Navy awards $8.5M engineering services task order to AMERICAN SYSTEMS CORPORATION for ship alterations

Contract Overview

Contract Amount: $8,539,029 ($8.5M)

Contractor: American Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2024-08-08

End Date: 2026-08-07

Contract Duration: 729 days

Daily Burn Rate: $11.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: SHIPALT TASK ORDER

Place of Performance

Location: CHANTILLY, FAIRFAX County, VIRGINIA, 20151

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $8.5 million to AMERICAN SYSTEMS CORPORATION for work described as: SHIPALT TASK ORDER Key points: 1. Value for money assessed through competitive bidding, indicating potential for cost efficiencies. 2. Competition dynamics suggest a healthy market for engineering services within the defense sector. 3. Risk indicators appear moderate given the task order nature and established contractor. 4. Performance context is a delivery order under an existing contract, implying prior vetting. 5. Sector positioning places this within the broader defense engineering and technical services market.

Value Assessment

Rating: good

The contract value of $8.5 million for engineering services appears reasonable within the context of defense shipbuilding and maintenance. Benchmarking against similar task orders for ship alterations and engineering support would provide a more precise value assessment. The Cost Plus Fixed Fee (CPFF) contract type allows for cost reimbursement with a fixed fee, which can be effective for complex projects where costs are difficult to predict precisely, but requires careful oversight to manage expenditures.

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 presence of two bids suggests a competitive environment, though a higher number of bidders would typically lead to more robust price discovery and potentially lower costs for the government. The specific details of the bidding process and the evaluation criteria would further illuminate the effectiveness of the competition.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down prices and encourage innovation from contractors.

Public Impact

The Department of the Navy is the primary beneficiary, receiving critical engineering services for ship alterations. Services delivered will likely involve design, planning, and technical support for modifications to naval vessels. Geographic impact is centered around naval facilities where the ship alterations will be performed, likely in Virginia. Workforce implications include employment for engineers, technicians, and support staff at AMERICAN SYSTEMS CORPORATION and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts require diligent oversight to ensure costs remain within reasonable bounds and the fixed fee is justified.
The duration of the contract (729 days) necessitates sustained monitoring of performance and progress.
Potential for scope creep in engineering services if not clearly defined and managed.

Positive Signals

Awarded under full and open competition, suggesting a competitive process.
AMERICAN SYSTEMS CORPORATION is an established contractor, implying a degree of familiarity with government contracting and performance.
The task order is a delivery order, indicating it falls under a pre-existing contract vehicle, which can streamline acquisition.

Sector Analysis

The defense engineering services sector is a significant market driven by the need for specialized technical expertise in areas such as naval architecture, mechanical engineering, and systems integration. This contract fits within the broader category of professional, scientific, and technical services supporting military readiness and modernization. Spending in this sector is often characterized by long-term contracts, complex requirements, and a focus on innovation and reliability.

Small Business Impact

There is no indication that this contract was specifically set aside for small businesses, nor is there information on subcontracting plans. The award to AMERICAN SYSTEMS CORPORATION, a large business, suggests that small business participation would likely occur through subcontracting opportunities, if any are identified by the prime contractor.

Oversight & Accountability

Oversight for this contract will be managed by the Department of the Navy, likely through contracting officers and technical representatives who will monitor performance, costs, and adherence to the contract terms. The Cost Plus Fixed Fee structure necessitates robust financial oversight to ensure the government is receiving fair value. Transparency is typically maintained through contract databases and reporting requirements.

Related Government Programs

Naval Ship Maintenance and Modernization Programs
Defense Engineering and Technical Services
Ship Alteration and Repair Contracts
Naval Vessel Lifecycle Support

Risk Flags

Cost Plus Fixed Fee contract type requires diligent oversight.
Potential for scope creep in engineering services.
Performance monitoring is crucial for a 729-day contract.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $8.5 million to AMERICAN SYSTEMS CORPORATION. SHIPALT TASK ORDER

Who is the contractor on this award?

The obligated recipient is AMERICAN SYSTEMS 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 $8.5 million.

What is the period of performance?

Start: 2024-08-08. End: 2026-08-07.

What is the historical performance record of AMERICAN SYSTEMS CORPORATION with the Department of the Navy for similar engineering services?

AMERICAN SYSTEMS CORPORATION has a history of performing various services for the Department of the Navy, including engineering, IT, and program management support. Analyzing past contract performance reviews (e.g., Contractor Performance Assessment Reporting System - CPARS) would provide specific insights into their track record regarding quality, timeliness, and cost control on similar projects. A review of their past performance on ship alteration or modification contracts would be particularly relevant to assess their suitability and reliability for this specific task order.

How does the Cost Plus Fixed Fee (CPFF) structure compare to other contract types for ship alteration projects of this nature?

The CPFF structure is often used for complex projects where the scope of work or the costs involved are not precisely determinable at the outset, such as research and development or significant modifications. For ship alterations, other contract types like Firm-Fixed-Price (FFP) might be used if the scope is very well-defined and predictable, potentially offering greater cost certainty for the government. However, FFP can shift more risk to the contractor. Cost-Plus-Incentive-Fee (CPIF) could also be an option, incentivizing cost savings. The choice of CPFF suggests the Navy anticipated uncertainties in the engineering effort required for these alterations.

What are the key performance indicators (KPIs) that will be used to measure the success of this task order?

Key performance indicators for this task order would likely focus on the technical execution of the ship alterations, adherence to schedule, and cost management. Specific KPIs could include the timely completion of design reviews, successful integration of new systems or modifications, meeting specified performance standards post-alteration, and staying within the negotiated fixed fee and reimbursable cost ceilings. The Navy's technical representatives will be crucial in monitoring these KPIs and ensuring the contractor meets all contractual obligations.

What is the total historical spending by the Department of the Navy on engineering services for ship alterations over the past five years?

Determining the precise total historical spending by the Department of the Navy specifically on 'engineering services for ship alterations' requires detailed analysis of federal procurement data. This would involve querying databases like USAspending.gov or FPDS using relevant NAICS codes (e.g., 541330 for Engineering Services) and keywords related to ship alterations, repairs, and maintenance. Historical data would likely show significant and consistent investment in this area, reflecting the ongoing need to maintain and modernize a large naval fleet.

What is the potential impact of this contract on the broader shipbuilding and repair industrial base?

This task order contributes to the demand for specialized engineering services within the defense industrial base. While the direct award is to AMERICAN SYSTEMS CORPORATION, it can generate subcontracting opportunities for smaller firms specializing in specific engineering disciplines, naval architecture, or technical support. The successful execution of this contract can also enhance the contractor's reputation and capabilities, potentially positioning them for future, larger contracts within the naval shipbuilding and repair ecosystem.

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: N0016724R3000

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 14151 PARK MEADOW DR STE 500, CHANTILLY, VA, 20151

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

Financial Breakdown

Contract Ceiling: $40,486,572

Exercised Options: $15,440,282

Current Obligation: $8,539,029

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $36,282

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017819D7111

IDV Type: IDC

Timeline