DoD's Navy awards $32.3M contract for engineering and combat systems readiness assessment support

Contract Overview

Contract Amount: $32,311,817 ($32.3M)

Contractor: THE Mchenry Management Group, LLC

Awarding Agency: Department of Defense

Start Date: 2024-08-01

End Date: 2026-07-31

Contract Duration: 729 days

Daily Burn Rate: $44.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: CNSL N44 READINESS ASSESSMENT TEAMS FOR ENGINEERING, COMBAT SYSTEMS, INSURV SUBJECT MATTER EXPERT (SME) SUPPORT TO IMPROVE PERFORMANCE DURING ASSESSMENTS FOR ENHANCED READINESS PERFORMANCE.

Place of Performance

Location: NORFOLK, NORFOLK CITY County, VIRGINIA, 23511

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $32.3 million to THE MCHENRY MANAGEMENT GROUP, LLC for work described as: CNSL N44 READINESS ASSESSMENT TEAMS FOR ENGINEERING, COMBAT SYSTEMS, INSURV SUBJECT MATTER EXPERT (SME) SUPPORT TO IMPROVE PERFORMANCE DURING ASSESSMENTS FOR ENHANCED READINESS PERFORMANCE. Key points: 1. Contract aims to enhance performance during assessments for improved readiness. 2. Focus on subject matter expert support for engineering and combat systems. 3. Performance period spans two years, indicating a medium-term engagement. 4. The contract is a delivery order under a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle. 5. Firm-fixed-price contract type suggests predictable costs for the government. 6. No small business set-aside was utilized for this specific award.

Value Assessment

Rating: good

The total award amount of $32.3 million over two years suggests a significant investment in specialized support services. Benchmarking against similar contracts for engineering and readiness assessment support is crucial. Given the specialized nature of subject matter expert (SME) support for combat systems, pricing is likely influenced by the scarcity of qualified personnel. The firm-fixed-price structure provides cost certainty, which is a positive indicator for value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. The presence of two bidders suggests a moderate level of competition for this specialized service. While more bidders could potentially drive prices lower, two offers indicate that the market has at least some capacity and interest in providing these critical support services.

Taxpayer Impact: Full and open competition, even with a limited number of bidders, generally benefits taxpayers by ensuring a broader pool of potential providers and encouraging competitive pricing strategies.

Public Impact

Naval forces will benefit from improved readiness through enhanced assessment processes. Services delivered include subject matter expert support for engineering and combat systems. The primary geographic impact is likely within naval operational areas and training facilities. Workforce implications include the need for highly specialized engineers and technical experts.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if scope creep occurs despite firm-fixed-price.
Dependence on a limited number of bidders could impact future competition.
Ensuring consistent quality of SME support across the performance period.

Positive Signals

Firm-fixed-price contract type provides cost predictability.
Awarded under full and open competition, maximizing potential provider reach.
Focus on readiness and performance improvement aligns with core defense objectives.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting defense readiness and technical assessments. The market for specialized defense engineering support is substantial, driven by the continuous need for modernization and operational effectiveness of military assets. Comparable spending often involves contracts for system design, integration, testing, and maintenance, where expert knowledge is paramount. The Navy's investment reflects the critical nature of maintaining advanced combat systems.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. This suggests that the primary awardee, The McHenry Management Group, LLC, is likely a larger entity or that the nature of the specialized services did not lend itself to a small business set-aside. The impact on the small business ecosystem is neutral in this instance, as there's no direct set-aside or subcontracting mandate.

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 embedded in the firm-fixed-price structure and performance delivery requirements. Transparency is facilitated through contract award databases. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Naval Readiness Programs
Combat Systems Engineering Support
Defense Acquisition Support Services
Engineering and Technical Services Contracts
Department of Defense SME Support Contracts

Risk Flags

Potential for performance gaps due to specialized knowledge requirements.
Risk of cost escalation if scope is not precisely defined.
Limited competition (2 bidders) may impact future pricing.
Dependence on key personnel (SMEs) for successful delivery.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $32.3 million to THE MCHENRY MANAGEMENT GROUP, LLC. CNSL N44 READINESS ASSESSMENT TEAMS FOR ENGINEERING, COMBAT SYSTEMS, INSURV SUBJECT MATTER EXPERT (SME) SUPPORT TO IMPROVE PERFORMANCE DURING ASSESSMENTS FOR ENHANCED READINESS PERFORMANCE.

Who is the contractor on this award?

The obligated recipient is THE MCHENRY MANAGEMENT GROUP, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $32.3 million.

What is the period of performance?

Start: 2024-08-01. End: 2026-07-31.

What is the track record of The McHenry Management Group, LLC in providing similar readiness assessment and engineering support services to the Department of Defense?

The McHenry Management Group, LLC has a history of providing professional services, including management and technical consulting, to various government agencies. While specific details on their past performance in direct combat systems readiness assessment support are not fully elaborated in this summary, their award for this significant contract suggests they possess the requisite capabilities and experience. Further analysis would involve reviewing their contract history, past performance evaluations, and any reported issues or successes on similar engagements to fully gauge their track record in this specialized domain. Their ability to secure this contract under full and open competition indicates a competitive standing among peers.

How does the $32.3 million award compare to historical spending on similar engineering and readiness assessment support for the Navy?

The $32.3 million award represents a substantial investment over its two-year duration for specialized engineering and readiness assessment support. To benchmark this effectively, one would need to analyze historical spending patterns for similar services within the Department of the Navy and across the broader Department of Defense. This would involve identifying contracts with comparable scopes of work, such as subject matter expert support for combat systems, performance assessments, and engineering services. Factors like inflation, evolving technological requirements, and the number of bidders in past procurements would influence the comparison. Without specific historical data points for directly comparable contracts, it's challenging to definitively state if this award is high or low, but its scale indicates a significant need for these services.

What are the primary risks associated with this contract, and what mitigation strategies are likely in place?

Key risks include potential performance deficiencies if the subject matter experts lack the precise knowledge required for advanced combat systems, leading to inaccurate assessments and impacting fleet readiness. Another risk is cost overruns if the firm-fixed-price contract doesn't adequately account for unforeseen complexities or scope creep, though the fixed-price nature aims to mitigate this. Dependence on a limited number of bidders (two in this case) could also pose a future risk if it signals a shrinking competitive market. Mitigation strategies likely involve rigorous contractor performance monitoring, clear performance metrics, robust quality assurance processes, and potentially contingency planning for knowledge transfer or alternative support if needed.

How effective is the firm-fixed-price contract type in ensuring value for money for this specific type of service?

The firm-fixed-price (FFP) contract type is generally considered effective for services where the scope of work is well-defined and risks can be reasonably estimated. For engineering and readiness assessment support, FFP provides cost certainty to the government, encouraging the contractor to manage their resources efficiently to maintain profitability. This can lead to better value by preventing cost overruns. However, the effectiveness hinges on the accuracy of the initial scope definition. If the complexities of combat systems assessments are underestimated, the contractor might struggle to deliver within the fixed price, potentially impacting quality or leading to change orders. The presence of experienced SMEs is critical for accurate initial scoping.

What is the potential impact of this contract on the broader defense engineering services market and competition?

This contract award to The McHenry Management Group, LLC, under full and open competition, signals continued demand for specialized engineering and readiness assessment services within the Navy. It reinforces the importance of expertise in combat systems and assessment methodologies. The fact that only two bids were received could indicate a concentrated market for these highly specialized skills, potentially limiting future competition or driving up prices for similar services if demand remains high. It also highlights the role of established firms in securing significant defense contracts, while potentially presenting opportunities for smaller, specialized subcontractors if the prime contractor utilizes them.

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: N0018924R3041

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 600 INDEPENDENCE PKWY STE 105, CHESAPEAKE, VA, 23320

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

Financial Breakdown

Contract Ceiling: $93,548,570

Exercised Options: $32,311,817

Current Obligation: $32,311,817

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $10,033,309

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017819D8084

IDV Type: IDC

Timeline