Army awards $14.3M for HH-60L modification kits, addressing component obsolescence and maintenance challenges

Contract Overview

Contract Amount: $14,288,623 ($14.3M)

Contractor: Defense Systems and Solutions

Awarding Agency: Department of Defense

Start Date: 2022-07-29

End Date: 2026-04-30

Contract Duration: 1,371 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: PROVIDE TWO EACH HH-60L MODIFICATION KITS IAW DRAWING PACKAGE 1063667, INSTALLATION OF KITS ON ONE HH-60L AIRCRAFT. OPTION TO EVALUATE UH-60A AIRCRAFT TO ADDRESS COMPONENT OBSOLESCENCE AND MAINTENANCE ISSUES. ANOTHER OPTION TO PROCURE 380HD FLIR.

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35808

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $14.3 million to DEFENSE SYSTEMS AND SOLUTIONS for work described as: PROVIDE TWO EACH HH-60L MODIFICATION KITS IAW DRAWING PACKAGE 1063667, INSTALLATION OF KITS ON ONE HH-60L AIRCRAFT. OPTION TO EVALUATE UH-60A AIRCRAFT TO ADDRESS COMPONENT OBSOLESCENCE AND MAINTENANCE ISSUES. ANOTHER OPTION TO PROCURE 380HD FLIR. Key points: 1. Value for money assessed through a cost-plus-fixed-fee contract, requiring careful monitoring of contractor expenses against the fixed fee. 2. Competition dynamics indicate a full and open competition after exclusion of sources, suggesting an effort to maximize market participation. 3. Risk indicators include potential cost overruns inherent in cost-plus contracts and the complexity of aircraft modifications. 4. Performance context involves upgrading aging HH-60L helicopters to mitigate obsolescence and improve maintainability. 5. Sector positioning within the defense aviation manufacturing industry, focusing on specialized helicopter component upgrades.

Value Assessment

Rating: fair

The contract is a Cost Plus Fixed Fee (CPFF) type, which can lead to cost overruns if not managed tightly. Benchmarking against similar modification kits is difficult without more specific details on the kits' complexity and the scope of installation. The total award amount of $14.3 million for two kits and installation, with potential for additional procurements, needs to be evaluated against the specific technical requirements and the expected lifespan extension of the aircraft.

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.' This suggests that while the initial intent might have been restricted, the agency ultimately opened the competition to all eligible sources. The number of bidders is not specified, but this approach generally aims to foster broader competition and potentially achieve better pricing.

Taxpayer Impact: This competitive approach, even with an initial exclusion, is intended to provide taxpayers with a more competitive price than a sole-source or limited competition scenario.

Public Impact

The primary beneficiaries are the U.S. Army aviation units operating HH-60L helicopters, gaining enhanced operational capabilities. Services delivered include the provision of modification kits and their installation, directly improving aircraft reliability and reducing maintenance burdens. Geographic impact is primarily within the operational theaters where the HH-60L fleet is deployed. Workforce implications include the need for skilled technicians for installation and maintenance of the upgraded aircraft.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost growth due to the CPFF contract structure.
Complexity of integrating new kits with existing aircraft systems.
Dependence on a single contractor for specialized modification kits.

Positive Signals

Addresses critical component obsolescence, extending the life of valuable assets.
Aims to improve aircraft maintainability and reduce operational downtime.
Utilizes a competitive procurement process to secure the best value.

Sector Analysis

This contract falls within the aerospace and defense manufacturing sector, specifically focusing on helicopter modernization. The market for aircraft modification and upgrade kits is specialized, driven by the need to extend the service life of existing fleets and incorporate new technologies. Comparable spending benchmarks would involve analyzing other contracts for similar helicopter upgrade programs, considering factors like aircraft type, scope of work, and technological advancements.

Small Business Impact

The data indicates that small business participation (sb) is false, and there is no indication of a small business set-aside. This suggests the contract was not specifically targeted towards small businesses. Subcontracting opportunities for small businesses may exist but are not explicitly detailed in the provided information. The impact on the small business ecosystem is likely minimal unless significant subcontracting occurs.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Army's contracting and program management offices. Accountability measures are built into the CPFF contract structure, requiring detailed cost reporting and justification. Transparency is facilitated through contract award databases, though specific performance metrics and oversight reports may not be publicly available.

Related Government Programs

UH-60 Black Hawk Helicopter Modifications
Military Helicopter Upgrade Programs
Aviation Component Obsolescence Management
Defense Logistics Agency (DLA) Aviation Support

Risk Flags

Cost Overrun Risk (CPFF Contract)
Technical Integration Complexity
Component Obsolescence Mitigation Dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.3 million to DEFENSE SYSTEMS AND SOLUTIONS. PROVIDE TWO EACH HH-60L MODIFICATION KITS IAW DRAWING PACKAGE 1063667, INSTALLATION OF KITS ON ONE HH-60L AIRCRAFT. OPTION TO EVALUATE UH-60A AIRCRAFT TO ADDRESS COMPONENT OBSOLESCENCE AND MAINTENANCE ISSUES. ANOTHER OPTION TO PROCURE 380HD FLIR.

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 $14.3 million.

What is the period of performance?

Start: 2022-07-29. End: 2026-04-30.

What is the specific nature of the 'component obsolescence and maintenance issues' being addressed for the UH-60A aircraft evaluation option?

The provided data does not detail the specific components facing obsolescence or the exact maintenance issues within the UH-60A aircraft that the evaluation option aims to address. Typically, component obsolescence in aging aircraft fleets arises from the discontinuation of manufacturing for critical parts, leading to difficulties in sourcing replacements and increasing the risk of component failure. Maintenance issues can range from increased unscheduled repairs to difficulties in performing routine servicing due to outdated systems. Further analysis would require access to technical documentation, maintenance logs, and the specific requirements outlined in the contract's Statement of Work (SOW) for the UH-60A evaluation.

How does the 'Full and Open Competition After Exclusion of Sources' process impact the final pricing and value for the taxpayer?

The 'Full and Open Competition After Exclusion of Sources' process suggests an initial intent to limit the competition, perhaps due to specific technical requirements or perceived limited sources. However, the subsequent opening to full and open competition indicates a broader market search was conducted. This approach, when executed effectively, should theoretically lead to more competitive pricing as a wider range of capable contractors can bid. The 'exclusion of sources' aspect might imply that certain initial potential bidders were disqualified or not solicited, which could slightly limit the breadth of competition compared to a purely unrestricted full and open process. Ultimately, the value for the taxpayer depends on the number of responsive bids received and the rigor of the source selection evaluation.

What are the key performance indicators (KPIs) used to measure the success of the HH-60L modification kit installation and integration?

The provided data does not specify the Key Performance Indicators (KPIs) for this contract. However, typical KPIs for aircraft modification contracts include metrics related to schedule adherence (on-time delivery of kits and completion of installation), cost control (adherence to budget, minimizing cost overruns in a CPFF contract), technical performance (successful integration of kits without introducing new issues, meeting specified performance enhancements), and quality (minimizing defects, successful completion of acceptance testing). The effectiveness of the modification in addressing obsolescence and improving maintainability would likely be assessed through post-installation operational readiness rates and reduced unscheduled maintenance events.

What is the historical spending trend for HH-60L modification kits or similar helicopter upgrade programs by the Department of the Army?

The provided data does not include historical spending trends for HH-60L modification kits or similar helicopter upgrade programs. To establish such a trend, one would need to analyze historical contract awards for the Army's aviation modernization efforts, specifically focusing on the HH-60 series and comparable helicopter platforms. This analysis would involve identifying previous contracts for modifications, upgrades, and component replacements, examining their values, durations, and the scope of work. Understanding these historical patterns is crucial for benchmarking current spending, identifying potential cost efficiencies, and forecasting future investment needs in fleet sustainment and modernization.

What are the potential risks associated with the 'Cost Plus Fixed Fee' (CPFF) contract type for this specific aircraft modification project?

The primary risk associated with a Cost Plus Fixed Fee (CPFF) contract for aircraft modifications is the potential for cost overruns. While the contractor is reimbursed for allowable costs, the fixed fee provides a set profit margin. If the contractor's costs exceed initial estimates significantly, they may face reduced profitability or seek contract modifications. Conversely, the government bears the risk of higher-than-expected costs. For the contractor, there is less incentive to control costs aggressively compared to fixed-price contracts, as their fee is fixed regardless of the final cost. Effective government oversight is critical to monitor costs, ensure efficiency, and prevent unnecessary expenditures.

Industry Classification

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

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

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: $15,193,971

Exercised Options: $14,288,623

Current Obligation: $14,288,623

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $320,362

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