DoD's $21.5M ICBM WAVE RELAY TACTICAL ASSAULT KIT sustainment contract awarded to Persistent Systems LLC

Contract Overview

Contract Amount: $21,511,785 ($21.5M)

Contractor: Persistent Systems LLC

Awarding Agency: Department of Defense

Start Date: 2024-09-23

End Date: 2029-09-22

Contract Duration: 1,825 days

Daily Burn Rate: $11.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ICBM WAVE RELAY TACTICAL ASSAULT KIT (WARTAK) SUSTAINMENT ENGINEERING SERVICES.

Place of Performance

Location: NEW YORK, NEW YORK County, NEW YORK, 10001

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $21.5 million to PERSISTENT SYSTEMS LLC for work described as: ICBM WAVE RELAY TACTICAL ASSAULT KIT (WARTAK) SUSTAINMENT ENGINEERING SERVICES. Key points: 1. Contract awarded on a sole-source basis, raising questions about potential price overruns and limited market engagement. 2. The firm-fixed-price structure aims to control costs, but the lack of competition may hinder optimal value. 3. Sustainment engineering services are critical for maintaining the operational readiness of the ICBM WAVE RELAY TACTICAL ASSAULT KIT. 4. The contract duration of five years suggests a long-term need for these specialized engineering services. 5. Performance risk appears moderate given the specialized nature of the equipment and the sole-source award. 6. Sector positioning is within defense communications and sustainment, a critical but often less transparent area.

Value Assessment

Rating: questionable

Benchmarking the value of this $21.5 million contract is challenging due to its sole-source nature and specialized application. Without competitive bids, it's difficult to ascertain if the pricing reflects fair market value or if taxpayers are receiving optimal value for money. The firm-fixed-price contract type offers some cost control, but the absence of competition limits the ability to compare pricing against alternative providers or similar sustainment services in the defense sector. Further analysis would require access to cost breakdowns and historical pricing data for similar sustainment engineering efforts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Persistent Systems LLC, was solicited. This approach is typically used when a unique capability or proprietary technology is required, or when there is an insufficient number of responsible sources. The lack of competition means that the government did not benefit from a bidding process that could have driven down prices or spurred innovation from multiple vendors. This limits the government's ability to explore a wider range of solutions and potentially secure more cost-effective options.

Taxpayer Impact: The sole-source award means taxpayers may not be getting the best possible price, as there was no competitive pressure to reduce costs. This could lead to higher overall spending for sustainment services compared to a competed contract.

Public Impact

The primary beneficiaries are the Department of Defense, specifically the Air Force, ensuring the continued operational readiness of critical ICBM WAVE RELAY TACTICAL ASSAULT KIT. The services delivered include sustainment engineering, crucial for maintaining and improving the functionality and reliability of specialized defense equipment. The geographic impact is likely concentrated within defense installations and operational areas where this equipment is deployed, primarily within the United States. Workforce implications may involve specialized engineers and technicians employed by Persistent Systems LLC, contributing to the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potentially increases costs for taxpayers.
Lack of competition may reduce incentives for innovation and service improvement.
Specialized nature of the equipment could create vendor lock-in.
Long contract duration without clear performance metrics could mask inefficiencies.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Sustainment engineering is vital for maintaining critical defense assets.
Award to a single, potentially specialized provider ensures continuity of essential services.

Sector Analysis

This contract falls within the defense electronics and sustainment sector, a critical component of the broader aerospace and defense industry. The market for specialized sustainment engineering services for advanced military equipment is often characterized by limited competition due to high technical barriers to entry and specific government requirements. Comparable spending benchmarks are difficult to establish without more detailed information on the specific technology and services provided, but sustainment contracts for complex defense systems can represent significant long-term investments.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. The award to a single, likely specialized, contractor suggests that small businesses may not have the capability or capacity to fulfill this specific requirement. This could limit opportunities for small businesses within this particular defense sustainment niche.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and program management offices. Accountability measures are inherent in the firm-fixed-price structure, which obligates the contractor to deliver services within the agreed-upon price. Transparency may be limited due to the sole-source nature of the award and the sensitive classification of some defense systems. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

ICBM Sustainment Programs
Tactical Communications Systems
Defense Engineering Services
Wireless Communications Equipment
Military Hardware Maintenance

Risk Flags

Sole-source award
Lack of competition
Potential for price inflation
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.5 million to PERSISTENT SYSTEMS LLC. ICBM WAVE RELAY TACTICAL ASSAULT KIT (WARTAK) SUSTAINMENT ENGINEERING SERVICES.

Who is the contractor on this award?

The obligated recipient is PERSISTENT SYSTEMS LLC.

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 $21.5 million.

What is the period of performance?

Start: 2024-09-23. End: 2029-09-22.

What is the specific nature of the ICBM WAVE RELAY TACTICAL ASSAULT KIT (WARTAK) and why is specialized sustainment engineering required?

The ICBM WAVE RELAY TACTICAL ASSAULT KIT (WARTAK) is a specialized communication system likely used in conjunction with Intercontinental Ballistic Missile (ICBM) operations, providing tactical relay capabilities. Its specific function is to ensure secure and reliable communication links in potentially high-risk or remote environments associated with strategic defense assets. Specialized sustainment engineering is required due to the complex, proprietary, and potentially classified nature of the technology. This involves maintaining the system's integrity, ensuring its operational readiness, troubleshooting unique technical issues, and potentially implementing upgrades or modifications to keep pace with evolving threats or technological advancements. The unique design and critical role necessitate expertise that may only be available from the original manufacturer or a highly specialized firm.

What are the potential risks associated with a sole-source award for sustainment engineering services?

Sole-source awards carry several inherent risks. Primarily, the lack of competition can lead to inflated prices, as the contractor faces no pressure to offer the most cost-effective solution. This can result in taxpayers paying more than necessary for the services rendered. Secondly, without competitive benchmarking, it's difficult to assess whether the awarded price represents fair market value. Thirdly, a sole-source contract can foster vendor lock-in, making it difficult and costly to switch providers in the future, even if performance or pricing becomes unsatisfactory. Finally, the absence of multiple bidders may limit the government's exposure to innovative solutions or alternative approaches that could be more efficient or effective.

How does the firm-fixed-price contract type mitigate risks for the government in this sustainment context?

The firm-fixed-price (FFP) contract type is designed to provide the government with cost certainty. Under an FFP agreement, the contractor assumes the majority of the risk associated with cost overruns. Persistent Systems LLC is obligated to perform the specified sustainment engineering services for the agreed-upon price of $21.5 million, regardless of their actual costs incurred. This structure incentivizes the contractor to manage their resources efficiently and control expenses. While it doesn't eliminate the risk of paying a non-competitive price (due to the sole-source nature), it does protect the government from unexpected increases in the contractor's labor, material, or overhead costs during the contract period.

What is the historical spending pattern for sustainment engineering services related to ICBM WAVE RELAY TACTICAL ASSAULT KIT (WARTAK) or similar systems?

Historical spending data for the specific ICBM WAVE RELAY TACTICAL ASSAULT KIT (WARTAK) sustainment is not publicly available, which is common for specialized defense systems. However, sustainment engineering services for complex military hardware, particularly strategic assets like ICBM components, typically represent a significant and ongoing investment. These costs often escalate over the lifecycle of the equipment as it ages, requires more frequent maintenance, and necessitates specialized technical support. Annual spending can range from a few percent to over ten percent of the initial acquisition cost, depending on the system's complexity, operational tempo, and obsolescence. The $21.5 million awarded over five years ($4.3 million annually) appears consistent with the sustainment needs of critical, long-lifecycle defense technology, though a precise historical comparison is precluded by data limitations.

What are the potential implications for national security if sustainment services for this critical kit are disrupted?

Disruption of sustainment services for the ICBM WAVE RELAY TACTICAL ASSAULT KIT (WARTAK) could have severe implications for national security. This kit is likely integral to the command, control, and communication (C3) infrastructure supporting the U.S. nuclear deterrent. Any degradation in its functionality or reliability could compromise the ability to effectively manage and deploy ICBMs, potentially weakening the strategic deterrence posture. Furthermore, communication failures or vulnerabilities could create unacceptable risks during times of heightened geopolitical tension. Ensuring the continuous, high-quality sustainment of such critical systems is paramount to maintaining operational readiness and safeguarding national security interests.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 601 W 26TH ST, NEW YORK, NY, 10001

Business Categories: Category Business, Manufacturer of Goods, Partnership or Limited Liability Partnership, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $41,759,076

Exercised Options: $41,759,076

Current Obligation: $21,511,785

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline