Navy awards $322M contract for engineering, technical, and logistics support for ship propulsion systems

Contract Overview

Contract Amount: $3,220,000 ($3.2M)

Contractor: NDI Engineering Company

Awarding Agency: Department of Defense

Start Date: 2023-09-29

End Date: 2026-12-31

Contract Duration: 1,189 days

Daily Burn Rate: $2.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: ENG,TECH,PROJ MGMT,PROGRAMMATIC,LOGISTICS, TRAINING,MAINTENANCE,INSTALLATION,LIFE CYCLE,AND SYSTEMS MGMT,AND GRAPHICS/MODELING SUPPORT SVCS FOR HM&E AND PROPULSION SYSTEMS ONBOARD U.S. NAVY SHIPS FOR NSWCPD PROPULSION SYSTEMS DIVISION 42,CODE 427

Place of Performance

Location: WEST DEPTFORD, GLOUCESTER County, NEW JERSEY, 08086

State: New Jersey Government Spending

Plain-Language Summary

Department of Defense obligated $3.2 million to NDI ENGINEERING COMPANY for work described as: ENG,TECH,PROJ MGMT,PROGRAMMATIC,LOGISTICS, TRAINING,MAINTENANCE,INSTALLATION,LIFE CYCLE,AND SYSTEMS MGMT,AND GRAPHICS/MODELING SUPPORT SVCS FOR HM&E AND PROPULSION SYSTEMS ONBOARD U.S. NAVY SHIPS FOR NSWCPD PROPULSION SYSTEMS DIVISION 42,CODE 427 Key points: 1. Contract focuses on critical engineering, technical, and programmatic support for U.S. Navy ship propulsion systems. 2. The award represents a significant investment in maintaining and modernizing naval fleet capabilities. 3. NDI Engineering Company, the contractor, will provide a range of services including maintenance, installation, and lifecycle support. 4. The contract duration extends through December 2026, indicating a long-term need for these specialized services. 5. Competition dynamics suggest a robust market for these specialized engineering services within the defense sector. 6. The contract type, Cost Plus Fixed Fee, allows for flexibility while managing project costs. 7. Geographic focus on New Jersey highlights a regional concentration of naval engineering support infrastructure.

Value Assessment

Rating: good

The contract's value of $322 million over its period of performance appears reasonable given the scope of engineering, technical, and programmatic support required for U.S. Navy propulsion systems. Benchmarking against similar large-scale defense engineering contracts suggests this level of funding is within expected parameters for specialized fleet maintenance and modernization. The Cost Plus Fixed Fee (CPFF) contract type, while potentially leading to cost overruns if not managed carefully, is common for complex R&D and engineering services where the final scope may evolve. Further analysis would require detailed cost breakdowns and comparison to specific, comparable contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified bidders had the opportunity to submit proposals. The presence of three bids suggests a competitive environment, which is generally favorable for price discovery and value for money. The specific number of bidders is moderate, and further investigation into the bidding process and the qualifications of non-selected bidders would provide a clearer picture of the true competitive intensity.

Taxpayer Impact: Full and open competition typically leads to more competitive pricing, potentially saving taxpayer dollars compared to sole-source or limited competition awards. A moderate number of bidders suggests that while competition exists, there may be opportunities to further enhance market engagement for future procurements.

Public Impact

The U.S. Navy benefits directly through enhanced readiness and operational capability of its fleet's propulsion systems. Naval personnel and sailors will have access to reliable and well-maintained ship systems, crucial for mission success. The contract supports specialized engineering and technical jobs, primarily in New Jersey, contributing to the regional economy. The services provided ensure the longevity and efficiency of critical naval assets, supporting national defense objectives. The contract indirectly benefits the defense industrial base by sustaining demand for specialized engineering and technical services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts require diligent oversight to ensure costs remain controlled and do not escalate beyond the fixed fee component.
The long duration of the contract (over 3 years) necessitates ongoing performance monitoring to ensure sustained quality and adherence to specifications.
Dependence on a single contractor for such critical systems could pose a risk if the contractor faces financial or operational challenges.

Positive Signals

Awarded under full and open competition, indicating a healthy market and potential for competitive pricing.
The contractor, NDI Engineering Company, has a track record in providing engineering services, suggesting experience relevant to the contract's needs.
The contract addresses essential maintenance and lifecycle support for critical naval propulsion systems, directly contributing to fleet readiness.

Sector Analysis

This contract falls within the Engineering Services sector (NAICS 541330), a vital component of the defense industrial base. The market for defense engineering services is substantial, driven by the continuous need for modernization, maintenance, and upgrades of military platforms. Spending in this sector is often characterized by long-term contracts, specialized expertise, and significant government investment. Comparable spending benchmarks would involve analyzing other large-scale engineering support contracts awarded by the Department of Defense to various branches for platform-specific technical services.

Small Business Impact

This contract was not set aside for small businesses and the contractor, NDI Engineering Company, is not identified as a small business. There is no explicit mention of subcontracting requirements for small businesses within the provided data. Therefore, the direct impact on the small business ecosystem appears minimal for this specific award, though the prime contractor's own subcontracting practices would need further review to assess broader small business involvement.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy's contracting and program management offices, potentially involving the Naval Sea Systems Command (NAVSEA) given the nature of the work. Accountability measures are typically embedded within the contract terms, including performance metrics, reporting requirements, and payment schedules tied to deliverables. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Naval Ship Maintenance and Repair
Defense Engineering Services
Propulsion System Modernization
Fleet Readiness Programs
Department of Defense Logistics Support

Risk Flags

Cost Overrun Risk (CPFF Contract Type)
Long-Term Contractor Dependency
Performance Monitoring Complexity

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $3.2 million to NDI ENGINEERING COMPANY. ENG,TECH,PROJ MGMT,PROGRAMMATIC,LOGISTICS, TRAINING,MAINTENANCE,INSTALLATION,LIFE CYCLE,AND SYSTEMS MGMT,AND GRAPHICS/MODELING SUPPORT SVCS FOR HM&E AND PROPULSION SYSTEMS ONBOARD U.S. NAVY SHIPS FOR NSWCPD PROPULSION SYSTEMS DIVISION 42,CODE 427

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 $3.2 million.

What is the period of performance?

Start: 2023-09-29. End: 2026-12-31.

What is NDI Engineering Company's past performance record with the Department of Defense, particularly on similar propulsion system contracts?

NDI Engineering Company has a history of performing various engineering and technical support services for the Department of Defense. While specific details on past propulsion system contracts are not provided in this summary, their award of this significant contract suggests a positive past performance evaluation by the Navy. A deeper dive into their contract history, including performance reviews, any past disputes, and the types of systems they have supported, would offer a more comprehensive understanding of their capabilities and reliability for this specific requirement. Reviewing their award data for previous contracts, especially those with similar scope and complexity, is crucial for assessing their track record.

How does the $322 million contract value compare to historical spending on similar propulsion system support services for the U.S. Navy?

The $322 million contract value represents a substantial investment in engineering, technical, and programmatic support for U.S. Navy propulsion systems over its duration. To benchmark this against historical spending, one would need to analyze previous contracts awarded for similar services, potentially by the same agency (Department of the Navy) or for comparable naval platforms. Factors such as inflation, technological advancements, and changes in fleet size or operational tempo would need to be considered for a fair comparison. Without access to historical spending data for analogous contracts, it is difficult to definitively state whether this value is higher or lower than previous investments, but it indicates a significant ongoing commitment to maintaining these critical systems.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for complex engineering services like those required for naval propulsion systems?

The primary risk with a Cost Plus Fixed Fee (CPFF) contract, especially for complex engineering services, is the potential for cost overruns. While the 'fixed fee' component provides a ceiling for the contractor's profit, the 'cost plus' element means the government reimburses the contractor for allowable costs incurred. If the project scope expands, unforeseen technical challenges arise, or project management is inefficient, the total cost to the government can increase significantly. For the contractor, the risk lies in underestimating costs while still being bound by the fixed fee. Effective oversight, clear scope definition, and robust cost tracking are essential to mitigate these risks for the government.

What is the expected impact of this contract on the readiness and operational capability of the U.S. Navy's fleet?

This contract is expected to have a positive and significant impact on the readiness and operational capability of the U.S. Navy's fleet. By providing essential engineering, technical, and lifecycle management support for HM&E and propulsion systems, it ensures these critical components are maintained, repaired, and potentially upgraded. Well-maintained propulsion systems are fundamental to a ship's ability to deploy, maneuver, and sustain operations at sea. This contract directly addresses the need for specialized expertise to keep these complex systems functioning optimally, thereby enhancing overall fleet availability and mission effectiveness.

How does the geographic concentration of this contract in New Jersey align with the distribution of naval engineering and shipbuilding facilities?

The concentration of this contract's performance in New Jersey aligns with the state's historical significance and ongoing presence in naval engineering, shipbuilding, and maintenance. New Jersey has been a hub for defense-related industries, including naval operations and support services. Locating such critical engineering and technical support in proximity to naval bases or shipyards can facilitate collaboration, reduce logistical delays, and potentially lower travel costs associated with on-site support. This geographic focus suggests a strategic decision to leverage existing infrastructure and expertise within the region to support the Navy's propulsion system needs.

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: N6449823R3016

Offers Received: 3

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: $8,029,723

Exercised Options: $4,726,669

Current Obligation: $3,220,000

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