Department of Defense awards $1.9M contract for MV-22 Osprey storage and maintenance

Contract Overview

Contract Amount: $18,960,588 ($19.0M)

Contractor: Defense Systems and Solutions

Awarding Agency: Department of Defense

Start Date: 2024-03-21

End Date: 2026-09-30

Contract Duration: 923 days

Daily Burn Rate: $20.5K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: MV-22 STORAGE AND MAINTENANCE.

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35806

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $19.0 million to DEFENSE SYSTEMS AND SOLUTIONS for work described as: MV-22 STORAGE AND MAINTENANCE. Key points: 1. Contract focuses on essential support services for a critical military aircraft. 2. Competition was conducted after exclusion of sources, suggesting specific capabilities were required. 3. The contract duration of over two years indicates a need for sustained support. 4. Awardee, Defense Systems and Solutions, likely possesses specialized knowledge for this aircraft. 5. The contract type (Cost Plus Fixed Fee) suggests potential for cost overruns if not closely managed. 6. Geographic location in Alabama may indicate proximity to operational bases or maintenance facilities.

Value Assessment

Rating: fair

The contract value of $1.9 million for storage and maintenance of MV-22 Ospreys over approximately two years appears reasonable given the specialized nature of the aircraft. However, without specific details on the scope of services (e.g., number of aircraft, types of maintenance), a direct comparison to similar contracts is difficult. The Cost Plus Fixed Fee (CPFF) contract type introduces a degree of risk, as costs can escalate beyond initial estimates if not rigorously monitored. Benchmarking value would require detailed service level agreements and historical cost data for MV-22 maintenance.

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 broad, specific criteria or circumstances led to the exclusion of certain potential bidders. The exact reasons for exclusion are not detailed, but it suggests that only a limited number of contractors met the stringent requirements for this specialized service. This limited competition may result in less aggressive pricing compared to a truly full and open competition.

Taxpayer Impact: Taxpayers may not benefit from the most competitive pricing due to the limited nature of the competition. The government may have paid a premium to secure the necessary specialized services.

Public Impact

The U.S. Department of the Army benefits from the continued operational readiness of the MV-22 Osprey fleet. Services include storage and maintenance, ensuring the aircraft are in optimal condition for deployment. The contract's impact is primarily within the defense sector, supporting military aviation capabilities. Workforce implications are likely concentrated within specialized aviation maintenance and logistics roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type can lead to cost overruns if not managed effectively.
Limited competition may result in higher prices than a fully open bidding process.
Specific details on maintenance scope are not provided, making value assessment challenging.

Positive Signals

Contract ensures continued support for a critical and complex military aircraft.
Awardee likely possesses specialized expertise required for MV-22 maintenance.
Contract duration suggests a stable and predictable support environment.

Sector Analysis

The aerospace and defense sector is characterized by high technological complexity and stringent regulatory requirements. Contracts for specialized aircraft maintenance, like that for the MV-22 Osprey, are typically awarded to firms with proven expertise and security clearances. The market for such services is often concentrated among a few key players due to the unique capabilities needed. This contract fits within the broader category of aircraft parts and auxiliary equipment manufacturing and maintenance, a significant segment of the defense industrial base.

Small Business Impact

This contract does not appear to have a small business set-aside (ss=false, sb=false). Given the specialized nature of MV-22 Osprey maintenance, it is unlikely that small businesses would be primary awardees unless they are subcontractors to a larger prime contractor. The contract's structure does not explicitly mention subcontracting goals for small businesses, which could limit their participation and the overall benefit to the small business ecosystem in this specialized niche.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Army's contracting and program management offices. Accountability measures are inherent in the Cost Plus Fixed Fee structure, requiring detailed cost reporting and justification. Transparency may be limited due to the 'exclusion of sources' competition, with less public information available compared to full and open competitions. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

MV-22 Osprey Operations and Support
Defense Aviation Maintenance Services
Aircraft Component Manufacturing
Military Logistics and Sustainment

Risk Flags

Limited competition may lead to higher costs.
CPFF contract type requires robust government oversight to manage costs.
Scope of services not fully detailed, hindering precise value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.0 million to DEFENSE SYSTEMS AND SOLUTIONS. MV-22 STORAGE AND MAINTENANCE.

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 $19.0 million.

What is the period of performance?

Start: 2024-03-21. End: 2026-09-30.

What is the specific scope of 'storage and maintenance' services covered under this contract?

The provided data does not detail the specific scope of 'storage and maintenance' services. This could range from basic preservation and environmental control for stored aircraft to comprehensive scheduled and unscheduled maintenance, component repair, and logistical support. Understanding the exact services is crucial for accurately assessing the contract's value, comparing it to benchmarks, and evaluating the contractor's performance. Without this information, the $1.9 million award is a broad figure for an undefined set of tasks.

Why was the competition conducted 'after exclusion of sources,' and what does this imply for pricing?

The 'Full and Open Competition After Exclusion of Sources' designation suggests that the government initially intended a broad competition but subsequently excluded certain potential offerors based on specific criteria. This could be due to unique technical requirements, proprietary technology, or past performance issues with some firms. While it aims for broad participation, the exclusion narrows the field, potentially leading to less competitive pricing than a truly open bid. The government likely determined that only a limited number of contractors possessed the necessary qualifications, potentially resulting in a higher price point than if all eligible sources could compete freely.

How does the Cost Plus Fixed Fee (CPFF) contract type impact cost control and potential for overruns?

The CPFF contract type means the contractor is reimbursed for allowable costs plus a fixed fee representing profit. While it allows for flexibility when project scope is uncertain, it places a significant burden on the government to meticulously monitor costs. There is an inherent risk of cost overruns if the contractor's actual costs exceed estimates, as the government is obligated to cover these. Effective oversight, detailed cost accounting, and clear performance metrics are essential to mitigate these risks and ensure the government receives good value. The fixed fee provides the contractor with an incentive to control costs to some extent, but the primary control mechanism lies with government oversight.

What is the track record of Defense Systems and Solutions in supporting complex military aircraft like the MV-22 Osprey?

Information regarding Defense Systems and Solutions' specific track record with the MV-22 Osprey is not provided in the data. To assess this aspect, further research into the company's past performance on similar Department of Defense contracts, particularly those involving complex aviation systems, would be necessary. Key indicators would include their history of on-time delivery, adherence to budget, quality of work, and any past performance reviews or awards. A strong track record would increase confidence in their ability to successfully execute this contract.

Are there comparable contracts for MV-22 Osprey maintenance or storage that can serve as a benchmark for this award?

Without access to a comprehensive database of federal contracts and their detailed scopes of work, it is difficult to identify direct, comparable benchmarks for MV-22 Osprey storage and maintenance. The unique nature of this tiltrotor aircraft means that maintenance requirements are highly specialized. However, general benchmarks for complex aircraft maintenance contracts within the Department of Defense could provide a rough comparison. Factors like contract duration, total value, and the specific services rendered (e.g., depot-level maintenance vs. line maintenance) are critical for meaningful comparison. The limited competition aspect also complicates direct benchmarking.

What are the potential risks associated with the geographic location (Alabama) for this contract?

The geographic location in Alabama (AL) for this contract is unlikely to pose significant risks in itself, but it may indicate proximity to key operational bases or maintenance facilities for the MV-22 Osprey fleet, potentially streamlining logistics and reducing transit times. Potential risks could arise if the location experiences natural disasters, labor shortages in specialized aviation fields, or if transportation infrastructure is inadequate. However, these are general risks applicable to many contracts and would need specific context related to Alabama's defense industrial base to be fully assessed. The primary benefit is likely logistical efficiency.

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: $24,269,949

Exercised Options: $18,960,588

Current Obligation: $18,960,588

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