DoD awards $19.4M for Air-to-Air Missile Program Management Support, with 4 bidders

Contract Overview

Contract Amount: $19,458,122 ($19.5M)

Contractor: Naval Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2017-06-29

End Date: 2025-09-16

Contract Duration: 3,001 days

Daily Burn Rate: $6.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: IGF::OT::IGF THIS IS A FOLLOW-ON REQUIREMENT FOR PROGRAM MANAGEMENT SUPPORT SERVICES FOR THE PMA 259 AIR-TO-AIR MISSILES PROGRAM.

Place of Performance

Location: LEXINGTON PARK, SAINT MARYS County, MARYLAND, 20653

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $19.5 million to NAVAL SYSTEMS, INC. for work described as: IGF::OT::IGF THIS IS A FOLLOW-ON REQUIREMENT FOR PROGRAM MANAGEMENT SUPPORT SERVICES FOR THE PMA 259 AIR-TO-AIR MISSILES PROGRAM. Key points: 1. Contract provides essential program management support for a critical defense acquisition program. 2. Competition level suggests a healthy market for these specialized engineering services. 3. Contract duration extends over 8 years, indicating a long-term need. 4. Cost-plus-fixed-fee contract type allows for flexibility but requires careful oversight. 5. The award is a delivery order against an existing contract, suggesting a follow-on requirement. 6. Focus on engineering services highlights the technical complexity of the program.

Value Assessment

Rating: good

The contract value of $19.4 million over an estimated 8-year period appears reasonable for specialized program management support in the defense sector. Benchmarking against similar contracts for large-scale defense acquisition programs would provide a more precise value-for-money assessment. The cost-plus-fixed-fee structure necessitates diligent monitoring of costs to ensure efficiency and prevent overruns, but it is a common and often necessary structure for complex, evolving programs.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with four bidders submitting proposals. This indicates a competitive market for the required engineering and program management services. The presence of multiple bidders suggests that the government was able to solicit a range of offers, potentially leading to more favorable pricing and terms compared to a sole-source or limited competition scenario.

Taxpayer Impact: The full and open competition ensures that taxpayer dollars are being used efficiently by fostering a competitive environment that drives down costs and encourages innovation among contractors.

Public Impact

The primary beneficiaries are the Department of Defense and specifically the PMA 259 program, ensuring the successful execution of the Air-to-Air Missiles program. Services delivered include crucial program management support, essential for the acquisition and sustainment of advanced missile systems. The geographic impact is primarily within the defense acquisition ecosystem, supporting national security objectives. Workforce implications include the employment of skilled engineers, program managers, and support staff within the contracting company and potentially its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contracts can incentivize higher spending if not closely managed.
Long contract duration requires sustained oversight to ensure continued value and performance.
Follow-on nature of the requirement means historical performance data should be reviewed.

Positive Signals

Full and open competition indicates a robust market and potential for competitive pricing.
Multiple bidders (4) suggest strong interest and a healthy competitive landscape.
Award supports a critical national defense program, aligning with strategic priorities.

Sector Analysis

The defense sector, particularly within aerospace and missile systems, relies heavily on specialized engineering and program management support. This contract falls within the broader category of engineering services (NAICS 541330) and supports a critical acquisition program. Spending in this area is substantial, driven by the need for advanced technological capabilities and national security. Comparable spending benchmarks would typically involve other large-scale defense acquisition contracts requiring similar levels of program oversight and technical expertise.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract. However, the prime contractor, Naval Systems, Inc., may engage small businesses as subcontractors to fulfill certain aspects of the program management support. Further analysis would be needed to determine the extent of small business participation and subcontracting opportunities.

Oversight & Accountability

Oversight for this contract is likely managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. The cost-plus-fixed-fee structure necessitates rigorous financial oversight to monitor expenditures and ensure that costs are reasonable and allocable. Transparency is typically maintained through contract reporting mechanisms and performance reviews, with potential oversight from the Department of Defense Inspector General for significant issues.

Related Government Programs

Air-to-Air Missiles Programs
Defense Acquisition Programs
Naval Systems Engineering Support
Program Management Services

Risk Flags

Long contract duration may lead to obsolescence of services or technology.
Cost-plus-fixed-fee structure requires diligent cost oversight.
Follow-on nature could potentially limit competitive innovation if not managed carefully.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.5 million to NAVAL SYSTEMS, INC.. IGF::OT::IGF THIS IS A FOLLOW-ON REQUIREMENT FOR PROGRAM MANAGEMENT SUPPORT SERVICES FOR THE PMA 259 AIR-TO-AIR MISSILES PROGRAM.

Who is the contractor on this award?

The obligated recipient is NAVAL SYSTEMS, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $19.5 million.

What is the period of performance?

Start: 2017-06-29. End: 2025-09-16.

What is the historical spending trend for program management support services for the PMA 259 Air-to-Air Missiles Program?

The provided data indicates this is a follow-on requirement, with the current award being a delivery order. The total value of this specific delivery order is $19,458,122.40, with an estimated completion date in September 2025, suggesting a duration of approximately 8 years from the award date of June 29, 2017. To understand the historical spending trend, one would need to examine previous delivery orders or contracts issued under the parent contract for PMA 259 program management support. This would involve analyzing the total obligated amounts, period of performance, and the nature of services rendered in prior contract actions to identify patterns in spending, potential increases or decreases in demand, and the overall investment in program management over time.

How does the number of bidders (4) compare to similar defense program management contracts?

A competition with four bidders for a specialized defense program management support contract is generally considered healthy. In the defense sector, the number of bidders can vary significantly based on the contract's complexity, required expertise, and the number of capable companies in the market. For highly specialized or niche requirements, three to five bidders might represent a robust competition. For broader services, more bidders might be expected. The fact that four companies were willing and able to bid suggests that the requirement was well-defined and that there is a competitive market for these services, which is generally positive for price discovery and value for the government.

What are the key risks associated with a Cost Plus Fixed Fee (CPFF) contract type for this program?

The primary risk with a Cost Plus Fixed Fee (CPFF) contract is the potential for cost overruns. While the contractor is incentivized by a fixed fee, the government bears the risk of all allowable costs. If the contractor's costs exceed estimates, the government pays them, potentially leading to a higher total contract price than initially anticipated. This necessitates robust government oversight to ensure that all costs incurred are reasonable, allocable, and allowable. Another risk is that the contractor might not be sufficiently motivated to control costs aggressively if they believe the fixed fee is disproportionately low compared to the effort required, or conversely, they might inflate costs to ensure the fee is a larger percentage of the total. Effective management and clear performance metrics are crucial to mitigate these risks.

What is the significance of this contract being a 'follow-on requirement'?

A 'follow-on requirement' signifies that this contract is a continuation or extension of previously performed work, likely under a prior contract or delivery order. This has several implications. First, it suggests that the government has a continued need for these specific program management support services, indicating the ongoing importance of the Air-to-Air Missiles Program (PMA 259). Second, it implies that the incumbent contractor (or a contractor from a previous iteration) likely possesses institutional knowledge and established processes related to the program, potentially leading to smoother execution. However, it also raises questions about whether the follow-on nature might have limited the scope of competition or if the government adequately re-evaluated the need and market for these services to ensure continued best value.

How does the contract's duration (estimated 3001 days) impact its overall value and risk?

The estimated duration of 3001 days (approximately 8.2 years) for this contract is substantial and has significant implications. On the value side, a long-term contract can provide stability and predictability for both the government and the contractor, potentially leading to efficiencies and cost savings through economies of scale and reduced transition costs. It allows for deep integration into the program's lifecycle. However, a long duration also increases risk. Market conditions, technological requirements, and program priorities can change significantly over 8 years, potentially making the contracted services less relevant or efficient over time. It also means that the government is committed to a specific provider and scope for an extended period, which could limit its flexibility to adapt to unforeseen circumstances or capitalize on new opportunities. Robust contract management and periodic reviews are essential to manage these long-term risks.

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: N0002416R3159

Offers Received: 4

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 21491 GREAT MILLS ROAD STE 100, LEXINGTON PARK, MD, 20653

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

Financial Breakdown

Contract Ceiling: $23,082,142

Exercised Options: $23,054,320

Current Obligation: $19,458,122

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017814D7851

IDV Type: IDC

Timeline