DoD's $26.6M contract for aviation support operations awarded to System Studies & Simulation, Inc. shows mixed value

Contract Overview

Contract Amount: $26,645,638 ($26.6M)

Contractor: System Studies & Simulation, Inc.

Awarding Agency: Department of Defense

Start Date: 2008-01-02

End Date: 2011-10-12

Contract Duration: 1,379 days

Daily Burn Rate: $19.3K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: COST PLUS AWARD FEE

Sector: R&D

Official Description: 21ST CAVALRY BRIGADE, AVIATION SUPPORT OPERATIONS

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35806

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $26.6 million to SYSTEM STUDIES & SIMULATION, INC. for work described as: 21ST CAVALRY BRIGADE, AVIATION SUPPORT OPERATIONS Key points: 1. The contract's value proposition appears fair, with a cost-plus award fee structure that incentivizes performance. 2. Competition was robust, indicating potential for competitive pricing, though the final award fee could fluctuate. 3. Risk indicators are moderate, with the cost-plus structure requiring careful oversight to manage potential cost overruns. 4. Performance context suggests a focus on research and development for specialized aviation support. 5. The contract falls within the R&D sector, specifically focusing on physical and engineering sciences.

Value Assessment

Rating: fair

The contract utilized a Cost Plus Award Fee (CPAF) structure, which allows for contractor reimbursement of allowable costs plus an award fee based on performance. While this can incentivize good performance, it also requires diligent oversight to ensure costs remain reasonable and the award fee is justified. Benchmarking against similar R&D contracts for specialized aviation support would be necessary for a definitive value assessment, but the CPAF structure itself suggests a moderate approach to value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating a competitive process was initiated, but specific sources were excluded. The presence of two bidders suggests some level of competition, which is generally positive for price discovery. However, the exclusion of sources warrants further investigation to understand its impact on the breadth of competition and potential pricing.

Taxpayer Impact: A competitive process, even with exclusions, generally benefits taxpayers by encouraging multiple firms to bid and potentially offer lower prices. The specific impact depends on the number of bidders and the reasons for source exclusion.

Public Impact

The primary beneficiaries are the U.S. Army's aviation units requiring specialized support operations. Services delivered likely include research, development, simulation, and analysis related to aviation systems. The geographic impact is primarily within Alabama, where the contractor is located, but the services support national defense. Workforce implications include specialized engineering, research, and technical roles within the contractor's organization.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost creep due to the Cost Plus Award Fee structure if not closely monitored.
The exclusion of sources in the competition process could limit the full benefit of open competition.
The duration of the contract (over 3 years) necessitates ongoing performance monitoring.

Positive Signals

Awarded under full and open competition, suggesting a structured procurement process.
The CPAF structure incentivizes contractor performance and efficiency.
The contract supports critical aviation research and development for the Department of Defense.

Sector Analysis

This contract falls within the Research and Development sector, specifically NAICS code 541712 (Research and Development in the Physical, Engineering, and Life Sciences). This sector is characterized by innovation and specialized expertise. Comparable spending benchmarks would involve looking at other DoD contracts for similar R&D services related to aviation systems, which can vary significantly based on complexity and scope.

Small Business Impact

There is no indication that this contract included small business set-asides, nor is there information suggesting significant subcontracting opportunities for small businesses. The focus appears to be on specialized R&D capabilities likely held by larger, established firms in the sector.

Oversight & Accountability

Oversight would typically be managed by the contracting officer and program managers within the Department of the Army. Accountability measures are embedded in the CPAF structure, linking payment to performance. Transparency is generally maintained through contract awards databases, but detailed performance metrics and cost breakdowns may not be publicly available.

Related Government Programs

Department of the Army Aviation Programs
DoD Research and Development Contracts
Aviation Systems Engineering Support
Simulation and Modeling Services

Risk Flags

Potential for cost overruns in CPAF contracts.
Limited competition due to source exclusion.
Need for robust performance monitoring.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.6 million to SYSTEM STUDIES & SIMULATION, INC.. 21ST CAVALRY BRIGADE, AVIATION SUPPORT OPERATIONS

Who is the contractor on this award?

The obligated recipient is SYSTEM STUDIES & SIMULATION, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $26.6 million.

What is the period of performance?

Start: 2008-01-02. End: 2011-10-12.

What is the track record of System Studies & Simulation, Inc. with Department of Defense contracts?

System Studies & Simulation, Inc. has a history of performing contracts with the Department of Defense, primarily in research and development and engineering services. Their portfolio often includes work related to simulation, modeling, and analysis for various defense applications. Examining their past performance on similar Cost Plus Award Fee contracts would provide insight into their ability to manage costs and achieve performance objectives. A review of contract award data and performance reviews, where available, would be crucial to assess their reliability and expertise in delivering on complex R&D requirements for the DoD.

How does the value of this contract compare to similar aviation support R&D contracts?

Directly comparing the $26.6 million value requires identifying contracts with identical scope, duration, and complexity within the aviation support R&D domain. However, given the CPAF structure and the specialized nature of R&D, this contract's value appears within a reasonable range for such services. Contracts for basic research or less specialized engineering might be lower, while those involving cutting-edge technology development or extensive system integration could be significantly higher. The key is to benchmark against contracts that share similar technical challenges and performance expectations.

What are the primary risks associated with this Cost Plus Award Fee contract?

The primary risks with a Cost Plus Award Fee (CPAF) contract like this one revolve around cost control and performance measurement. For the government, the risk is that the contractor may not manage costs efficiently, leading to higher-than-expected expenditures, especially if the award fee criteria are not stringent or well-defined. There's also a risk that the contractor might prioritize achieving the award fee over other critical aspects of performance or innovation. For the contractor, the risk lies in not meeting the performance targets required to earn the full award fee, thus reducing their overall profit margin. Effective oversight and clear, objective performance metrics are crucial to mitigate these risks.

How effective is the 'Full and Open Competition After Exclusion of Sources' in ensuring competitive pricing?

The effectiveness of 'Full and Open Competition After Exclusion of Sources' in ensuring competitive pricing is variable. While it starts with the intent of broad competition, the subsequent exclusion of specific sources can limit the number of potential bidders and the diversity of approaches. If the excluded sources were significant competitors, their absence could reduce the pressure on the remaining bidders to offer the most competitive prices. Conversely, if the exclusions were based on specific technical requirements or security concerns that only a few entities could meet, the remaining competition might still be robust enough to yield fair pricing. A thorough analysis would require understanding the rationale behind the exclusions and the market dynamics among the remaining potential bidders.

What is the historical spending trend for aviation support R&D within the Department of the Army?

Historical spending trends for aviation support R&D within the Department of the Army are generally substantial, reflecting the critical role of air power and the continuous need for technological advancement. This spending fluctuates based on strategic priorities, technological breakthroughs, and budget allocations. Over the years, the Army has invested heavily in areas such as unmanned aerial systems (UAS), advanced avionics, simulation and training technologies, and improved aircraft survivability. Analyzing specific budget lines for aviation R&D over the past decade would reveal trends in investment levels, shifts in focus areas (e.g., from manned to unmanned platforms), and the overall commitment to innovation in this domain.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology)

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: W9113M07R0006

Offers Received: 2

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Address: 615 DISCOVERY DR NW, HUNTSVILLE, AL, 35806

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Woman Owned Business

Financial Breakdown

Contract Ceiling: $27,864,391

Exercised Options: $27,864,391

Current Obligation: $26,645,638

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W9113M08D0002

IDV Type: IDC

Timeline