DoD's $233M Submarine C5I contract to Amentum Services, Inc. awarded under full and open competition

Contract Overview

Contract Amount: $233,021,811 ($233.0M)

Contractor: Amentum Services, Inc.

Awarding Agency: Department of Defense

Start Date: 2017-07-20

End Date: 2024-07-20

Contract Duration: 2,557 days

Daily Burn Rate: $91.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: IGF::OT::IGF SUBMARINE C5I, NC3 AND SUBOPAUTH TEST AND EVALUATION, AND ENGINEERING SUPPORT

Place of Performance

Location: NORTH CHARLESTON, CHARLESTON County, SOUTH CAROLINA, 29419

State: South Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $233.0 million to AMENTUM SERVICES, INC. for work described as: IGF::OT::IGF SUBMARINE C5I, NC3 AND SUBOPAUTH TEST AND EVALUATION, AND ENGINEERING SUPPORT Key points: 1. Contract provides critical engineering and test support for submarine command, control, communications, intelligence, and operations. 2. Long-term contract duration (7 years) suggests a need for sustained, specialized technical expertise. 3. Cost-plus-fixed-fee (CPFF) pricing structure allows for flexibility but requires robust oversight to manage costs. 4. Awarded to a single contractor, Amentum Services, Inc., indicating a potentially concentrated market for these specific services. 5. The contract's focus on test and evaluation highlights its role in ensuring the reliability and effectiveness of submarine systems. 6. Geographic concentration in South Carolina points to a specific operational or testing hub for these submarine capabilities.

Value Assessment

Rating: good

The total contract value of $233 million over seven years averages approximately $33 million annually. Benchmarking this against similar large-scale engineering and test support contracts for complex defense systems is challenging without more specific service details. However, the CPFF structure, while common for R&D and complex services, necessitates careful monitoring of indirect costs and labor rates to ensure value for money. The contract's duration suggests a stable, long-term need, which can sometimes lead to better pricing through economies of scale if managed effectively.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple qualified vendors had the opportunity to bid. The fact that it resulted in a single award suggests that Amentum Services, Inc. was the most advantageous offer based on the evaluation criteria. The level of competition prior to award is not detailed, but the 'full and open' designation generally promotes price discovery and encourages competitive pricing.

Taxpayer Impact: A full and open competition process is generally favorable for taxpayers as it aims to secure the best value by allowing a wide range of potential contractors to compete, driving down prices and improving service quality.

Public Impact

The primary beneficiaries are the U.S. Navy's submarine fleet, ensuring the operational readiness and technological superiority of critical C5I and subopauth systems. Services delivered include test and evaluation, engineering support, and potentially research and development for submarine command, control, communications, intelligence, and operational authorization systems. The contract has a geographic impact concentrated in South Carolina, likely supporting naval facilities or testing ranges in that region. Workforce implications include the employment of highly skilled engineers, technicians, and analysts specializing in naval systems and cybersecurity.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns due to the CPFF structure if not rigorously managed.
Dependence on a single contractor for critical submarine systems support could pose a risk if performance degrades or if the contractor faces financial instability.
Limited visibility into the specific performance metrics and quality assurance processes without further detail.

Positive Signals

Awarded through full and open competition, suggesting a competitive process that likely yielded a strong offer.
Long contract duration indicates a stable, long-term need and potential for building deep expertise within the contractor.
Focus on test and evaluation is crucial for maintaining the integrity and effectiveness of vital naval systems.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting the defense industry's complex command, control, communications, intelligence, and operational systems for submarines. The market for such specialized support is often dominated by a few large, experienced defense contractors due to the high technical barriers to entry and security clearances required. Comparable spending benchmarks would likely be found within other large, long-term engineering support contracts for major defense platforms.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a set-aside provision. However, the prime contractor, Amentum Services, Inc., may engage small businesses as subcontractors for specialized services or components, though this is not explicitly detailed in the provided data. The absence of a small business set-aside suggests the primary competition focused on large, established firms with the requisite capabilities.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting officers and program managers, who are responsible for monitoring performance, costs, and compliance. The CPFF structure necessitates stringent financial oversight to ensure costs are reasonable and allocable. Transparency is facilitated through contract reporting mechanisms, though specific public-facing dashboards for this particular contract are not detailed. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse related to the contract.

Related Government Programs

Naval Sea Systems Command (NAVSEA) Contracts
Submarine Warfare Systems
Defense C4ISR Programs
Naval Engineering Support Services
Test and Evaluation Services for Defense

Risk Flags

Cost Control Risk (CPFF)
Contractor Performance Dependency
Technological Obsolescence Risk
Long-Term Sustainment Requirements

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $233.0 million to AMENTUM SERVICES, INC.. IGF::OT::IGF SUBMARINE C5I, NC3 AND SUBOPAUTH TEST AND EVALUATION, AND ENGINEERING SUPPORT

Who is the contractor on this award?

The obligated recipient is AMENTUM SERVICES, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $233.0 million.

What is the period of performance?

Start: 2017-07-20. End: 2024-07-20.

What is Amentum Services, Inc.'s track record with similar large-scale defense engineering and test contracts?

Amentum Services, Inc. has a significant history of performing large-scale engineering, technology, and support services for the U.S. Department of Defense and other government agencies. They are a major contractor in areas such as naval systems, nuclear services, and mission support. Their experience often includes complex systems integration, lifecycle support, and test and evaluation for critical platforms. While specific details on past performance for submarine C5I and subopauth systems would require a deeper dive into their contract history, their overall profile suggests they possess the necessary expertise and capacity to handle a contract of this magnitude and complexity. Past performance evaluations on similar contracts would be a key factor in their selection for this award.

How does the $233 million contract value compare to historical spending on submarine C5I and related engineering support?

The $233 million total contract value over seven years represents an average annual spend of approximately $33 million. Historical spending on submarine C5I and related engineering support can fluctuate significantly based on modernization programs, new platform development, and sustainment needs. Without specific historical data for this precise service category within the Navy, a direct comparison is difficult. However, major defense programs often involve multi-billion dollar investments over their lifecycles. This $33 million annual figure appears to be a substantial, but not unprecedented, allocation for specialized, long-term engineering and test support for a critical naval capability like submarine C5I. It suggests a sustained need for expert services rather than a one-off procurement.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for complex defense systems like submarine C5I?

The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract, such as this one for submarine C5I, revolve around cost control and contractor incentives. The 'cost plus' component means the government reimburses the contractor for allowable costs incurred, plus a fixed fee representing profit. This can incentivize contractors to incur higher costs, as their profit margin (the fixed fee) remains constant regardless of the total cost. For the government, the risk is that costs could escalate beyond initial estimates, potentially leading to a higher overall expenditure than anticipated. Effective risk mitigation requires robust government oversight, detailed cost accounting standards, stringent auditing, and clear performance metrics to ensure the contractor remains efficient and delivers value within the agreed-upon fee structure.

How effective is full and open competition in ensuring value for money for specialized defense engineering services?

Full and open competition is generally considered the most effective method for ensuring value for money in government contracting, including for specialized defense engineering services. By allowing all responsible sources to submit bids, it maximizes the pool of potential offerors, fostering a competitive environment that drives down prices and encourages innovation. This process allows the government to compare a wider range of technical approaches and cost proposals, increasing the likelihood of selecting the most advantageous offer. While specialized services may limit the number of truly capable bidders, the principle of broad competition remains crucial. The success of this approach depends on well-defined requirements, clear evaluation criteria, and a rigorous selection process that prioritizes both technical merit and cost-effectiveness.

What are the potential implications of this contract's duration (7 years) on technological advancement in submarine C5I systems?

A seven-year contract duration for submarine C5I engineering and test support can have mixed implications for technological advancement. On one hand, the long-term commitment provides stability and allows the contractor to develop deep expertise and invest in specialized resources, potentially leading to incremental improvements and sustained reliability of existing systems. It also allows for long-term planning and integration of new technologies. However, very long contracts can sometimes create inertia, potentially slowing the adoption of disruptive or rapidly evolving technologies if the contract scope is not flexible enough to adapt. The government must ensure that the contract includes mechanisms for incorporating new technological advancements and that performance metrics incentivize innovation, not just sustainment of the status quo.

What is the significance of the 'SUBOPAUTH' (Submarine Operational Authorization) aspect of this contract?

The inclusion of 'SUBOPAUTH' (Submarine Operational Authorization) in the contract's description signifies that the engineering and test support extends to ensuring submarines meet the stringent requirements for operational deployment and authorization. This involves verifying that all command, control, communications, intelligence, and other critical systems function correctly, securely, and reliably to meet mission objectives and safety standards. It implies a role in the certification and validation processes necessary for submarines to be deemed ready for operational missions. This aspect underscores the high stakes involved, as failures in these systems can have severe operational and safety consequences.

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: N6523617R3057

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: PAE Government Services Inc.

Address: 4800 WESTFIELDS BLVD STE 400, CHANTILLY, VA, 20151

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $271,145,158

Exercised Options: $271,145,158

Current Obligation: $233,021,811

Actual Outlays: $12,279,870

Subaward Activity

Number of Subawards: 9

Total Subaward Amount: $37,274,971

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017804D4042

IDV Type: IDC

Timeline