Department of the Navy awards $12.2M engineering services contract to Vectrus Systems LLC for MH-60R helicopter support

Contract Overview

Contract Amount: $12,215,112 ($12.2M)

Contractor: Vectrus Systems LLC

Awarding Agency: Department of Defense

Start Date: 2020-04-30

End Date: 2025-12-17

Contract Duration: 2,057 days

Daily Burn Rate: $5.9K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: LABOR MH-60R DENMARK

Place of Performance

Location: RESTON, FAIRFAX County, VIRGINIA, 20191

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $12.2 million to VECTRUS SYSTEMS LLC for work described as: LABOR MH-60R DENMARK Key points: 1. Contract awarded on a sole-source basis, limiting potential cost savings from competition. 2. The contract type is Cost Plus Award Fee, which can incentivize performance but may lead to higher costs if not managed closely. 3. A significant duration of 2057 days suggests a long-term need for these specialized engineering services. 4. The contract is for engineering services, a critical support function for complex military assets like the MH-60R helicopter. 5. The award value of $12.2 million is a baseline; actual spending could fluctuate based on performance and award fees. 6. The contractor, Vectrus Systems LLC, has a track record in government contracting, but specific performance on this project requires further analysis.

Value Assessment

Rating: fair

Benchmarking the value of this Cost Plus Award Fee contract is challenging without detailed cost breakdowns and performance metrics. The award fee structure suggests a mechanism for incentivizing performance, but it also carries the risk of increased costs if not carefully managed. Comparing this to similar engineering support contracts for naval aviation assets would provide a clearer picture of whether the pricing is competitive, especially given the sole-source nature of the award. The baseline obligation of $12.2 million needs to be viewed in the context of the contract's long duration and the specialized nature of the MH-60R helicopter.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning competition was not sought. This approach is typically used when only one responsible source is available or when there is a compelling justification for excluding other potential bidders. The lack of competition means that the government did not benefit from the price discovery and potential cost reductions that a competitive bidding process could have offered. This raises questions about whether the government secured the best possible price and value.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. Without multiple bids, there is less certainty that the negotiated price reflects the most economical option available in the market.

Public Impact

The primary beneficiaries are the Department of the Navy and its aviation units relying on the MH-60R helicopter for critical missions. Services delivered include specialized engineering support essential for the operational readiness and maintenance of the MH-60R fleet. The geographic impact is likely concentrated where MH-60R squadrons are based or undergoing maintenance, primarily within the United States and potentially overseas deployments. Workforce implications include the employment of skilled engineers and technical personnel by Vectrus Systems LLC to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially impacting cost-effectiveness.
Cost Plus Award Fee structure requires diligent oversight to manage costs and ensure value.
Lack of detailed performance data makes it difficult to assess contractor efficiency and effectiveness.
Long contract duration (2057 days) necessitates sustained monitoring for performance degradation or cost overruns.

Positive Signals

Contract addresses a critical need for specialized engineering support for a key naval asset.
Award fee mechanism provides an incentive for contractor performance.
Vectrus Systems LLC is an established government contractor with experience in defense support services.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting defense aviation. The market for specialized aerospace engineering and maintenance services is substantial, driven by the ongoing need to maintain complex military platforms. Comparable spending benchmarks would involve analyzing other contracts for similar helicopter support, depot-level maintenance, and engineering services provided to the Department of Defense. The unique requirements of the MH-60R platform likely position this contract within a niche segment of the broader aerospace services market.

Small Business Impact

The data indicates that small business participation (sb) is false, and there is no indication of a small business set-aside (ss). This suggests that the contract was not specifically targeted towards small businesses. Consequently, there are no direct subcontracting implications for small businesses arising from a set-aside provision. The impact on the small business ecosystem is neutral in terms of direct set-aside opportunities, though larger prime contractors like Vectrus Systems LLC may engage small businesses as subcontractors for specific components or services not covered by this prime contract.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Navy contracting officers and program managers. Accountability measures are built into the Cost Plus Award Fee structure, which links a portion of the payment to performance. Transparency could be enhanced through public reporting of performance metrics and cost data, although such details are often sensitive. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract.

Related Government Programs

MH-60R Seahawk Helicopter Program
Naval Aviation Maintenance Programs
Defense Engineering Services Contracts
Cost Plus Award Fee Contracts
Sole-Source Defense Procurements

Risk Flags

Sole-source award raises concerns about price competition.
Cost Plus Award Fee requires robust oversight to prevent cost overruns.
Lack of detailed performance metrics in the provided data hinders value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.2 million to VECTRUS SYSTEMS LLC. LABOR MH-60R DENMARK

Who is the contractor on this award?

The obligated recipient is VECTRUS SYSTEMS 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 $12.2 million.

What is the period of performance?

Start: 2020-04-30. End: 2025-12-17.

What is the track record of Vectrus Systems LLC in performing similar engineering support contracts for naval aviation assets?

Vectrus Systems LLC has a history of performing various support services for the U.S. military, including aviation maintenance and logistics. While specific details on their performance for MH-60R engineering support are not immediately available in this data snippet, their broader experience suggests a capability to handle complex technical requirements. A deeper dive into their past performance evaluations, contract awards, and any reported issues on similar contracts would be necessary to fully assess their track record for this specific requirement. Government contract databases and performance assessment reports (e.g., CPARS) would be key resources for this analysis.

How does the awarded value of $12.2 million compare to the estimated market rate for similar MH-60R engineering support services?

Determining the precise market rate for specialized MH-60R engineering support is complex due to the unique nature of the platform and the sole-source award. However, a comparison can be made by looking at other contracts for engineering services on similar military helicopters or complex aerospace systems. The $12.2 million figure represents the initial or estimated total value over the contract's duration (2057 days). Without access to detailed cost breakdowns, overhead rates, and profit margins, it's difficult to benchmark against market rates. A competitive bidding process would typically yield a more reliable price comparison. Given the sole-source nature, it's plausible that the negotiated price might be higher than what could be achieved through competition.

What are the primary risks associated with a sole-source, Cost Plus Award Fee contract for engineering services?

The primary risks associated with this contract structure are twofold. Firstly, the sole-source nature eliminates competitive pressure, potentially leading to higher costs than if multiple bidders were involved. The government may not be achieving the best possible price. Secondly, the Cost Plus Award Fee (CPAF) structure, while incentivizing performance, carries the risk of cost overruns if the award fee criteria are not tightly defined and rigorously monitored. The contractor has an incentive to incur costs to achieve higher fees, and the government must ensure that these costs are reasonable and necessary. Effective oversight and clear performance metrics are crucial to mitigate these risks.

What is the expected impact of this contract on the operational readiness of the MH-60R helicopter fleet?

This contract is expected to have a positive impact on the operational readiness of the MH-60R helicopter fleet by ensuring the availability of specialized engineering expertise. The MH-60R is a critical asset for naval operations, and its effective maintenance and sustainment rely heavily on skilled engineering support. By securing these services through Vectrus Systems LLC, the Department of the Navy aims to maintain the airworthiness, performance, and safety of these helicopters, thereby supporting their deployment in various missions. The long duration of the contract suggests a commitment to sustained support, which is vital for long-term fleet readiness.

How has historical spending on MH-60R helicopter support evolved, and does this contract represent a significant shift?

Analyzing historical spending patterns for MH-60R support requires access to comprehensive budget and contract data over multiple fiscal years. Without that specific data, it's difficult to determine if this $12.2 million contract represents a significant shift. However, the MH-60R is a long-serving platform, and consistent investment in its sustainment, maintenance, and engineering support is typical. The nature of the award (sole-source, CPAF) and the specific services procured (engineering) are key factors. If previous support was competitively procured or utilized different contract types, this award might indicate a change in procurement strategy or a response to specific market conditions or contractor capabilities.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0042120R0108

Offers Received: 1

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: Vectrus, Inc.

Address: 1875 CAMPUS COMMONS DRIVE SUITE 301, RESTON, VA, 20191

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $13,510,554

Exercised Options: $12,671,393

Current Obligation: $12,215,112

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $31,724

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline