DoD Invests $16.6M in Industry 4.0 for SME Defense Supply Chain Metal Castings

Contract Overview

Contract Amount: $16,619,617 ($16.6M)

Contractor: National Center for Defense Manufacturing and Machining

Awarding Agency: Department of Defense

Start Date: 2022-02-24

End Date: 2026-09-30

Contract Duration: 1,679 days

Daily Burn Rate: $9.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: INDUSTRY 4.0 ADOPTION IN THE SME DEFENSE SUPPLY CHAIN FOR METAL CASTINGS

Place of Performance

Location: EAST HARTFORD, HARTFORD County, CONNECTICUT, 06118

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $16.6 million to NATIONAL CENTER FOR DEFENSE MANUFACTURING AND MACHINING for work described as: INDUSTRY 4.0 ADOPTION IN THE SME DEFENSE SUPPLY CHAIN FOR METAL CASTINGS Key points: 1. Focus on R&D for advanced manufacturing in the defense supply chain. 2. Significant investment in a niche sector, potentially driving innovation. 3. Risk of technology adoption challenges within SMEs. 4. Sectoral focus on defense manufacturing, critical for national security.

Value Assessment

Rating: fair

The contract's Cost Plus Fixed Fee (CPFF) structure allows for cost reimbursement plus a fixed fee, which can lead to cost overruns if not managed closely. The awarded amount of $16.6M for R&D is substantial for this specific niche.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting a competitive bidding process. However, the specific nature of Industry 4.0 adoption in SME defense supply chains might limit the pool of truly qualified bidders.

Taxpayer Impact: Taxpayer funds are being invested in research and development aimed at modernizing critical defense supply chains, potentially leading to long-term efficiency gains and enhanced national security.

Public Impact

Enhances the technological capabilities of the defense industrial base. Aims to improve the resilience and efficiency of critical supply chains. Supports the adoption of advanced manufacturing techniques by small and medium-sized enterprises.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns due to CPFF contract type.
Risk of limited SME capacity to adopt advanced technologies.
Dependency on specific R&D outcomes for tangible benefits.

Positive Signals

Investment in a critical and strategic sector.
Promotes innovation and modernization within the defense supply chain.
Utilizes full and open competition to ensure fair pricing.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on advanced manufacturing technologies for the defense industry. Benchmarks for R&D contracts vary widely, but this investment targets a specialized area within the broader defense manufacturing ecosystem.

Small Business Impact

While the contract aims to support the SME defense supply chain, the data indicates this specific award was not set-aside for small businesses. Further analysis would be needed to determine the extent of SME participation as subcontractors.

Oversight & Accountability

The Department of Defense, through the Defense Logistics Agency, is responsible for overseeing this R&D contract. Standard oversight mechanisms for R&D projects, including milestone reviews and performance reporting, would be expected.

Related Government Programs

Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)
Department of Defense Contracting
Defense Logistics Agency Programs

Risk Flags

Cost overrun potential (CPFF).
Technology adoption challenges for SMEs.
Cybersecurity risks with Industry 4.0.
Dependency on successful R&D outcomes.
Limited direct small business award.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $16.6 million to NATIONAL CENTER FOR DEFENSE MANUFACTURING AND MACHINING. INDUSTRY 4.0 ADOPTION IN THE SME DEFENSE SUPPLY CHAIN FOR METAL CASTINGS

Who is the contractor on this award?

The obligated recipient is NATIONAL CENTER FOR DEFENSE MANUFACTURING AND MACHINING.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $16.6 million.

What is the period of performance?

Start: 2022-02-24. End: 2026-09-30.

What is the expected return on investment for this Industry 4.0 adoption initiative within the defense supply chain?

The return on investment is anticipated through improved manufacturing efficiency, enhanced product quality, reduced lead times, and increased supply chain resilience. Quantifying this ROI is challenging for R&D, but successful adoption could lead to significant cost savings and strategic advantages for the DoD over the long term.

What are the primary risks associated with implementing Industry 4.0 technologies in the SME defense metal casting supply chain?

Key risks include the high cost of technology implementation, the need for specialized workforce training, cybersecurity vulnerabilities introduced by interconnected systems, and potential resistance to change within SMEs. Ensuring interoperability between new and existing systems is also a significant challenge.

How will the effectiveness of this R&D investment be measured and ensured?

Effectiveness will likely be measured through defined R&D milestones, successful prototype development, pilot program results demonstrating improved processes, and the eventual adoption rate of these technologies by SMEs. Regular technical reviews and performance assessments by the Defense Logistics Agency will be crucial.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: SP470120B0220

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 486 CORNELL RD, BLAIRSVILLE, PA, 15717

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

Financial Breakdown

Contract Ceiling: $26,999,900

Exercised Options: $26,999,900

Current Obligation: $16,619,617

Actual Outlays: $316,797

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $6,630,268

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline