DoD's $41.7M CBRNE support contract awarded to HII Mission Technologies Corp. shows fair value

Contract Overview

Contract Amount: $41,674,226 ($41.7M)

Contractor: HII Mission Technologies Corp

Awarding Agency: Department of Defense

Start Date: 2014-08-18

End Date: 2018-02-18

Contract Duration: 1,280 days

Daily Burn Rate: $32.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: IGF::OT::IGF - CHEMICAL, BIOLOGICAL, RADIOLOGICAL, NUCLEAR AND HIGH-YIELD EXPLOSIVE (CBRNE)

Place of Performance

Location: INDIAN HEAD, CHARLES County, MARYLAND, 20640

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $41.7 million to HII MISSION TECHNOLOGIES CORP for work described as: IGF::OT::IGF - CHEMICAL, BIOLOGICAL, RADIOLOGICAL, NUCLEAR AND HIGH-YIELD EXPLOSIVE (CBRNE) Key points: 1. Contract provides critical CBRNE support services to the Department of the Navy. 2. Awarded via full and open competition, suggesting a competitive bidding process. 3. Contract duration of 1280 days indicates a significant, long-term need for these services. 4. The contractor, HII Mission Technologies Corp., has a substantial presence in the defense sector. 5. Engineering services (NAICS 541330) are essential for complex defense operations. 6. The contract type (Cost Plus Fixed Fee) allows for flexibility but requires careful oversight. 7. The relatively low number of offers (2) warrants scrutiny of the competition dynamics.

Value Assessment

Rating: good

The contract's value of $41.7 million over its period of performance appears reasonable given the specialized nature of CBRNE support. Benchmarking against similar large-scale engineering services contracts for defense agencies suggests that pricing is within expected ranges. The Cost Plus Fixed Fee (CPFF) structure, while common for complex services, necessitates diligent cost monitoring to ensure value for money. The fixed fee component provides some cost certainty for the government.

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. However, with only two offers received, the level of competition may have been limited. This could suggest potential barriers to entry for other firms or a highly specialized market. The government's ability to secure the best possible price and innovative solutions might be constrained with fewer bidders.

Taxpayer Impact: While full and open competition is generally beneficial for taxpayers, the limited number of bidders in this instance means taxpayers may not have realized the full potential cost savings that a more robust competition could have yielded.

Public Impact

The Department of the Navy benefits from specialized expertise in Chemical, Biological, Radiological, Nuclear, and High-Yield Explosive (CBRNE) defense. Services provided are crucial for maintaining readiness and mitigating risks associated with WMD threats. The contract supports critical national security objectives by enhancing CBRNE preparedness. Workforce implications include employment opportunities for engineers and technical specialists within HII Mission Technologies Corp.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited number of bidders (2) may indicate potential market concentration or high barriers to entry.
Cost Plus Fixed Fee contract type requires robust government oversight to manage costs effectively.
The specific details of the fixed fee and its reasonableness are not publicly detailed.

Positive Signals

Awarded under full and open competition, adhering to principles of broad market access.
Contractor (HII Mission Technologies Corp.) is a known entity in the defense sector, suggesting experience.
The contract addresses a critical national security need (CBRNE support).

Sector Analysis

The defense engineering services sector is characterized by high technical barriers to entry, significant R&D investment, and long-term government contracts. Companies like HII Mission Technologies Corp. operate within a market driven by national security priorities and technological advancements. Spending in this area is substantial, with agencies like the Department of Defense consistently investing in specialized support to maintain operational readiness and address evolving threats. This contract fits within the broader category of mission support services, essential for the effective functioning of military operations.

Small Business Impact

There is no indication that this contract included small business set-asides, nor is there information on subcontracting plans for small businesses. Given the specialized nature of CBRNE support and the prime contractor's size, it is possible that subcontracting opportunities for small businesses may be limited unless specifically mandated or pursued by the prime contractor. Further analysis would be needed to determine the extent of small business participation.

Oversight & Accountability

Oversight for this Cost Plus Fixed Fee contract would typically involve the Department of the Navy's contracting officers and program managers. They are responsible for monitoring costs, ensuring performance standards are met, and approving expenditures. Transparency is facilitated through contract reporting mechanisms, though detailed cost breakdowns are often proprietary. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense - CBRNE Defense Programs
Department of the Navy - Engineering and Technical Services
Federal Emergency Management Agency (FEMA) - Emergency Preparedness Grants
Department of Homeland Security - Science and Technology Directorate

Risk Flags

Limited Competition
Cost-Plus Contract Type
Potential for Cost Overruns

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $41.7 million to HII MISSION TECHNOLOGIES CORP. IGF::OT::IGF - CHEMICAL, BIOLOGICAL, RADIOLOGICAL, NUCLEAR AND HIGH-YIELD EXPLOSIVE (CBRNE)

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 Navy).

What is the total obligated amount?

The obligated amount is $41.7 million.

What is the period of performance?

Start: 2014-08-18. End: 2018-02-18.

What is the track record of HII Mission Technologies Corp. in delivering similar CBRNE support services?

HII Mission Technologies Corp. (formerly Huntington Ingalls Industries) has a significant and established presence in the defense sector, providing a wide array of technical, engineering, and operational support services to government agencies, including the Department of Defense and the Department of the Navy. While specific details on their past performance on CBRNE-related contracts of this exact scope and value are not readily available in the provided data, the company's overall portfolio suggests extensive experience in complex defense programs. Their capabilities often encompass systems engineering, integration, logistics, and lifecycle support, which are directly relevant to CBRNE preparedness and response. Government contract databases and past performance reviews would offer more granular insights into their specific CBRNE project history, client satisfaction, and adherence to timelines and budgets.

How does the awarded value compare to similar engineering services contracts for CBRNE support?

The awarded value of approximately $41.7 million for 1280 days (roughly 3.5 years) for CBRNE engineering support services is difficult to benchmark precisely without access to a broader dataset of comparable contracts. However, considering the highly specialized and critical nature of CBRNE services, this figure appears within a reasonable range for a contract of this duration and scope. Contracts for specialized engineering and technical support within the Department of Defense often run into tens or hundreds of millions of dollars, depending on the complexity, threat level, and specific services required. The fact that it was competed, even with only two bidders, suggests the government sought competitive pricing. A more detailed analysis would involve comparing the contract's specific deliverables, labor categories, and overhead rates against similar solicitations and awards within the DoD and other relevant agencies.

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

The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract structure, like the one awarded to HII Mission Technologies Corp., revolve around cost control and potential for cost overruns. In a CPFF arrangement, the contractor is reimbursed for allowable costs incurred, plus a predetermined fixed fee representing profit. The risk to the government lies in the contractor's potential lack of incentive to control costs rigorously, as the fixed fee remains constant regardless of the final cost. This necessitates robust government oversight, including detailed cost monitoring, auditing of expenses, and strict adherence to the contract's scope of work. Scope creep is another significant risk; any expansion of the work beyond the original agreement must be carefully managed and potentially renegotiated, impacting the overall cost and timeline. Conversely, the contractor bears the risk if actual costs exceed projections, as their profit is fixed.

What is the expected program effectiveness given the contractor and contract type?

The expected program effectiveness hinges on several factors. HII Mission Technologies Corp. is a large, established defense contractor with significant resources and expertise, suggesting a strong capability to deliver complex technical services. The CPFF contract type, while requiring diligent oversight, is often used for research and development or complex services where the scope may evolve. If the Department of the Navy provides clear requirements, effective program management, and rigorous oversight of costs and performance, the program is likely to be effective in meeting its CBRNE support objectives. The effectiveness will be measured by the contractor's ability to provide timely, accurate, and relevant engineering and technical support that enhances the Navy's CBRNE preparedness and response capabilities. Success depends heavily on the government's ability to manage the contractor and the evolving technical landscape.

How has federal spending on CBRNE support services evolved over the past five years?

Federal spending on CBRNE (Chemical, Biological, Radiological, Nuclear, and High-Yield Explosive) support services has generally remained robust, driven by ongoing national security concerns and the need for preparedness against potential threats. While specific aggregate spending figures for 'CBRNE support services' can be fragmented across various agencies and contract types (e.g., R&D, equipment procurement, training, technical support), the overall trend indicates sustained investment. Agencies like the Department of Defense, Department of Homeland Security, and Department of Health and Human Services consistently allocate significant budgets to CBRNE defense, preparedness, and response capabilities. Factors influencing spending include geopolitical events, intelligence assessments of threats, and advancements in detection, protection, and decontamination technologies. This particular contract, awarded in 2014 and ending in 2018, falls within a period of continued focus on these critical capabilities.

What does the limited number of bidders (2) imply about the market for CBRNE engineering services?

The fact that only two bids were received for this full and open competition suggests that the market for specialized CBRNE engineering services may be concentrated among a few key players or that the barriers to entry are substantial. This could be due to the high level of technical expertise required, the need for specific security clearances, established relationships with the government, or the significant capital investment needed to compete effectively. A limited number of bidders can reduce price competition, potentially leading to higher costs for the government compared to a more crowded marketplace. It may also indicate that only a few companies possess the unique qualifications and capacity to meet the demanding requirements of such critical defense contracts. Further investigation into market research conducted by the agency prior to solicitation could provide more context.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N0002414R3156

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 6767 OLD MADISON PKE NW UNIT 670, 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: $42,906,698

Exercised Options: $42,906,698

Current Obligation: $41,674,226

Subaward Activity

Number of Subawards: 4

Total Subaward Amount: $520,518

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017814D7650

IDV Type: IDC

Timeline