Navy awards $12M contract for CNO services on USNS Hunter, with a 200-day duration

Contract Overview

Contract Amount: $12,001,642 ($12.0M)

Contractor: Tecnico Corporation

Awarding Agency: Department of Defense

Start Date: 2025-08-15

End Date: 2026-03-03

Contract Duration: 200 days

Daily Burn Rate: $60.0K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: CNO FOR USNS HUNTER

Place of Performance

Location: NORFOLK, NORFOLK CITY County, VIRGINIA, 23504

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $12.0 million to TECNICO CORPORATION for work described as: CNO FOR USNS HUNTER Key points: 1. Contract value appears reasonable given the scope of CNO services for a naval vessel. 2. Full and open competition was utilized, suggesting a competitive pricing environment. 3. Potential risks include performance delays or cost overruns, though not explicitly indicated. 4. This contract supports the operational readiness of naval assets. 5. The shipbuilding and repairing sector is characterized by complex, high-value contracts. 6. The contract is a delivery order, indicating it's part of a larger indefinite-delivery contract.

Value Assessment

Rating: good

The contract value of $12,001,642.37 for 200 days of CNO services on the USNS Hunter seems within a reasonable range for specialized maritime support. Benchmarking against similar CNO contracts for naval vessels of comparable size and complexity would provide a more precise value-for-money assessment. However, the firm fixed-price nature of the contract suggests that the contractor bears the risk of cost overruns, which is a positive indicator for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that multiple bidders were solicited and considered. The presence of two bidders suggests a degree of competition, which typically leads to more competitive pricing and better value for the government. The specific exclusion of sources might be due to specialized requirements, but the overall approach aimed for broad market participation.

Taxpayer Impact: The use of full and open competition is beneficial for taxpayers as it encourages a wider range of suppliers to bid, driving down prices and ensuring the government receives the best possible value for its investment.

Public Impact

The primary beneficiaries are the U.S. Navy and the operational readiness of the USNS Hunter. Services delivered include critical CNO (Command, Control, Communications, Computers, and Cyber) support. The geographic impact is likely focused on the operational theater where the USNS Hunter is deployed. Workforce implications include employment for skilled technicians and maritime professionals involved in CNO services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if CNO requirements evolve beyond the initial contract terms.
Dependence on the contractor's specialized expertise could pose a risk if key personnel depart.
Ensuring seamless integration of CNO services with existing naval systems requires careful oversight.

Positive Signals

Firm fixed-price contract structure shifts cost overrun risk to the contractor.
Full and open competition suggests a robust bidding process and potential for competitive pricing.
The contract specifies a clear performance period, aiding in schedule management.

Sector Analysis

The contract falls within the broader shipbuilding and repairing sector (NAICS 336611), which is a critical component of national defense and maritime commerce. This sector is characterized by high barriers to entry, specialized technical expertise, and significant capital investment. Contracts like this are essential for maintaining the operational capabilities of naval fleets. Comparable spending benchmarks would involve analyzing other CNO support contracts for similar vessels within the Department of Defense.

Small Business Impact

There is no explicit indication of small business set-asides or subcontracting requirements in the provided data. Given the specialized nature of CNO services, it is possible that the prime contractor is a large business. Further analysis would be needed to determine if small businesses are involved in the supply chain or if subcontracting opportunities exist.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy, with specific program managers responsible for monitoring performance, adherence to schedule, and quality of services. Accountability measures are embedded in the firm fixed-price contract, which incentivizes the contractor to meet requirements within budget. Transparency is generally maintained through contract award databases, though specific performance details may be sensitive.

Related Government Programs

Naval Vessel Maintenance and Repair
C4ISR Systems Support
Shipbuilding and Repair Services
Defense Logistics Support

Risk Flags

Potential for performance issues impacting operational readiness.
Risk of schedule delays affecting naval deployment schedules.
Technical complexity of CNO systems may lead to unforeseen challenges.
Contractor dependency and key personnel retention.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.0 million to TECNICO CORPORATION. CNO FOR USNS HUNTER

Who is the contractor on this award?

The obligated recipient is TECNICO 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 $12.0 million.

What is the period of performance?

Start: 2025-08-15. End: 2026-03-03.

What is the track record of TECNICO CORPORATION in providing CNO services to the Department of Defense?

A thorough review of TECNICO CORPORATION's past performance with the Department of Defense is crucial for assessing their reliability and capability in delivering CNO services. This would involve examining contract histories for similar projects, including contract values, durations, and any reported performance issues or awards. Data on past performance, such as CPARS (Contractor Performance Assessment Reporting System) ratings, would provide objective insights into their ability to meet technical requirements, manage schedules, and control costs. Understanding their experience with naval vessels specifically, and the USNS Hunter class in particular, would further inform the risk assessment for this contract.

How does the awarded amount compare to similar CNO support contracts for naval vessels?

To benchmark the value-for-money, the awarded amount of approximately $12 million for 200 days of CNO services needs to be compared against historical data for similar contracts. This comparison should consider factors such as the size and class of the vessel, the specific CNO capabilities required, the duration of the service, and the geographic location of operations. If data indicates that similar contracts for comparable vessels have been awarded at significantly lower or higher price points, it would suggest potential overpricing or underpricing, respectively. The firm fixed-price nature of this contract also implies that the contractor assumes cost risk, which should be factored into any value comparison.

What are the primary risks associated with this specific CNO support contract?

The primary risks associated with this contract include potential performance deficiencies, where TECNICO CORPORATION may fail to meet the required CNO service levels, impacting the operational readiness of the USNS Hunter. Schedule delays are another significant risk, especially given the 200-day performance period, which could disrupt naval operations. Technical risks related to the integration and maintenance of complex CNO systems are also present. Furthermore, there's a risk of cost escalation if unforeseen issues arise that are not adequately covered by the firm fixed-price structure, although the contractor bears most of this risk. Contractor dependency and the potential loss of key personnel could also pose a risk.

How effective is the 'Full and Open Competition After Exclusion of Sources' approach in ensuring competitive pricing for specialized CNO services?

The 'Full and Open Competition After Exclusion of Sources' approach aims to balance broad competition with the need for specialized capabilities. By excluding certain sources, the government may be targeting specific technical requirements or security clearances. However, if the exclusion is too broad or not adequately justified, it can limit the number of potential bidders, thereby reducing competition and potentially leading to higher prices. The fact that two bidders participated suggests some level of competition was achieved. Analyzing the number of proposals received and the price spread between them would provide a clearer picture of how effective this specific competition was in driving competitive pricing for these specialized CNO services.

What is the historical spending trend for CNO services within the Department of the Navy?

Analyzing historical spending trends for CNO services within the Department of the Navy is essential for contextualizing this $12 million award. This would involve examining aggregate spending on CNO support contracts over several fiscal years, identifying major contractors, and noting any significant fluctuations in contract values or award volumes. Understanding whether spending on CNO services has been increasing, decreasing, or remaining stable can indicate evolving requirements, technological advancements, or shifts in procurement strategies. Such analysis helps in assessing whether the current contract award aligns with established spending patterns or represents an anomaly.

What are the implications of the firm fixed-price contract type for cost control and contractor performance?

A firm fixed-price (FFP) contract type is generally favored by the government for services where the scope of work is well-defined and risks are manageable. For this CNO support contract, the FFP structure places the primary financial risk on TECNICO CORPORATION. This means the contractor is obligated to complete the work for the agreed-upon price, regardless of actual costs incurred. This incentivizes the contractor to manage costs efficiently and perform diligently to avoid losses. For the government, it provides cost certainty, as the total price is fixed. However, it's crucial that the initial price reflects a realistic estimate of costs and profit, as the contractor may seek to maximize profit by minimizing effort or quality if oversight is lax.

Industry Classification

NAICS: Manufacturing › Ship and Boat Building › Ship Building and Repairing

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › NON-NUCLEAR SHIP REPAIR

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N5005424R0003

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: American Maritime Holdings, Inc.

Address: 831 INDUSTRIAL AVE, CHESAPEAKE, VA, 23324

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $12,001,642

Exercised Options: $12,001,642

Current Obligation: $12,001,642

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N5005425D0006

IDV Type: IDC

Timeline