DoD's $22.3M logistics support contract for HAWK/CHAPARRAL missile systems awarded to PROJECTXYZ, INC

Contract Overview

Contract Amount: $22,332,388 ($22.3M)

Contractor: Projectxyz, Inc.

Awarding Agency: Department of Defense

Start Date: 2024-04-01

End Date: 2026-03-31

Contract Duration: 729 days

Daily Burn Rate: $30.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: LOGISTICS SUPPORT CENTER (LSC) AND CONTRACTOR LOGISTICS SUPPORT (CLS) FOR THE HAWK AND CHAPARRAL MISSILE SYSTEMS TO INCLUDE TECHNICAL SUPPORT, OTHER DIRECTOR COSTS, PMR, R&R, SECURITY AND DEMILARIZATION COST.

Place of Performance

Location: MADISON, MADISON County, ALABAMA, 35758

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $22.3 million to PROJECTXYZ, INC. for work described as: LOGISTICS SUPPORT CENTER (LSC) AND CONTRACTOR LOGISTICS SUPPORT (CLS) FOR THE HAWK AND CHAPARRAL MISSILE SYSTEMS TO INCLUDE TECHNICAL SUPPORT, OTHER DIRECTOR COSTS, PMR, R&R, SECURITY AND DEMILARIZATION COST. Key points: 1. Contract provides comprehensive logistics support, including technical assistance and maintenance for critical missile systems. 2. The award to a single contractor suggests potential limitations in market competition for specialized services. 3. A firm-fixed-price structure aims to control costs, but requires careful monitoring for scope creep. 4. The contract duration of 729 days allows for sustained support but necessitates performance evaluation throughout. 5. Focus on HAWK and CHAPARRAL systems indicates specialized, potentially aging, defense assets requiring dedicated maintenance. 6. Geographic focus on Alabama (AL) may concentrate economic benefits and workforce impact in a specific region.

Value Assessment

Rating: fair

The total contract value of $22.3 million over two years for specialized missile system logistics appears within a reasonable range for defense contracts of this nature. However, without specific benchmarks for HAWK and CHAPARRAL system support, a precise value-for-money assessment is challenging. The firm-fixed-price nature suggests an attempt to cap costs, but the absence of competition raises concerns about whether the government secured the most competitive pricing available in the market.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. The specific reasons for this approach, such as unique capabilities or lack of alternative providers, are not detailed. A sole-source award limits the government's ability to leverage market competition to drive down prices and ensure the best possible value. It also raises questions about the availability of other qualified contractors who could have potentially offered competitive bids.

Taxpayer Impact: The lack of competition means taxpayers may not have benefited from potential cost savings that a competitive bidding process could have yielded. This could result in a higher overall expenditure for the required services.

Public Impact

The Department of the Army benefits from sustained operational readiness of the HAWK and CHAPARRAL missile systems. Services include technical support, maintenance, and demilitarization, ensuring system longevity and safety. The contract's geographic focus on Alabama (AL) may provide economic benefits and employment opportunities within that state. Specialized technical expertise is required, potentially impacting the demand for skilled defense logistics personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition for a significant contract value raises concerns about potential overpricing and limited innovation.
Sole-source awards can reduce transparency and make it harder to assess fair market value.
The specialized nature of missile system logistics might create a barrier to entry for new competitors, potentially perpetuating sole-source awards.

Positive Signals

Firm-fixed-price contract type provides cost certainty for the government, assuming the scope remains well-defined.
The contract duration allows for consistent and reliable support for critical defense assets.
The awardee, PROJECTXYZ, INC., is tasked with providing essential services, indicating a recognized capability in this niche area.

Sector Analysis

This contract falls within the broader defense logistics and support services sector, which is a critical component of national security spending. The market for specialized missile system maintenance is often characterized by high barriers to entry due to technical expertise, security clearances, and proprietary knowledge. While specific market size data for HAWK and CHAPARRAL system support is not readily available, the overall defense logistics market is substantial, with significant government investment aimed at maintaining readiness for aging and modern weapon systems.

Small Business Impact

The contract data indicates that small business participation (ss: false, sb: false) was not a primary consideration or requirement for this specific award. There is no indication of small business set-asides or subcontracting plans. This suggests that the prime contractor, PROJECTXYZ, INC., is expected to perform the majority of the work, and opportunities for small businesses within this contract's scope may be limited unless proactively sought by the prime.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. As a definitive contract, it is subject to standard federal procurement regulations and oversight mechanisms. Transparency is limited due to the sole-source nature. While specific Inspector General (IG) jurisdiction is not detailed, the DoD IG generally has oversight over defense spending and contract performance to identify waste, fraud, and abuse.

Related Government Programs

Missile Defense Systems Support
Army Aviation and Missile Command Logistics Support
Defense Contract Management Agency Services
Weapon System Sustainment Programs

Risk Flags

Sole-source award raises concerns about price competition and value for money.
Lack of small business participation noted.
Contract supports aging weapon systems, potentially increasing maintenance complexity and cost.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.3 million to PROJECTXYZ, INC.. LOGISTICS SUPPORT CENTER (LSC) AND CONTRACTOR LOGISTICS SUPPORT (CLS) FOR THE HAWK AND CHAPARRAL MISSILE SYSTEMS TO INCLUDE TECHNICAL SUPPORT, OTHER DIRECTOR COSTS, PMR, R&R, SECURITY AND DEMILARIZATION COST.

Who is the contractor on this award?

The obligated recipient is PROJECTXYZ, 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 $22.3 million.

What is the period of performance?

Start: 2024-04-01. End: 2026-03-31.

What is the track record of PROJECTXYZ, INC. in providing logistics support for defense systems, particularly missile systems?

Information regarding PROJECTXYZ, INC.'s specific track record in providing logistics support for defense systems, especially missile systems like HAWK and CHAPARRAL, is not detailed in the provided data. A comprehensive assessment would require reviewing past performance evaluations, contract history, and any reported issues or successes on similar government contracts. Without this data, it's difficult to definitively gauge their experience and reliability for this critical function. Further investigation into federal contract databases and performance reports would be necessary to establish a clear picture of their capabilities and past performance.

How does the $22.3 million contract value compare to similar logistics support contracts for aging missile systems?

Benchmarking the $22.3 million contract value against similar logistics support contracts for aging missile systems is challenging without access to comparable contract data. The HAWK and CHAPARRAL systems are older, which can sometimes lead to higher maintenance costs due to parts availability and specialized knowledge required. However, the absence of competition for this contract makes direct price comparison difficult. Ideally, a competitive process would reveal market rates. If comparable sole-source contracts exist, they might offer a reference point, but the unique technical requirements and specific support needs for these particular missile systems mean that direct comparisons might not be perfectly analogous.

What are the primary risks associated with a sole-source award for critical defense logistics support?

The primary risks associated with a sole-source award for critical defense logistics support include potential overpricing due to the lack of competitive pressure, reduced incentive for the contractor to innovate or improve efficiency, and a lack of transparency in pricing. Taxpayers may end up paying more than necessary for the services. Furthermore, reliance on a single provider can create vulnerabilities if the contractor experiences financial difficulties, operational issues, or fails to meet performance standards. It also limits the government's flexibility to switch providers if performance is unsatisfactory or if better alternatives emerge.

How effective is the firm-fixed-price (FFP) contract type in managing costs for specialized logistics services like missile system support?

The firm-fixed-price (FFP) contract type is generally effective in managing costs for specialized logistics services because it shifts the risk of cost overruns to the contractor. This provides the government with cost certainty, assuming the contract's scope of work is clearly defined and does not change significantly. For services like missile system support, where technical requirements can be complex, FFP encourages the contractor to manage their own costs efficiently to maximize profit. However, if the scope is poorly defined or if unforeseen technical challenges arise, the contractor may be incentivized to cut corners on quality or seek change orders, which can negate the cost-control benefits.

What are the historical spending patterns for logistics support of the HAWK and CHAPARRAL missile systems by the Department of Defense?

Historical spending patterns for the logistics support of the HAWK and CHAPARRAL missile systems by the Department of Defense are not provided in the current data. To analyze this, one would need to examine past contracts awarded for these specific systems, including their values, durations, and the contractors involved. Understanding historical spending would help determine if the current $22.3 million award represents an increase, decrease, or stable level of investment. It would also reveal trends in competition, contract types, and potential cost escalation over time for these aging weapon systems.

What are the implications of the 729-day contract duration for sustainment and potential future procurements?

A contract duration of 729 days (approximately two years) for logistics support provides a stable period for the sustainment of the HAWK and CHAPARRAL missile systems. This duration allows the contractor, PROJECTXYZ, INC., to establish efficient operations and for the Department of the Army to assess performance. From a future procurement perspective, this duration is sufficient to gather performance data and evaluate the need for continued support. It also allows time for market research to potentially identify and develop competition for subsequent contracts, mitigating the risks associated with perpetual sole-source awards.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Facilities Support Services › Facilities Support Services

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: W31P4Q24R0018

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1500 PERIMETER PKWY NW STE 426, HUNTSVILLE, AL, 35806

Business Categories: Black American Owned Business, Category Business, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Woman Owned Business, Women Owned Small Business

Financial Breakdown

Contract Ceiling: $22,332,388

Exercised Options: $22,332,388

Current Obligation: $22,332,388

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline