Navy Awards $16.8M Contract to NDI Engineering for Ship Systems Support Amid Obsolescence Concerns

Contract Overview

Contract Amount: $16,800,617 ($16.8M)

Contractor: NDI Engineering Company

Awarding Agency: Department of Defense

Start Date: 2021-06-24

End Date: 2026-06-23

Contract Duration: 1,825 days

Daily Burn Rate: $9.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: SERVICES SUPPORT FOR DIMINISHED MANUFACTURING SOURCES & MATERIAL SHORTAGES/OBSOLESCENCE ISSUES/CONFIGURATION/PROVISIONING & ALL ASSOCIATED MACHINERY R&D FOR HULL, MECHANICAL, & ELECTRICAL SYSTEMS & EQUIPMENT INSTALLED ON U.S. NAVY SURFACE SHIPS

Place of Performance

Location: THOROFARE, GLOUCESTER County, NEW JERSEY, 08086

State: New Jersey Government Spending

Plain-Language Summary

Department of Defense obligated $16.8 million to NDI ENGINEERING COMPANY for work described as: SERVICES SUPPORT FOR DIMINISHED MANUFACTURING SOURCES & MATERIAL SHORTAGES/OBSOLESCENCE ISSUES/CONFIGURATION/PROVISIONING & ALL ASSOCIATED MACHINERY R&D FOR HULL, MECHANICAL, & ELECTRICAL SYSTEMS & EQUIPMENT INSTALLED ON U.S. NAVY SURFACE SHIPS Key points: 1. Contract focuses on critical R&D for hull, mechanical, and electrical systems on U.S. Navy surface ships. 2. Addresses diminished manufacturing sources and material shortages, a growing challenge in defense. 3. NDI Engineering Company, based in New Jersey, is the awardee. 4. The contract type is Cost Plus Fixed Fee, indicating potential for cost overruns. 5. Competition was full and open, suggesting a competitive bidding process.

Value Assessment

Rating: fair

The contract value of $16.8M over 5 years for specialized engineering services appears reasonable given the complexity of naval systems and the need to address obsolescence. However, the Cost Plus Fixed Fee structure warrants close monitoring for cost efficiency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which generally promotes competitive pricing and allows for a broad range of potential contractors to bid. This method is expected to yield fair market prices.

Taxpayer Impact: The competitive award process aims to ensure taxpayer funds are used efficiently for essential defense services, though the CPFF structure requires diligent oversight to control costs.

Public Impact

Ensures the continued operational readiness of U.S. Navy surface ships by addressing critical material shortages and obsolescence. Supports the development of advanced engineering solutions for complex hull, mechanical, and electrical systems. Invests in domestic manufacturing capabilities and R&D to mitigate reliance on foreign or outdated components. Contributes to the long-term sustainability and modernization of the naval fleet.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type can lead to higher costs if not managed effectively.
Potential for scope creep in R&D projects addressing complex obsolescence issues.
Reliance on a single awardee for this specific task order, though the initial competition was broad.

Positive Signals

Addresses a critical defense need related to material obsolescence.
Awarded through full and open competition.
Long-term contract duration allows for sustained focus on R&D and problem-solving.

Sector Analysis

This contract falls within the Engineering Services sector (NAICS 541330), which is a significant area of federal spending, particularly within the Department of Defense. Benchmarks for similar complex R&D and support services for defense platforms are highly variable but typically represent substantial investments.

Small Business Impact

The data indicates this contract was not awarded to a small business (ss: false). While the initial competition was full and open, there is no specific indication of small business participation or subcontracting goals within this particular delivery order.

Oversight & Accountability

The Department of the Navy is responsible for oversight of this contract. The Cost Plus Fixed Fee structure necessitates robust financial oversight and performance monitoring to ensure value for money and prevent cost overruns.

Related Government Programs

Engineering Services
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Cost Plus Fixed Fee contract type.
Potential for R&D scope expansion.
Long-term duration increases exposure to changing technological landscapes.
No explicit small business set-aside noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $16.8 million to NDI ENGINEERING COMPANY. SERVICES SUPPORT FOR DIMINISHED MANUFACTURING SOURCES & MATERIAL SHORTAGES/OBSOLESCENCE ISSUES/CONFIGURATION/PROVISIONING & ALL ASSOCIATED MACHINERY R&D FOR HULL, MECHANICAL, & ELECTRICAL SYSTEMS & EQUIPMENT INSTALLED ON U.S. NAVY SURFACE SHIPS

Who is the contractor on this award?

The obligated recipient is NDI ENGINEERING COMPANY.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $16.8 million.

What is the period of performance?

Start: 2021-06-24. End: 2026-06-23.

What is the projected cost growth potential under this Cost Plus Fixed Fee contract, and what mechanisms are in place to control it?

The Cost Plus Fixed Fee (CPFF) structure inherently allows for costs to exceed initial estimates, with the fee remaining fixed. The Department of the Navy must implement stringent oversight, including regular audits, detailed cost tracking, and performance reviews, to manage potential cost growth. Clear milestones and deliverables tied to fee payment can also incentivize efficiency and control expenditures.

How will the effectiveness of the R&D efforts in resolving material shortages and obsolescence be measured and validated?

Effectiveness will likely be measured through a combination of technical performance metrics, successful integration of new or refurbished components into ship systems, and reduced reliance on obsolete parts. Validation could involve rigorous testing, operational deployment feedback, and independent engineering assessments to confirm that the R&D solutions meet the Navy's requirements for reliability and performance.

What is the long-term strategy for ensuring continued access to critical materials and components beyond the scope of this contract?

This contract addresses immediate R&D needs for obsolescence. The Navy's long-term strategy likely involves a multi-faceted approach including proactive lifecycle management, fostering domestic industrial base capabilities, exploring alternative materials, and potentially establishing long-term agreements with manufacturers. This contract serves as a critical step in identifying and developing solutions for current and future material challenges.

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: N6449821R3002

Offers Received: 4

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 100 GROVE RD, THOROFARE, NJ, 08086

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

Financial Breakdown

Contract Ceiling: $17,639,498

Exercised Options: $17,639,498

Current Obligation: $16,800,617

Actual Outlays: $208,121

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017819D8168

IDV Type: IDC

Timeline