Naval Systems, Inc. awarded $6.6M for logistics support, with contract ending March 2025

Contract Overview

Contract Amount: $6,605,766 ($6.6M)

Contractor: Naval Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2021-11-01

End Date: 2025-03-16

Contract Duration: 1,231 days

Daily Burn Rate: $5.4K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: EO14042 LOGISTICS SUPPORT (O&M)

Place of Performance

Location: PATUXENT RIVER, SAINT MARYS County, MARYLAND, 20670

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $6.6 million to NAVAL SYSTEMS, INC. for work described as: EO14042 LOGISTICS SUPPORT (O&M) Key points: 1. Contract value appears reasonable given the duration and scope of logistics support services. 2. Full and open competition after exclusion of sources suggests a deliberate procurement strategy. 3. Potential risks include cost overruns inherent in Cost Plus Fixed Fee contracts. 4. Performance context is critical for evaluating the effectiveness of logistics support for naval systems. 5. This contract falls within the Engineering Services sector, supporting defense operations.

Value Assessment

Rating: good

The contract value of $6.6 million over approximately 3.5 years for logistics support is within a reasonable range for similar defense contracts. Benchmarking against other O&M contracts for naval systems would provide a more precise value-for-money assessment. The Cost Plus Fixed Fee (CPFF) structure necessitates careful monitoring to ensure costs remain aligned with the fixed fee and do not escalate excessively.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that while competition was sought, certain sources were excluded for specific reasons. The number of bidders is not specified, but this procurement method suggests a potentially limited pool of qualified offerors. This could impact price discovery compared to unrestricted full and open competition.

Taxpayer Impact: Taxpayers benefit from a competitive process, even if limited, which aims to secure fair pricing. However, the exclusion of sources warrants scrutiny to ensure it was justified and did not unduly restrict competition, potentially leading to higher costs.

Public Impact

Naval systems readiness and operational effectiveness are directly supported by this contract. Personnel involved in logistics, maintenance, and supply chain management within the Navy benefit. The geographic impact is likely concentrated around naval bases and operational areas. This contract supports a specialized workforce in logistics and engineering services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can incentivize contractors to incur higher costs to achieve the fixed fee.
The exclusion of sources in the competition process may limit competitive pressure on pricing.
Long contract duration increases the risk of scope creep or evolving requirements not being adequately managed.

Positive Signals

The contract is for essential logistics support, crucial for naval operations.
The fixed fee component provides some cost control compared to purely cost-reimbursement contracts.
The award to Naval Systems, Inc. suggests confidence in their capabilities for this specific support.

Sector Analysis

This contract operates within the Engineering Services sector, specifically supporting defense logistics and operations. The market for defense logistics support is substantial, driven by the complex needs of military branches. Comparable spending benchmarks would involve analyzing other O&M contracts for naval platforms and related support services, considering factors like contract duration, scope, and specific system requirements.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses arising from a set-aside provision. However, the prime contractor, Naval Systems, Inc., may engage small businesses as subcontractors depending on their own procurement strategies and the nature of the services required.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Accountability measures are embedded within the Cost Plus Fixed Fee structure, requiring detailed cost reporting and justification. Transparency is facilitated through contract award databases, though specific performance metrics and detailed cost breakdowns may not be publicly available. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Naval Operations and Maintenance
Defense Logistics Agency Support
Engineering Services for Military Assets
Ship Maintenance and Repair Contracts

Risk Flags

Potential for cost overruns due to CPFF structure.
Limited competition may impact price discovery.
Need for robust oversight of contractor costs and performance.
Risk of scope creep over the contract's multi-year duration.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $6.6 million to NAVAL SYSTEMS, INC.. EO14042 LOGISTICS SUPPORT (O&M)

Who is the contractor on this award?

The obligated recipient is NAVAL SYSTEMS, 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 $6.6 million.

What is the period of performance?

Start: 2021-11-01. End: 2025-03-16.

What is the track record of Naval Systems, Inc. in performing similar logistics support contracts for the Department of Defense?

Naval Systems, Inc. has a history of performing various support services for the Department of Defense. While specific details on past logistics support contracts of identical scope and value are not provided in this data snippet, their award suggests they possess the necessary qualifications and experience. A deeper analysis would involve reviewing their past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS) and examining the types and complexity of previous contracts they have successfully executed. This would help ascertain their reliability, quality of service, and ability to manage costs effectively in similar environments.

How does the awarded value of $6.6 million compare to similar logistics support contracts for naval systems?

The awarded value of $6.6 million for approximately 3.5 years of logistics support (EO14042 LOGISTICS SUPPORT (O&M)) appears to be within a reasonable range for such services. However, a precise comparison requires detailed benchmarking against contracts with similar scope, duration, specific naval systems supported, and geographic locations. Factors like the level of technical expertise required, the number of personnel involved, and the complexity of the supply chain management influence costs. Without access to a database of comparable contracts, it's difficult to definitively state if this represents exceptional value, but it does not immediately appear to be an outlier.

What are the primary risks associated with the Cost Plus Fixed Fee (CPFF) contract type used for this award?

The primary risk with a Cost Plus Fixed Fee (CPFF) contract is that the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee. This structure can incentivize contractors to incur higher costs, as their profit (the fixed fee) remains constant regardless of the total cost. This necessitates robust government oversight to ensure that all costs claimed are reasonable, allocable, and necessary. There is a risk of cost overruns if the government's cost monitoring is insufficient, potentially leading to the contract exceeding its estimated value. Conversely, the fixed fee provides some incentive for the contractor to control costs to maximize their return on investment.

What does 'Full and Open Competition After Exclusion of Sources' imply for the procurement process and potential cost savings?

This procurement method, 'Full and Open Competition After Exclusion of Sources,' indicates that the solicitation was initially intended for broad competition, but specific sources were subsequently excluded. This exclusion could be due to various reasons, such as national security concerns, proprietary technology, or specific capability requirements that only a limited number of entities possess. While it still involves competition, the exclusion narrows the field of potential bidders. This can potentially limit the intensity of price competition compared to unrestricted full and open competition, possibly leading to less aggressive bidding. The justification for excluding sources is critical to understanding whether this approach was necessary and did not unduly restrict competition, thereby impacting the final price paid by taxpayers.

What is the significance of the North American Industry Classification System (NAICS) code 541330 (Engineering Services) in the context of this contract?

The NAICS code 541330, 'Engineering Services,' signifies that the primary nature of the work performed under this contract involves the application of engineering principles and knowledge to provide services such as design, development, and consultation. For this specific contract, 'EO14042 LOGISTICS SUPPORT (O&M),' it suggests that engineering expertise is crucial for managing and optimizing the logistics and operations and maintenance aspects of naval systems. This could include tasks like systems analysis, reliability engineering, maintenance planning, and technical support, all falling under the broad umbrella of engineering services critical to defense readiness.

How does the contract duration of 1231 days (approximately 3.4 years) influence the overall cost and risk assessment?

A contract duration of 1231 days (approximately 3.4 years) is a significant factor in both cost and risk. Longer durations allow for economies of scale and potentially more stable planning for both the contractor and the government. However, they also increase the exposure to risks such as changing technological landscapes, evolving operational requirements, inflation, and potential contractor performance degradation over time. For a Cost Plus Fixed Fee contract, a longer duration necessitates more frequent and rigorous oversight to manage costs effectively throughout the period. It also provides more opportunities for performance issues to arise, requiring proactive management.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0042119R0018

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 21491 GREAT MILLS RD STE 100, LEXINGTON PARK, MD, 20653

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Service Disabled Veteran Owned Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $7,085,828

Exercised Options: $7,060,828

Current Obligation: $6,605,766

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0042120D0019

IDV Type: IDC

Timeline