Dod Awards $11.5M for Tomahawk Support Services to Chugach Industries, Inc

Contract Overview

Contract Amount: $11,509,175 ($11.5M)

Contractor: Chugach Industries, Inc.

Awarding Agency: Department of Defense

Start Date: 2006-12-01

End Date: 2012-06-30

Contract Duration: 2,038 days

Daily Burn Rate: $5.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: TOMAHAWK SUPPORT SERVICES

Place of Performance

Location: ANCHORAGE, ANCHORAGE County, ALASKA, 99503

State: Alaska Government Spending

Plain-Language Summary

Department of Defense obligated $11.5 million to CHUGACH INDUSTRIES, INC. for work described as: TOMAHAWK SUPPORT SERVICES Key points: 1. Value for money appears fair given the 6-year duration of the contract. 2. The contract was awarded under full and open competition, suggesting a competitive pricing environment. 3. Risk indicators are moderate, with a fixed fee structure potentially incentivizing cost control. 4. Performance context is for engineering services supporting TOMAHAWK systems. 5. This contract fits within the broader Defense sector's need for specialized engineering support. 6. The contract duration of over 2000 days indicates a long-term need for these services.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance metrics or comparable service costs. However, the fixed fee structure provides some cost certainty. The total award value of $11.5 million spread over approximately six years suggests a moderate annual expenditure for specialized engineering support. Further analysis would require understanding the scope of 'TOMAHAWK SUPPORT SERVICES' and comparing it to industry standards for similar engineering contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of a competitive bidding process generally leads to better price discovery and potentially more favorable terms for the government. The specific number of bidders is not provided, but the designation implies a robust competition.

Taxpayer Impact: Full and open competition typically benefits taxpayers by driving down costs through market forces, ensuring the government receives competitive pricing for the services procured.

Public Impact

The Department of Defense benefits from specialized engineering expertise for TOMAHAWK systems. Services delivered include engineering support crucial for the maintenance and potential upgrades of TOMAHAWK missile systems. The geographic impact is noted as Alaska (AK), suggesting services may be performed or managed from this location. Workforce implications include the potential for skilled engineering jobs within the defense sector, possibly concentrated in Alaska.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the fixed fee does not adequately account for unforeseen technical challenges.
Dependence on a single contractor for critical engineering support could pose a risk if performance issues arise.
The long contract duration might lead to vendor lock-in or reduced flexibility in adapting to evolving technological needs.

Positive Signals

The fixed fee structure provides a degree of cost control and predictability for the government.
Awarding under full and open competition suggests a competitive process that likely secured a reasonable price.
The contract duration indicates a stable, long-term requirement, allowing for focused expertise development by the contractor.

Sector Analysis

The defense engineering services sector is characterized by highly specialized technical expertise and long-term support requirements. Contracts often involve complex systems requiring deep knowledge of specific platforms, such as the TOMAHAWK missile system. Spending in this area is driven by national security needs and the lifecycle management of advanced weaponry. Comparable spending benchmarks would typically be found within other large defense contracts for system engineering and technical assistance.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a set-aside provision. The primary contractor, CHUGACH INDUSTRIES, INC., is likely a larger entity, and its role in the small business ecosystem would depend on its own subcontracting practices, which are not detailed here.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA), as indicated by the 'sa' field. Accountability measures are embedded in the contract terms, particularly the fixed-fee structure, which incentivizes the contractor to manage costs. Transparency is generally provided through contract award databases, though detailed performance reporting may be internal to the agency.

Related Government Programs

TOMAHAWK Weapon System Support
Defense Engineering Services
Missile System Maintenance Contracts
Aerospace and Defense Support Services
Department of Defense Procurement

Risk Flags

Long contract duration may reduce flexibility.
Fixed fee structure requires careful cost monitoring.
Potential for vendor lock-in.
Dependence on specialized engineering expertise.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.5 million to CHUGACH INDUSTRIES, INC.. TOMAHAWK SUPPORT SERVICES

Who is the contractor on this award?

The obligated recipient is CHUGACH INDUSTRIES, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $11.5 million.

What is the period of performance?

Start: 2006-12-01. End: 2012-06-30.

What is the track record of CHUGACH INDUSTRIES, INC. with similar Department of Defense contracts?

CHUGACH INDUSTRIES, INC. has a history of securing contracts with the Department of Defense, often in areas related to logistics, facilities management, and technical services. Analyzing their past performance on similar engineering or support contracts would involve reviewing contract award data for quality, timeliness, and adherence to cost. A deeper dive would examine any past performance reviews, award fee determinations, or instances of contract disputes. Their experience with complex systems and long-term support agreements is a key factor in assessing their suitability for the TOMAHAWK SUPPORT SERVICES contract.

How does the $11.5 million award compare to other TOMAHAWK support contracts?

Direct comparison of the $11.5 million award for TOMAHAWK SUPPORT SERVICES requires access to historical data on similar contracts for the TOMAHAWK system. Factors such as the contract duration (approximately 6 years), the specific services included (engineering support), and the scope of work are critical. If this award represents a significant portion of the TOMAHAWK program's sustainment budget or is notably higher or lower than previous support contracts of similar scope and duration, it would indicate potential value or concern. Without specific comparable data points, assessing whether this represents a benchmark value is difficult.

What are the primary risks associated with this specific contract?

The primary risks associated with this contract include potential cost overruns if the fixed fee is insufficient to cover unforeseen technical challenges or scope creep, despite the fixed-fee structure aiming for cost control. There's also a risk of performance degradation or contractor dependency, given the long duration and specialized nature of the engineering support required for the TOMAHAWK system. Ensuring the contractor maintains adequate technical expertise and responsiveness throughout the contract period is crucial. Furthermore, geopolitical factors or changes in defense priorities could impact the long-term need for these specific support services.

How effective is the Cost Plus Fixed Fee (CPFF) contract type for engineering services like these?

The Cost Plus Fixed Fee (CPFF) contract type is often used for research and development or complex services where the scope is not fully defined at the outset, balancing flexibility with cost control. For engineering services like TOMAHAWK SUPPORT SERVICES, CPFF allows the government to leverage contractor expertise while providing an incentive for the contractor to manage costs to achieve their fixed fee. The effectiveness hinges on robust government oversight to monitor costs and ensure the contractor operates efficiently. If costs escalate significantly, the government bears the increased expense, making oversight critical to prevent excessive spending.

What is the historical spending trend for TOMAHAWK support services within the Department of Defense?

Analyzing historical spending trends for TOMAHAWK support services requires aggregating data across multiple contracts over several fiscal years. This would reveal patterns in annual expenditures, identify major sustainment periods, and highlight any significant increases or decreases in funding. Understanding these trends provides context for the current $11.5 million award, indicating whether it aligns with historical investment levels or represents a deviation. Such analysis helps in forecasting future needs and budgeting for the TOMAHAWK weapon system's lifecycle sustainment.

What is the significance of the contract being awarded in Alaska (AK)?

The contract's designation of Alaska (AK) as its location suggests that either the primary performance site, the contractor's operational base, or a significant portion of the work will be conducted within Alaska. This could imply a focus on supporting TOMAHAWK systems deployed or based in the region, or it might reflect the location of CHUGACH INDUSTRIES, INC.'s facilities. For the Department of Defense, this could relate to strategic positioning or logistical considerations in the Alaskan theater. It also has implications for local economic impact and workforce development within Alaska.

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: N0002406R3587

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Chugach Alaska Corporation (UEI: 071844021)

Address: 3800 CENTERPOINT DR STE 601, ANCHORAGE, AK, 99503

Business Categories: 8(a) Program Participant, Alaskan Native Corporation Owned Firm, Category Business, Corporate Entity Not Tax Exempt, Minority Owned Business, Native American Owned Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $12,513,128

Exercised Options: $12,513,128

Current Obligation: $11,509,175

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0017805D4240

IDV Type: IDC

Timeline