Navy awards $14.6M for fleet sensor and cable support, with 2 bids received

Contract Overview

Contract Amount: $14,681,081 ($14.7M)

Contractor: American Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2008-05-07

End Date: 2016-09-30

Contract Duration: 3,068 days

Daily Burn Rate: $4.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: FLEET SENSORS AND CABLES SUPPORT SERVICES

Place of Performance

Location: WATERFORD, NEW LONDON County, CONNECTICUT, 06385

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $14.7 million to AMERICAN SYSTEMS CORPORATION for work described as: FLEET SENSORS AND CABLES SUPPORT SERVICES Key points: 1. Contract value of $14.6M over 8 years suggests a moderate annual spend. 2. The contract was awarded under full and open competition, indicating a broad search for qualified vendors. 3. Two bids were received, which is on the lower end and may warrant further investigation into market dynamics. 4. The cost-plus-fixed-fee (CPFF) pricing structure can incentivize contractor efficiency but requires careful oversight. 5. The contract duration of over 8 years (3068 days) allows for long-term support but also carries inherent risks. 6. The primary agency is the Department of the Navy, a major defense spender. 7. The North American Industry Classification System (NAICS) code 541330 points to engineering services. 8. The contract was awarded as a delivery order, suggesting it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle.

Value Assessment

Rating: fair

The total award of $14.6 million over approximately 8 years averages to about $1.8 million annually. Benchmarking this against similar fleet support contracts is difficult without more specific service details. The CPFF contract type, while common for complex services, can lead to cost overruns if not managed tightly. The limited number of bids (2) raises questions about whether the pricing achieved represents the best possible value for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit bids. However, only two bids were received. This limited competition could indicate a niche market, high barriers to entry for potential bidders, or perhaps insufficient outreach. While competition was technically open, the low number of actual bidders may have constrained price discovery and potentially led to a higher-than-optimal price for the government.

Taxpayer Impact: The limited number of bidders suggests that taxpayers may not have benefited from the full potential of competitive pricing that a larger pool of offers could have generated.

Public Impact

The U.S. Navy benefits from specialized support services for its fleet's sensors and cables. This contract ensures the operational readiness and maintenance of critical naval assets. The services are likely delivered within naval facilities or shipyards, primarily impacting military personnel and operations. The contract supports the defense industrial base, potentially involving specialized engineering and technical labor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition (2 bids) may have reduced price pressure.
Cost-plus-fixed-fee structure requires diligent oversight to control costs.
Long contract duration (over 8 years) increases exposure to potential cost escalations or scope creep.
Specific performance metrics and quality assurance details are not readily available for a full risk assessment.

Positive Signals

Awarded under full and open competition, allowing for broad market access.
Contractor American Systems Corporation has a track record with government contracts.
Delivery order structure implies it's part of a potentially pre-vetted IDIQ vehicle.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting defense applications. The market for specialized naval engineering and technical support is often concentrated among a few key contractors. The $14.6 million award over 8 years represents a moderate investment in maintaining complex defense systems. Comparable spending benchmarks would depend on the specific type of sensors and cables involved, but this appears to be a significant, long-term support agreement.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). There is no explicit information regarding subcontracting plans for small businesses. Without this information, it's difficult to assess the direct impact on the small business ecosystem, though larger prime contracts often have subcontracting goals.

Oversight & Accountability

Oversight would primarily be conducted by the Department of the Navy's contracting and program management offices. As a delivery order under a larger contract, existing oversight mechanisms for the parent IDIQ likely apply. Transparency is facilitated by contract award databases, but detailed performance monitoring and Inspector General involvement would depend on specific contract clauses and any identified issues.

Related Government Programs

Naval Ship Systems Engineering
Fleet Maintenance and Modernization
Defense Logistics Support
Engineering Services Contracts
Sensor Technology Support
Cabling and Infrastructure Services

Risk Flags

Limited Competition
Cost-Plus Contract Type
Long Contract Duration
Potential for Cost Overruns
Technological Obsolescence Risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.7 million to AMERICAN SYSTEMS CORPORATION. FLEET SENSORS AND CABLES SUPPORT SERVICES

Who is the contractor on this award?

The obligated recipient is AMERICAN SYSTEMS CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $14.7 million.

What is the period of performance?

Start: 2008-05-07. End: 2016-09-30.

What is the specific nature of the 'fleet sensors and cables' being supported under this contract?

The provided data does not specify the exact type of fleet sensors and cables. However, given the context of the Department of the Navy and the NAICS code for Engineering Services, these likely pertain to critical electronic systems aboard naval vessels. This could include sonar, radar, communication systems, navigation equipment, and associated wiring harnesses. The 'support services' likely encompass maintenance, repair, diagnostics, upgrades, and potentially the integration of new sensor technologies or cable management solutions to ensure the operational effectiveness of the fleet.

How does the pricing structure (Cost Plus Fixed Fee) compare to industry standards for similar engineering support services?

Cost Plus Fixed Fee (CPFF) is a common contract type for complex services where the scope may evolve or is difficult to define precisely upfront, such as research and development or specialized engineering. The government agrees to pay the contractor's allowable costs plus a fixed fee representing profit. For engineering services, this structure can be advantageous when innovation or adaptation is key. However, it places a significant burden on the government to meticulously audit costs and ensure they are reasonable and allocable. Compared to fixed-price contracts, CPFF offers less price certainty for the government but can facilitate performance on technically challenging projects. Industry standards vary, but effective oversight is universally critical for CPFF contracts to prevent cost overruns and ensure value.

What are the potential risks associated with the long contract duration (over 8 years)?

A contract duration exceeding 8 years presents several risks. Firstly, technological obsolescence is a significant concern; the sensors and cables supported might become outdated during the contract period, requiring costly modifications or replacements not fully anticipated. Secondly, cost escalation risk is heightened, as inflation, labor rate changes, and material cost fluctuations over such a long period can substantially increase the total expenditure beyond initial projections, even with a fixed fee. Thirdly, contractor performance degradation is possible; motivation and efficiency might wane over time, necessitating robust performance management and potential re-competition or contract restructuring. Finally, the government's flexibility to adapt to changing strategic needs or adopt new technologies is reduced.

What is American Systems Corporation's track record with similar Department of Defense contracts?

American Systems Corporation has a history of performing contracts for the Department of Defense, including services related to engineering, technical support, and IT. While the specific details of their past performance on sensor and cable support are not provided here, their presence as a bidder and awardee in this space suggests they possess relevant capabilities and experience. A deeper dive into their contract history, including past performance reviews and any past issues or successes, would be necessary for a comprehensive assessment of their reliability and expertise for this specific requirement.

How does the $14.6 million total award compare to historical spending on fleet sensor and cable support by the Navy?

Without access to historical spending data specifically for 'fleet sensors and cables support services' across the entire Navy, a direct comparison is challenging. However, $14.6 million spread over approximately 8 years equates to an average annual spend of roughly $1.8 million. This figure seems moderate for a specialized engineering support contract within a large organization like the Navy, which manages extensive fleets and complex systems. It suggests this contract addresses a specific set of needs rather than a broad, enterprise-wide overhaul. Further analysis would require comparing this to budgets for similar systems or previous contracts for analogous support.

What are the implications of only receiving two bids for this contract?

Receiving only two bids for a contract initially competed under 'full and open' conditions suggests potential issues with market saturation, contractor capability concentration, or the attractiveness of the contract terms. It could mean that only a limited number of companies possess the highly specialized skills required for supporting naval fleet sensors and cables. Alternatively, the solicitation might have been perceived as overly complex, the duration too long, or the profit margins insufficient by other potential bidders. This limited competition reduces the government's leverage in price negotiations and may indicate a higher risk of paying above market rates compared to a more robustly competed contract.

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: N0002408R3014

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 14151 PARK MEADOW DR STE 500, CHANTILLY, VA, 20151

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: $18,043,006

Exercised Options: $17,963,939

Current Obligation: $14,681,081

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017804D4032

IDV Type: IDC

Timeline