DHS awards $636.5M R&D contract to Vertex Aerospace LLC under full and open competition
Contract Overview
Contract Amount: $636,547,516 ($636.5M)
Contractor: Vertex Aerospace LLC
Awarding Agency: Department of Homeland Security
Start Date: 2003-09-10
End Date: 2009-09-30
Contract Duration: 2,212 days
Daily Burn Rate: $287.8K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 5
Pricing Type: COST PLUS AWARD FEE
Sector: R&D
Place of Performance
Location: MADISON, MADISON County, MISSISSIPPI, 39110
Plain-Language Summary
Department of Homeland Security obligated $636.5 million to VERTEX AEROSPACE LLC for work described as: Key points: 1. Significant investment in R&D for physical, engineering, and life sciences. 2. Vertex Aerospace LLC is the sole awardee, raising questions about broader market engagement. 3. Contract duration of 2212 days (approx. 6 years) indicates a long-term project. 4. The 'COST PLUS AWARD FEE' structure incentivizes performance but can lead to cost overruns.
Value Assessment
Rating: fair
The contract value of $636.5M over approximately 6 years suggests a substantial investment. Benchmarking is difficult without specific deliverables, but the Cost Plus Award Fee structure warrants scrutiny for potential cost inefficiencies compared to fixed-price contracts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating a broad solicitation. However, the single awardee, Vertex Aerospace LLC, suggests that only one entity met the requirements or was the most competitive.
Taxpayer Impact: Taxpayer funds are being utilized for advanced research and development, with the potential for significant technological advancements. The cost-plus structure requires careful oversight to ensure value for money.
Public Impact
Advancement in physical, engineering, and life sciences research funded by taxpayers. Potential for new technologies and capabilities for U.S. Customs and Border Protection. Long-term commitment to a single contractor may limit future innovation from other sources.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Award Fee structure can lead to higher costs.
- Long contract duration may not adapt well to rapidly changing R&D landscapes.
- Lack of small business participation noted.
Positive Signals
- Awarded under full and open competition.
- Significant investment in critical R&D areas.
- Potential for high-impact technological advancements.
Sector Analysis
This contract falls under Research and Development in the Physical, Engineering, and Life Sciences (NAICS 541710). Spending in this sector is crucial for innovation but can be complex to manage due to the inherent uncertainties in R&D outcomes. Benchmarks vary widely based on the specific research area.
Small Business Impact
The data indicates that small businesses were not directly involved in this large prime contract award. Further analysis would be needed to determine if subcontracting opportunities were made available to small businesses.
Oversight & Accountability
The 'COST PLUS AWARD FEE' contract type necessitates robust oversight to ensure performance targets are met and costs are managed effectively. The long duration requires sustained monitoring by the Department of Homeland Security.
Related Government Programs
- Research and Development in the Physical, Engineering, and Life Sciences
- Department of Homeland Security Contracting
- U.S. Customs and Border Protection Programs
Risk Flags
- Cost Overruns Potential (CPAF)
- Vendor Lock-in Risk
- Limited Small Business Participation
- Long Contract Duration
- Lack of Specific Deliverables in Data
Tags
research-and-development-in-the-physical, department-of-homeland-security, ms, purchase-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Homeland Security awarded $636.5 million to VERTEX AEROSPACE LLC. See the official description on USAspending.
Who is the contractor on this award?
The obligated recipient is VERTEX AEROSPACE LLC.
Which agency awarded this contract?
Awarding agency: Department of Homeland Security (U.S. Customs and Border Protection).
What is the total obligated amount?
The obligated amount is $636.5 million.
What is the period of performance?
Start: 2003-09-10. End: 2009-09-30.
What specific R&D objectives does this contract aim to achieve, and how will success be measured to justify the Cost Plus Award Fee structure?
The specific R&D objectives are not detailed in the provided data. However, a Cost Plus Award Fee (CPAF) structure typically involves the government paying all allowable costs plus a base fee, with the potential for an award fee based on meeting or exceeding performance targets. Success measurement would likely involve predefined technical milestones, innovation metrics, and adherence to project timelines, requiring detailed performance metrics and regular government evaluation.
Given the long duration and single awardee, what mechanisms are in place to mitigate the risk of vendor lock-in and ensure continued innovation?
The risk of vendor lock-in and stifled innovation with a long-term, sole-awardee contract is significant. Mitigation strategies could include built-in review periods, clear exit clauses, requirements for technology transfer, and potentially incentivizing the contractor to collaborate with or subcontract to other entities, including small businesses, to foster broader innovation and knowledge sharing.
How does the $636.5M investment align with broader federal R&D spending priorities in physical, engineering, and life sciences, and what is the expected return on investment?
Without specific details on the R&D focus, aligning this investment with broader priorities is challenging. However, R&D in these fields is generally a federal priority for national security, economic competitiveness, and scientific advancement. The return on investment is expected to be in the form of technological advancements, enhanced border security capabilities, and potentially commercializable innovations, though the timeline for realizing such returns can be lengthy and uncertain.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences
Product/Service Code: AEROSPACE CRAFT LAUNCHING, LANDING, GROUND HANDLING AND SERVICING EQUIPMENT
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 5
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Parent Company: L3 Technologies, Inc. (UEI: 008898884)
Address: 555 INDUSTRIAL DR S, MADISON, MS, 39110
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $1,257,073,362
Exercised Options: $1,242,353,942
Current Obligation: $636,547,516
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Timeline
Start Date: 2003-09-10
Current End Date: 2009-09-30
Potential End Date: 2009-12-31 00:00:00
Last Modified: 2021-02-02
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