DoD's $140M R&D contract for Navy virtual training awarded to HII Mission Technologies Corp

Contract Overview

Contract Amount: $140,043,823 ($140.0M)

Contractor: HII Mission Technologies Corp

Awarding Agency: Department of Defense

Start Date: 2020-06-30

End Date: 2025-06-30

Contract Duration: 1,826 days

Daily Burn Rate: $76.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: JOINT SEMI-AUTOMATED FORCES RESEARCH AND DEVELOPMENT TO NAVY VIRTUAL AND CONSTRUCTIVE FLEET TRAINING NAVAL SURFACE WARFARE CENTER CORONA

Place of Performance

Location: NORFOLK, NORFOLK CITY County, VIRGINIA, 23511

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $140.0 million to HII MISSION TECHNOLOGIES CORP for work described as: JOINT SEMI-AUTOMATED FORCES RESEARCH AND DEVELOPMENT TO NAVY VIRTUAL AND CONSTRUCTIVE FLEET TRAINING NAVAL SURFACE WARFARE CENTER CORONA Key points: 1. Contract focuses on advanced virtual and constructive fleet training solutions. 2. Significant investment in R&D for naval warfare simulation capabilities. 3. Awarded under full and open competition, suggesting a competitive bidding process. 4. Duration of 5 years indicates a long-term commitment to developing these technologies. 5. Contract type is Cost Plus Fixed Fee, which can incentivize cost control but requires robust oversight. 6. The North American Industry Classification System (NAICS) code 541715 points to R&D in physical and engineering sciences.

Value Assessment

Rating: good

The contract's value of approximately $140 million over five years represents a substantial investment in advanced training technologies. Benchmarking against similar R&D contracts in defense simulation and training is challenging without more specific data on the scope of work. However, the Cost Plus Fixed Fee (CPFF) structure suggests that the government is willing to cover costs plus a predetermined profit, which can be appropriate for research where exact costs are uncertain. The pricing will be heavily influenced by the labor rates and material costs incurred by the contractor, necessitating careful monitoring of expenditures to ensure value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The number of bidders is not specified, but this approach generally fosters a competitive environment, which can lead to better pricing and innovative solutions. The open competition suggests that the Naval Surface Warfare Center sought the best possible offer from the market, rather than restricting the opportunity to a select few contractors.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it increases the likelihood of receiving competitive pricing and encourages a wider range of innovative solutions, potentially leading to more cost-effective outcomes.

Public Impact

Naval personnel will benefit from enhanced virtual and constructive training environments, improving readiness and operational effectiveness. The contract supports the development of advanced simulation technologies for fleet training. Geographic impact is primarily within Virginia, where the Naval Surface Warfare Center Corona is located, but the training solutions will be utilized by the Navy globally. Workforce implications include potential job creation in R&D, engineering, and simulation development roles within HII Mission Technologies Corp. and its subcontractors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts require diligent oversight to manage costs effectively and prevent overruns.
The long duration of the contract necessitates ongoing performance monitoring to ensure objectives are met.
Reliance on a single awardee for this critical R&D could pose a risk if performance falters.

Positive Signals

Awarded through full and open competition, suggesting a robust selection process.
Focus on advanced R&D indicates a commitment to modernizing naval training capabilities.
The contract's duration allows for sustained development and integration of complex training systems.

Sector Analysis

The defense simulation and training sector is a significant market driven by the need for realistic and cost-effective training solutions. Companies like HII Mission Technologies Corp. are key players, leveraging advanced technologies such as virtual reality, augmented reality, and artificial intelligence to create immersive training environments. This contract fits within the broader trend of digital transformation in defense, moving towards more sophisticated, data-driven training methodologies. Comparable spending benchmarks are difficult to establish without detailed scope, but R&D investments in this area often range from tens to hundreds of millions of dollars.

Small Business Impact

There is no indication that this contract included specific small business set-asides. However, as a large R&D contract awarded to a major defense contractor, there is potential for subcontracting opportunities for small businesses specializing in simulation, software development, or related technical services. The extent of small business participation will depend on HII Mission Technologies Corp.'s subcontracting plan and the availability of qualified small business vendors in the required fields.

Oversight & Accountability

Oversight for this Cost Plus Fixed Fee contract will likely be managed by the Naval Surface Warfare Center, with specific program managers responsible for monitoring contractor performance, costs, and adherence to technical requirements. Accountability measures would include regular progress reports, milestone reviews, and audits of incurred costs. Transparency is typically maintained through contract databases and reporting requirements, though detailed project specifics may be sensitive. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Navy Virtual and Constructive Training Systems
Naval Training and Simulation Programs
Defense Research and Development Programs
Fleet Readiness and Modernization Initiatives

Risk Flags

Cost Plus Fixed Fee contract requires diligent oversight.
Long contract duration necessitates sustained performance monitoring.
Potential for cost overruns in R&D projects.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $140.0 million to HII MISSION TECHNOLOGIES CORP. JOINT SEMI-AUTOMATED FORCES RESEARCH AND DEVELOPMENT TO NAVY VIRTUAL AND CONSTRUCTIVE FLEET TRAINING NAVAL SURFACE WARFARE CENTER CORONA

Who is the contractor on this award?

The obligated recipient is HII MISSION TECHNOLOGIES CORP.

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 $140.0 million.

What is the period of performance?

Start: 2020-06-30. End: 2025-06-30.

What is the track record of HII Mission Technologies Corp. in delivering similar virtual and constructive training solutions for the Navy?

HII Mission Technologies Corp., a subsidiary of Huntington Ingalls Industries, has a substantial track record in defense contracting, including significant work in simulation, training, and C5ISR systems. They have been involved in various naval programs, providing advanced technological solutions. While specific details on their past performance on virtual and constructive training systems for the Navy would require a deeper dive into contract histories and performance reviews, their broad experience in complex defense systems suggests a capability to undertake this R&D effort. Their portfolio often includes integrating hardware and software to create sophisticated operational environments, which aligns with the requirements of this contract. Past performance evaluations, if publicly available, would offer more precise insights into their success rates and areas of expertise relevant to this specific award.

How does the value of this contract compare to other R&D investments in naval training simulation?

The $140 million awarded to HII Mission Technologies Corp. for joint semi-automated forces research and development for Navy virtual and constructive fleet training is a significant investment. Comparing it directly to other R&D contracts in naval training simulation requires access to a comprehensive database of similar awards, including their scope, duration, and specific technological focus. However, R&D contracts of this magnitude are typical for developing cutting-edge simulation capabilities that aim to enhance fleet readiness and reduce the cost and risk associated with live training exercises. Investments in virtual and constructive training are increasing across military branches as technology advances, making such funding levels plausible for developing advanced, integrated training systems that can simulate complex operational scenarios.

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

The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract structure, particularly for Research and Development (R&D), revolve around cost control and contractor efficiency. In a CPFF arrangement, the contractor is reimbursed for allowable costs plus a fixed fee representing profit. For R&D, where the scope and ultimate costs can be highly uncertain, this structure can incentivize contractors to incur costs without strict adherence to budget if oversight is not robust, as their profit is fixed regardless of the final cost. The risk for the government is potential cost overruns if the contractor does not manage expenses diligently or if unforeseen technical challenges significantly increase project costs. Effective risk mitigation requires stringent cost monitoring, detailed progress reporting, and clear definition of milestones and deliverables to ensure the fixed fee remains justified by the work accomplished.

What is the expected impact of this contract on the future of Navy fleet training?

This contract is expected to significantly advance the future of Navy fleet training by enhancing virtual and constructive simulation capabilities. The focus on 'joint semi-automated forces' suggests the development of more sophisticated, AI-driven training environments that can better replicate complex, multi-domain operational scenarios. This will allow sailors to train in more realistic and challenging conditions without the logistical and financial burdens of live exercises. Improved simulation fidelity can lead to better decision-making skills, enhanced team coordination, and increased overall combat readiness. Ultimately, this investment aims to equip the Navy with more effective, adaptable, and cost-efficient training tools, preparing personnel for modern warfare challenges.

How has federal spending on R&D for defense simulation and training evolved over the past five years?

Federal spending on R&D for defense simulation and training has generally seen a steady increase over the past five years, driven by technological advancements and the recognized need for more effective, cost-efficient training solutions. Agencies like the Department of Defense are prioritizing investments in areas such as artificial intelligence, virtual reality, augmented reality, and advanced modeling to create more immersive and realistic training environments. This trend reflects a strategic shift towards leveraging technology to enhance readiness, reduce reliance on expensive live training, and prepare forces for complex, multi-domain operations. While specific figures fluctuate annually based on budget allocations and program priorities, the overall trajectory indicates a sustained commitment to modernizing defense training through R&D.

Industry Classification

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

Product/Service Code: RESEARCH AND DEVELOPMENT › OTHER RESEARCH/DEVELOPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Huntington Ingalls Industries, Inc

Address: 4021 EXECUTIVE DR, BEAVERCREEK, OH, 45430

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

Financial Breakdown

Contract Ceiling: $182,313,636

Exercised Options: $182,313,636

Current Obligation: $140,043,823

Actual Outlays: $23,159,147

Subaward Activity

Number of Subawards: 40

Total Subaward Amount: $8,282,586

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: FA807518D0002

IDV Type: IDC

Timeline