Customs and Border Protection awards $15M for HH-60L aircraft modifications, impacting Alabama's aerospace sector

Contract Overview

Contract Amount: $15,057,351 ($15.1M)

Contractor: Defense Systems and Solutions

Awarding Agency: Department of Defense

Start Date: 2024-01-09

End Date: 2027-10-31

Contract Duration: 1,391 days

Daily Burn Rate: $10.8K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: CUSTOMS & BORDER PROTECTION HH-60L AIRCRAFT 12 MODIFICATIONS

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35806

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $15.1 million to DEFENSE SYSTEMS AND SOLUTIONS for work described as: CUSTOMS & BORDER PROTECTION HH-60L AIRCRAFT 12 MODIFICATIONS Key points: 1. Contract value of $15.06 million for aircraft modifications suggests a significant investment in fleet readiness. 2. The contract type, Cost Plus Fixed Fee, can introduce cost escalation risks if not closely managed. 3. Competition was conducted under 'Full and Open Competition After Exclusion of Sources,' indicating a specific justification for limiting bidders. 4. The award to Defense Systems and Solutions highlights a key contractor in the aerospace support sector. 5. The modifications are for HH-60L aircraft, a critical asset for Customs and Border Protection operations. 6. The contract duration of approximately 3.8 years allows for phased implementation and testing of modifications.

Value Assessment

Rating: fair

The contract value of $15.06 million for 12 aircraft modifications appears reasonable given the specialized nature of military aircraft work. However, without specific details on the scope of modifications, direct comparison to similar contracts is challenging. The Cost Plus Fixed Fee (CPFF) pricing structure introduces inherent risk for cost overruns, as the contractor is reimbursed for actual costs plus a fixed fee. This necessitates robust oversight to ensure value for money and prevent unnecessary expenses.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This designation implies that while the competition was intended to be open, specific circumstances led to the exclusion of certain potential bidders. The exact reasons for this exclusion are not detailed but typically involve proprietary technology, unique capabilities, or prior development efforts. The limited nature of the competition may restrict the range of pricing and innovation compared to a truly open solicitation.

Taxpayer Impact: Taxpayers may face higher costs due to a potentially reduced competitive landscape. The justification for excluding sources needs to be rigorously evaluated to ensure it aligns with the government's objective of obtaining the best value.

Public Impact

Customs and Border Protection (CBP) will benefit from enhanced capabilities and readiness of its HH-60L aircraft fleet. The services delivered include critical modifications to ensure the operational effectiveness and safety of the aircraft. The contract's performance is geographically centered in Alabama, supporting the state's aerospace industry and workforce. This contract will likely sustain or create jobs within the aerospace maintenance and modification sector in Alabama.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type carries inherent risk of cost escalation if not meticulously managed and overseen.
The 'Full and Open Competition After Exclusion of Sources' designation raises questions about the extent of true competition and potential impact on pricing.
Lack of detailed scope of work for modifications makes it difficult to benchmark value-for-money effectively.
The contractor, Defense Systems and Solutions, needs a proven track record with similar complex aircraft modifications for this specific platform.

Positive Signals

Awarding modifications to a critical CBP asset like the HH-60L demonstrates a commitment to operational readiness.
The contract duration allows for a structured and phased approach to implementing the necessary upgrades.
The performance location in Alabama aligns with existing aerospace infrastructure and expertise.

Sector Analysis

The aerospace and defense sector is characterized by high technological complexity, stringent regulatory requirements, and significant government spending. This contract falls within the aircraft parts and auxiliary equipment manufacturing sub-sector. The market for aircraft modifications is competitive, but often specialized, with a few key players possessing the necessary certifications and expertise. Government spending in this area is crucial for maintaining aging fleets and incorporating new technologies, with benchmarks often driven by the specific aircraft type and complexity of the required upgrades.

Small Business Impact

The data indicates that small business participation is not a primary focus for this specific contract, as the 'sb' field is false. There is no explicit small business set-aside mentioned. Subcontracting opportunities for small businesses may exist, but they would depend on the prime contractor's strategy and the nature of the work packages. The overall impact on the small business ecosystem is likely minimal unless significant subcontracting occurs.

Oversight & Accountability

Oversight for this Cost Plus Fixed Fee contract will be critical, likely managed by the Department of the Army on behalf of CBP. Accountability measures will involve rigorous review of incurred costs, progress reports, and adherence to the fixed fee. Transparency will depend on the agency's reporting practices regarding contract performance and expenditures. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

CBP Aviation
Department of Defense Aircraft Maintenance
Helicopter Modification Programs
Aerospace Manufacturing and Repair

Risk Flags

Cost Plus Fixed Fee contract type requires diligent oversight to manage potential cost overruns.
Limited competition due to source exclusion may impact price competitiveness.
Scope of modifications is not detailed, hindering precise value assessment.
Contractor's specific experience with HH-60L modifications needs verification.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $15.1 million to DEFENSE SYSTEMS AND SOLUTIONS. CUSTOMS & BORDER PROTECTION HH-60L AIRCRAFT 12 MODIFICATIONS

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 $15.1 million.

What is the period of performance?

Start: 2024-01-09. End: 2027-10-31.

What is the specific scope of the 12 modifications to the HH-60L aircraft, and how do these modifications enhance operational capabilities?

The provided data does not detail the specific scope of the 12 modifications to the HH-60L aircraft. These modifications are likely aimed at enhancing the aircraft's operational capabilities, which could include upgrades to avionics, communication systems, sensor suites, structural integrity, or mission-specific equipment. For Customs and Border Protection (CBP), such enhancements could translate to improved surveillance, interdiction, search and rescue, or transport capabilities. A thorough understanding of the modification details is essential for assessing their true value and impact on CBP's mission effectiveness. Without this information, it is difficult to determine if the $15.06 million award represents a fair price for the anticipated improvements.

How does the Cost Plus Fixed Fee (CPFF) pricing structure for this contract compare to industry standards for similar aircraft modification projects?

The Cost Plus Fixed Fee (CPFF) structure is common in complex defense and aerospace projects where the scope of work can be difficult to define precisely upfront, or where innovation and adaptation are expected during performance. For aircraft modifications, especially those involving older platforms like the HH-60L, unforeseen issues can arise, making CPFF a suitable, albeit riskier, choice. Industry standards often favor fixed-price contracts for well-defined scopes. However, when significant unknowns exist, CPFF allows the contractor to be reimbursed for actual costs plus a negotiated fixed fee, incentivizing completion. The key to value-for-money with CPFF lies in robust government oversight to control costs and ensure the fixed fee is reasonable for the effort involved. Benchmarking the fixed fee against similar projects is crucial for assessing fairness.

What were the specific justifications for excluding sources in this 'Full and Open Competition After Exclusion of Sources' award, and what was the competitive landscape?

The designation 'Full and Open Competition After Exclusion of Sources' indicates that the solicitation was initially intended to be open to all responsible sources, but specific criteria or circumstances led to the exclusion of certain potential bidders. Common justifications include proprietary data rights, unique capabilities developed by a specific contractor, or prior substantial investment in research and development by a particular firm that would make their offering significantly superior or more cost-effective. Without further details from the contract award notice or agency documentation, the precise reasons for exclusion remain unclear. This limited competition potentially reduces price pressure and may result in a higher overall cost to the government compared to a scenario with broader participation.

What is the track record of Defense Systems and Solutions in performing similar HH-60L aircraft modifications or complex aerospace support contracts?

Information regarding the specific track record of Defense Systems and Solutions (DSS) in performing HH-60L aircraft modifications is not detailed in the provided data. To assess the risk and value of this contract, a review of DSS's past performance is essential. This would include examining their experience with similar helicopter platforms, the complexity of modifications undertaken, their history of meeting schedule and budget requirements, and any past performance issues or commendations. Their success in previous contracts, particularly those involving Cost Plus Fixed Fee structures and similar technical challenges, would provide critical insights into their capability to successfully execute this $15.06 million award for CBP.

How does the $15.06 million contract value for 12 modifications compare to historical spending on HH-60L aircraft sustainment and upgrades by CBP or other agencies?

Comparing the $15.06 million contract value for 12 HH-60L modifications to historical spending requires access to broader contract databases and historical financial records. The average cost per modification would be approximately $1.25 million ($15.06M / 12). This figure needs to be contextualized by the specific nature of the modifications. If these are extensive avionics or structural upgrades, this cost might be within a reasonable range. However, without knowing the scope, it's difficult to establish a definitive benchmark. Historical data on similar modification efforts for the HH-60L or comparable military helicopters by agencies like the Department of Defense or other law enforcement aviation units would be necessary to determine if this award represents an increase, decrease, or alignment with past spending trends.

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: $15,057,351

Exercised Options: $15,057,351

Current Obligation: $15,057,351

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