DoD's $24M contract for aircraft landing systems awarded to Defense Systems and Solutions after limited competition

Contract Overview

Contract Amount: $24,070,603 ($24.1M)

Contractor: Defense Systems and Solutions

Awarding Agency: Department of Defense

Start Date: 2024-07-15

End Date: 2028-01-31

Contract Duration: 1,295 days

Daily Burn Rate: $18.6K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: ASSURED AIRSPACE ACCESS SYSTEMS (A3S) INSTRUMENT LANDING SYSTEM (ILS) INTEGRATION.

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35806

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $24.1 million to DEFENSE SYSTEMS AND SOLUTIONS for work described as: ASSURED AIRSPACE ACCESS SYSTEMS (A3S) INSTRUMENT LANDING SYSTEM (ILS) INTEGRATION. Key points: 1. The contract value of $24.07 million for instrument landing systems appears reasonable given the duration and scope. 2. Competition was limited, raising questions about potential price discovery and value for taxpayer dollars. 3. The contract type (Cost Plus Fixed Fee) can lead to cost overruns if not closely monitored. 4. Performance is tied to the Department of the Army, indicating a focus on military aviation readiness. 5. The sector is 'Other Aircraft Parts and Auxiliary Equipment Manufacturing,' a niche but critical area for defense. 6. The contract duration of nearly four years suggests a long-term need for these systems.

Value Assessment

Rating: fair

The contract value of $24.07 million over approximately 3.5 years averages to about $6.88 million annually. Benchmarking this against similar contracts for specialized aviation equipment is challenging without more specific details on the system's capabilities and integration complexity. However, the Cost Plus Fixed Fee (CPFF) contract type introduces inherent risk for cost escalation, which could impact overall value if not managed diligently by the agency.

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, certain sources were excluded, potentially limiting the pool of bidders. The specific reasons for exclusion are not detailed, but this approach can sometimes lead to less competitive pricing compared to truly open competition. The number of bidders is not specified, making it difficult to fully assess the degree of competition.

Taxpayer Impact: Limited competition can mean that taxpayers may not benefit from the lowest possible prices achievable through a broader bidding process. This could result in higher overall spending for the required equipment and services.

Public Impact

The primary beneficiaries are the U.S. Army aviation units requiring enhanced instrument landing capabilities for safe operations. The services delivered include the integration of Instrument Landing Systems (ILS) into aircraft, improving navigation accuracy. The geographic impact is primarily within Alabama, where the contractor is located, but the ultimate use is global for Army operations. Workforce implications include skilled technicians and engineers involved in the manufacturing and integration of specialized aviation components.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type increases risk of cost overruns.
Limited competition may result in suboptimal pricing for taxpayers.
Lack of detail on source exclusion criteria hinders full transparency.
Potential for scope creep in CPFF contracts if not tightly managed.

Positive Signals

Contract awarded to a company specializing in defense systems, suggesting relevant expertise.
Long-term contract duration indicates a sustained need and potential for stable supply.
Focus on critical aviation safety systems (ILS) is a positive for operational readiness.

Sector Analysis

The 'Other Aircraft Parts and Auxiliary Equipment Manufacturing' sector is a specialized segment within the broader aerospace and defense industry. This contract addresses a critical need for advanced navigation and landing systems, which are essential for military aviation safety and operational effectiveness. The market for such specialized components is often characterized by high technical barriers to entry and a limited number of qualified suppliers, particularly for defense applications. Comparable spending benchmarks are difficult to establish without detailed system specifications, but investments in aviation electronics and navigation systems are a significant portion of defense procurement budgets.

Small Business Impact

The contract indicates that small business participation was not a primary set-aside consideration, as 'ss' and 'sb' are false. There is no explicit mention of subcontracting goals for small businesses within the provided data. This suggests that the primary contractor is expected to handle the majority of the work, and the impact on the small business ecosystem may be minimal unless the prime contractor voluntarily engages small businesses for specific components or services.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Army's contracting and program management offices. The Cost Plus Fixed Fee structure necessitates rigorous financial oversight to monitor expenditures against the fixed fee and ensure cost reasonableness. Transparency is dependent on the agency's reporting practices and the availability of contract performance data. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Aircraft Navigation Systems
Avionics Manufacturing
Defense Aviation Procurement
Instrument Landing Systems
Military Aircraft Support Equipment

Risk Flags

Limited Competition
Cost Plus Fixed Fee Contract Type
Potential for Cost Overruns
Lack of Transparency on Source Exclusions

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.1 million to DEFENSE SYSTEMS AND SOLUTIONS. ASSURED AIRSPACE ACCESS SYSTEMS (A3S) INSTRUMENT LANDING SYSTEM (ILS) INTEGRATION.

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 $24.1 million.

What is the period of performance?

Start: 2024-07-15. End: 2028-01-31.

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

Defense Systems and Solutions (DSS) has a history of providing various defense-related products and services. While specific details on their past performance with Instrument Landing Systems (ILS) integration are not provided in this data snippet, their designation as a defense contractor suggests experience with government procurement processes and potentially related technologies. A deeper dive into DSS's contract history with the Department of Defense, including past performance reviews and any reported issues on previous contracts, would be necessary to fully assess their track record for this specific requirement. Examining their portfolio for similar complex integration projects would offer further insight into their capabilities and reliability.

How does the $24.07 million contract value compare to market rates for ILS integration?

Directly comparing the $24.07 million contract value to precise market rates for Instrument Landing System (ILS) integration is challenging without detailed specifications of the systems being integrated and the scope of work. The complexity of integration, the specific aircraft platforms involved, and the required performance standards significantly influence costs. The Cost Plus Fixed Fee (CPFF) nature of this contract also means the final cost could vary. However, given the duration of nearly four years and the specialized nature of military aviation equipment, the annual expenditure of approximately $6.88 million does not appear immediately excessive, but it warrants close monitoring for cost efficiency throughout the contract lifecycle.

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

The primary risk with a Cost Plus Fixed Fee (CPFF) contract, such as this $24.07 million award, is the potential for cost overruns. In a CPFF structure, the contractor is reimbursed for allowable costs plus a predetermined fixed fee representing profit. This incentivizes the contractor to incur costs, as their reimbursement is tied to actual expenses, potentially leading to higher total contract values than anticipated if cost controls are not robust. For specialized equipment like ILS integration, unforeseen technical challenges or scope adjustments can easily drive up costs. Effective oversight by the Department of the Army is crucial to scrutinize incurred costs, ensure efficiency, and prevent unnecessary spending to mitigate this inherent risk.

What does 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' imply for program effectiveness?

The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' designation suggests a competitive process was initiated, but certain potential bidders were deliberately excluded. This implies that the agency identified a need and sought proposals but had specific criteria or reasons (e.g., security, specialized capability, prior performance issues) for narrowing the field before or during the solicitation. While it aims for competition, the exclusion of sources can limit the range of solutions and potentially impact the final price and innovation. Program effectiveness could be influenced if the excluded sources offered unique advantages or more cost-effective solutions. The justification for these exclusions would be key to understanding the full implications.

How has historical spending on aircraft landing systems by the Department of the Army trended?

Historical spending on aircraft landing systems by the Department of the Army, and the broader DoD, has generally trended towards modernization and technological advancement. Investments in navigation and landing aids are critical for maintaining operational readiness and safety across diverse global environments. While specific figures for ILS integration contracts are not readily available without extensive database queries, the Army consistently allocates significant portions of its budget to aviation systems, including upgrades to avionics, communication, and navigation equipment. Factors like evolving threats, technological obsolescence, and the need for interoperability drive continuous investment in these areas, suggesting a sustained demand for such systems.

What are the implications of awarding this contract in Alabama (ST: AL, SN: ALABAMA)?

Awarding this contract to a company located in Alabama (ST: AL, SN: ALABAMA) has several implications. Economically, it signifies direct investment and job creation within the state's defense and manufacturing sectors. It supports the local economy through employment opportunities for skilled labor, such as engineers and technicians, and potentially stimulates related businesses in the supply chain. For the Department of the Army, having a contractor located within the U.S. can sometimes simplify logistics and oversight, although the ultimate deployment of the systems is global. The specific location might also be influenced by existing defense industry infrastructure or workforce availability in the region.

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: $24,070,603

Exercised Options: $24,070,603

Current Obligation: $24,070,603

Subaward Activity

Number of Subawards: 3

Total Subaward Amount: $11,362,469

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