DoD's $7.5M H20 Fleet Support Contract Awarded to Applied Management Corp

Contract Overview

Contract Amount: $7,491,838 ($7.5M)

Contractor: Applied Management Corp

Awarding Agency: Department of Defense

Start Date: 2023-02-01

End Date: 2026-01-31

Contract Duration: 1,095 days

Daily Burn Rate: $6.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: H20 FLEET SUPPORT

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22202

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $7.5 million to APPLIED MANAGEMENT CORP for work described as: H20 FLEET SUPPORT Key points: 1. Contract value represents a significant investment in fleet support services. 2. Applied Management Corp. secured this contract through full and open competition. 3. The contract duration of 1095 days suggests a need for sustained support. 4. Engineering services are critical for maintaining the operational readiness of the H20 fleet. 5. The contract's cost-plus-fixed-fee structure requires careful monitoring of costs and performance. 6. Virginia is the primary location for contract performance, indicating regional economic impact.

Value Assessment

Rating: fair

Benchmarking the value of this $7.5 million contract is challenging without specific performance metrics or comparable service contracts. The cost-plus-fixed-fee (CPFF) pricing structure, while common for complex services, can lead to cost overruns if not managed tightly. The awarded amount is within a typical range for engineering support services of this duration, but the ultimate value for money depends on the efficiency and effectiveness of Applied Management Corp.'s service delivery and the government's oversight.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple capable vendors had the opportunity to bid. The presence of a single award (NO=1) suggests that Applied Management Corp. was deemed the most advantageous offer. The level of competition, while broad in its initial offering, resulted in a single award, which could imply a highly specialized service or a strong competitive proposal from the selected contractor.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down prices and improve service quality, ensuring the government receives the best value.

Public Impact

The Department of the Navy benefits from enhanced operational readiness of the H20 fleet. Engineering services provided will support the maintenance and potentially the modernization of fleet assets. The contract's performance in Virginia will likely create or sustain jobs in the engineering and support services sector within the state. The successful execution of this contract contributes to the overall defense capabilities of the U.S. military.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in CPFF contracts if not rigorously managed.
Ensuring consistent service quality and performance throughout the contract's multi-year duration.
Dependence on a single contractor for critical fleet support services.

Positive Signals

Awarded through full and open competition, suggesting a competitive process.
Contract duration indicates a stable, long-term need for these services.
Focus on engineering services points to critical support for fleet readiness.

Sector Analysis

This contract falls within the Engineering Services sector (NAICS 541330), a critical component of the broader professional, scientific, and technical services industry. The defense sector heavily relies on specialized engineering firms for the design, development, maintenance, and upgrade of complex systems and platforms. Spending in this area is often driven by modernization efforts, operational demands, and the lifecycle management of military assets. Comparable spending benchmarks would typically be found within other large-scale defense engineering support contracts.

Small Business Impact

The data indicates this contract was awarded under full and open competition and does not specify any small business set-aside provisions (SB=false, SS=false). Therefore, there is no direct analysis of small business set-aside impact. However, the prime contractor, Applied Management Corp., may engage small businesses as subcontractors. The extent of subcontracting to small businesses would need further investigation to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract will primarily reside with the Department of the Navy, a component of the Department of Defense. Mechanisms likely include contract performance reviews, financial audits, and adherence to the terms of the Cost Plus Fixed Fee agreement. Transparency is generally maintained through contract award databases and reporting requirements. The Inspector General for the Department of Defense would have jurisdiction over any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Naval Fleet Maintenance Contracts
Defense Engineering Services
Military Logistics Support
Aerospace Engineering Services
Government Professional Services Contracts

Risk Flags

Cost Overrun Risk (CPFF)
Performance Monitoring Intensity
Contractor Dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $7.5 million to APPLIED MANAGEMENT CORP. H20 FLEET SUPPORT

Who is the contractor on this award?

The obligated recipient is APPLIED MANAGEMENT CORP.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $7.5 million.

What is the period of performance?

Start: 2023-02-01. End: 2026-01-31.

What is the track record of Applied Management Corp. in performing similar defense engineering contracts?

A thorough review of Applied Management Corp.'s past performance is crucial for assessing their capability to successfully execute the H20 Fleet Support contract. This would involve examining their history with similar contracts, particularly those involving fleet support, engineering services, and Cost Plus Fixed Fee (CPFF) structures. Key indicators to investigate include on-time delivery, adherence to budget (especially relevant for CPFF), quality of work, and any past performance issues or disputes. Government contract databases and past performance evaluations (if publicly available) would be primary sources for this analysis. A strong track record with comparable contracts would increase confidence in their ability to meet the Department of the Navy's requirements, while a history of issues would raise concerns about potential risks.

How does the awarded value of $7.5 million compare to similar fleet support engineering contracts?

Comparing the $7.5 million award for the H20 Fleet Support contract requires identifying similar contracts in terms of scope, duration, and complexity. Factors such as the specific type of fleet (e.g., naval, air), the nature of the engineering services (e.g., maintenance, upgrades, design), and the contract type (CPFF) are critical for a meaningful benchmark. Without access to a comprehensive database of comparable contracts, a precise comparison is difficult. However, for a 1095-day contract involving specialized engineering services for a defense fleet, $7.5 million appears to be within a reasonable range, assuming it covers a significant scope of work. A higher value might be justified by extensive R&D or complex system integration, while a lower value could indicate a more focused or less intensive support requirement.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract of this magnitude?

The primary risk associated with a Cost Plus Fixed Fee (CPFF) contract of this $7.5 million magnitude is the potential for cost overruns. In a CPFF structure, the contractor is reimbursed for allowable costs plus a fixed fee representing profit. While the fee is fixed, the total cost is variable. If the contractor incurs higher-than-expected costs due to inefficiencies, unforeseen challenges, or scope creep, the government bears the burden of these increased costs. Effective government oversight, including rigorous cost monitoring, auditing, and performance management, is essential to mitigate this risk. Another risk is the contractor's incentive to control costs, as their profit is fixed regardless of the final cost. This can sometimes lead to a focus on meeting minimum requirements rather than optimizing efficiency.

How does the 'full and open competition' award mechanism impact the overall value for taxpayers?

Awarding the $7.5 million H20 Fleet Support contract through 'full and open competition' generally benefits taxpayers by promoting a competitive marketplace. This mechanism allows any responsible source to submit a bid, encouraging a wider range of potential contractors to compete. The increased competition typically drives down prices, improves the quality of services offered, and fosters innovation as contractors strive to differentiate their proposals. For taxpayers, this means the government is more likely to secure the best possible value for its investment, as the selection process is based on a comprehensive evaluation of technical merit, past performance, and price. It reduces the risk of paying inflated prices that might occur in less competitive or sole-source situations.

What are the implications of the contract being performed in Virginia?

The performance of the $7.5 million H20 Fleet Support contract in Virginia has several implications. Economically, it signifies a direct injection of funds into the state's economy through contractor spending, employment, and potential subcontracting opportunities. Virginia has a significant defense industry presence, making it a logical location for such contracts. For the government, proximity to naval bases or relevant Department of Defense facilities in Virginia could offer logistical advantages, potentially reducing travel costs and improving communication and oversight efficiency. It also means that a portion of the federal defense budget is being utilized within a specific geographic region, contributing to local job creation and business development in the engineering and professional services sectors.

What is the historical spending trend for similar engineering services within the Department of the Navy?

Analyzing historical spending trends for similar engineering services within the Department of the Navy (DoN) is crucial for contextualizing the $7.5 million award for the H20 Fleet Support contract. The DoN consistently invests heavily in engineering and technical services to maintain its vast fleet of ships, aircraft, and associated systems. Spending in this category typically fluctuates based on modernization programs, new platform acquisitions, and the lifecycle management needs of existing assets. Factors like budget allocations, geopolitical events, and technological advancements influence these trends. Understanding whether this $7.5 million award represents an increase, decrease, or stable level of spending compared to previous years or similar contracts will provide insight into the Navy's current priorities and resource allocation for fleet support.

Industry Classification

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

Product/Service Code: MODIFICATION OF EQUIPMENT › MODIFICATION OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N0017821R3013

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 137 NATIONAL PLZ STE 350, OXON HILL, MD, 20745

Business Categories: 8(a) Program Participant, Black American Owned Business, Category Business, Corporate Entity Not Tax Exempt, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $16,634,608

Exercised Options: $9,935,460

Current Obligation: $7,491,838

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017819D7140

IDV Type: IDC

Timeline