DoD awards $24.4M for MV-22 mission computer retrofit kits, addressing obsolescence

Contract Overview

Contract Amount: $24,412,212 ($24.4M)

Contractor: Defense Systems and Solutions

Awarding Agency: Department of Defense

Start Date: 2019-09-27

End Date: 2027-01-30

Contract Duration: 2,682 days

Daily Burn Rate: $9.1K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: SUPPORT NAVAIRSYSCOM PMA275 FOR THE PROCUREMENT, MANUFACTURING, INTEGRATION, KITTING, DELIVERY, AND INSTALLATION OF MISSION COMPUTER OBSOLESCENCE INITIATIVE RETROFIT KITS UNDER ECP-873 R4 FOR THE U.S. MARINE CORPS VARIANT OF THE MV-22.

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35808

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $24.4 million to DEFENSE SYSTEMS AND SOLUTIONS for work described as: SUPPORT NAVAIRSYSCOM PMA275 FOR THE PROCUREMENT, MANUFACTURING, INTEGRATION, KITTING, DELIVERY, AND INSTALLATION OF MISSION COMPUTER OBSOLESCENCE INITIATIVE RETROFIT KITS UNDER ECP-873 R4 FOR THE U.S. MARINE CORPS VARIANT OF THE MV-22. Key points: 1. Contract addresses critical component obsolescence for the MV-22 Osprey, ensuring continued operational readiness. 2. Full and open competition after exclusion of sources suggests a deliberate procurement strategy to ensure best value. 3. The contract's duration of over 2.5 years indicates a significant undertaking for integration and installation. 4. Focus on manufacturing, integration, kitting, delivery, and installation points to a comprehensive lifecycle support approach. 5. The use of a Cost Plus Fixed Fee (CPFF) contract type may require close monitoring to manage costs effectively. 6. This award falls under the 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' NAICS code, highlighting specialized defense manufacturing.

Value Assessment

Rating: good

The contract value of $24.4 million for the procurement, manufacturing, integration, kitting, delivery, and installation of mission computer obsolescence retrofit kits appears reasonable given the scope. While specific cost breakdowns are not provided, the complexity of integrating and installing hardware modifications across a fleet of aircraft suggests a significant investment. Benchmarking against similar large-scale avionics upgrade programs would provide further insight into value for money, but the focus on obsolescence mitigation is a necessary expenditure for maintaining fleet readiness.

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 the competition was intended to be open, specific sources may have been excluded based on predefined criteria, potentially related to technical capabilities or existing knowledge of the system. The exact number of bidders is not specified, but this procurement method suggests a balance between ensuring broad competition and potentially narrowing the field to qualified entities with specific expertise.

Taxpayer Impact: This procurement method aims to achieve a balance between competitive pricing and ensuring the selection of a contractor with the necessary specialized skills for complex defense systems, ultimately seeking to provide value to taxpayers.

Public Impact

The U.S. Marine Corps benefits directly through the modernization of its MV-22 Osprey fleet, enhancing operational capabilities. Services delivered include the procurement, manufacturing, integration, kitting, delivery, and installation of critical retrofit kits. The geographic impact is primarily within the operational bases and maintenance facilities supporting the MV-22 fleet. Workforce implications include skilled labor in manufacturing, avionics integration, and logistics within the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can lead to cost overruns if not managed diligently.
The 'exclusion of sources' in the competition may limit the pool of potential cost-saving bidders.
Obsolescence mitigation is a reactive measure; proactive lifecycle management could potentially reduce future costs.

Positive Signals

Addresses critical component obsolescence, ensuring the long-term viability of a key military asset.
Comprehensive scope of work (procurement to installation) suggests a well-defined and managed project.
Awarded to Defense Systems and Solutions, a contractor with experience in defense systems support.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on aircraft parts and auxiliary equipment. The market for such specialized components and integration services is driven by military modernization programs and the need to maintain aging fleets. Spending in this area is substantial, reflecting the high costs associated with advanced military technology and the long operational lifecycles of major defense platforms like the MV-22. Comparable spending benchmarks would involve other large-scale avionics upgrade or sustainment contracts for similar military aircraft.

Small Business Impact

The data indicates that small business participation (sb: false) was not a primary set-aside consideration for this specific contract. Therefore, the direct impact on small businesses through set-asides is minimal. However, the prime contractor, Defense Systems and Solutions, may engage small businesses as subcontractors for specialized components or services, contributing indirectly to the small business ecosystem within the defense supply chain.

Oversight & Accountability

Oversight for this contract would likely be managed by the Naval Air Systems Command (NAVAIR) PMA275, which is responsible for the MV-22 program. Accountability measures would be embedded within the CPFF contract terms, requiring detailed reporting and justification for costs incurred. Transparency is facilitated through contract award databases and potential reporting requirements to Congress, though specific details of ongoing oversight are not publicly detailed. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

MV-22 Osprey Sustainment Programs
Avionics Modernization Contracts
Defense Logistics and Support Services
Aerospace Component Manufacturing
Military Aircraft Retrofit Programs

Risk Flags

Potential for cost overruns due to CPFF contract type.
Risk of limited competition impacting price discovery.
Dependency on specific contractor capabilities due to source exclusion.
Technical challenges in integration and installation across the fleet.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.4 million to DEFENSE SYSTEMS AND SOLUTIONS. SUPPORT NAVAIRSYSCOM PMA275 FOR THE PROCUREMENT, MANUFACTURING, INTEGRATION, KITTING, DELIVERY, AND INSTALLATION OF MISSION COMPUTER OBSOLESCENCE INITIATIVE RETROFIT KITS UNDER ECP-873 R4 FOR THE U.S. MARINE CORPS VARIANT OF THE MV-22.

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 $24.4 million.

What is the period of performance?

Start: 2019-09-27. End: 2027-01-30.

What is the track record of Defense Systems and Solutions in supporting similar complex aircraft modification programs?

Defense Systems and Solutions (DSS) has a history of providing support for various defense platforms. While specific details on their involvement in MV-22 specific modifications are not elaborated in the provided data, their general experience in defense systems integration and manufacturing suggests a capability to handle complex projects. Further investigation into DSS's past performance on contracts with similar scope, complexity, and value, particularly those involving avionics or mission systems upgrades for military aircraft, would be necessary to fully assess their track record for this specific initiative. Reviewing past performance evaluations and contract awards would offer deeper insights into their reliability and success rates in delivering on similar technical requirements.

How does the Cost Plus Fixed Fee (CPFF) structure compare to other contract types for this type of work, and what are the implications for cost control?

The Cost Plus Fixed Fee (CPFF) contract type is often used for research and development or complex projects where the scope is not fully defined at the outset, allowing for flexibility. In this case, it's applied to the procurement, manufacturing, integration, kitting, delivery, and installation of retrofit kits. While it allows the contractor to cover all allowable costs plus a predetermined fixed fee (profit), it places a significant burden on the government to meticulously monitor and audit costs to prevent overruns. Compared to a Firm-Fixed-Price (FFP) contract, CPFF offers less cost certainty for the government but can be more appropriate when technical uncertainties are high. The fixed fee incentivizes the contractor to complete the work but does not directly tie profit to cost savings, unlike Cost Plus Incentive Fee (CPIF) contracts. Effective oversight and robust cost accounting are crucial to ensure value for money under a CPFF arrangement.

What are the primary risks associated with the obsolescence of mission computer components on the MV-22, and how does this contract mitigate them?

The obsolescence of mission computer components on the MV-22 poses significant risks to operational readiness, safety, and maintainability. Obsolete parts can lead to increased downtime due to difficulties in sourcing replacements, higher repair costs, and potential unreliability, impacting mission effectiveness. Furthermore, outdated systems may lack compatibility with newer technologies or cybersecurity threats. This contract directly mitigates these risks by procuring, manufacturing, and integrating new retrofit kits designed to replace or upgrade the obsolete components. By addressing obsolescence proactively, the contract ensures the MV-22 fleet remains operational, supportable, and capable of meeting its mission requirements for the foreseeable future, thereby enhancing overall fleet survivability and effectiveness.

What is the historical spending trend for MV-22 sustainment and modernization by the Department of Defense?

Historical spending on MV-22 sustainment and modernization by the Department of Defense has been substantial, reflecting the program's complexity and strategic importance. While specific figures for this particular retrofit initiative are detailed in this award, overall spending encompasses a wide range of activities including fleet readiness, upgrades, spare parts, maintenance, and training. The MV-22 program has consistently required significant investment to maintain its operational capability and address evolving threats and technological advancements. Trends typically show sustained, high-level funding for such major platforms, with periodic increases for major upgrade programs like obsolescence mitigation or capability enhancements. Analyzing broader defense budget allocations for tiltrotor aircraft programs would provide context for this specific contract's financial scale.

How does the 'exclusion of sources' clause in the competition impact the potential for innovation and cost savings?

The 'Full and Open Competition After Exclusion of Sources' clause introduces a nuanced approach to competition. While it aims to ensure a broad base of potential bidders, the explicit exclusion of certain sources can limit the diversity of approaches and potentially stifle innovation if the excluded entities possessed unique or superior solutions. From a cost-saving perspective, excluding potential competitors reduces the overall competitive pressure, which could theoretically lead to higher prices than if a truly unrestricted open competition were held. However, the exclusion is typically based on specific technical requirements, security needs, or the need for specialized knowledge of the existing system, suggesting that the government prioritized specific capabilities over maximum price competition in this instance. The effectiveness of this approach hinges on whether the remaining bidders offer sufficient competition to drive a fair price.

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: $31,419,981

Exercised Options: $24,412,212

Current Obligation: $24,412,212

Subaward Activity

Number of Subawards: 16

Total Subaward Amount: $11,810,322

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