DoD awards $186.6M for lifecycle engineering support, with a significant portion allocated to Alabama

Contract Overview

Contract Amount: $186,624,851 ($186.6M)

Contractor: Torch Technologies Inc

Awarding Agency: Department of Defense

Start Date: 2018-09-07

End Date: 2025-01-31

Contract Duration: 2,338 days

Daily Burn Rate: $79.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: TIME AND MATERIALS

Sector: Defense

Official Description: LIFECYCLE ENGINEERING SUPPORT

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35802

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $186.6 million to TORCH TECHNOLOGIES INC for work described as: LIFECYCLE ENGINEERING SUPPORT Key points: 1. Contract value represents a substantial investment in specialized engineering services. 2. Competition dynamics suggest a potentially competitive bidding environment for this type of support. 3. Risk indicators are moderate, typical for long-term engineering contracts. 4. Performance context is crucial for assessing the long-term value of lifecycle engineering. 5. Sector positioning places this contract within the broader defense engineering services market.

Value Assessment

Rating: good

The contract's total value of $186.6 million over its lifecycle is substantial. Benchmarking against similar lifecycle engineering support contracts is challenging without more specific service details. However, the pricing structure (Time and Materials) can lead to cost variability. The provided benchmark of $79,822 per period suggests a reasonable rate, but a deeper analysis would require comparing specific labor categories and overhead rates to industry standards and other government contracts.

Cost Per Unit: $79,822 per period

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 3 bidders suggests a moderate level of competition for this specific award. While more than one bidder is positive, a higher number typically leads to more robust price discovery and potentially lower costs for the government.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages a wider range of offers, potentially leading to better pricing and innovation.

Public Impact

The Department of Defense benefits from continuous lifecycle engineering support for its systems. Services delivered include critical engineering expertise to maintain and improve defense assets. Geographic impact is concentrated in Alabama, where the contractor is based. Workforce implications include the creation or sustainment of specialized engineering jobs.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns with Time and Materials pricing if not closely managed.
Dependence on a single contractor for critical lifecycle engineering functions.
Scope creep could increase the overall contract value beyond initial projections.

Positive Signals

Awarded through full and open competition, suggesting a competitive process.
Contractor has secured a significant award, indicating a level of trust and capability.
Long contract duration allows for sustained support and knowledge retention.

Sector Analysis

This contract falls within the Engineering Services sector (NAICS 541330), a critical component of the defense industrial base. The market for defense engineering services is substantial, driven by the continuous need for modernization, maintenance, and sustainment of complex military systems. Comparable spending benchmarks would typically be found within other large, long-term engineering support contracts awarded by the Department of Defense.

Small Business Impact

The contract data indicates that small business participation was not a specific set-aside criterion for this award (ss: false, sb: false). While the prime contractor is not a small business, there may be opportunities for small businesses to participate as subcontractors. Further analysis would be needed to determine the extent of small business subcontracting and its impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program executive office within the Department of the Army. Accountability measures would be tied to performance metrics and delivery schedules outlined in the contract. Transparency is facilitated through contract databases, but detailed performance reports are often internal. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense Lifecycle Support Services
Engineering and Technical Services
Department of Defense Contract Awards
Alabama Defense Industry Contracts

Risk Flags

Potential for cost overruns due to T&M pricing structure.
Need for robust oversight to ensure contractor efficiency and value.
Dependence on contractor for critical lifecycle engineering functions.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $186.6 million to TORCH TECHNOLOGIES INC. LIFECYCLE ENGINEERING SUPPORT

Who is the contractor on this award?

The obligated recipient is TORCH TECHNOLOGIES INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $186.6 million.

What is the period of performance?

Start: 2018-09-07. End: 2025-01-31.

What is the historical spending pattern for lifecycle engineering support within the Department of Defense?

Historical spending on lifecycle engineering support within the Department of Defense (DoD) has been substantial and consistent, reflecting the complex and long-lived nature of military assets. The DoD relies heavily on specialized engineering services to ensure the operational readiness, sustainment, and modernization of its vast array of equipment, from aircraft and ships to ground vehicles and communication systems. Annual spending in this category often runs into billions of dollars across various branches and agencies. This spending is driven by factors such as aging equipment requiring extensive maintenance, the introduction of new technologies demanding integration and support, and evolving threat landscapes necessitating system upgrades. Analyzing historical data reveals trends in contract types (e.g., fixed-price vs. cost-plus), competition levels, and the prevalence of specific service providers, all of which inform current procurement strategies and budget allocations for lifecycle engineering.

How does the awarded amount compare to other similar lifecycle engineering contracts?

The awarded amount of $186.6 million for lifecycle engineering support is a significant figure, placing it among larger contracts within this specialized domain. To provide a precise comparison, one would need to analyze contracts with similar scope, duration, and service complexity. For instance, contracts for lifecycle support of major weapon systems (like fighter jets or naval vessels) can easily reach hundreds of millions or even billions of dollars over their extended periods. Smaller, more focused engineering support contracts might range from a few million to tens of millions. The 'per period' benchmark of $79,822 suggests a moderate scale for the defined periods within this contract. A comprehensive benchmark would involve comparing the total contract value, duration, and the specific engineering disciplines covered against a portfolio of comparable DoD engineering services contracts awarded over the past 3-5 years.

What are the primary risks associated with Time and Materials (T&M) contract types for engineering services?

Time and Materials (T&M) contracts, like the one awarded here, present specific risks primarily related to cost control. The government pays the contractor for the actual labor hours expended and the cost of materials used, plus a fixed fee or நிர்ணயிக்கப்பட்ட rate. The primary risk for the government is the potential for cost overruns if the scope of work is not well-defined or if contractor efficiency is low. Without strong oversight and management, contractors may not have a strong incentive to control costs or complete tasks efficiently, as their profit is tied to the time and materials consumed. This can lead to unexpected increases in the contract's total cost. To mitigate these risks, the government must implement robust monitoring of labor hours, material costs, and contractor performance, often including 'level of effort' clauses or 'best practices' requirements to ensure efficiency and value.

What is the track record of TORCH TECHNOLOGIES INC in securing and performing on large federal contracts?

TORCH TECHNOLOGIES INC has a notable track record within the federal contracting space, particularly with the Department of Defense. Securing a $186.6 million contract for lifecycle engineering support indicates a demonstrated capability and a level of trust from the awarding agency. Examining their contract history reveals a pattern of awards in engineering, technical services, and program management, often supporting defense initiatives. Their ability to win competitive bids suggests they are perceived as a capable and cost-effective provider. Performance on previous contracts, including adherence to schedules, quality of deliverables, and customer satisfaction, would be key indicators of their reliability. While this specific award is substantial, it aligns with the company's established presence in the defense sector, suggesting a reasonable expectation of performance, contingent on effective program management and oversight.

How does the competition level (3 bidders) impact price discovery and potential savings for taxpayers?

A competition level involving three bidders for a federal contract generally offers a moderate benefit for price discovery and taxpayer savings. With three distinct offers, there is a basis for comparison, allowing the government to assess which bid provides the best value. This is significantly better than a sole-source or limited competition scenario where options are restricted. However, a higher number of bidders, such as five or more, typically intensifies competition, driving prices down further and potentially leading to greater innovation and more favorable terms for the government. Therefore, while three bidders indicate a healthy competitive process, there might still be room for more aggressive pricing if the market allowed for broader participation. Taxpayers benefit from this level of competition by avoiding the premium often associated with less competitive awards.

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

Offers Received: 3

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 4090 MEMORIAL PKWY SW, HUNTSVILLE, AL, 35802

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

Financial Breakdown

Contract Ceiling: $250,249,729

Exercised Options: $186,624,851

Current Obligation: $186,624,851

Actual Outlays: $3,894,447

Subaward Activity

Number of Subawards: 2196

Total Subaward Amount: $2,009,581,174

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS23F0321N

IDV Type: FSS

Timeline