded by the Navy or other defense agencies for similar complex engineering services on major platforms. However, without access to detailed cost breakdowns and scope comparisons, it's difficult to definitively state if this represents a premium or a standard rate. The CPFF structure also means the final cost could vary.

What are the primary risks associated with the Cost Plus Fixed Fee (CPFF) contract type for this acquisition?

The primary risk associated with a Cost Plus Fixed Fee (CPFF) contract is the potential for cost overruns. In a CPFF arrangement, the contractor is reimbursed for all allowable costs incurred, plus a fixed fee representing their profit. If the contractor's costs exceed initial estimates, the government bears the burden of these increased expenses. This necessitates robust oversight and diligent cost tracking by the government to ensure that costs remain reasonable and allocable to the contract. For the Navy, this means ensuring Propulsor Technology Inc. maintains meticulous records and justifies all expenditures. The fixed fee, however, provides some predictability in contractor profit, unlike other cost-reimbursement types.

How does the scope of services (design, development, manufacture, installation, inspection) impact the overall value and risk of this contract?

The broad scope of services, encompassing design through inspection, indicates a comprehensive support requirement for the advanced propulsors and propellers. This integrated approach aims to ensure seamless lifecycle support and potentially faster issue resolution. From a value perspective, consolidating these services under one contract could lead to efficiencies and better coordination. However, it also increases the complexity and potential risk. Managing design changes, manufacturing quality, installation challenges, and inspection protocols all require distinct expertise and rigorous oversight. The contractor must demonstrate proficiency across all these areas, and the government must ensure adequate oversight mechanisms are in place for each phase to realize the intended value and mitigate risks.

What is the significance of this contract being a delivery order under an IDIQ contract?

This contract being a delivery order under an Indefinite Delivery/Indefinite Quantity (IDIQ) contract signifies that it is one of potentially many orders placed against a broader, pre-negotiated contract vehicle. IDIQs are often used to streamline the procurement process for services that are expected to be needed over time but with uncertain quantities or timing. For this specific award, it means Propulsor Technology Inc. has likely secured a position on a larger contract framework, and this $16.3 million order represents a specific tasking within that framework. The advantage for the Navy is flexibility and potentially faster ordering. For the contractor, it provides a baseline of expected work, though the total value and duration of their involvement depend on future delivery orders.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N0016722R3004

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 80 EMERSON LN STE 1302, BRIDGEVILLE, PA, 15017

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

Financial Breakdown

Contract Ceiling: $33,248,664

Exercised Options: $19,052,259

Current Obligation: $16,263,506

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017819D8352

IDV Type: IDC

Timeline