DoD's $66.5M Apache teaming contract awarded to Science and Engineering Services, LLC, faces scrutiny over value and competition

Contract Overview

Contract Amount: $66,534,235 ($66.5M)

Contractor: Science and Engineering Services, LLC

Awarding Agency: Department of Defense

Start Date: 2015-03-03

End Date: 2022-10-31

Contract Duration: 2,799 days

Daily Burn Rate: $23.8K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: DESIGN AND QUALIFICATION OF THE MANNED / UNMANNED TEAMING EXPANDED CAPABILITIES (MUMT-X) FOR THE AH-64 APACHE REQUIREMENT.

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35824

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $66.5 million to SCIENCE AND ENGINEERING SERVICES, LLC for work described as: DESIGN AND QUALIFICATION OF THE MANNED / UNMANNED TEAMING EXPANDED CAPABILITIES (MUMT-X) FOR THE AH-64 APACHE REQUIREMENT. Key points: 1. The contract's value of $66.5 million over nearly 8 years raises questions about cost-effectiveness for advanced aviation technology. 2. Awarded under 'full and open competition after exclusion of sources,' the competition dynamics warrant closer examination. 3. The contract's duration and cost-plus-fixed-fee structure present potential risks for cost overruns. 4. Performance context is limited, but the focus on manned/unmanned teaming for the AH-64 Apache suggests a critical capability area. 5. This contract positions Science and Engineering Services, LLC within the high-stakes defense aviation technology sector.

Value Assessment

Rating: questionable

Benchmarking the value of this $66.5 million contract is challenging without detailed performance metrics and comparable contracts. The cost-plus-fixed-fee (CPFF) pricing structure, while common for R&D, can lead to higher costs compared to fixed-price contracts if not managed tightly. The relatively high number of contract modifications (23771) suggests potential scope creep or evolving requirements, which could impact the overall value proposition. Further analysis of the contractor's performance and adherence to budget is needed to definitively assess value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'full and open competition after exclusion of sources,' which implies that while the competition was intended to be broad, specific sources may have been excluded for defined reasons. The data indicates two bidders, suggesting a limited competitive landscape for this specialized requirement. This level of competition may not have driven the most aggressive pricing or innovation, potentially impacting the government's ability to secure the best possible terms.

Taxpayer Impact: With only two bidders, taxpayers may have faced higher prices than if a more robust competition had been feasible. The limited competition could also mean less pressure on the contractor to optimize costs and deliver maximum efficiency.

Public Impact

The primary beneficiaries are the U.S. Army, which receives enhanced capabilities for its AH-64 Apache attack helicopters through manned-unmanned teaming. The contract delivers critical research, development, and engineering services to advance aviation technology. Geographic impact is primarily within the United States, supporting defense innovation and potentially related aerospace hubs. Workforce implications include specialized engineering, software development, and aviation technical roles, likely concentrated within the contractor's operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'exclusion of sources' clause in the competition type raises questions about the breadth of initial market research and potential barriers to entry for other qualified firms.
A high number of contract modifications (23771) suggests potential instability in requirements or scope creep, which can inflate costs and delay delivery.
The Cost Plus Fixed Fee (CPFF) contract type, while suitable for R&D, carries inherent risks of cost overruns if not meticulously managed and overseen.
Limited competition (2 bidders) may have resulted in less favorable pricing and terms for the government compared to a more robust bidding process.

Positive Signals

The contract addresses a critical defense capability: manned-unmanned teaming for a key attack helicopter platform (AH-64 Apache).
Awarding to Science and Engineering Services, LLC, indicates confidence in their specialized technical expertise in this niche area.
The contract duration (nearly 8 years) suggests a long-term commitment to developing and integrating advanced technologies, fostering stability for the contractor and program.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on advanced aviation systems and unmanned technologies. The market for manned-unmanned teaming (MUMT) is a rapidly growing segment within defense, driven by the need for enhanced situational awareness, reduced pilot workload, and expanded operational reach. Comparable spending benchmarks would likely be found in other advanced aircraft development programs or complex systems integration contracts within the Department of Defense, often running into tens or hundreds of millions of dollars.

Small Business Impact

The data indicates that small business participation was not a primary focus, as the contract was not set aside for small businesses (ss: false, sb: false). There is no explicit information on subcontracting plans for small businesses within the provided data. This suggests that the primary contractor, Science and Engineering Services, LLC, is likely a larger entity, and the contract's impact on the broader small business ecosystem in this specialized defense technology area may be limited unless specific subcontracting opportunities are pursued.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army and potentially the Department of Defense's Inspector General. Accountability measures would be tied to the contract's performance metrics, delivery schedules, and adherence to the Cost Plus Fixed Fee structure. Transparency is often limited in defense contracts due to national security considerations, but contract awards, modifications, and basic financial data are typically reported through federal procurement databases like FPDS.

Related Government Programs

AH-64 Apache Modernization Programs
Unmanned Aerial Vehicle (UAV) Development Programs
Defense Aviation Technology Research and Development
Advanced Systems Integration Contracts
Department of Defense Science and Technology Programs

Risk Flags

High number of contract modifications
Limited competition
Cost-plus contract type risk
Potential for scope creep

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $66.5 million to SCIENCE AND ENGINEERING SERVICES, LLC. DESIGN AND QUALIFICATION OF THE MANNED / UNMANNED TEAMING EXPANDED CAPABILITIES (MUMT-X) FOR THE AH-64 APACHE REQUIREMENT.

Who is the contractor on this award?

The obligated recipient is SCIENCE AND ENGINEERING SERVICES, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $66.5 million.

What is the period of performance?

Start: 2015-03-03. End: 2022-10-31.

What is the track record of Science and Engineering Services, LLC in delivering complex defense aviation technology contracts?

Assessing the track record of Science and Engineering Services, LLC requires a deeper dive into their past performance on similar contracts. While this specific contract award indicates they were selected for a critical role in manned-unmanned teaming for the AH-64 Apache, it doesn't inherently speak to their historical success rate, on-time delivery, or cost control on previous projects. Information on past performance evaluations, any contract disputes, or awards/penalties would be crucial. Without this granular data, it's difficult to definitively gauge their reliability and expertise beyond their selection for this particular program. Further investigation into their contract history with the DoD and other agencies would be necessary.

How does the $66.5 million cost compare to similar manned-unmanned teaming development contracts?

Directly comparing the $66.5 million cost of this contract to similar manned-unmanned teaming (MUMT) development contracts is challenging without access to detailed scope and performance data for those comparable contracts. MUMT programs can vary significantly in complexity, technological maturity, and the specific platforms involved. However, given the nearly 8-year duration and the focus on integrating advanced capabilities with a major attack helicopter platform like the AH-64 Apache, $66.5 million appears to be within a plausible range for a significant R&D effort in this specialized defense sector. Benchmarking would ideally involve looking at contracts for similar system integration, software development, and hardware modification for other advanced military aircraft.

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

The primary risk associated with the Cost Plus Fixed Fee (CPFF) contract structure for this Manned/Unmanned Teaming Expanded Capabilities (MUMT-X) program is the potential for cost overruns. While the fixed fee provides the contractor with a guaranteed profit margin, the government bears the risk of increased costs incurred during contract performance. If the contractor's actual costs exceed initial estimates, the government pays those higher costs, plus the agreed-upon fixed fee. This structure necessitates robust government oversight to monitor expenditures, control scope creep, and ensure efficient resource utilization. Without stringent management, CPFF contracts can become significantly more expensive than anticipated, diminishing the overall value for money.

How effective has the 'full and open competition after exclusion of sources' strategy been in securing competitive pricing for this contract?

The effectiveness of 'full and open competition after exclusion of sources' in securing competitive pricing for this contract is questionable, given that only two bidders participated. While this method allows for competition, the 'exclusion of sources' implies that certain potential bidders were deliberately not considered, potentially narrowing the field. A limited number of bidders, especially in specialized fields, often leads to less aggressive pricing as the competitive pressure is reduced. The government may not have received the full benefit of a truly open market. Analyzing the bid prices submitted by the two competitors, if available, and comparing them to independent cost estimates would be necessary to fully assess the pricing outcomes.

What are the implications of the high number of contract modifications (23771) on the program's budget and timeline?

The exceptionally high number of contract modifications (23,771) for this contract raises significant concerns regarding budget stability, timeline adherence, and effective program management. Each modification potentially represents a change in scope, technical requirements, or pricing, which can lead to cost increases and schedule delays. Such a high volume suggests either a highly dynamic and evolving requirement, poor initial planning, or inadequate change control processes. This level of modification activity can erode the original contract's value, make accurate forecasting difficult, and indicate underlying issues in defining and executing the program's objectives efficiently. It necessitates a thorough review of the modification history to understand the drivers and their cumulative impact.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Science and Engineering Services LLC

Address: 248 DUNLOP BLVD, HUNTSVILLE, AL, 35824

Business Categories: Asian Pacific American Owned Business, Category Business, Limited Liability Corporation, Minority Owned Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $66,534,235

Exercised Options: $66,534,235

Current Obligation: $66,534,235

Subaward Activity

Number of Subawards: 21

Total Subaward Amount: $49,016,508

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W58RGZ13D0048

IDV Type: IDC

Timeline