Navy awards $21.4M contract for material inspection and training support to The McHenry Management Group, LLC

Contract Overview

Contract Amount: $21,435,635 ($21.4M)

Contractor: THE Mchenry Management Group, LLC

Awarding Agency: Department of Defense

Start Date: 2022-10-01

End Date: 2025-09-30

Contract Duration: 1,095 days

Daily Burn Rate: $19.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: TYCOM MATERIAL INSPECTION AND TRAINING SUPPORT SERVICES FOR COMMANDER NAVAL SURFACE FORCES, U.S. PACIFIC FLEET

Place of Performance

Location: SAN DIEGO, SAN DIEGO County, CALIFORNIA, 92155

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $21.4 million to THE MCHENRY MANAGEMENT GROUP, LLC for work described as: TYCOM MATERIAL INSPECTION AND TRAINING SUPPORT SERVICES FOR COMMANDER NAVAL SURFACE FORCES, U.S. PACIFIC FLEET Key points: 1. Contract value of $21.4 million over three years suggests a significant need for specialized inspection and training services. 2. Full and open competition indicates a healthy market for these services, potentially leading to competitive pricing. 3. The contract's duration of 1095 days allows for sustained support and potential for performance improvements. 4. The award to The McHenry Management Group, LLC, highlights their established presence in providing engineering and support services to the DoD. 5. Focus on material inspection and training points to critical quality assurance and readiness requirements within the U.S. Pacific Fleet. 6. The Cost Plus Fixed Fee (CPFF) contract type may incentivize cost control while ensuring necessary services are delivered. 7. The absence of small business set-aside suggests the primary contractor is not a small business, with potential implications for subcontracting opportunities.

Value Assessment

Rating: good

The contract value of $21.4 million over three years averages approximately $7.1 million annually. Benchmarking against similar contracts for naval inspection and training services is challenging without more specific service details. However, the duration and scope suggest a fair market price for specialized technical support. The CPFF structure requires careful monitoring of costs to ensure value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified vendors were likely solicited. The presence of three bidders (implied by 'no': 3) suggests a competitive environment. This level of competition is generally favorable for price discovery and ensures the government receives offers from a range of capable providers.

Taxpayer Impact: Full and open competition typically results in more competitive pricing, which is beneficial for taxpayers. It reduces the risk of overpayment and encourages contractors to offer their best value solutions.

Public Impact

Naval Surface Forces, U.S. Pacific Fleet personnel benefit from enhanced material readiness and training. Services delivered include critical inspection and training to ensure operational effectiveness of naval assets. Geographic impact is primarily focused on the U.S. Pacific Fleet's operational areas. Workforce implications include the potential for skilled technical personnel to be employed by the contractor to fulfill these specialized services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns under the CPFF contract type if not closely managed.
Dependence on a single contractor for critical inspection and training services could pose a risk if performance falters.

Positive Signals

Awarded through full and open competition, indicating a competitive process.
Contract duration allows for sustained support and relationship building.
The contractor, The McHenry Management Group, LLC, likely has a proven track record in similar services.

Sector Analysis

This contract falls within the Engineering Services sector (NAICS 541330), which is a significant part of the federal contracting landscape, particularly for defense agencies. The market for specialized inspection, testing, and training services for complex military assets like naval vessels is substantial. Spending in this area is driven by the need to maintain fleet readiness, ensure compliance with safety and operational standards, and support advanced technological systems. Comparable spending benchmarks would typically be found within broader defense readiness and maintenance contracts.

Small Business Impact

The contract was not set aside for small businesses, and the awardee, The McHenry Management Group, LLC, is not listed as a small business. This suggests that the primary focus was on securing the best technical solution and price from the broader market. There may be opportunities for small businesses to participate as subcontractors to The McHenry Management Group, LLC, depending on their subcontracting plan and the specific needs of the contract.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the contract administration office within the Department of the Navy. Performance monitoring, quality assurance, and financial oversight are standard mechanisms. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Naval Readiness and Maintenance Programs
Fleet Training and Simulation Services
Defense Logistics Agency Support Contracts
Naval Shipyard Operations Support

Risk Flags

Cost Overrun Risk (CPFF)
Performance Dependency
Contractor Capability Verification

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.4 million to THE MCHENRY MANAGEMENT GROUP, LLC. TYCOM MATERIAL INSPECTION AND TRAINING SUPPORT SERVICES FOR COMMANDER NAVAL SURFACE FORCES, U.S. PACIFIC FLEET

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 $21.4 million.

What is the period of performance?

Start: 2022-10-01. End: 2025-09-30.

What is the track record of The McHenry Management Group, LLC in providing similar inspection and training services to the Department of Defense?

The McHenry Management Group, LLC has a history of contracting with the Department of Defense, primarily in areas related to engineering, technical support, and program management. While specific details on their performance for material inspection and training services for naval fleets require deeper analysis of past performance reviews and contract histories, their repeated awards suggest a satisfactory level of performance and capability. Further investigation into their specific experience with U.S. Pacific Fleet requirements and similar complex inspection protocols would provide a more comprehensive understanding of their suitability for this contract.

How does the annual value of this contract compare to similar naval inspection and training support contracts?

The annual value of this contract, approximately $7.1 million ($21.4 million / 3 years), needs to be benchmarked against comparable contracts for specialized naval inspection and training. Without access to a detailed database of similar procurements, a precise comparison is difficult. However, for large-scale fleet support operations, this figure appears reasonable, reflecting the complexity and criticality of ensuring material readiness and effective training for a major naval command. The specific scope of services, geographic coverage, and required expertise will heavily influence comparability.

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

The primary risk with a Cost Plus Fixed Fee (CPFF) contract is the potential for cost overruns if the contractor's actual costs exceed initial estimates, although the fixed fee provides a ceiling for the contractor's profit. The government bears the risk of cost increases. Effective oversight and robust cost accounting standards are crucial to mitigate this risk. The contractor is incentivized to control costs to ensure their fee is realized, but the government must diligently monitor expenditures to ensure the overall cost remains reasonable and within budget expectations.

How effective is the full and open competition process in ensuring value for money for this type of specialized service?

Full and open competition is generally considered the most effective method for ensuring value for money, especially for specialized services like material inspection and training. It allows a wide range of qualified vendors to compete, driving down prices through market forces and encouraging innovation. The presence of three bidders in this case suggests a competitive landscape. The government's ability to define clear requirements and evaluation criteria is paramount to translating this competition into the best possible value, ensuring that the lowest price technically acceptable or best value offer is selected.

What are the historical spending patterns for material inspection and training support within the U.S. Pacific Fleet?

Historical spending patterns for material inspection and training support within the U.S. Pacific Fleet are likely characterized by consistent, significant investment due to the operational demands and scale of the fleet. These services are critical for maintaining readiness and safety, suggesting a sustained need across multiple fiscal years. Spending may fluctuate based on fleet modernization efforts, new platform introductions, or changes in operational tempo. Analyzing past contract awards for similar services over the last 5-10 years would reveal trends in contract values, durations, and awarded contractors, providing context for the current $21.4 million award.

What are the implications of the contract duration (1095 days) on performance and contractor stability?

A contract duration of 1095 days (three years) provides significant stability for both the contractor and the government. For the contractor, it allows for resource planning, investment in personnel and equipment, and the development of a deep understanding of the client's needs. This stability can lead to improved performance and efficiency over time. For the government, it ensures continuity of essential services without the frequent disruption of re-procurement. This longer duration can foster a stronger working relationship and allow for the implementation of performance improvements and strategic initiatives.

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: N0024422R3015

Offers Received: 3

Pricing Type: COST PLUS FIXED FEE (U)

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: $22,285,744

Exercised Options: $22,285,744

Current Obligation: $21,435,635

Actual Outlays: $6,979,435

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $10,166,686

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