DoD's $23.3M contract for system-wide maintenance awarded to Dynetics, Inc. for 2 years

Contract Overview

Contract Amount: $23,340,565 ($23.3M)

Contractor: Dynetics, Inc.

Awarding Agency: Department of Defense

Start Date: 2018-02-01

End Date: 2020-01-31

Contract Duration: 729 days

Daily Burn Rate: $32.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: INTENT OF THIS TASK ORDER IS TO PROVIDE ALL SUSTAINMENT NEEDED FOR THE MIGS, EMC2, EBUCS, VTE AND THE DOTD CLASSROOM BECAUSE THE USASMDC/ARSTRAT DOES NOT HAVE ORGANIC CAPABILITY TO EXECUTE SYSTEM WIDE MAINTENANCE ABOVE THE DASH 10 (USER LEVEL MAINTENANCE). IF ADDITIONAL EQUIPMENT ENHANCEMENTS ARE MADE THAT SIMPLY REPLACE OR INCREASE FUNCTIONALITY OF EXISTING SYSTEMS, CONTRACTOR WILL BE NOTIFIED OF EQUIPMENT CHANGES AND INCORPORATE THOSE INTO BASELINE SUPPORT, BUT NO CHANGES TO PWS ARE EXPECTED.

Place of Performance

Location: COLORADO SPRINGS, EL PASO County, COLORADO, 80914

State: Colorado Government Spending

Plain-Language Summary

Department of Defense obligated $23.3 million to DYNETICS, INC. for work described as: INTENT OF THIS TASK ORDER IS TO PROVIDE ALL SUSTAINMENT NEEDED FOR THE MIGS, EMC2, EBUCS, VTE AND THE DOTD CLASSROOM BECAUSE THE USASMDC/ARSTRAT DOES NOT HAVE ORGANIC CAPABILITY TO EXECUTE SYSTEM WIDE MAINTENANCE ABOVE THE DASH 10 (USER LEVEL MAINTENANCE). IF ADDITIONAL EQUIPMENT… Key points: 1. Contract focuses on essential system-wide maintenance for multiple critical systems, addressing organic capability gaps. 2. The award was made under full and open competition, suggesting a competitive bidding process. 3. Performance period spans two years, indicating a medium-term commitment for sustainment services. 4. The contract type is Cost Plus Fixed Fee, which allows for cost reimbursement plus a fixed fee for profit. 5. This task order supports USASMDC/ARSTRAT by providing maintenance beyond user-level capabilities. 6. The scope includes sustainment for MIGS, EMC2, EBUCS, VTE, and DOTD Classroom systems. 7. Potential for contract modifications exists for equipment enhancements, but no PWS changes are anticipated. 8. The North American Industry Classification System (NAICS) code is 541712, indicating R&D in physical, engineering, and life sciences.

Value Assessment

Rating: fair

The contract value of $23.3 million over two years for system-wide maintenance appears to be within a reasonable range for specialized sustainment services. However, without specific benchmarks for the systems supported (MIGS, EMC2, EBUCS, VTE, DOTD Classroom), a precise value-for-money assessment is challenging. The Cost Plus Fixed Fee (CPFF) contract type can sometimes lead to higher costs compared to fixed-price contracts if not managed carefully, but it is appropriate for R&D-heavy or uncertain scope work. Further analysis would require comparing this to similar sustainment contracts for comparable defense systems.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. This suggests a robust bidding process where multiple companies likely had the opportunity to compete for the work. The level of competition is generally positive for price discovery and ensuring the government receives competitive pricing. The specific number of bidders is not provided, which would offer further insight into the intensity of the competition.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down costs and encourage innovation, leading to better value for public funds.

Public Impact

The primary beneficiaries are the USASMDC/ARSTRAT, which gains essential system-wide maintenance capabilities it lacks organically. Services delivered include sustainment and maintenance for critical defense systems like MIGS, EMC2, EBUCS, VTE, and the DOTD Classroom. The geographic impact is likely focused on the operational areas of USASMDC/ARSTRAT, primarily within the United States. Workforce implications include the employment of skilled technicians and engineers by Dynetics, Inc. to perform the required maintenance and sustainment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can incentivize contractor to incur costs, potentially leading to higher overall expenditures if not closely monitored.
Lack of specific performance metrics or KPIs in the provided data makes it difficult to assess the effectiveness of the sustainment services.
The reliance on external contractors for 'system-wide maintenance above the user level' highlights a potential organic capability gap within the agency.
Potential for scope creep or increased costs if 'additional equipment enhancements' require significant PWS modifications, despite current expectations.

Positive Signals

Awarded under full and open competition, suggesting a competitive process that should yield fair pricing.
Contract addresses a clear need for sustainment where the agency lacks organic capability, ensuring operational readiness.
The contractor, Dynetics, Inc., is a known entity in the defense sector, potentially bringing relevant expertise.
The task order has a defined period of performance, allowing for periodic reassessment of needs and contractor performance.

Sector Analysis

This contract falls within the Research and Development sector, specifically NAICS code 541712, which covers physical, engineering, and life sciences R&D. However, the core of the task order is system sustainment and maintenance, which is a critical component of the defense industrial base. The defense sector often involves complex systems requiring specialized, long-term support. Comparable spending benchmarks would typically be found within sustainment contracts for similar military hardware or software systems, often involving significant investment in ensuring operational readiness and longevity of high-value assets.

Small Business Impact

The provided data indicates that small business participation (ss and sb flags) is false for this contract. This suggests that the prime contract was not set aside for small businesses, nor does it appear to have specific subcontracting goals for small businesses mandated within this task order. Consequently, the direct impact on the small business ecosystem from this specific award is likely minimal, unless Dynetics, Inc. voluntarily engages small businesses as subcontractors.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army and the specific USASMDC/ARSTRAT contracting and program management offices. The Cost Plus Fixed Fee (CPFF) structure necessitates robust oversight to monitor incurred costs and ensure the fixed fee is earned appropriately. Transparency is generally expected through contract reporting mechanisms, though specific details on public accessibility of performance reports are not provided. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense System Sustainment
Military Maintenance Contracts
R&D Support Services
Army Logistics and Readiness
Information Technology Maintenance
Specialized Equipment Support

Risk Flags

Cost Plus Fixed Fee (CPFF) contract type requires diligent oversight to manage costs.
Potential for organic capability gaps to lead to increased reliance on contractors.
Scope definition for 'system-wide maintenance' could be ambiguous.
Lack of specific performance metrics in provided data hinders effectiveness assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.3 million to DYNETICS, INC.. INTENT OF THIS TASK ORDER IS TO PROVIDE ALL SUSTAINMENT NEEDED FOR THE MIGS, EMC2, EBUCS, VTE AND THE DOTD CLASSROOM BECAUSE THE USASMDC/ARSTRAT DOES NOT HAVE ORGANIC CAPABILITY TO EXECUTE SYSTEM WIDE MAINTENANCE ABOVE THE DASH 10 (USER LEVEL MAINTENANCE). IF ADDITIONAL EQUIPMENT ENHANCEMENTS ARE MADE THAT SIMPLY REPLACE OR INCREASE FUNCTIONALITY OF EXISTING SYSTEMS, CONTRACTOR WILL BE NOTIFIED OF EQUIPMENT CHANGES AND INCORPORATE THOSE INTO BASELINE SUPPORT, BUT NO CHANGES TO PWS ARE EXPECTED.

Who is the contractor on this award?

The obligated recipient is DYNETICS, 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 $23.3 million.

What is the period of performance?

Start: 2018-02-01. End: 2020-01-31.

What is Dynetics, Inc.'s track record with similar sustainment contracts for complex defense systems?

Dynetics, Inc. has a history of supporting various defense programs, often involving advanced technologies and research and development. While specific details on their sustainment performance for systems analogous to MIGS, EMC2, EBUCS, VTE, and the DOTD Classroom are not detailed here, their general profile suggests experience in complex technical environments. A deeper dive into their contract history, past performance evaluations, and any reported issues on similar government contracts would be necessary for a comprehensive assessment. Their involvement in R&D suggests a capacity for technical problem-solving, which is valuable in sustainment, but direct experience in long-term, system-wide maintenance of the specific systems mentioned would be a key differentiator.

How does the $23.3 million cost compare to industry benchmarks for similar system sustainment contracts?

Benchmarking this $23.3 million contract requires specific data on the systems being supported (MIGS, EMC2, EBUCS, VTE, DOTD Classroom) and the scope of 'system-wide maintenance above the user level.' Without this granular detail, a direct comparison is difficult. Generally, sustainment costs for complex defense systems can range significantly, often representing a substantial percentage of the system's acquisition cost over its lifecycle. The Cost Plus Fixed Fee (CPFF) nature of this contract means costs are reimbursed plus a profit, which can be higher than fixed-price contracts if not managed tightly. To establish a benchmark, one would need to compare the cost per system, cost per year, or cost as a percentage of system value against similar contracts awarded by the DoD or other agencies for comparable equipment and service levels.

What are the primary risks associated with this Cost Plus Fixed Fee (CPFF) contract for system sustainment?

The primary risk with a CPFF contract is the potential for cost overruns, as the contractor is reimbursed for allowable costs incurred, plus a fixed fee. This structure can incentivize the contractor to incur costs without the same direct pressure to minimize them as in a fixed-price contract. For system sustainment, risks include the contractor not having sufficient organic capability, leading to reliance on subcontractors, potential delays in maintenance, or difficulties in troubleshooting complex issues. Another risk is the potential for scope creep if 'additional equipment enhancements' require significant changes to the Performance Work Statement (PWS), potentially increasing costs beyond the initial estimate, despite the expectation of no PWS changes. Effective oversight and clear definition of 'system-wide maintenance' are crucial to mitigate these risks.

How effective is the current sustainment strategy in ensuring the operational readiness of the supported systems?

The effectiveness of the current sustainment strategy hinges on the execution by Dynetics, Inc. and the clarity of the Performance Work Statement (PWS). The contract aims to address an organic capability gap within USASMDC/ARSTRAT for maintenance above the user level, suggesting that the current strategy is necessary for maintaining operational readiness. However, the provided data does not include specific performance metrics, Key Performance Indicators (KPIs), or historical data on system uptime, Mean Time Between Failures (MTBF), or Mean Time To Repair (MTTR). Without these measures, assessing the actual effectiveness of the sustainment services in ensuring operational readiness is not possible. A review of contractor performance reports and system readiness metrics would be required.

What has been the historical spending pattern for system-wide maintenance for these specific systems prior to this contract?

The provided data focuses on a single task order awarded in February 2018. It does not offer historical spending patterns for the maintenance of the MIGS, EMC2, EBUCS, VTE, and DOTD Classroom systems. To understand historical spending, one would need to examine previous contracts, task orders, or internal agency budgets related to the sustainment of these specific systems. It's possible that prior to this contract, the agency attempted organic maintenance, used different contractors, or perhaps these systems were newly acquired or had different support structures. Understanding the trend in spending over time, the reasons for shifts in contracting strategy, and the total lifecycle costs associated with these systems would provide valuable context.

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

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: W9113M13R0010

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 1002 EXPLORER BLVD, HUNTSVILLE, AL, 35806

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

Financial Breakdown

Contract Ceiling: $23,340,565

Exercised Options: $23,340,565

Current Obligation: $23,340,565

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W9113M17D0002

IDV Type: IDC

Timeline