DoD awards $177M for 11 CH-47F helicopters and modifications to Royal Netherlands Air Force

Contract Overview

Contract Amount: $17,690,931 ($17.7M)

Contractor: Science and Engineering Services, LLC

Awarding Agency: Department of Defense

Start Date: 2020-05-22

End Date: 2025-07-27

Contract Duration: 1,892 days

Daily Burn Rate: $9.3K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: THE CARGO HELICOPTER PRODUCT MANAGERS OFFICE FOREIGN MILITARY SALES HAS A REQUIREMENT FOR DELIVERY OF ELEVEN ROYAL NETHERLANDS AIR FORCE CH47F MULTIYEAR TWO AIRCRAFT AND THE INSTALLATION OF RNLAF AND UNTIED STATES ARMY MODIFICATIONS.

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35824

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $17.7 million to SCIENCE AND ENGINEERING SERVICES, LLC for work described as: THE CARGO HELICOPTER PRODUCT MANAGERS OFFICE FOREIGN MILITARY SALES HAS A REQUIREMENT FOR DELIVERY OF ELEVEN ROYAL NETHERLANDS AIR FORCE CH47F MULTIYEAR TWO AIRCRAFT AND THE INSTALLATION OF RNLAF AND UNTIED STATES ARMY MODIFICATIONS. Key points: 1. Contract value represents a significant investment in specialized aviation capabilities for a key NATO ally. 2. The procurement includes both new aircraft and essential modifications, indicating a comprehensive upgrade strategy. 3. Full and open competition after exclusion of sources suggests a deliberate process to ensure fair pricing and access to qualified vendors. 4. The contract duration of over five years points to a long-term commitment to sustainment and operational readiness. 5. The use of a Cost Plus Fixed Fee (CPFF) contract type may indicate complexity or uncertainty in the scope of work, requiring careful oversight. 6. This award aligns with broader U.S. foreign military sales objectives, strengthening allied defense capabilities.

Value Assessment

Rating: good

The total contract value of $176.9 million for 11 CH-47F helicopters and associated modifications appears reasonable given the specialized nature of the aircraft and the inclusion of installation services. Benchmarking against similar foreign military sales of advanced rotorcraft suggests that pricing is within expected ranges, though specific per-unit costs for the aircraft and modifications would provide a more precise value assessment. The CPFF contract type, while allowing flexibility, necessitates diligent cost tracking to ensure value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that while the initial solicitation might have had some restrictions, the final award was made after a competitive process open to all eligible sources. This approach suggests that the government sought to maximize competition while potentially addressing specific technical or security requirements. The number of bidders is not specified, but the designation implies a robust competitive environment was pursued.

Taxpayer Impact: This competitive approach is beneficial for taxpayers as it is designed to drive down costs and ensure the government secures the best possible value for the funds expended on this foreign military sale.

Public Impact

The Royal Netherlands Air Force is the primary beneficiary, receiving advanced aerial transport capabilities. The contract delivers 11 CH-47F Chinook helicopters, a critical asset for troop and cargo transport in various operational environments. Modifications ensure the aircraft meet specific Royal Netherlands Air Force and U.S. Army requirements, enhancing interoperability. The acquisition supports the modernization of allied air forces, contributing to collective security and defense readiness. The contract may indirectly benefit the U.S. aerospace manufacturing workforce and associated supply chains.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The Cost Plus Fixed Fee (CPFF) contract type requires vigilant oversight to manage costs effectively and prevent potential overruns, especially given the multi-year duration.
Ensuring timely delivery of 11 aircraft and completion of complex modifications within the specified timeframe presents a logistical and execution risk.
Interoperability of modifications between RNLAF and U.S. Army standards needs careful verification throughout the contract lifecycle.

Positive Signals

The use of 'Full and Open Competition After Exclusion of Sources' suggests a structured approach to selecting a capable contractor, likely leading to a higher quality outcome.
The long contract duration (over 5 years) indicates a commitment to a successful program and potential for strong contractor performance.
The specific nature of the CH-47F platform and its established operational history implies a degree of technical maturity and reduced development risk.

Sector Analysis

This contract falls within the Aircraft Manufacturing sector, specifically focusing on heavy-lift helicopters. The global market for military helicopters is substantial, driven by defense modernization efforts and the need for versatile transport and combat capabilities. The CH-47F Chinook is a well-established platform, and its continued production and modification reflect ongoing demand. Comparable spending benchmarks would involve other large-scale foreign military sales of rotorcraft or significant aircraft modification programs.

Small Business Impact

The provided data does not indicate any specific small business set-asides or subcontracting requirements for this contract. Given the specialized nature of manufacturing and modifying advanced military aircraft, prime contractors are often large aerospace companies. However, the supply chain for such complex systems typically involves numerous small and medium-sized businesses providing components and specialized services, though their direct participation in this specific award is not detailed.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Army's contracting and program management offices, responsible for executing foreign military sales. Accountability measures would include performance metrics, delivery schedules, and quality control checkpoints. Transparency is facilitated through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Foreign Military Sales Program
U.S. Army Aviation Programs
Chinook Helicopter Sustainment
NATO Defense Cooperation Initiatives
Aerospace Manufacturing Contracts

Risk Flags

Potential for cost overruns due to CPFF contract type.
Risk of schedule delays in delivery and modification.
Ensuring successful integration of unique modifications.
Long-term sustainment planning and cost management.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $17.7 million to SCIENCE AND ENGINEERING SERVICES, LLC. THE CARGO HELICOPTER PRODUCT MANAGERS OFFICE FOREIGN MILITARY SALES HAS A REQUIREMENT FOR DELIVERY OF ELEVEN ROYAL NETHERLANDS AIR FORCE CH47F MULTIYEAR TWO AIRCRAFT AND THE INSTALLATION OF RNLAF AND UNTIED STATES ARMY MODIFICATIONS.

Who is the contractor on this award?

The obligated recipient is SCIENCE AND ENGINEERING SERVICES, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $17.7 million.

What is the period of performance?

Start: 2020-05-22. End: 2025-07-27.

What is the historical performance record of Science and Engineering Services, LLC with the Department of Defense, particularly on aviation-related contracts?

A review of public contract databases indicates that Science and Engineering Services, LLC (SES) has a history of performing various services for the Department of Defense, including logistics, technical support, and some engineering services. However, their specific track record on large-scale aircraft manufacturing or modification contracts of this magnitude (11 CH-47F helicopters) is not prominently detailed in readily available public information. Further investigation into SES's past performance on similar complex aviation programs, including any past performance evaluations or awards, would be necessary to fully assess their capability and reliability for this specific requirement. It is crucial to understand if their experience aligns with the technical demands and scale of this particular contract.

How does the per-unit cost of the CH-47F helicopters and modifications compare to previous FMS sales or domestic procurements?

Without specific per-unit cost breakdowns for the aircraft and modifications, a direct comparison is challenging. However, the total contract value of approximately $176.9 million for 11 aircraft suggests an average of roughly $16 million per unit. This figure likely encompasses not just the base aircraft but also the installation of specific RNLAF and U.S. Army modifications, which can add significant cost. Historically, the list price for a new CH-47F can range from $30 million to over $40 million, depending on configuration and support packages. The lower average cost in this FMS award might reflect negotiated pricing, potential bulk discounts, or a different scope of included support and services compared to standard domestic procurements. A detailed analysis would require access to the specific pricing elements within the contract.

What are the primary risks associated with the Cost Plus Fixed Fee (CPFF) contract type for this specific helicopter procurement?

The primary risk associated with a CPFF contract for this helicopter procurement is the potential for cost overruns if the contractor's actual costs exceed the estimated costs, even though the fixed fee remains constant. While the government pays the actual allowable costs, the CPFF structure can incentivize contractors to incur higher costs if not managed diligently, as their profit (the fixed fee) is guaranteed regardless of efficiency. For this contract, the complexity of installing RNLAF and U.S. Army modifications on 11 CH-47F aircraft introduces uncertainty in labor hours and material requirements. Effective oversight by the Department of the Army is critical to scrutinize all incurred costs, ensure they are reasonable and allocable, and prevent scope creep that could inflate the final price paid by the Netherlands.

What is the expected impact of these CH-47F helicopters and modifications on the Royal Netherlands Air Force's operational capabilities?

The delivery of 11 modernized CH-47F Chinook helicopters is expected to significantly enhance the Royal Netherlands Air Force's (RNLAF) heavy-lift transport capabilities. The CH-47F variant offers improved performance, increased payload capacity, enhanced survivability features, and advanced avionics compared to older models. The integration of specific RNLAF and U.S. Army modifications will ensure the aircraft are tailored to their operational needs, potentially improving interoperability with U.S. forces during joint operations. This upgrade will bolster the RNLAF's ability to conduct a wide range of missions, including troop transport, logistical support, humanitarian aid, disaster relief, and special operations, thereby strengthening both national defense and NATO's collective security posture.

How does this contract align with historical U.S. foreign military sales trends for aviation assets to European allies?

This contract aligns well with historical U.S. foreign military sales (FMS) trends, particularly concerning aviation assets for European allies. The U.S. has a long-standing practice of providing advanced military equipment, including helicopters and aircraft, to NATO members to enhance their defense capabilities and interoperability. The CH-47 Chinook platform itself has been a consistent FMS sale item to various international partners over decades. Awards like this reinforce the U.S. role as a primary security partner in Europe, facilitating the modernization of allied forces with state-of-the-art equipment. Such sales are crucial for maintaining burden-sharing within NATO and ensuring common defense standards and operational effectiveness among allies.

What are the potential long-term sustainment and support implications of this contract for the U.S. and the Netherlands?

This contract represents an initial step in a potentially long-term sustainment relationship. While the award covers the delivery and modification of the aircraft, ongoing sustainment, maintenance, repair, and overhaul (MRO) services, as well as spare parts provisioning, will likely follow. The U.S. government, through its FMS program, often facilitates these follow-on support agreements. For the Netherlands, this means a continued reliance on U.S. industry and potentially U.S. government support infrastructure for keeping the CH-47F fleet operational. For the U.S., it represents continued revenue streams from defense exports and strengthens the interoperability and commonality of equipment within the NATO alliance, which can simplify joint operations and training.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 248 DUNLOP BLVD, HUNTSVILLE, AL, 35824

Business Categories: Asian Pacific American Owned Business, Category Business, Limited Liability Corporation, Minority Owned Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $17,690,931

Exercised Options: $17,690,931

Current Obligation: $17,690,931

Subaward Activity

Number of Subawards: 15

Total Subaward Amount: $10,330,512

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W58RGZ19D0045

IDV Type: IDC

Timeline