Army awards $7.47M for Long-Range Persistent Surveillance, supporting ALPS program

Contract Overview

Contract Amount: $7,471,868 ($7.5M)

Contractor: Dynetics, Inc.

Awarding Agency: Department of Defense

Start Date: 2025-09-12

End Date: 2026-12-18

Contract Duration: 462 days

Daily Burn Rate: $16.2K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: THIS ACTION WILL SUPPORT THE ARMY LONG-RANGE PERSISTENT SURVEILLANCE (ALPS) PROGRAM.

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35806

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $7.5 million to DYNETICS, INC. for work described as: THIS ACTION WILL SUPPORT THE ARMY LONG-RANGE PERSISTENT SURVEILLANCE (ALPS) PROGRAM. Key points: 1. Contract supports a critical Army surveillance program, indicating strategic importance. 2. Sole-source award raises questions about potential cost efficiencies and market exploration. 3. Fixed-fee contract structure may incentivize cost control by the contractor. 4. Performance period extends over two fiscal years, suggesting a sustained need. 5. Geographic focus on Alabama aligns with existing defense industry presence. 6. The award is a delivery order, likely part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract.

Value Assessment

Rating: fair

The contract value of $7.47 million for a period of approximately 1.5 years appears moderate for a defense surveillance program. Without access to the specific deliverables or the base IDIQ contract, a direct comparison to similar contracts is challenging. However, the cost-plus-fixed-fee (CPFF) structure warrants scrutiny to ensure the contractor is incentivized to manage costs effectively, as the government bears the risk of cost overruns beyond the fixed fee. Benchmarking the value would require understanding the scope of 'persistent surveillance' capabilities being procured.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning the Army did not conduct a competitive bidding process. This approach is typically used when only one responsible source is available or when urgency dictates. The lack of competition limits the government's ability to explore a wider range of solutions and potentially secure more favorable pricing through market forces. It is important to understand the justification for this sole-source determination.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as the benefits of competition, such as price reductions and innovative solutions, are not realized. This necessitates robust oversight to ensure fair pricing and value.

Public Impact

The U.S. Army benefits directly through enhanced capabilities for its Long-Range Persistent Surveillance (ALPS) program. Services delivered likely include the development, integration, or sustainment of surveillance systems. The geographic impact is concentrated in Alabama, potentially supporting local defense industry jobs. Workforce implications may involve specialized engineers, technicians, and support staff within Dynetics and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially impacting cost-effectiveness.
Cost-plus-fixed-fee structure requires careful monitoring to prevent cost overruns.
Lack of publicly available details on specific performance metrics hinders assessment of program effectiveness.

Positive Signals

Supports a critical national security program (ALPS) for the Army.
Dynetics, Inc. is a known entity in the defense sector, suggesting established capabilities.
Fixed fee component provides some level of cost certainty for the government.

Sector Analysis

This contract falls within the defense sector, specifically focusing on advanced surveillance systems. The market for such technologies is characterized by high barriers to entry, significant R&D investment, and a limited number of specialized contractors. Comparable spending benchmarks would typically involve other programs focused on intelligence, surveillance, and reconnaissance (ISR) platforms and technologies. The total addressable market for defense ISR systems is substantial, driven by evolving global security challenges.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a sole-source award to Dynetics, Inc., there is no direct indication of subcontracting opportunities for small businesses within this specific action. However, larger defense contractors often have established subcontracting plans that may include small businesses for various components or services, though this is not guaranteed or specified here.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Army contracting and program management offices. As a cost-plus-fixed-fee contract, rigorous financial oversight is crucial to monitor expenditures against the fixed fee and ensure compliance with contract terms. Transparency regarding the justification for the sole-source award and performance metrics would enhance accountability. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Army Aviation Programs
Intelligence, Surveillance, and Reconnaissance (ISR) Systems
Long-Range Sensing Technologies
Defense Advanced Research Projects Agency (DARPA) Initiatives

Risk Flags

Sole-source award requires justification.
Cost-plus contract type necessitates robust cost monitoring.
Limited public information on specific performance metrics.
Potential for cost overruns inherent in CPFF structure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $7.5 million to DYNETICS, INC.. THIS ACTION WILL SUPPORT THE ARMY LONG-RANGE PERSISTENT SURVEILLANCE (ALPS) PROGRAM.

Who is the contractor on this award?

The obligated recipient is DYNETICS, 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 $7.5 million.

What is the period of performance?

Start: 2025-09-12. End: 2026-12-18.

What is the specific nature of the 'Long-Range Persistent Surveillance' capabilities being procured under this contract?

The provided data indicates this action supports the Army Long-Range Persistent Surveillance (ALPS) program. While the exact technical specifications are not detailed, 'persistent surveillance' generally refers to the continuous or near-continuous monitoring of an area of interest using various sensor platforms (e.g., aerial drones, satellites, ground sensors). This could involve data collection, processing, and dissemination for intelligence gathering, reconnaissance, and situational awareness. The contract likely covers aspects such as system integration, sensor technology, data analysis tools, or operational support for existing ALPS assets. Further details would be found in the contract's Statement of Work (SOW).

What is the justification for awarding this contract on a sole-source basis to Dynetics, Inc.?

Sole-source awards are typically justified when only one responsible source is capable of meeting the government's needs, or when a compelling urgency exists that precludes full and open competition. For defense contracts, this often relates to unique technological capabilities, proprietary systems, or critical sustainment requirements for existing platforms where only the original manufacturer or a highly specialized entity can provide the necessary services or supplies. Without the specific justification document (e.g., a Justification and Approval - J&A), it is impossible to determine the precise reason. However, Dynetics is known for its work in advanced technologies, suggesting they may possess unique expertise or intellectual property relevant to the ALPS program.

How does the Cost Plus Fixed Fee (CPFF) contract type influence cost control and risk allocation?

A Cost Plus Fixed Fee (CPFF) contract is a type of cost-reimbursement contract where the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. This structure shifts significant cost risk to the government, as the government is obligated to pay all allowable costs, even if they exceed initial estimates. The 'fixed fee' portion provides the contractor with a defined profit margin, incentivizing them to complete the work efficiently to maximize their return on investment. However, it does not directly incentivize minimizing costs beyond what is necessary to achieve the fixed fee. Effective oversight is crucial to ensure costs are reasonable, allocable, and allowable.

What is Dynetics, Inc.'s track record with the Department of Defense and similar surveillance programs?

Dynetics, Inc. is a well-established defense contractor with a history of working with the Department of Defense across various technological domains, including advanced systems, aerospace, and information technology. They have been involved in numerous research, development, and production contracts for military applications. While specific details on their involvement with the ALPS program prior to this award are not provided, their general profile suggests they possess the technical expertise and experience necessary for complex defense projects. A deeper dive into their contract history would reveal the extent and success of their previous work on surveillance and related technologies.

What are the potential implications of this contract award on the broader defense surveillance technology market?

This sole-source award to Dynetics for the ALPS program suggests a potential concentration of capability or a specific technological path chosen by the Army. It may signal a reduced opportunity for competitors in this specific niche for the contract duration. However, it could also spur innovation within Dynetics and its potential subcontractors to meet the program's demands. The broader market implications depend on whether this represents a unique solution or a trend towards specific types of persistent surveillance technologies. The defense sector often sees consolidation and specialization, so this award fits within that context, but the lack of competition limits broader market signals.

How does the contract duration (462 days) and end date (December 2026) align with the Army's strategic objectives for persistent surveillance?

The contract duration of approximately 462 days (roughly 1.5 years) ending in December 2026 suggests a focused effort on a specific phase or set of tasks within the larger ALPS program. This timeframe indicates that the Army likely has defined milestones or deliverables expected within this period. It implies that either this is a discrete project, or it is part of a larger, multi-year strategy where subsequent contract actions will be required to achieve full program objectives. The end date aligns with the Army's ongoing modernization efforts, which heavily emphasize intelligence, surveillance, and reconnaissance capabilities to maintain battlefield awareness and superiority.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 1002 EXPLORER BOULEVARD, HUNTSVILLE, AL, 35806

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

Financial Breakdown

Contract Ceiling: $13,803,711

Exercised Options: $7,471,868

Current Obligation: $7,471,868

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $59,340

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W31P4Q23D0023

IDV Type: IDC

Timeline