DoD awards $5.3M sole-source contract for aeronautical system support to Aerostar Technical Solutions

Contract Overview

Contract Amount: $5,303,144 ($5.3M)

Contractor: Aerostar Technical Solutions, LLC

Awarding Agency: Department of Defense

Start Date: 2024-08-29

End Date: 2029-08-28

Contract Duration: 1,825 days

Daily Burn Rate: $2.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: YEAR 1 SUPPORT

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22202

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $5.3 million to AEROSTAR TECHNICAL SOLUTIONS, LLC for work described as: YEAR 1 SUPPORT Key points: 1. Contract awarded on a sole-source basis, limiting competitive opportunities. 2. Pricing and value-for-money assessment is challenging without competitive benchmarks. 3. Contract duration of five years suggests a long-term need for these services. 4. The specific nature of 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' indicates a specialized requirement. 5. Virginia is the state of performance, potentially impacting local workforce and economy. 6. The contract type is Cost Plus Fixed Fee, which can incentivize cost control but requires careful oversight.

Value Assessment

Rating: questionable

Benchmarking the value of this $5.3 million contract is difficult due to its sole-source nature. Without competitive bids, it's hard to determine if the pricing reflects fair market value or if alternative solutions could offer better value. The Cost Plus Fixed Fee structure requires diligent oversight to ensure costs remain reasonable and that the fixed fee is appropriate for the work performed. Further analysis would be needed to compare the proposed labor rates and overhead to industry standards.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning only one vendor, Aerostar Technical Solutions, LLC, was solicited. This approach bypasses the standard competitive bidding process. While sole-source awards can be appropriate for unique capabilities or urgent needs, they reduce the potential for price discovery and may lead to higher costs for the government compared to a fully competed contract. The lack of competition means taxpayers do not benefit from the cost savings that can arise from multiple vendors vying for the contract.

Taxpayer Impact: The absence of competition means taxpayers may not be receiving the most cost-effective solution. Without bids from other companies, there's a risk that the awarded price is not as low as it could have been.

Public Impact

The Department of the Navy benefits from specialized support for critical aeronautical and nautical systems. This contract ensures the continued operation and maintenance of essential navigation and guidance equipment. The primary beneficiaries are likely military personnel relying on these systems for mission success. Performance is located in Virginia, potentially creating or sustaining jobs within the state's defense industry.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
Cost Plus Fixed Fee contract type requires robust oversight to manage costs effectively.
Lack of transparency in the procurement process due to sole-source justification.

Positive Signals

Contract awarded to a specific vendor likely possessing unique or specialized expertise.
Five-year duration indicates a stable, long-term relationship for critical system support.
Contract supports essential defense systems, contributing to national security.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on instruments for navigation, guidance, and detection. This is a highly specialized area often characterized by long development cycles, high R&D costs, and a limited number of qualified suppliers. The market size for such specialized components and support services is significant within the defense industrial base. Comparable spending benchmarks would typically involve other contracts for similar system maintenance and support within the DoD, often awarded on a sole-source or limited-competition basis due to technical requirements.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. As a sole-source award to Aerostar Technical Solutions, LLC, it does not directly contribute to the small business contracting goals. The impact on the small business ecosystem is neutral in this instance, as it does not appear to involve small business participation.

Oversight & Accountability

Oversight for this Cost Plus Fixed Fee contract will likely be managed by the Department of the Navy's contracting and program management offices. Accountability measures will focus on ensuring that costs incurred are reasonable and allocable to the contract, and that the fixed fee is earned through satisfactory performance. Transparency may be limited due to the sole-source nature of the award, but contract details and performance reports should be available through federal procurement databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Naval Air Systems Command (NAVAIR) contracts
Defense contract for navigation systems
Aeronautical instrument manufacturing contracts
Cost Plus Fixed Fee contracts in DoD

Risk Flags

Sole-source award
Cost Plus Fixed Fee contract type
Potential for cost overruns without strong oversight

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $5.3 million to AEROSTAR TECHNICAL SOLUTIONS, LLC. YEAR 1 SUPPORT

Who is the contractor on this award?

The obligated recipient is AEROSTAR TECHNICAL SOLUTIONS, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $5.3 million.

What is the period of performance?

Start: 2024-08-29. End: 2029-08-28.

What is Aerostar Technical Solutions, LLC's track record with the Department of Defense, particularly for similar services?

A review of federal procurement data indicates that Aerostar Technical Solutions, LLC has a history of receiving contracts from the Department of Defense, including the Navy. While specific details on past performance for identical services require deeper analysis of contract awards and performance reviews, their selection for this sole-source award suggests a perceived capability or existing relationship. Further investigation into their contract history, including past performance evaluations and any reported issues, would provide a more comprehensive understanding of their reliability and expertise in supporting aeronautical and nautical systems.

How does the $5.3 million contract value compare to similar sole-source awards for navigation and guidance system support?

Direct comparison of this $5.3 million contract value to similar sole-source awards is challenging without access to detailed pricing structures and scopes of work for comparable contracts. Sole-source awards are inherently difficult to benchmark as they lack competitive bids. However, within the defense sector, contracts for specialized system support, maintenance, and sustainment can range from hundreds of thousands to tens of millions of dollars, depending on the complexity, duration, and criticality of the systems involved. The $5.3 million figure for a five-year support contract suggests a moderate level of investment for specialized aeronautical and nautical system maintenance.

What are the primary risks associated with a sole-source, Cost Plus Fixed Fee contract for critical defense systems?

The primary risks associated with a sole-source, Cost Plus Fixed Fee (CPFF) contract for critical defense systems include potential cost overruns and reduced incentive for efficiency. Since the contractor is reimbursed for allowable costs plus a fixed fee, there's less pressure to minimize expenses compared to fixed-price contracts. The sole-source nature exacerbates this by eliminating competitive pressure on pricing. Risks also include vendor lock-in, where the government becomes dependent on a single provider, potentially limiting future flexibility and negotiation power. Robust government oversight is crucial to mitigate these risks by scrutinizing costs and ensuring performance standards are met.

What is the expected program effectiveness or outcome of this contract for the Department of the Navy?

The expected outcome of this contract is the sustained operational readiness and effectiveness of the Department of the Navy's search, detection, navigation, guidance, aeronautical, and nautical systems. By providing essential support services, Aerostar Technical Solutions, LLC is expected to ensure these critical components function reliably, thereby supporting naval operations, training, and mission execution. The five-year duration suggests a commitment to long-term system sustainment, aiming to prevent degradation and obsolescence, and ensuring that naval assets are equipped with functioning technology necessary for their intended purposes.

How does historical spending on 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' compare to this award?

Historical spending on the North American Industry Classification System (NAICS) code 334511, which covers 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing,' by the Department of Defense and other federal agencies is substantial. This specific award of $5.3 million represents a portion of that broader spending category. Annual spending within this sector can reach billions of dollars across all government agencies, reflecting the continuous need for advanced systems and their maintenance. This particular contract's value is modest in the context of the overall defense budget allocated to such specialized manufacturing and support services.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N6833524R0013

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: CNH Industrial N.V.

Address: 2231 CRYSTAL DR STE 515, ARLINGTON, VA, 22202

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

Financial Breakdown

Contract Ceiling: $40,104,802

Exercised Options: $15,821,672

Current Obligation: $5,303,144

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline