Army awards $9.99M for V-22 Osprey harness modification, with 6 bids received

Contract Overview

Contract Amount: $9,988,506 ($10.0M)

Contractor: Defense Systems and Solutions

Awarding Agency: Department of Defense

Start Date: 2022-09-20

End Date: 2027-01-29

Contract Duration: 1,592 days

Daily Burn Rate: $6.3K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: V-22 OSPREY CONVERSION AREA HARNESS MODIFICATION INSTALLATION.

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35808

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $10.0 million to DEFENSE SYSTEMS AND SOLUTIONS for work described as: V-22 OSPREY CONVERSION AREA HARNESS MODIFICATION INSTALLATION. Key points: 1. Contract awarded via full and open competition after exclusion of sources, indicating a competitive process. 2. The contract type is Cost Plus Fixed Fee (CPFF), which can lead to cost overruns if not managed carefully. 3. The contract duration is over 4 years, suggesting a long-term need for these modifications. 4. The awardee, Defense Systems and Solutions, is a new entity in federal contracting, warranting close performance monitoring. 5. The North American Industry Classification System (NAICS) code 336413 points to specialized aircraft parts manufacturing. 6. The contract is a delivery order, implying it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract.

Value Assessment

Rating: fair

The contract's total value is $9.99 million. Benchmarking this specific modification is challenging without more detailed cost breakdowns. However, the CPFF contract type introduces inherent risk in cost control. The awardee, Defense Systems and Solutions, appears to be a relatively new entrant to federal contracting, making historical performance comparisons difficult. Further analysis of the fixed fee percentage and the contractor's proposed costs would be necessary for a more definitive value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This suggests that while competition was sought, certain sources may have been excluded prior to the solicitation, potentially limiting the breadth of competition. Six bids were received, indicating a moderate level of interest. The exclusion of sources warrants further investigation to understand if it was justified and if it impacted the final price.

Taxpayer Impact: A moderate level of competition, with six bidders, generally supports fair price discovery for taxpayers. However, the 'exclusion of sources' clause suggests potential limitations that could have influenced the final negotiated price.

Public Impact

The primary beneficiaries are the U.S. Army, ensuring the continued operational readiness and safety of the V-22 Osprey fleet. The services delivered involve the modification and installation of conversion area harness systems for the V-22 Osprey aircraft. The geographic impact is primarily within Alabama (AL), where the contract is being performed. Workforce implications may include specialized technicians and engineers required for aircraft modifications, potentially supporting local jobs in Alabama.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The contract type (Cost Plus Fixed Fee) can incentivize cost overruns if not rigorously managed.
The awardee, Defense Systems and Solutions, is a new entity in federal contracting, raising questions about their past performance and capacity.
The 'Exclusion of Sources' clause in the competition type requires scrutiny to ensure it did not unduly restrict competition.
The specific nature of 'harness modification' could be critical to aircraft safety and performance, requiring high-quality execution.

Positive Signals

The contract was awarded under a competitive process, with six bids received, indicating market interest.
The modification addresses a specific need for the V-22 Osprey, a critical military asset.
The contract is a delivery order, suggesting it aligns with a broader strategic procurement framework.

Sector Analysis

The aerospace manufacturing sector, particularly for military aircraft components, is highly specialized and technologically advanced. The V-22 Osprey is a unique tiltrotor aircraft, and modifications to its systems, such as the conversion area harness, are critical for its continued operation and safety. Spending in this niche often involves complex engineering and stringent quality control. Comparable spending benchmarks would typically be found within other V-22 sustainment contracts or similar complex aircraft modification programs.

Small Business Impact

This contract does not appear to have a small business set-aside. There is no indication of subcontracting plans specifically targeting small businesses in the provided data. Therefore, the direct impact on the small business ecosystem from this specific award is likely minimal, though the prime contractor may engage small businesses as suppliers.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. Given the CPFF contract type, rigorous financial oversight and auditing will be crucial to manage costs effectively. Transparency is facilitated by the contract award data being publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

V-22 Osprey Sustainment
Aircraft Component Manufacturing
Defense Logistics Agency (DLA) Contracts
Naval Air Systems Command (NAVAIR) Contracts
Air Force Materiel Command Contracts

Risk Flags

New Contractor Performance Risk
Cost Overrun Potential (CPFF)
Limited Competition Justification Scrutiny
Long-Term Contract Management

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $10.0 million to DEFENSE SYSTEMS AND SOLUTIONS. V-22 OSPREY CONVERSION AREA HARNESS MODIFICATION INSTALLATION.

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 $10.0 million.

What is the period of performance?

Start: 2022-09-20. End: 2027-01-29.

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

Based on the provided data, Defense Systems and Solutions appears to be a relatively new entity in federal contracting. The data does not indicate a significant history of prime contract awards. This lack of extensive track record means that assessing their past performance, reliability, and capacity to handle complex defense contracts is challenging. Future performance on this V-22 Osprey modification contract will be a key indicator of their capabilities. Agencies typically rely on past performance evaluations, and for new contractors, this often involves reviewing any prior subcontracts or relevant industry experience.

How does the Cost Plus Fixed Fee (CPFF) contract type compare to other contract types for similar modifications?

Cost Plus Fixed Fee (CPFF) contracts are often used when the scope of work is not precisely defined, or when there is significant uncertainty in the costs involved, such as in research and development or complex modifications. For aircraft modifications, other common types include Firm-Fixed Price (FFP), which offers price certainty but shifts risk to the contractor, or Cost Plus Incentive Fee (CPIF), which incentivizes cost savings. CPFF can be advantageous for the government if it allows for flexibility and ensures the contractor is motivated to complete the work, but it carries a higher risk of cost growth compared to FFP. Rigorous oversight is essential to control costs under a CPFF arrangement.

What are the potential risks associated with the 'Full and Open Competition After Exclusion of Sources' award type?

The 'Full and Open Competition After Exclusion of Sources' award type suggests that while the solicitation was open to all responsible sources, certain potential offerors were excluded prior to the solicitation being issued. This exclusion must be justified by the agency, often based on specific requirements, past performance issues, or unique capabilities. The primary risk is that this exclusion may have limited the competitive pool, potentially leading to a higher price or less innovative solutions than if broader competition had been allowed. It is crucial for the agency to document the rationale for exclusion to ensure fairness and maximize value for taxpayers.

What is the significance of the NAICS code 336413 for this contract?

The North American Industry Classification System (NAICS) code 336413, 'Other Aircraft Parts and Auxiliary Equipment Manufacturing,' signifies that the contractor is involved in the production or modification of components and parts for aircraft, excluding engines and engine parts. For this V-22 Osprey contract, it indicates that the work involves specialized manufacturing or modification related to the aircraft's structure, systems, or auxiliary equipment, specifically the conversion area harness. This code helps categorize the contract within the broader aerospace manufacturing industry and provides context for the type of technical expertise and production capabilities required.

How does the contract duration of over 4 years impact the overall value and risk?

A contract duration of approximately 1592 days (over 4 years) for a modification project suggests a long-term, ongoing requirement for the V-22 Osprey program. This extended period allows for phased implementation and potential adjustments based on operational feedback. From a value perspective, it can provide cost stability and predictability for the government over the contract's life. However, it also increases the risk associated with potential technological obsolescence, changes in program requirements, or contractor performance degradation over time. The CPFF structure, combined with a long duration, necessitates continuous monitoring of costs and performance.

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: $27,753,232

Exercised Options: $9,988,506

Current Obligation: $9,988,506

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