DoD's F-35 JSF OT&E contract awarded to American Systems Corp. for $36.4M

Contract Overview

Contract Amount: $36,392,419 ($36.4M)

Contractor: American Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2016-06-15

End Date: 2021-12-15

Contract Duration: 2,009 days

Daily Burn Rate: $18.1K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: IGF::CT::IGF F-35 JOINT STRIKE FIGHTER (JSF) AIR SYSTEM OPERATIONAL TEST AND EVALUATION (OT&E)

Place of Performance

Location: EDWARDS, KERN County, CALIFORNIA, 93523

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $36.4 million to AMERICAN SYSTEMS CORPORATION for work described as: IGF::CT::IGF F-35 JOINT STRIKE FIGHTER (JSF) AIR SYSTEM OPERATIONAL TEST AND EVALUATION (OT&E) Key points: 1. Contract focuses on critical operational test and evaluation for the F-35 program. 2. Awarded via full and open competition, suggesting a competitive bidding process. 3. Duration of the contract spans over 5 years, indicating a long-term need. 4. The contract type is Cost Plus Fixed Fee, which can present cost control challenges. 5. The North American Industry Classification System (NAICS) code points to R&D services. 6. The contract was awarded as a delivery order under a larger contract vehicle. 7. The prime contractor, American Systems Corporation, has a role in supporting complex defense systems.

Value Assessment

Rating: fair

Benchmarking the value of this specific $36.4 million delivery order is challenging without access to the parent contract details or comparable OT&E services for similar complex weapon systems. The Cost Plus Fixed Fee (CPFF) contract type, while allowing flexibility, can lead to costs exceeding initial estimates if not managed tightly. The fixed fee component provides some cost certainty for the contractor's profit, but the overall cost to the government is subject to the actual costs incurred. Further analysis would require comparing the scope of work and deliverables against industry standards for F-35 program testing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, indicating that all responsible sources were permitted to submit bids. The specific number of bidders is not provided, but this approach generally fosters a competitive environment, which can lead to better pricing and innovation. The use of a delivery order suggests it was placed against an existing contract vehicle that itself was competed.

Taxpayer Impact: A full and open competition is generally favorable for taxpayers as it maximizes the potential for competitive pricing and ensures that the government is not unduly constrained in its sourcing options.

Public Impact

The primary beneficiaries are the Department of Defense and the U.S. Air Force, who receive essential testing and evaluation services for the F-35 program. The services delivered are critical for ensuring the operational readiness and effectiveness of the F-35 aircraft before full deployment. The geographic impact is primarily within the United States, likely at test facilities and operational bases where the F-35 is being evaluated. Workforce implications include specialized technical and engineering roles required for complex aerospace testing and analysis.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can lead to cost overruns if not rigorously managed.
Lack of specific bidder count in the provided data makes it difficult to fully assess the intensity of competition.
The duration of the contract (over 5 years) requires sustained oversight to ensure continued value and performance.
Operational Test and Evaluation (OT&E) for a program as complex as the F-35 carries inherent technical and schedule risks.

Positive Signals

Awarded through full and open competition, indicating a broad search for qualified contractors.
The contract supports a critical national defense program (F-35), aligning with strategic priorities.
American Systems Corporation's involvement suggests they possess relevant expertise in defense systems support.
The delivery order mechanism implies a pre-competed contract vehicle was utilized, potentially streamlining the acquisition process.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences, as indicated by NAICS code 541712. The defense industry, a significant segment of this sector, heavily invests in R&D for advanced weapon systems like the F-35. Spending in this area is crucial for maintaining technological superiority. Comparable spending benchmarks would involve analyzing other OT&E contracts for major defense platforms, which often represent substantial investments due to the complexity and criticality of the systems being tested.

Small Business Impact

The provided data indicates this contract was awarded under full and open competition and does not specify any small business set-aside provisions (ss: false, sb: false). Therefore, there is no direct analysis of small business set-aside impact. However, the prime contractor, American Systems Corporation, may engage small businesses as subcontractors. Without subcontracting plan details, the specific impact on the small business ecosystem remains unclear, though large prime contracts often include subcontracting opportunities.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting activity within the Department of the Air Force, a component of the Department of Defense. Accountability measures would include performance reviews, milestone tracking, and adherence to the Cost Plus Fixed Fee terms. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected or identified during the contract's performance or closeout.

Related Government Programs

F-35 Joint Strike Fighter Program
Department of Defense Research and Development Contracts
Operational Test and Evaluation Services
Aerospace Engineering and Support Services
Defense Acquisition Programs

Risk Flags

Cost Overrun Risk (CPFF Contract Type)
Performance Measurement Challenges (Complex R&D)
Scope Creep Potential (Long-term OT&E)

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $36.4 million to AMERICAN SYSTEMS CORPORATION. IGF::CT::IGF F-35 JOINT STRIKE FIGHTER (JSF) AIR SYSTEM OPERATIONAL TEST AND EVALUATION (OT&E)

Who is the contractor on this award?

The obligated recipient is AMERICAN SYSTEMS CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $36.4 million.

What is the period of performance?

Start: 2016-06-15. End: 2021-12-15.

What is the track record of American Systems Corporation in supporting large-scale defense testing and evaluation programs?

American Systems Corporation has a history of providing a range of technical, professional, and operational support services to government agencies, including the Department of Defense. Their expertise often lies in areas such as systems engineering, test and evaluation, training, and IT support. For large-scale defense programs like the F-35, their involvement typically centers on providing specialized personnel and technical services to assist in the complex testing phases. While specific details on their performance on this particular F-35 OT&E contract require deeper investigation into performance reports and historical data, their established presence in the defense sector suggests a capacity to handle such demanding requirements. Evaluating their broader track record involves reviewing past performance evaluations and contract awards across similar programs to gauge reliability and effectiveness.

How does the $36.4 million value of this delivery order compare to other F-35 program testing contracts?

The $36.4 million value of this specific delivery order for F-35 Joint Strike Fighter (JSF) Air System Operational Test and Evaluation (OT&E) represents a segment of the overall testing budget for the program. The F-35 is one of the most expensive defense programs in history, with total lifecycle costs projected in the trillions. OT&E is a critical and often costly phase. Without access to the parent contract or a comprehensive database of all F-35 testing-related awards, a direct comparison is difficult. However, given the complexity and scale of the F-35, $36.4 million for over five years of specialized OT&E services appears to be a reasonable allocation for a specific task order, likely covering personnel, equipment, and analysis related to defined test objectives. Broader comparisons would involve looking at the total annual spending on F-35 testing and evaluation across all contracts.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for R&D services like this?

The primary risk associated with a Cost Plus Fixed Fee (CPFF) contract, particularly for Research and Development (R&D) services, is the potential for cost overruns. In a CPFF structure, the government agrees to pay the contractor's actual allowable costs plus a fixed fee representing profit. While the fee is fixed, the total cost to the government is not. If the contractor incurs higher costs than anticipated due to unforeseen technical challenges, scope creep, or inefficient performance, the government bears the brunt of these increased expenses. For R&D, where outcomes can be inherently uncertain, this risk is amplified. Effective oversight, stringent cost controls, and clear definition of allowable costs are crucial to mitigate these risks and ensure the government receives value for its investment. The fixed fee provides an incentive for the contractor to control costs to some extent, as their profit margin is based on a percentage of costs, but the primary cost risk remains with the government.

How has federal spending on F-35 program support and testing evolved over the years?

Federal spending on F-35 program support and testing has been substantial and has evolved significantly since the program's inception. Initially, spending focused on development and early testing. As the program matured through low-rate initial production and into full-rate production, spending shifted towards sustainment, operational testing, training, and modernization. The total annual obligations for the F-35 program, encompassing procurement, research, development, test, and evaluation (RDT&E), and operations and maintenance (O&M), have consistently been in the tens of billions of dollars annually. This specific contract, valued at $36.4 million over approximately five years, represents a portion of the RDT&E budget allocated for operational test and evaluation. Historical data shows a trend of increasing sustainment costs alongside continued RDT&E investments for upgrades and new capabilities.

What is the significance of the NAICS code 541712 (Research and Development in Physical, Engineering, and Life Sciences) for this contract?

The assignment of NAICS code 541712, 'Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology),' to this contract signifies that the core service being procured involves systematic study and investigation in these scientific fields. For the F-35 JSF OT&E contract, this means the work performed by American Systems Corporation is focused on advancing knowledge and understanding related to the physical and engineering aspects of the F-35 aircraft system. This includes activities such as designing experiments, conducting analyses, developing methodologies, and interpreting results pertaining to the aircraft's performance, capabilities, and limitations in operational environments. It distinguishes the contract from purely manufacturing, maintenance, or basic IT services, highlighting its emphasis on innovation, discovery, and the application of scientific principles to solve complex technical challenges inherent in testing a sophisticated weapon system.

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: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: FA704615R0001

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 14151 PARK MEADOW DR STE 500, CHANTILLY, VA, 20151

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $47,235,342

Exercised Options: $47,235,342

Current Obligation: $36,392,419

Subaward Activity

Number of Subawards: 22

Total Subaward Amount: $3,212,663

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA704616D0001

IDV Type: IDC

Timeline