DoD awards $10.3M for Electronic Systems Test Set modernization, with a 900-day performance period

Contract Overview

Contract Amount: $10,299,475 ($10.3M)

Contractor: Defense Systems and Solutions

Awarding Agency: Department of Defense

Start Date: 2024-09-11

End Date: 2027-02-28

Contract Duration: 900 days

Daily Burn Rate: $11.4K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: ELECTRONIC SYSTEMS TEST SET (ESTS) MODERNIZATION.

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35808

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $10.3 million to DEFENSE SYSTEMS AND SOLUTIONS for work described as: ELECTRONIC SYSTEMS TEST SET (ESTS) MODERNIZATION. Key points: 1. The contract aims to modernize critical electronic systems testing capabilities. 2. Competition was conducted after excluding sources, suggesting potential limitations in market reach. 3. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. 4. Performance is expected over 900 days, indicating a significant, long-term project. 5. The awardee, Defense Systems and Solutions, will deliver this modernization for the Department of the Army. 6. The North American Industry Classification System (NAICS) code 336413 points to specialized aircraft parts manufacturing, potentially indicating the end-use application of the test sets.

Value Assessment

Rating: fair

Benchmarking the value of this $10.3 million contract is challenging without specific details on the Electronic Systems Test Set (ESTS) modernization scope. The Cost Plus Fixed Fee (CPFF) contract type introduces inherent risk for cost control, as the government pays actual costs plus a fixed fee. While the fee provides an incentive for the contractor to control costs, it doesn't guarantee optimal value compared to fixed-price contracts. Further analysis would require understanding the specific deliverables, the complexity of the modernization, and comparable modernization projects for similar test equipment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES.' This procurement method indicates that while competition was sought, certain sources were excluded from the outset. The specific reasons for exclusion are not provided, but this approach typically limits the pool of potential bidders compared to unrestricted full and open competition. The number of bidders is not specified, making it difficult to fully assess the intensity of the competition and its impact on price discovery.

Taxpayer Impact: The exclusion of sources may have limited the potential for the most competitive pricing, potentially resulting in higher costs for taxpayers than if a broader range of qualified contractors had been allowed to bid.

Public Impact

The primary beneficiaries are the Department of the Army, which will receive modernized electronic systems test sets. The services delivered will enhance the capability to test and maintain critical electronic systems, likely for aviation or defense platforms. The geographic impact is primarily within the Department of Defense's operational and maintenance infrastructure. Workforce implications may include specialized technical roles for the development, testing, and integration of the modernized test sets.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type introduces potential for cost overruns if not rigorously managed.
The 'exclusion of sources' procurement method may have limited competitive pricing opportunities.
Lack of specific details on modernization scope makes value assessment difficult.
The contract duration of 900 days requires sustained oversight to ensure timely and effective delivery.

Positive Signals

The contract addresses a critical need for modernization of electronic systems test equipment.
The awardee, Defense Systems and Solutions, is tasked with delivering this important capability.
The project has a defined performance period, allowing for structured progress monitoring.

Sector Analysis

The defense electronics sector is characterized by high technological complexity, stringent performance requirements, and significant government investment. Companies operating in this space often specialize in niche areas such as testing, simulation, and maintenance of sophisticated electronic systems. The market size for defense electronics is substantial, driven by ongoing modernization efforts and the need to maintain readiness across various military branches. This contract for Electronic Systems Test Set (ESTS) modernization fits within this sector by addressing the need for advanced testing capabilities, which are crucial for ensuring the reliability and effectiveness of defense platforms. Comparable spending benchmarks would typically involve other contracts for specialized test equipment, simulation systems, or maintenance support for complex defense hardware.

Small Business Impact

This contract does not appear to have a small business set-aside (ss=false, sb=false). Therefore, there are no direct subcontracting implications or specific benefits for small businesses mandated by this award. The primary contractor, Defense Systems and Solutions, will likely manage the subcontracting opportunities based on its own needs and capabilities, rather than through specific set-aside requirements for this particular contract.

Oversight & Accountability

Oversight for this contract will be managed by the Department of the Army, likely through contracting officers and program managers responsible for the Electronic Systems Test Set (ESTS) modernization. Accountability measures will be tied to the Cost Plus Fixed Fee (CPFF) structure, requiring detailed cost reporting and performance metrics. Transparency will depend on the Army's reporting practices regarding contract performance and expenditures. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected or identified during the contract's lifecycle.

Related Government Programs

Defense Logistics Agency (DLA) Test Equipment Programs
Army Aviation and Missile Command (AMCOM) Logistics Support
Naval Air Systems Command (NAVAIR) Test and Evaluation
Air Force Test and Evaluation Command

Risk Flags

Limited competition due to source exclusion.
Cost Plus Fixed Fee contract type carries inherent cost overrun risk.
Potential for technological obsolescence over the 900-day performance period.
Lack of detailed public information on specific modernization scope and deliverables.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $10.3 million to DEFENSE SYSTEMS AND SOLUTIONS. ELECTRONIC SYSTEMS TEST SET (ESTS) MODERNIZATION.

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 $10.3 million.

What is the period of performance?

Start: 2024-09-11. End: 2027-02-28.

What specific electronic systems will these test sets be used to evaluate, and what is the criticality of these systems to Army operations?

The provided data does not specify the exact electronic systems that the Electronic Systems Test Set (ESTS) modernization will support. However, given the NAICS code 336413 (Other Aircraft Parts and Auxiliary Equipment Manufacturing) and the awarding agency being the Department of the Army, it is highly probable that these test sets are intended for use with aviation-related electronic systems. This could include avionics, radar systems, communication equipment, or weapon control systems found on Army aircraft such as helicopters (e.g., Black Hawks, Apaches) or unmanned aerial vehicles (UAVs). The criticality of these systems to Army operations is likely very high, as modern military aviation relies heavily on sophisticated electronics for navigation, targeting, communication, and overall mission effectiveness. Failures in these electronic systems, or inadequate testing, could compromise aircraft safety, mission success, and personnel well-being.

How does the Cost Plus Fixed Fee (CPFF) contract type compare to other potential contract types for this type of modernization, and what are the associated risks and benefits?

The Cost Plus Fixed Fee (CPFF) contract type is often used when the scope of work is not precisely defined or when there is significant uncertainty in the cost of performance, which can be the case in complex modernization efforts. Under CPFF, the contractor is reimbursed for all allowable costs incurred plus a predetermined fixed fee representing profit. Compared to fixed-price contracts (like Firm-Fixed Price), CPFF offers greater flexibility to adapt to evolving requirements and unforeseen technical challenges. However, it shifts much of the cost risk to the government, as the final price is not capped. The primary benefit for the contractor is reduced financial risk. For the government, the benefit lies in acquiring complex or uncertain services, but the risk is potential cost overruns if the contractor's costs escalate beyond initial estimates. Effective oversight, detailed cost tracking, and clear performance metrics are crucial to mitigate these risks and ensure value for money.

What does 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' imply about the competitive landscape and potential impact on pricing?

'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' is a specific procurement method that allows for competition among all responsible sources, but with certain pre-identified sources excluded. This exclusion is typically based on specific criteria, such as unique capabilities, prior performance on related systems, or national security considerations. While it aims to ensure competition, the exclusion of certain potential bidders inherently limits the competitive pool. This reduced competition can potentially lead to less aggressive pricing compared to unrestricted full and open competition where all qualified vendors can participate. The impact on pricing depends heavily on the number of bidders remaining after exclusions and the nature of the excluded sources. If only a few sources remain, or if the excluded sources were major competitors, taxpayers might face higher costs.

What is the typical cost range for modernizing electronic test sets in the defense sector, and how does this $10.3 million award compare?

Determining a precise 'typical' cost range for modernizing electronic test sets is challenging due to the wide variability in the complexity, scope, and specific technologies involved. Costs can range from hundreds of thousands to tens of millions of dollars, depending on factors such as the age and sophistication of the existing equipment, the desired upgrades (e.g., software, hardware, calibration), the number of units to be modernized, and the specific performance requirements. A $10.3 million award for a modernization effort over 900 days (approximately 2.5 years) suggests a moderately complex project. Without detailed specifications of the ESTS modernization, it's difficult to definitively benchmark this award. However, it falls within a plausible range for significant upgrades to specialized defense testing equipment, especially considering the potential for advanced capabilities and integration requirements.

What are the potential risks associated with a 900-day performance period for this contract, and what oversight mechanisms are in place?

A 900-day (approximately 2.5 years) performance period for the ESTS modernization presents several potential risks. Firstly, technological obsolescence: the technology landscape can change rapidly, and the test sets being modernized might become outdated before the project is even completed, or shortly thereafter. Secondly, scope creep: longer contracts are more susceptible to changes in requirements or additions to the scope of work, which can lead to cost increases and schedule delays if not managed tightly. Thirdly, contractor performance degradation: maintaining consistent high performance over an extended period can be challenging. Oversight mechanisms are crucial to mitigate these risks. The Department of the Army will likely employ program managers, contracting officers, and quality assurance representatives to monitor progress, review deliverables, manage changes, and ensure adherence to the contract terms. Regular progress reports, milestone reviews, and potentially site visits would be standard oversight practices.

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: $11,142,685

Exercised Options: $10,299,475

Current Obligation: $10,299,475

Subaward Activity

Number of Subawards: 8

Total Subaward Amount: $3,390,692

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