DoD's $21M AH-64D Apache repair kit contract awarded to Defense Systems and Solutions

Contract Overview

Contract Amount: $20,974,068 ($21.0M)

Contractor: Defense Systems and Solutions

Awarding Agency: Department of Defense

Start Date: 2019-08-27

End Date: 2025-02-28

Contract Duration: 2,012 days

Daily Burn Rate: $10.4K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: THE(ARB) ADDS AN ARMAMENT REPAIR CAPABILITY TO THE AVIONICS AND ELECTRICAL REPAIR SECTION. THIS(SOW) DEFINES THE ARB SUPPORT REQUIRED FOR THE INSPECTION, PROCUREMENT, MANUFACTURING, INTEGRATION, KITTING, AND DELIVERY OF MULTIPLE AH-64D(STTE) KITS.

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35808

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $21.0 million to DEFENSE SYSTEMS AND SOLUTIONS for work described as: THE(ARB) ADDS AN ARMAMENT REPAIR CAPABILITY TO THE AVIONICS AND ELECTRICAL REPAIR SECTION. THIS(SOW) DEFINES THE ARB SUPPORT REQUIRED FOR THE INSPECTION, PROCUREMENT, MANUFACTURING, INTEGRATION, KITTING, AND DELIVERY OF MULTIPLE AH-64D(STTE) KITS. Key points: 1. Contract focuses on enhancing armament repair capabilities for AH-64D Apache helicopters. 2. The scope includes inspection, procurement, manufacturing, integration, kitting, and delivery of STTE kits. 3. Awarded under a Cost Plus Fixed Fee (CPFF) pricing structure. 4. The contract has a significant duration, spanning from August 2019 to February 2025. 5. This contract supports the Department of the Army's aviation maintenance and readiness. 6. The work is geographically concentrated in Alabama.

Value Assessment

Rating: fair

The contract's Cost Plus Fixed Fee (CPFF) structure can lead to cost overruns if not managed carefully. Benchmarking the value is challenging without specific performance metrics or comparable contracts for similar STTE kits. The total value of over $20 million over approximately six years suggests a substantial investment in maintaining the AH-64D fleet's armament systems. Further analysis would require understanding the unit costs of the kits and the labor hours involved.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This indicates that while competition was sought, certain sources were excluded, potentially limiting the pool of bidders. The specific reasons for exclusion are not detailed, but this approach can sometimes result in less competitive pricing compared to unrestricted full and open competition. The number of bidders is not specified, making it difficult to fully assess the competitive landscape.

Taxpayer Impact: The limited competition may mean taxpayers did not benefit from the lowest possible price achievable through a broader bidding process.

Public Impact

The primary beneficiaries are the U.S. Army aviation units operating the AH-64D Apache helicopter, ensuring their armament systems are functional and ready. Services delivered include the complex kitting and integration of components for armament repair. The geographic impact is concentrated in Alabama, where the contractor is located and likely where the work is performed. Workforce implications include skilled labor in manufacturing, logistics, and aviation repair within the contractor's facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

CPFF contract type can incentivize contractor to increase costs to increase fee.
Limited competition may have resulted in a higher price than could have been achieved through full and open competition.
The exclusion of sources, without clear justification, raises questions about the fairness of the procurement process.

Positive Signals

Supports critical readiness for AH-64D Apache attack helicopters.
Contract awarded to a company specializing in defense systems, suggesting relevant expertise.
Long-term contract provides stability for supply chain and maintenance operations.

Sector Analysis

This contract falls within the broader aerospace and defense manufacturing sector, specifically focusing on aircraft parts and auxiliary equipment. The market for military aircraft sustainment and modernization is substantial, with significant government spending allocated to maintaining aging fleets and developing new capabilities. This contract for AH-64D Apache kits represents a niche but vital segment of this market, ensuring the operational readiness of a key attack helicopter platform.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a set-aside requirement. The prime contractor, Defense Systems and Solutions, is likely a large business, and their subcontracting opportunities would depend on their own procurement strategies rather than mandated set-asides for this specific contract.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. Accountability measures would be embedded in the Cost Plus Fixed Fee contract terms, requiring detailed reporting and justification of costs. Transparency is facilitated through contract award databases, though specific performance data and cost breakdowns may be considered sensitive. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

AH-64 Apache Program
Avionics and Electrical Repair
Aircraft Parts Manufacturing
Defense Logistics Support
Military Aircraft Sustainment

Risk Flags

Limited competition may impact price.
CPFF contract type carries cost overrun risk.
Exclusion of sources requires justification.
Long contract duration may lead to obsolescence.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.0 million to DEFENSE SYSTEMS AND SOLUTIONS. THE(ARB) ADDS AN ARMAMENT REPAIR CAPABILITY TO THE AVIONICS AND ELECTRICAL REPAIR SECTION. THIS(SOW) DEFINES THE ARB SUPPORT REQUIRED FOR THE INSPECTION, PROCUREMENT, MANUFACTURING, INTEGRATION, KITTING, AND DELIVERY OF MULTIPLE AH-64D(STTE) KITS.

Who is the contractor on this award?

The obligated recipient is DEFENSE SYSTEMS AND SOLUTIONS.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $21.0 million.

What is the period of performance?

Start: 2019-08-27. End: 2025-02-28.

What is the track record of Defense Systems and Solutions with similar DoD contracts?

Defense Systems and Solutions (DSS) has a history of performing contracts for the Department of Defense, often related to aircraft components, repair services, and logistical support. While specific details on past performance for AH-64D armament kits are not provided in this data snippet, DSS's general profile suggests experience in the defense sector. A deeper dive into their contract history, including past performance reviews, on-time delivery rates, and cost performance on previous similar awards, would be necessary to fully assess their track record for this specific type of work. Examining awards for other aircraft platforms or complex kitting services could provide further insight into their capabilities and reliability.

How does the pricing structure (Cost Plus Fixed Fee) compare to industry standards for this type of work?

Cost Plus Fixed Fee (CPFF) contracts are common in defense acquisition, particularly for complex projects where the scope may evolve or where precise cost estimation is difficult upfront. This structure reimburses the contractor for allowable costs plus a fixed fee representing profit. While standard, CPFF contracts carry inherent risks of cost growth if not rigorously managed. Industry benchmarks for CPFF fees vary, but typically range from 5-15% of the estimated cost. The effectiveness of this pricing structure hinges on robust government oversight to control costs and ensure the fixed fee remains appropriate for the effort and risk involved. Without specific cost data and fee percentages, a direct comparison to market rates is challenging.

What are the primary risks associated with this contract and how are they being mitigated?

Key risks include potential cost overruns due to the CPFF structure, supply chain disruptions for specialized components, and technical challenges in integrating armament kits. Mitigation strategies likely involve stringent cost monitoring and auditing by the Army, strong supplier relationship management, and detailed technical reviews throughout the kitting and integration process. The 'Exclusion of Sources' aspect of the competition also presents a risk if it limits the availability of innovative solutions or competitive pricing. The long contract duration (2019-2025) also introduces risks related to obsolescence of technology or changes in military requirements over time.

How effective is the current approach to maintaining AH-64D armament systems, and does this contract represent a significant improvement?

This contract aims to establish or enhance an armament repair capability for the AH-64D Apache, suggesting a need for improved or more efficient maintenance processes. The specific 'kits' mentioned (STTE Kits) likely streamline the repair and upgrade process, potentially reducing downtime and improving readiness. The effectiveness of this approach will be measured by the contractor's ability to deliver these kits on time, within budget, and to specification, ultimately contributing to the operational availability of the AH-64D fleet. Without pre-contract performance data, it's difficult to quantify the 'improvement,' but the investment indicates a strategic focus on this aspect of fleet readiness.

What are the historical spending patterns for AH-64D sustainment and armament repair?

Historical spending on AH-64D sustainment and armament repair has been substantial, reflecting the platform's long service life and critical role in Army aviation. The U.S. Army consistently allocates significant funds towards maintaining its helicopter fleets, including upgrades, spare parts, and depot-level maintenance. Spending patterns often show fluctuations based on modernization programs, operational tempo, and the availability of spare parts. Contracts like this one, focusing on specific repair capabilities and kits, are part of a larger, ongoing investment strategy to ensure the AH-64D remains a viable and effective asset throughout its lifecycle.

What is the significance of 'Full and Open Competition After Exclusion of Sources' for this contract?

This procurement method signifies that the contract was initially intended for full and open competition, but specific sources were later excluded. This is often done when a particular technology or capability is unique to certain vendors, or when there are national security concerns. However, it can also limit the competitive landscape and potentially lead to higher prices compared to unrestricted full and open competition. The rationale behind the exclusion of sources is critical for understanding the true level of competition and its impact on value for money. Without this rationale, it raises questions about whether the most competitive outcome was achieved for the taxpayer.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Other Aircraft Parts and Auxiliary Equipment Manufacturing

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 631 DISCOVERY DR, HUNTSVILLE, AL, 35806

Business Categories: Alaskan Native Corporation Owned Firm, Category Business, Minority Owned Business, Native American Owned Business, Partnership or Limited Liability Partnership, SBA Certified 8 a Joint Venture, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $20,974,068

Exercised Options: $20,974,068

Current Obligation: $20,974,068

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W58RGZ18D0001

IDV Type: IDC

Timeline