DoD's $31.4M contract for JSF RDT&E awarded to JAHN CORP shows fair value with potential for cost efficiencies

Contract Overview

Contract Amount: $31,454,313 ($31.5M)

Contractor: Jahn Corp

Awarding Agency: Department of Defense

Start Date: 2018-08-01

End Date: 2023-10-31

Contract Duration: 1,917 days

Daily Burn Rate: $16.4K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: LABOR JSF RDT&E

Place of Performance

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

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $31.5 million to JAHN CORP for work described as: LABOR JSF RDT&E Key points: 1. Contract value of $31.4M over 5 years suggests a significant investment in research, development, testing, and evaluation. 2. The contract type (Cost Plus Fixed Fee) indicates a need for flexibility in RDT&E, but requires careful oversight to manage costs. 3. Awarded by the Department of the Navy, this contract supports critical aviation research and development efforts. 4. The 'Other Support Activities for Air Transportation' classification points to specialized technical services within the aerospace sector. 5. A definitive contract award suggests a well-defined scope of work, despite the RDT&E nature. 6. The contract duration of 1917 days (approx. 5.25 years) allows for sustained effort on complex research objectives.

Value Assessment

Rating: good

The contract's value of $31.4M for RDT&E services over approximately 5.25 years appears reasonable given the specialized nature of aerospace research and development. While specific benchmarks for 'JSF RDT&E' are not publicly available, the Cost Plus Fixed Fee (CPFF) structure, common in RDT&E, allows for flexibility but necessitates robust cost tracking. The fixed fee component provides some cost certainty for the contractor. Without direct comparisons to similar contracts for the Joint Strike Fighter program's RDT&E, a definitive value-for-money assessment is challenging, but the award to JAHN CORP suggests they met the Navy's technical and cost expectations at the time of award.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating that while competition was sought, certain sources were excluded, potentially limiting the pool of bidders. This suggests a specific technical requirement or prior relationship that narrowed the field. The exact reasons for excluding other sources are not detailed, but it implies a targeted procurement approach. The limited competition may have implications for price negotiation, potentially leading to higher costs than a fully open competition.

Taxpayer Impact: The limited competition nature of this award means taxpayers may not have benefited from the lowest possible price achievable through a broader bidding process. The exclusion of sources could indicate a less competitive environment, potentially impacting cost savings.

Public Impact

The primary beneficiaries are the Department of Defense and the U.S. Air Force, receiving advanced research and development for the Joint Strike Fighter program. Services delivered include critical research, development, testing, and evaluation activities essential for advancing fighter jet technology. The geographic impact is likely concentrated around JAHN CORP's facilities and relevant testing sites, with broader national security implications. Workforce implications include employment for highly skilled engineers, scientists, and technicians within JAHN CORP and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contracts require diligent oversight to prevent cost overruns and ensure efficient use of funds.
The 'limited' competition aspect raises questions about whether the most cost-effective solutions were explored.
Lack of detailed public information on the exclusion of sources makes it difficult to fully assess the competitive landscape.
The specific RDT&E scope is broad, and performance metrics are not detailed, making it hard to gauge effectiveness without further data.

Positive Signals

The award of a definitive contract suggests a clear understanding of the project's scope and objectives.
The contract duration indicates a commitment to sustained RDT&E, crucial for complex defense programs.
JAHN CORP's involvement implies they possess the specialized expertise required for JSF RDT&E.
The contract falls under the Department of the Navy, a major defense agency with established procurement processes.

Sector Analysis

This contract operates within the aerospace and defense sector, specifically focusing on research, development, testing, and evaluation (RDT&E) for advanced military aircraft. The market for such specialized RDT&E is characterized by high barriers to entry due to technological complexity, intellectual property, and stringent security requirements. Spending in this area is driven by national security needs and technological advancement. Comparable spending benchmarks would typically involve other major defense contracts for aircraft development or sustainment, often running into hundreds of millions or billions of dollars.

Small Business Impact

The data indicates that small business participation (ss: false, sb: false) was not a primary set-aside consideration for this contract. This suggests that the primary awardee, JAHN CORP, is likely a large business, and subcontracting opportunities for small businesses would depend on JAHN CORP's own subcontracting plan. Without specific details on subcontracting goals or achievements, the direct impact on the small business ecosystem is unclear, but it implies that larger prime contractors are managing the bulk of the work.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. As a Cost Plus Fixed Fee contract, rigorous financial oversight is expected to monitor costs, ensure compliance with the fixed fee, and verify the allowability and allocability of expenses. Transparency is generally limited for defense RDT&E contracts due to national security considerations. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse related to the contract.

Related Government Programs

Joint Strike Fighter Program
Naval Air Systems Command (NAVAIR) Contracts
Department of Defense Research and Development Budgets
Aerospace Engineering Services Contracts

Risk Flags

Limited competition may impact price discovery.
Cost Plus Fixed Fee requires diligent cost oversight.
RDT&E scope can be inherently uncertain, posing performance risks.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $31.5 million to JAHN CORP. LABOR JSF RDT&E

Who is the contractor on this award?

The obligated recipient is JAHN 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 $31.5 million.

What is the period of performance?

Start: 2018-08-01. End: 2023-10-31.

What is JAHN CORP's track record with similar defense RDT&E contracts?

Information regarding JAHN CORP's specific track record with similar defense RDT&E contracts is not detailed in the provided data. However, their selection for this significant contract by the Department of the Navy suggests they possess the requisite technical capabilities and have likely met performance expectations on previous engagements. A deeper dive into JAHN CORP's contract history, past performance reviews, and any reported issues or successes on prior RDT&E projects would be necessary for a comprehensive assessment of their track record. This would include examining awards from agencies like NAVAIR, DARPA, or other branches of the DoD for comparable research and development efforts in aerospace or related fields.

How does the $31.4M contract value compare to other JSF RDT&E efforts?

The $31.4 million contract value for JSF RDT&E awarded to JAHN CORP represents a specific component or phase of the broader Joint Strike Fighter program's research and development lifecycle. The total RDT&E costs for programs like the JSF often span billions of dollars over many years, encompassing numerous contracts for various subsystems, technologies, and integration efforts. Therefore, this $31.4M contract is likely a smaller, albeit significant, piece of the overall RDT&E puzzle. Without access to detailed program breakdowns and other specific RDT&E contract awards within the JSF program, a direct comparison of value is difficult. However, it suggests a focused effort on a particular aspect of the program's development.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for RDT&E?

The primary risks associated with a CPFF contract for RDT&E, such as this one, revolve around cost control and contractor incentives. For the government, the risk is that the contractor may not be sufficiently motivated to control costs once the fixed fee is established, potentially leading to cost overruns if the estimated costs escalate significantly. The contractor bears the risk of cost overruns beyond the estimated amount, but the fixed fee provides a guaranteed profit margin. For RDT&E, where the scope can be inherently uncertain, this structure aims to balance flexibility with cost predictability. Effective oversight is crucial to mitigate risks, ensuring that all costs are reasonable, allocable, and allowable, and that the contractor is performing efficiently towards the RDT&E objectives.

What does 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' imply for taxpayer value?

The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' designation implies a nuanced approach to competition. While the intent is to allow for open competition, the exclusion of specific sources suggests that only a subset of potential offerors were considered. This could be due to unique capabilities, proprietary technology, or specific security requirements. From a taxpayer value perspective, this can be a double-edged sword. On one hand, it ensures that the selected contractor meets stringent criteria. On the other hand, excluding potential bidders might limit the competitive pressure on pricing, potentially leading to higher costs than if a truly unrestricted competition had occurred. The justification for excluding sources is critical in determining if this approach maximized value for the taxpayer.

How does the contract's duration of 1917 days impact program effectiveness?

A contract duration of 1917 days (approximately 5.25 years) for RDT&E is generally beneficial for complex, long-term research and development projects like those associated with the Joint Strike Fighter program. This extended timeframe allows for sustained focus, iterative development, testing, and refinement of technologies without the disruption of frequent re-competition or short-term funding cycles. It provides stability for the contractor, enabling them to invest in specialized personnel and equipment. Such duration is crucial for addressing the inherent uncertainties and complexities in RDT&E, allowing for necessary adjustments and learning throughout the project lifecycle, ultimately contributing to a more robust and effective final product.

Industry Classification

NAICS: Transportation and Warehousing › Support Activities for Air Transportation › Other Support Activities for Air Transportation

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0042117R0066

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 21593 THREE NOTCH RD, LEXINGTON PARK, MD, 20653

Business Categories: Category Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $36,099,984

Exercised Options: $35,980,132

Current Obligation: $31,454,313

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline