DoD awards $6.4M for Communication Modernization, Defense Systems and Solutions to provide support for HIMARS

Contract Overview

Contract Amount: $6,438,754 ($6.4M)

Contractor: Defense Systems and Solutions

Awarding Agency: Department of Defense

Start Date: 2023-04-13

End Date: 2027-06-23

Contract Duration: 1,532 days

Daily Burn Rate: $4.2K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: COMMUNICATION MODERNIZATION PROJECT SUPPORT HIMARS

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35808

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $6.4 million to DEFENSE SYSTEMS AND SOLUTIONS for work described as: COMMUNICATION MODERNIZATION PROJECT SUPPORT HIMARS Key points: 1. Contract value represents a significant investment in enhancing communication capabilities for critical defense systems. 2. The award to Defense Systems and Solutions suggests a focus on specialized expertise in defense technology. 3. The duration of the contract indicates a long-term commitment to the modernization effort. 4. The contract type (Cost Plus Fixed Fee) may lead to cost overruns if not carefully managed. 5. The geographic location of performance in Alabama could stimulate local economic activity and job creation. 6. The specific nature of the support for HIMARS highlights the strategic importance of this program.

Value Assessment

Rating: fair

The contract value of $6.4 million for communication modernization support for HIMARS is difficult to benchmark without more specific details on the scope of work. The Cost Plus Fixed Fee (CPFF) contract type introduces inherent risk for cost overruns, as the contractor is reimbursed for actual costs plus a fixed fee. This structure can sometimes lead to less price discipline compared to fixed-price contracts. Further analysis would require comparing the labor rates, overhead, and fee structure to similar contracts for defense system support.

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 a competitive process was intended, specific circumstances led to the exclusion of certain potential bidders. The exact reasons for this exclusion are not detailed, but it suggests that the pool of eligible contractors may have been narrowed, potentially impacting the level of competition and price discovery. Without knowing the number of proposals received or the rationale for excluding other sources, it's challenging to definitively assess the competitive landscape.

Taxpayer Impact: A limited competition may result in higher prices for taxpayers compared to a fully open and unrestricted bidding process, as fewer companies had the opportunity to compete.

Public Impact

The primary beneficiaries are the U.S. Army units utilizing the HIMARS (High Mobility Artillery Rocket System) platform, who will receive enhanced communication capabilities. The services delivered will focus on modernizing and supporting the communication systems integral to the HIMARS' operational effectiveness. The contract performance is located in Alabama, potentially creating or sustaining jobs within the state's defense industry. This contract supports the readiness and technological advancement of the U.S. Army's artillery capabilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type can lead to cost uncertainty and potential overruns.
Limited competition after exclusion of sources may reduce price competitiveness.
The specific nature of 'COMMUNICATION MODERNIZATION PROJECT SUPPORT' for HIMARS could involve complex integration challenges.
Reliance on a single contractor for specialized support could create vendor lock-in.

Positive Signals

Award to a company with potential expertise in defense systems and solutions.
Long contract duration suggests a commitment to sustained improvement and reliability.
Performance in Alabama may leverage existing regional defense industry infrastructure.

Sector Analysis

The defense industry is characterized by long procurement cycles, high technological complexity, and significant government investment. This contract falls within the broader defense electronics and communication systems sector, which is crucial for maintaining military superiority. The market for such specialized support services is often dominated by a few key players with the necessary security clearances and technical expertise. Benchmarking this spending would require comparing it to other contracts for similar communication modernization efforts within the Department of Defense or other military branches.

Small Business Impact

The data indicates that small business participation (ss: false, sb: false) was not a primary set-aside consideration for this contract. This suggests that the prime contractor, Defense Systems and Solutions, is likely a larger entity. There is no explicit information on subcontracting plans for small businesses. Without this detail, it's difficult to assess the direct impact on the small business ecosystem, though larger prime contracts often have subcontracting requirements that can benefit small businesses.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Army contracting and program management offices. Accountability measures are typically embedded within the Cost Plus Fixed Fee structure through reporting requirements and milestone approvals. Transparency may be limited due to the nature of defense contracts, but contract awards and basic details are publicly available through federal procurement databases. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

HIMARS Program Support
Army Communications Systems
Defense Electronics Modernization
Tactical Communication Networks
DoD IT Modernization Initiatives

Risk Flags

Cost Overrun Risk (CPFF)
Limited Competition Impact
Potential for Scope Creep

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $6.4 million to DEFENSE SYSTEMS AND SOLUTIONS. COMMUNICATION MODERNIZATION PROJECT SUPPORT HIMARS

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 $6.4 million.

What is the period of performance?

Start: 2023-04-13. End: 2027-06-23.

What is the specific nature of the 'COMMUNICATION MODERNIZATION PROJECT SUPPORT' for HIMARS?

The specific nature of the 'COMMUNICATION MODERNIZATION PROJECT SUPPORT' for HIMARS likely involves upgrading or replacing existing communication hardware and software components within the HIMARS platform. This could include enhancing data transmission capabilities, improving network security, integrating new communication technologies (e.g., satellite, encrypted radio), and ensuring interoperability with other battlefield systems. The goal is to ensure that HIMARS units can effectively communicate critical targeting data, operational orders, and situational awareness information in real-time, even in contested electromagnetic environments. The 'COST PLUS FIXED FEE' structure suggests that the exact scope might evolve, requiring ongoing cost tracking and management to ensure the project stays within budget while achieving the modernization objectives.

How does the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' impact the value for taxpayers?

The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' presents a mixed picture for taxpayers. Ideally, full and open competition drives down prices through robust bidding. However, the 'exclusion of sources' implies that not all potential offerors were allowed to compete. If the exclusion was based on legitimate, narrowly defined criteria (e.g., specific technical capabilities, security clearances, or past performance essential for HIMARS support), then the competition among the remaining eligible sources might still yield a reasonable price. Conversely, if the exclusion was overly broad or arbitrary, it could have limited the number of bidders, potentially leading to less aggressive pricing and a higher cost for taxpayers than a truly unrestricted competition might have achieved.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for this type of project?

The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for communication modernization support are cost overruns and a potential lack of contractor incentive to control expenses. In a CPFF arrangement, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. This structure shifts much of the cost risk to the government. If the project scope expands, unforeseen technical challenges arise, or the contractor's cost management is inefficient, the total cost to the government can significantly exceed initial estimates. The fixed fee, while intended to provide profit, does not directly incentivize cost reduction in the same way a fixed-price contract would. Effective government oversight, rigorous cost tracking, and clear definition of allowable costs are crucial to mitigate these risks.

What is the track record of Defense Systems and Solutions in similar defense communication contracts?

Information regarding the specific track record of 'Defense Systems and Solutions' in similar defense communication contracts is not provided in the abbreviated data. To assess their capability and past performance, one would need to consult federal procurement databases (like SAM.gov or FPDS) for details on previous awards, contract performance evaluations (e.g., CPARS reports), and any history of disputes or contract modifications. A positive track record with similar complex communication modernization projects for defense systems would indicate a lower risk for this current contract. Conversely, a history of cost overruns, schedule delays, or performance issues on comparable projects would raise concerns about the contractor's ability to successfully execute this award.

How does this $6.4M award compare to historical spending on HIMARS communication systems?

The provided data does not include historical spending figures for HIMARS communication systems, making a direct comparison difficult. To establish a benchmark, one would need to analyze past contracts awarded for the development, procurement, and sustainment of communication components for the HIMARS platform across different fiscal years. This analysis should consider the scope of work, contract type, and inflation adjustments. A $6.4 million award for modernization support could be considered significant if it represents a substantial upgrade or a new technological integration, or it could be relatively modest if it's part of a larger, ongoing sustainment effort. Understanding the historical context is key to evaluating whether this award represents value for money.

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: $6,438,754

Exercised Options: $6,438,754

Current Obligation: $6,438,754

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