DoD awards $18.1M follow-on contract for reliability and maintainability engineering services to Andromeda Systems Inc

Contract Overview

Contract Amount: $18,112,988 ($18.1M)

Contractor: Andromeda Systems Incorporated

Awarding Agency: Department of Defense

Start Date: 2023-12-28

End Date: 2026-12-27

Contract Duration: 1,095 days

Daily Burn Rate: $16.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: RELIABILITY AND MAINTAINABILITY FOLLOW-ON CONTRACT

Place of Performance

Location: PATUXENT RIVER, SAINT MARYS County, MARYLAND, 20670

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $18.1 million to ANDROMEDA SYSTEMS INCORPORATED for work described as: RELIABILITY AND MAINTAINABILITY FOLLOW-ON CONTRACT Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. 3. Andromeda Systems Incorporated is the sole awardee for this follow-on effort. 4. The contract duration is 1095 days, indicating a long-term need for these services. 5. The primary service falls under Engineering Services, a critical support function for defense operations. 6. Awarded by the Department of the Navy, highlighting a specific branch's requirement. 7. The contract is a Delivery Order, suggesting it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle.

Value Assessment

Rating: fair

Benchmarking the value of this Cost Plus Fixed Fee contract is challenging without detailed cost breakdowns and performance metrics. However, the total award amount of $18.1 million over three years for specialized engineering services appears within a reasonable range for complex defense support. Comparisons to similar reliability and maintainability contracts would be necessary for a more precise assessment of value for money. The fixed fee component provides some cost control, but the cost-reimbursement nature requires diligent oversight to prevent excessive spending.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of multiple bidders (implied by 'full and open') typically fosters price discovery and encourages competitive pricing. The Department of the Navy likely sought the best technical solution and value through this process. The number of actual bidders is not specified, which would provide further insight into the intensity of the competition.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down costs through market forces, ensuring the government receives competitive pricing and a wider range of innovative solutions.

Public Impact

The primary beneficiaries are the Department of the Navy and its operational readiness, through enhanced reliability and maintainability of systems. Services delivered include critical engineering support focused on ensuring defense assets are functional and dependable. The geographic impact is likely concentrated around naval operations and maintenance facilities, primarily in Maryland where the contractor is located. Workforce implications include employment for specialized engineers and technical staff at Andromeda Systems Incorporated.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts carry inherent risks of cost escalation if not rigorously managed.
Follow-on nature of the contract may limit new entrants and potentially reduce competitive pressure over time.
Lack of specific performance metrics in the provided data makes it difficult to assess the effectiveness of the services.
The sole awardee status for this specific delivery order could indicate a specialized capability, but also limits broader market engagement.

Positive Signals

Awarded through full and open competition, suggesting a robust initial selection process.
The contract addresses critical reliability and maintainability needs, essential for defense asset longevity and performance.
The fixed fee component provides a ceiling on contractor profit, offering some cost predictability.
The long-term duration (3 years) suggests a stable and ongoing requirement, potentially leading to efficiencies through sustained effort.

Sector Analysis

This contract falls within the Engineering Services sector, a vital component of the broader professional, scientific, and technical services industry. This sector supports numerous government functions, particularly in defense, by providing specialized expertise. The market for defense engineering services is substantial, driven by the continuous need to maintain, upgrade, and develop complex military systems. Comparable spending benchmarks would typically involve analyzing other contracts for similar reliability and maintainability support across different defense agencies and branches.

Small Business Impact

The provided 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 mandated by this award. The impact on the small business ecosystem is neutral, as it does not appear to leverage or specifically support small business capabilities through this particular contract vehicle.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Navy contracting officers and program managers. Accountability measures are typically embedded within the Cost Plus Fixed Fee structure, requiring detailed reporting and justification of costs. Transparency is facilitated through contract award databases, although specific performance details and cost breakdowns may be sensitive. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Defense Engineering Services
Reliability and Maintainability Support
Naval Systems Engineering
Cost Plus Fixed Fee Contracts
Follow-on Contracts
Delivery Orders

Risk Flags

Cost Plus Fixed Fee contract type requires diligent oversight to manage costs.
Follow-on nature may reduce competitive intensity over time.
Specific performance metrics and outcomes are not detailed in the award data.
Sole awardee for this delivery order limits visibility into broader market capabilities.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $18.1 million to ANDROMEDA SYSTEMS INCORPORATED. RELIABILITY AND MAINTAINABILITY FOLLOW-ON CONTRACT

Who is the contractor on this award?

The obligated recipient is ANDROMEDA SYSTEMS INCORPORATED.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $18.1 million.

What is the period of performance?

Start: 2023-12-28. End: 2026-12-27.

What is the historical spending pattern for reliability and maintainability engineering services within the Department of the Navy?

Analyzing the historical spending patterns for reliability and maintainability (R&M) engineering services within the Department of the Navy requires access to comprehensive federal procurement data. Generally, the Navy, like other branches of the DoD, invests significantly in R&M to ensure the operational readiness and longevity of its vast array of complex platforms and systems, including ships, aircraft, and ground support equipment. Spending in this area fluctuates based on modernization programs, fleet age, and specific system sustainment requirements. Contracts can range from small, specialized task orders to large, multi-year IDIQ vehicles. Historically, R&M services are often procured through engineering services contracts, with varying contract types such as Cost Plus Fixed Fee (CPFF), Firm-Fixed Price (FFP), and Time and Materials (T&M), depending on the level of definition and risk. The trend has been towards performance-based contracts where possible, but the inherent complexity of R&M often necessitates cost-reimbursement structures. The total annual spend can be in the hundreds of millions, if not billions, across the Navy, reflecting the critical nature of maintaining a high state of readiness.

How does the Cost Plus Fixed Fee (CPFF) contract type compare to other pricing arrangements for similar engineering services?

The Cost Plus Fixed Fee (CPFF) contract type is characterized by the government reimbursing the contractor for all allowable costs incurred, plus a predetermined fixed fee representing profit. This contrasts with Firm-Fixed Price (FFP) contracts, where the price is set regardless of actual costs, placing cost risk on the contractor. Time and Materials (T&M) contracts reimburse based on direct labor hours at specified rates and indirect costs plus a fixed fee or fixed overhead. For complex engineering services like reliability and maintainability, where the scope may evolve or technical uncertainties are high, CPFF can be advantageous as it allows flexibility and incentivizes the contractor to perform the work without being overly constrained by a fixed price. However, it shifts significant cost risk to the government and requires robust oversight to control spending. FFP is generally preferred for well-defined scopes to maximize cost savings, while T&M is often used for smaller efforts or when the mix of labor is unpredictable.

What are the potential risks associated with follow-on contracts in specialized engineering fields?

Follow-on contracts, like the one awarded to Andromeda Systems Incorporated, can present several risks. One primary concern is the potential for reduced competition over time. If a contractor has successfully performed previous related work, they may have an advantage in subsequent procurements, potentially leading to less aggressive pricing or fewer innovative approaches from new bidders. This can create a 'lock-in' effect. Another risk is complacency; the incumbent contractor might become less motivated to optimize performance or control costs, assuming continued awards. Furthermore, if the initial contract's scope or performance metrics were not perfectly defined, the follow-on effort might inherit or perpetuate those deficiencies. Ensuring that follow-on procurements still undergo rigorous evaluation, including market research to identify potential new competitors and clear performance standards, is crucial to mitigate these risks and ensure continued value for the government.

What is Andromeda Systems Incorporated's track record with the Department of the Navy or similar defense contracts?

Assessing Andromeda Systems Incorporated's track record requires a detailed review of their contract history, particularly with the Department of the Navy and other defense agencies. Publicly available data often shows award amounts, contract types, and performance periods. A positive indicator would be a history of successful contract completions, timely delivery, and adherence to technical specifications. Conversely, red flags might include contract terminations for default, significant cost overruns, past performance issues cited in source selections, or unresolved disputes. For this specific follow-on contract, the fact that it was awarded suggests a satisfactory performance on prior related efforts. However, a deeper dive into past performance evaluations, any debriefings provided to unsuccessful bidders on previous related procurements, and the contractor's financial stability would offer a more comprehensive view of their reliability and capability.

How does the $18.1 million contract value compare to the overall budget for reliability and maintainability within the Navy's engineering services portfolio?

The $18.1 million value of this specific contract represents a component of the Department of the Navy's broader expenditure on reliability and maintainability (R&M) engineering services. The Navy's total budget for engineering and technical support services is substantial, often running into billions of dollars annually, encompassing a wide range of activities from ship design and modernization to aircraft sustainment and weapons system integration. This $18.1 million award, spread over three years, is a significant sum for a single follow-on delivery order but likely constitutes a relatively small fraction of the Navy's overall R&M budget. To contextualize it further, one would need to compare it against the total spend for similar R&M services across the Navy, benchmark it against the cost of comparable contracts awarded to other entities, and analyze its proportion relative to the specific systems or platforms it supports. Without this broader fiscal context, it's difficult to definitively state its significance within the Navy's entire R&M portfolio.

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: N0042123R3000

Offers Received: 3

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 440 VIKING DRIVE, VIRGINIA BEACH, VA, 23452

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

Financial Breakdown

Contract Ceiling: $62,547,953

Exercised Options: $30,895,519

Current Obligation: $18,112,988

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017819D7124

IDV Type: IDC

Timeline