DoD's Missile Defense Agency awards $233.8M for test and war game support to Axient LLC

Contract Overview

Contract Amount: $233,761,711 ($233.8M)

Contractor: Axient LLC

Awarding Agency: Department of Defense

Start Date: 2016-05-25

End Date: 2021-10-21

Contract Duration: 1,975 days

Daily Burn Rate: $118.4K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 4

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: TEST, EXERCISE AND WARGAMES SUPPORT IGF::OT::IGF

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35898

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $233.8 million to AXIENT LLC for work described as: TEST, EXERCISE AND WARGAMES SUPPORT IGF::OT::IGF Key points: 1. Contract awarded via full and open competition after exclusion of sources, indicating a potentially limited but justified bidding process. 2. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not closely managed. 3. The duration of the contract is 1975 days, spanning over 5 years, suggesting a long-term need for these services. 4. The contract was awarded to Axient LLC, a single contractor, raising questions about market concentration. 5. The North American Industry Classification System (NAICS) code 541330 points to Engineering Services, a critical support function for defense. 6. The contract was awarded in Alabama, suggesting a concentration of defense-related services in that region.

Value Assessment

Rating: fair

The contract value of $233.8 million over approximately 5.4 years averages to about $43.3 million annually. Benchmarking this against similar large-scale engineering support contracts for defense agencies is challenging without more specific service details. The Cost Plus Fixed Fee (CPFF) structure means the government pays actual costs plus a fixed fee, which can be less predictable than fixed-price contracts. Oversight is crucial to ensure costs remain reasonable and the fixed fee is appropriate for the services rendered.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES'. This solicitation type suggests that while competition was sought, certain sources were excluded, potentially due to specific qualifications or prior relationships. The presence of 4 bids indicates some level of competition, but the exclusion of sources might limit the breadth of competitive pressure and potentially impact price discovery.

Taxpayer Impact: The exclusion of sources, even with multiple bidders, may mean taxpayers did not benefit from the widest possible range of competitive offers, potentially leading to a higher-than-optimal price.

Public Impact

This contract directly supports the Department of Defense's Missile Defense Agency, enhancing national security capabilities. Services provided are crucial for testing, exercising, and wargaming missile defense systems, ensuring their readiness and effectiveness. The contract's geographic impact is primarily in Alabama, where the contractor is located, potentially creating or sustaining local jobs. The workforce implications include employment for engineers and technical specialists involved in complex defense simulations and analyses.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can incentivize higher spending if not rigorously managed.
Limited competition due to exclusion of sources may result in less favorable pricing for the government.
Long contract duration (over 5 years) increases exposure to potential scope creep or evolving requirements without re-competition.
Single award to Axient LLC could indicate a lack of broad market availability or a strategic decision that limits future competition.
The specific nature of 'TEST, EXERCISE AND WARGAMES SUPPORT' is broad and may obscure specific performance metrics or value achieved.

Positive Signals

Awarded through a competitive process, even if limited, suggests an effort to find qualified providers.
The Missile Defense Agency is a critical national security entity, implying the services are of high importance.
The contract is for engineering services, which are essential for the development and maintenance of complex defense systems.
The fixed fee component of the CPFF contract provides some level of cost predictability for the government compared to pure cost-plus contracts.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting the defense industry's complex simulation and testing needs. The market for specialized defense engineering and wargaming support is often concentrated among a few key players due to high barriers to entry, including security clearances, specialized expertise, and established relationships with agencies like the Missile Defense Agency. Spending in this niche can be substantial, driven by the continuous need to develop, test, and refine advanced defense technologies.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). There is no information provided regarding subcontracting plans or performance. Given the specialized nature of missile defense wargaming and engineering support, it is possible that large, specialized firms like Axient LLC are the primary contractors, with small businesses potentially participating as subcontractors if opportunities arise.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and administrative contracting officer within the Department of Defense, specifically the Missile Defense Agency. The CPFF structure necessitates close monitoring of costs and progress to ensure value for money. Transparency is generally limited for specific defense contracts, but contract awards and basic details are publicly available through systems like FPDS. Inspector General jurisdiction would apply if fraud, waste, or abuse were suspected.

Related Government Programs

Missile Defense Systems
Defense Wargaming and Simulation
Engineering Services Contracts
Department of Defense Research and Development
Test and Evaluation Support

Risk Flags

Cost Plus Fixed Fee contract type carries inherent risk of cost overruns.
Limited competition due to source exclusion may impact price competitiveness.
Long contract duration increases exposure to evolving requirements and potential inefficiencies.
Single award concentrates program risk with one contractor.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $233.8 million to AXIENT LLC. TEST, EXERCISE AND WARGAMES SUPPORT IGF::OT::IGF

Who is the contractor on this award?

The obligated recipient is AXIENT LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Missile Defense Agency).

What is the total obligated amount?

The obligated amount is $233.8 million.

What is the period of performance?

Start: 2016-05-25. End: 2021-10-21.

What is Axient LLC's track record with the Department of Defense, particularly on similar contracts?

Axient LLC has a significant history of contracting with the Department of Defense. While this specific contract is for $233.8 million, the company has been awarded numerous other contracts across various defense agencies for a range of services including engineering, research, development, testing, and evaluation. Analyzing their past performance on similar large-scale, long-duration contracts would be crucial. Key metrics to examine would include their history of cost performance (did they stay within budget or incur cost overruns?), schedule adherence, quality of deliverables, and any past performance issues or awards. A review of their contract history might reveal a pattern of successful execution or potential red flags that warrant closer scrutiny for this current award.

How does the $233.8 million value compare to similar test and exercise support contracts within the Missile Defense Agency or DoD?

The $233.8 million value for five years of test, exercise, and wargame support is substantial, reflecting the complexity and criticality of missile defense systems. To benchmark this value, one would need to compare it against contracts for similar services, considering factors like the scope of work, the specific missile defense systems involved, the level of simulation fidelity required, and the duration. For instance, contracts supporting the development and testing of Ballistic Missile Defense System (BMDS) components or integrated exercises could serve as comparators. Without access to detailed service descriptions and specific pricing structures of comparable contracts, it's difficult to definitively state if $233.8 million represents excellent, fair, or questionable value. However, given the specialized nature and high stakes, significant investment is expected.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for engineering services?

The primary risk with a Cost Plus Fixed Fee (CPFF) contract, like the one awarded to Axient LLC, is that the government may end up paying more than necessary. In a CPFF structure, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. While the fee is fixed, the total cost is variable. This can incentivize contractors to incur higher costs, as their profit margin (the fixed fee) remains constant regardless of the total expenditure. Effective risk mitigation requires robust government oversight to scrutinize costs, ensure efficiency, and prevent unnecessary spending. The Missile Defense Agency must diligently monitor Axient's expenditures and performance to ensure the fixed fee remains appropriate for the value delivered and that costs are controlled.

What is the strategic importance of 'TEST, EXERCISE AND WARGAMES SUPPORT' for the Missile Defense Agency?

Test, exercise, and wargame support are fundamentally critical for the Missile Defense Agency (MDA). These activities are essential for validating the effectiveness, readiness, and integration of complex missile defense systems before they are deployed or used in real-world scenarios. Testing ensures that individual components and the integrated system function as designed against a wide range of threats. Exercises and wargames simulate operational environments, allowing commanders and operators to practice employing these systems, identify potential weaknesses in doctrine or tactics, and refine operational plans. For the MDA, this support directly contributes to ensuring the United States and its allies have reliable protection against ballistic missile threats, making it a cornerstone of national security strategy.

How does the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' procurement method impact potential competition and pricing?

The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' method is a nuanced approach to procurement. It signifies that the agency initially intended to compete the requirement broadly but subsequently excluded certain potential offerors. The reasons for exclusion must be justified and documented, often relating to specific technical capabilities, security requirements, or prior performance issues. While it allows for competition among the remaining eligible sources (in this case, 4 bidders), it inherently limits the pool of potential competitors. This limitation can reduce competitive pressure compared to unrestricted full and open competition, potentially leading to higher prices or less innovative solutions. The justification for excluding sources is key to understanding whether this method served the government's best interest in achieving optimal value.

What are the potential implications of awarding a long-term (1975 days) contract to a single entity for specialized engineering services?

Awarding a long-term contract, such as this 1975-day (over 5 years) agreement, to a single entity like Axient LLC for specialized engineering services carries several implications. Positively, it can provide stability and continuity for critical functions, allowing the contractor to develop deep expertise and institutional knowledge. This can lead to more efficient operations and better-tailored solutions over time. However, it also presents risks. A single award can reduce competitive pressure throughout the contract's life, potentially leading to complacency or less incentive for innovation. It also concentrates risk; if the contractor underperforms or faces financial difficulties, the program could be severely disrupted. Furthermore, it limits opportunities for other capable firms to gain experience and compete for this vital work, potentially hindering broader market development.

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 AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: HQ014715R0027

Offers Received: 4

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 1400 CRYSTAL DR SUITE 800, ARLINGTON, VA, 22202

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $290,049,351

Exercised Options: $252,495,508

Current Obligation: $233,761,711

Actual Outlays: $16,550,291

Subaward Activity

Number of Subawards: 14

Total Subaward Amount: $3,567,709

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline