DoD's $23M R&D contract for LVC-T support services awarded to American Systems Corp

Contract Overview

Contract Amount: $23,075,022 ($23.1M)

Contractor: American Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2021-06-14

End Date: 2026-06-14

Contract Duration: 1,826 days

Daily Burn Rate: $12.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: SBIR III ARMS FOR LVC-T SUPPORT SERVICES

Place of Performance

Location: NORFOLK, NORFOLK CITY County, VIRGINIA, 23551

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $23.1 million to AMERICAN SYSTEMS CORPORATION for work described as: SBIR III ARMS FOR LVC-T SUPPORT SERVICES Key points: 1. Contract awarded on a sole-source basis, limiting competitive price discovery. 2. Duration of 5 years suggests a long-term need for these specialized services. 3. The contract type (Cost Plus Fixed Fee) may incentivize cost overruns. 4. Focus on R&D in physical, engineering, and life sciences indicates advanced technological development. 5. Virginia is the primary state for contract performance, suggesting a concentration of related economic activity. 6. No small business set-aside was applied, potentially impacting small business participation.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance metrics or comparable sole-source R&D awards. The Cost Plus Fixed Fee (CPFF) structure, while common for R&D where costs are uncertain, carries inherent risks of cost escalation. The fixed fee component provides some cost control, but the overall price is subject to the actual costs incurred by the contractor. Without more data on the scope of work and expected outcomes, a definitive value assessment is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when a specific contractor possesses unique capabilities or when circumstances preclude full and open competition. The lack of competition means that taxpayers did not benefit from potential cost savings that could arise from a competitive bidding process.

Taxpayer Impact: Sole-source awards can lead to higher prices for taxpayers as there is no competitive pressure to drive down costs. This limits the government's ability to secure the best possible value for public funds.

Public Impact

The Department of the Navy benefits from specialized R&D support for Live, Virtual, Constructive-Training (LVC-T) systems. This contract supports the advancement of training technologies, potentially improving military readiness and effectiveness. Performance is concentrated in Virginia, likely benefiting the local economy through employment and subcontracts. The contract fosters innovation in physical, engineering, and life sciences related to defense training.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Cost Plus Fixed Fee contract type can lead to cost overruns if not closely managed.
Lack of small business set-aside may limit opportunities for smaller innovative firms.

Positive Signals

Contract supports critical R&D for advanced military training systems.
Long-term contract (5 years) indicates a sustained need and potential for stable support.
American Systems Corporation has a track record in defense contracting, suggesting relevant expertise.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. The market for defense training simulation and related R&D is substantial, driven by the need for advanced, cost-effective training solutions. Comparable spending in this area often involves significant investment in technology to enhance realism and effectiveness. This contract represents a specific investment in the LVC-T domain, a key area for modern military preparedness.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. This means that opportunities for small businesses to participate in this specific contract are limited unless they are prime contractors or directly subcontracted by American Systems Corporation. The absence of a set-aside may mean that the full potential of the small business innovation ecosystem is not being leveraged for this particular R&D effort.

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 and performance monitoring are crucial to ensure costs remain within reasonable bounds and that the contractor meets defined objectives. Transparency would be facilitated through regular reporting requirements and potential reviews by the Government Accountability Office (GAO) or the Department of Defense's Inspector General, depending on the nature of any reported issues.

Related Government Programs

DoD Training and Simulation Programs
SBIR/STTR Programs (if applicable to contractor's innovation)
Advanced Technology Development Contracts
Live, Virtual, Constructive Training Environments

Risk Flags

Sole-source award may limit cost savings.
CPFF contract type carries risk of cost overruns.
Lack of small business participation noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.1 million to AMERICAN SYSTEMS CORPORATION. SBIR III ARMS FOR LVC-T 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 $23.1 million.

What is the period of performance?

Start: 2021-06-14. End: 2026-06-14.

What is American Systems Corporation's track record with sole-source R&D contracts, particularly within the Department of Defense?

American Systems Corporation has a history of performing contracts for the Department of Defense, including R&D services. While specific data on their sole-source R&D contract volume is not readily available in this context, their overall presence in the defense sector suggests experience with government contracting processes. Sole-source awards are typically justified by unique capabilities or urgent needs. A deeper dive into their contract history would reveal the extent to which they have been awarded sole-source R&D contracts and their performance on those engagements. This would help assess their reliability and cost-effectiveness in such scenarios.

How does the $23 million contract value compare to similar R&D efforts in military training technologies?

The $23 million contract value for LVC-T support services is a moderate investment within the broader landscape of defense R&D. The cost of developing and integrating advanced training technologies can vary significantly based on complexity, scope, and duration. Contracts for simulation systems, virtual reality integration, and advanced modeling can range from a few million to hundreds of millions of dollars. Without specific details on the deliverables and technological advancements expected from this particular contract, a direct comparison is difficult. However, it suggests a focused effort on a specific aspect of LVC-T rather than a comprehensive system overhaul.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for R&D, and how are they mitigated?

The primary risk with CPFF contracts, especially in R&D, is cost overrun. Since the contractor is reimbursed for actual costs plus a fixed fee, there's less incentive to control expenses compared to fixed-price contracts. If costs escalate beyond initial projections, the total contract value can increase significantly. Mitigation strategies include robust government oversight, detailed cost accounting standards, clear definition of work scope, and performance metrics tied to fee realization. The fixed fee itself provides some predictability, but the government bears the risk of fluctuating direct costs. Regular audits and progress reviews are essential to manage these risks effectively.

What is the expected impact of this contract on the advancement of Live, Virtual, Constructive-Training (LVC-T) capabilities for the Navy?

This contract is expected to contribute to the enhancement and refinement of the Navy's LVC-T capabilities. LVC-T systems integrate live training environments (e.g., actual personnel and equipment), virtual environments (e.g., simulators), and constructive environments (e.g., computer-generated forces) to create complex, realistic training scenarios. By providing R&D support, American Systems Corporation likely aims to improve the fidelity, interoperability, and effectiveness of these integrated training systems. This could lead to more sophisticated training exercises, better preparation for complex operational environments, and potentially reduced costs associated with large-scale live training exercises.

Are there any historical spending patterns with American Systems Corporation or for LVC-T R&D that this contract aligns with or deviates from?

Analyzing historical spending patterns requires access to extensive contract databases. However, generally, defense spending on training and simulation technologies, including LVC-T, has been a consistent area of investment for the DoD. Companies like American Systems Corporation, with a focus on defense support services, often secure contracts in these domains. If this is a sole-source award, it might indicate a specific, ongoing project or a unique capability that the government has previously relied upon. Without specific historical data for this contractor and this precise R&D area, it's difficult to determine if this $23 million award represents a typical expenditure or a deviation. However, the 5-year duration suggests a sustained commitment to this R&D effort.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)

Product/Service Code: TECHNICAL REPRESENTATIVE SVCS. › TECHNICAL REPRESENTATIVE SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N6426721R0072

Offers Received: 1

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: $26,941,950

Exercised Options: $24,403,737

Current Obligation: $23,075,022

Actual Outlays: $9,043,290

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $8,783,458

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline