DoD's $308M engineering support contract for weapons development awarded to Torch Technologies Inc

Contract Overview

Contract Amount: $308,031,837 ($308.0M)

Contractor: Torch Technologies Inc

Awarding Agency: Department of Defense

Start Date: 2019-01-31

End Date: 2024-09-12

Contract Duration: 2,051 days

Daily Burn Rate: $150.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: TECHNICAL AND ENGINEERING SUPPORT FOR THE WEAPONS, DEVELOPMENT, AND INTEGRATION DIRECTORATE

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35898

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $308.0 million to TORCH TECHNOLOGIES INC for work described as: TECHNICAL AND ENGINEERING SUPPORT FOR THE WEAPONS, DEVELOPMENT, AND INTEGRATION DIRECTORATE Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract duration of 2051 days indicates a long-term need for these services. 3. The firm-fixed-price contract type aims to control costs by setting a predetermined price. 4. The contract is for technical and engineering support for weapons, development, and integration. 5. The awardee, Torch Technologies Inc., is a significant player in the defense sector. 6. The contract value of over $308 million represents substantial federal investment in defense R&D.

Value Assessment

Rating: good

The contract's firm-fixed-price structure is a positive indicator for cost control. Benchmarking against similar engineering support contracts for defense weapon systems is necessary for a precise value assessment. However, the significant duration and value suggest a critical need and potentially competitive pricing given the full and open competition.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit bids. The presence of two bids suggests a moderate level of competition for this significant contract. While two bidders participated, further analysis would be needed to determine if this level of competition was sufficient to drive optimal pricing and innovation.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to better pricing and service quality. The participation of multiple bidders, even if only two, indicates that the government sought to leverage market forces to secure the best value.

Public Impact

The primary beneficiaries are the Department of Defense and its weapons development and integration directorates, ensuring access to critical engineering expertise. Services delivered include technical and engineering support essential for the advancement and integration of weapon systems. The contract's geographic impact is primarily within Alabama, where the contractor is located, but the services support national defense objectives. The contract supports a specialized workforce of engineers and technical professionals, contributing to the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the fixed price does not adequately account for unforeseen technical challenges in weapons development.
Risk of vendor lock-in if the specialized nature of the support makes it difficult to switch contractors in the future.
Dependence on a single contractor for critical weapons development support could pose a risk if performance falters.

Positive Signals

Firm-fixed-price contract type helps mitigate cost escalation risks.
Full and open competition suggests a deliberate effort to secure competitive pricing.
Long contract duration indicates a stable, ongoing need and potential for strong performance relationships.

Sector Analysis

This contract falls within the Engineering Services sector (NAICS 541330), a critical component of the broader defense industrial base. The market for defense engineering services is substantial, driven by continuous modernization and development of military technologies. This contract represents a significant portion of spending within this specialized niche, supporting the development and integration of advanced weapon systems.

Small Business Impact

The data indicates this contract was not set aside for small businesses, and there is no explicit mention of subcontracting requirements for small businesses. This suggests that the primary awardee is likely a large business, and the contract may not directly contribute to the small business contracting goals unless subcontracting opportunities are pursued independently by the prime contractor.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Army's contracting and program management offices. Accountability measures are inherent in the firm-fixed-price structure, requiring the contractor to deliver specified services within the agreed-upon cost. Transparency is facilitated through contract award databases, though detailed performance metrics may not always be publicly available.

Related Government Programs

Defense Research and Development
Weapons Systems Development
Engineering and Technical Services
Department of the Army Contracts
Federal Procurement Data

Risk Flags

Long contract duration may increase exposure to changing technological requirements.
Dependence on a single contractor for critical support could pose a risk.
Limited number of bidders (2) may warrant further investigation into competition adequacy.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $308.0 million to TORCH TECHNOLOGIES INC. TECHNICAL AND ENGINEERING SUPPORT FOR THE WEAPONS, DEVELOPMENT, AND INTEGRATION DIRECTORATE

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 $308.0 million.

What is the period of performance?

Start: 2019-01-31. End: 2024-09-12.

What is the track record of Torch Technologies Inc. in delivering similar engineering support for defense projects?

Torch Technologies Inc. has a notable track record in providing technical and engineering support services to the Department of Defense. The company specializes in areas relevant to weapons development, simulation, and advanced technologies. Reviewing past performance evaluations and contract histories for Torch Technologies would provide insight into their reliability, quality of service, and ability to meet complex technical requirements. Specific details on their involvement in prior weapon system integration projects and their success rates in meeting milestones and technical specifications would be crucial for a comprehensive assessment of their capabilities and suitability for this contract.

How does the per-unit cost or hourly rate for this contract compare to industry benchmarks for similar engineering services?

Determining the precise per-unit cost or hourly rate for this contract is challenging without access to the detailed pricing structure, which is often proprietary. However, given the firm-fixed-price nature and the full and open competition, it is reasonable to assume that the rates were benchmarked against market data during the bidding process. To conduct a thorough comparison, one would need to analyze the labor categories, skill levels, and overhead rates proposed by Torch Technologies against publicly available data for engineering services in the defense sector, particularly in Alabama. Comparing the total contract value against the estimated hours or deliverables would provide an average cost, which could then be benchmarked.

What are the key performance indicators (KPIs) and risk mitigation strategies associated with this contract?

Key performance indicators for this contract would likely revolve around the successful technical development, integration, and testing of weapon systems, adherence to project timelines, and meeting stringent quality standards. Risk mitigation strategies are embedded within the contract's firm-fixed-price structure, which shifts much of the cost overrun risk to the contractor. Additional measures may include phased delivery schedules, regular progress reviews, and performance-based incentives or penalties. The Department of the Army would also have oversight mechanisms to monitor contractor performance and address any deviations from the contract requirements promptly.

What is the historical spending trend for technical and engineering support services within the Weapons, Development, and Integration Directorate?

Analyzing historical spending trends for technical and engineering support within this specific directorate is essential for contextualizing the $308 million award. This would involve examining procurement data over several fiscal years to identify patterns in contract values, types of services procured, and the contractors frequently engaged. A rising trend might indicate increasing reliance on external expertise or a surge in developmental activities, while a stable or declining trend could suggest mature programs or shifts in acquisition strategy. Understanding these historical patterns helps assess whether the current contract represents a typical investment or a significant deviation, potentially signaling new program priorities or challenges.

What is the potential impact of this contract on the competitive landscape for defense engineering services in Alabama?

The award of a $308 million contract to Torch Technologies Inc., a company based in Alabama, could have a significant impact on the regional defense engineering services market. It solidifies Torch Technologies' position as a key player and may lead to expansion of their workforce and facilities. This could create opportunities for smaller, local subcontractors and suppliers. However, it might also increase competition for other regional firms vying for similar contracts, potentially driving up labor costs or requiring smaller companies to specialize further to remain competitive. The long duration of the contract also means sustained economic activity and employment in the sector within Alabama.

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: 2

Pricing Type: FIRM FIXED PRICE (J)

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: $390,977,306

Exercised Options: $308,031,837

Current Obligation: $308,031,837

Actual Outlays: $4,143,614

Subaward Activity

Number of Subawards: 3132

Total Subaward Amount: $8,634,619,351

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS23F0321N

IDV Type: FSS

Timeline