Navy awards $14.4M contract for surface force training, with SOLUTE as prime

Contract Overview

Contract Amount: $14,444,291 ($14.4M)

Contractor: Solute

Awarding Agency: Department of Defense

Start Date: 2023-05-12

End Date: 2025-11-11

Contract Duration: 914 days

Daily Burn Rate: $15.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: BMD SURFACE FORCE TRAINING AND READINESS TRAINING IN SUPPORT OF CNSP AND ATGPAC.

Place of Performance

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

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $14.4 million to SOLUTE for work described as: BMD SURFACE FORCE TRAINING AND READINESS TRAINING IN SUPPORT OF CNSP AND ATGPAC. Key points: 1. Contract focuses on critical training and readiness for naval forces. 2. SOLUTE, the prime contractor, has a role in delivering these essential services. 3. The contract duration spans over two years, indicating a sustained need. 4. Competition was full and open, suggesting a potentially competitive bidding process. 5. The contract type is Cost Plus Fixed Fee, which can allow for flexibility but requires careful cost oversight. 6. Geographic focus is California, aligning with significant naval presence.

Value Assessment

Rating: fair

The contract value of $14.4 million for over two years of training services appears moderate for its scope. Benchmarking against similar large-scale naval training contracts is difficult without more specific service details. The Cost Plus Fixed Fee (CPFF) structure necessitates close monitoring to ensure costs remain reasonable and do not escalate beyond the fixed fee component. Without detailed cost breakdowns or comparisons to industry standards for similar training modules, a definitive value-for-money assessment is challenging.

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 were likely solicited and considered. The presence of two bidders suggests a degree of competition, though the exact number of proposals received and their quality would provide a clearer picture. Full and open competition generally promotes price discovery and can lead to more favorable pricing for the government compared to sole-source or limited competition scenarios.

Taxpayer Impact: The full and open competition process is beneficial for taxpayers as it encourages multiple companies to bid, potentially driving down costs and ensuring the government receives competitive pricing for essential training services.

Public Impact

Naval personnel in the CNSP (Commander, Naval Surface Force, U.S. Pacific Fleet) and ATGPAC (Naval Surface Group Pacific) will benefit from enhanced training. Services delivered include training and readiness support critical for operational effectiveness. The geographic impact is concentrated in California, home to major naval bases. This contract supports the readiness of the naval workforce, ensuring they are adequately prepared for their duties.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can incentivize contractors to incur costs without direct financial penalty, requiring robust government oversight.
The specific details of the training modules and their effectiveness are not fully elaborated, making it difficult to assess performance outcomes.
Limited information on the number of proposals received hinders a full assessment of the competitive landscape.

Positive Signals

Awarded under full and open competition, suggesting a robust bidding process.
The contract addresses a critical need for naval force readiness and training.
The duration of the contract indicates a long-term commitment to supporting naval operations.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting defense-related training and readiness. The market for defense training services is substantial, driven by the continuous need for military personnel to maintain and enhance their skills. Companies like SOLUTE operate within this specialized segment, providing technical and operational expertise. Comparable spending benchmarks would depend on the specific nature of the training, but large-scale readiness contracts can run into tens or hundreds of millions of dollars.

Small Business Impact

There is no explicit indication of small business set-asides for this contract, nor is SOLUTE identified as a small business. The contract's value and nature suggest it may not be heavily reliant on small business subcontracting unless specific requirements were mandated. Further analysis would be needed to determine if subcontracting opportunities exist for small businesses within the scope of this engineering and training service.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy, with specific program managers responsible for monitoring performance, costs, and adherence to contract terms. The Cost Plus Fixed Fee structure necessitates diligent financial oversight to ensure costs are reasonable and allocable. Transparency is generally maintained through contract reporting mechanisms, and while specific Inspector General (IG) involvement isn't detailed, the DoD IG has broad jurisdiction over defense contracts.

Related Government Programs

Naval Training and Readiness Programs
Defense Engineering Services
Surface Warfare Training
Fleet Readiness Support

Risk Flags

Cost Plus Fixed Fee contract type requires diligent oversight to manage costs.
Performance metrics and effectiveness measurement details are not fully specified.
Limited information on the number of proposals received hinders full competition assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.4 million to SOLUTE. BMD SURFACE FORCE TRAINING AND READINESS TRAINING IN SUPPORT OF CNSP AND ATGPAC.

Who is the contractor on this award?

The obligated recipient is SOLUTE.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $14.4 million.

What is the period of performance?

Start: 2023-05-12. End: 2025-11-11.

What is SOLUTE's track record with similar Department of Defense contracts, particularly in training and readiness?

SOLUTE has a history of performing contracts for the Department of Defense, often in areas related to engineering, technical services, and program management. While specific details on their past performance in large-scale surface force training and readiness programs require deeper investigation into contract databases and performance reviews, their presence as a prime contractor on this $14.4 million award suggests a level of established capability and trust within the defense sector. Analyzing their prior awards, contract values, and any reported performance issues or successes would provide a clearer picture of their suitability and experience for this specific requirement. It is important to note that 'track record' encompasses not just successful completion but also adherence to schedules, budgets, and quality standards.

How does the $14.4 million contract value compare to similar naval training and readiness contracts awarded by the Department of the Navy?

The $14.4 million value for this two-year contract for surface force training and readiness appears to be within a moderate range for specialized defense support services. However, a direct comparison is challenging without knowing the precise scope and deliverables. Larger, more comprehensive readiness or training modernization programs can easily exceed hundreds of millions of dollars. Conversely, smaller, more focused training initiatives or specific system support contracts might be valued in the low millions. To benchmark effectively, one would need to identify contracts with similar objectives (e.g., fleet readiness, specific platform training, simulation development) and similar durations, while also considering the level of complexity and the number of personnel or systems involved. The 'full and open competition' aspect suggests the government sought competitive bids, which typically aims to align pricing with market rates.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for training services?

The primary risk with a Cost Plus Fixed Fee (CPFF) contract, like this one, is that the contractor may have less incentive to control costs compared to fixed-price contracts, as their allowable costs are reimbursed, and they receive a predetermined fixed fee. This can lead to cost overruns if not managed diligently. For training services, risks include potential scope creep, where the definition of 'training' or 'readiness support' expands beyond the original intent, increasing costs. Another risk is the quality and effectiveness of the training delivered; ensuring it meets the required standards and actually improves personnel readiness requires robust government oversight and performance metrics. Contractor performance, personnel availability, and the accuracy of cost reporting are also key risk areas that necessitate careful monitoring by the contracting officer and technical team.

What are the expected program effectiveness outcomes and how are they measured for this contract?

The expected program effectiveness outcomes for this contract revolve around enhancing the training and readiness of naval surface forces, specifically for CNSP and ATGPAC. This translates to improved operational capabilities, better preparedness for combat or mission deployment, and potentially reduced training-related incidents. Measurement of effectiveness would likely involve key performance indicators (KPIs) tied to training completion rates, proficiency assessments of personnel, simulation performance, adherence to safety protocols during training, and ultimately, the overall readiness posture of the units being supported. The Department of the Navy would establish specific metrics and milestones within the contract's Performance Work Statement (PWS) to track progress and ensure the contractor is meeting the required standards for readiness enhancement.

How has the Department of the Navy's spending on engineering and training services evolved over the past five years?

Analyzing the Department of the Navy's spending on engineering and training services over the past five years would reveal trends in investment in these critical support areas. Generally, defense spending in these categories tends to be relatively stable but can fluctuate based on geopolitical priorities, modernization efforts, and budget allocations. Increased focus on readiness, new platform introductions, or evolving threats often leads to higher spending on training and associated engineering support. Conversely, budget constraints or shifts in strategic focus might lead to reductions. Examining historical data from sources like the Federal Procurement Data System (FPDS) or agency budget reports would provide quantitative insights into the Navy's commitment to these services and identify any significant upward or downward trends.

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: N0024423R3013

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 1455 FRAZEE ROAD, SAN DIEGO, CA, 92108

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: $15,817,205

Exercised Options: $15,756,572

Current Obligation: $14,444,291

Actual Outlays: $1,368,584

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017819D8534

IDV Type: IDC

Timeline