DoD's $28.8M LCAM contract awarded to Simmonds Precision Products Inc. for R&D

Contract Overview

Contract Amount: $28,837,618 ($28.8M)

Contractor: Simmonds Precision Products Inc

Awarding Agency: Department of Defense

Start Date: 2019-09-11

End Date: 2024-09-05

Contract Duration: 1,821 days

Daily Burn Rate: $15.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 99

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: LOW COST AIR-DROP MUNITION (LCAM) WEAPON SYSTEM DEVELOPMENT

Place of Performance

Location: VERGENNES, ADDISON County, VERMONT, 05491

State: Vermont Government Spending

Plain-Language Summary

Department of Defense obligated $28.8 million to SIMMONDS PRECISION PRODUCTS INC for work described as: LOW COST AIR-DROP MUNITION (LCAM) WEAPON SYSTEM DEVELOPMENT Key points: 1. Contract focuses on research and development for a low-cost air-drop munition weapon system. 2. Awarded by the Department of the Navy, indicating a specific strategic need within naval aviation. 3. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. 4. Duration of 1821 days suggests a long-term development effort. 5. The North American Industry Classification System (NAICS) code 541715 points to significant R&D investment. 6. The contract was awarded under full and open competition, suggesting a robust selection process.

Value Assessment

Rating: fair

Benchmarking the value of this R&D contract is challenging without specific performance metrics or comparable development projects. The Cost Plus Fixed Fee (CPFF) structure means the government pays the contractor's costs plus a fixed fee, which can be advantageous if costs are well-controlled but carries risk of cost escalation. Without detailed cost breakdowns or comparisons to similar weapon system development efforts, it's difficult to definitively assess value for money. However, the fixed fee component provides some predictability in contractor profit.

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 a bid. This typically suggests a competitive environment where multiple companies vied for the opportunity. The number of bidders is not specified, but the 'full and open' designation implies a deliberate effort to maximize competition and potentially achieve better pricing and innovation.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down costs and encourage innovative solutions, leading to better value for public funds.

Public Impact

The primary beneficiaries are the Department of Defense and specifically the Department of the Navy, which will receive the developed weapon system. The service delivered is research and development for a new munition system, aiming to enhance combat capabilities. The geographic impact is primarily within the defense sector, potentially affecting military operations globally. Workforce implications include employment for engineers, scientists, and technicians involved in the R&D process.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can incentivize cost overruns if not rigorously monitored.
Long contract duration (1821 days) increases the risk of scope creep or technological obsolescence.
Lack of specific performance metrics makes it difficult to assess R&D success upfront.

Positive Signals

Awarded under full and open competition, suggesting a competitive process that could yield better value.
Focus on developing a 'low-cost' munition aligns with potential cost-saving objectives.
The contract is for a specific weapon system development, addressing a clear defense need.

Sector Analysis

The defense sector is characterized by significant investment in research and development for advanced weapon systems. Contracts like this one, for munition development, are common within the aerospace and defense industry. The market size for such specialized R&D is substantial, driven by continuous military modernization efforts. This contract fits within the broader category of defense procurement, specifically focusing on next-generation ordnance.

Small Business Impact

The provided data does not indicate any small business set-aside provisions for this contract, nor does it specify subcontracting goals for small businesses. The award to Simmonds Precision Products Inc. suggests it may be a larger entity or that subcontracting opportunities were not a primary focus of the initial award. Further analysis would be needed to determine if small businesses are involved in the supply chain or as subcontractors.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Accountability measures are inherent in the Cost Plus Fixed Fee structure, requiring detailed cost reporting and justification. Transparency is generally maintained through contract award databases, though specific R&D progress reports may be sensitive. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Air-to-Ground Munitions Development
Advanced Weapon Systems Research
Naval Aviation Technology Programs
Department of Defense Research and Development

Risk Flags

Cost Overrun Risk (CPFF)
Technological Obsolescence
Performance Compromise for Cost
Long Development Cycle Risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.8 million to SIMMONDS PRECISION PRODUCTS INC. LOW COST AIR-DROP MUNITION (LCAM) WEAPON SYSTEM DEVELOPMENT

Who is the contractor on this award?

The obligated recipient is SIMMONDS PRECISION PRODUCTS INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $28.8 million.

What is the period of performance?

Start: 2019-09-11. End: 2024-09-05.

What is the historical spending pattern for Simmonds Precision Products Inc. with the Department of Defense?

Analyzing the historical spending patterns of Simmonds Precision Products Inc. with the Department of Defense is crucial for understanding their track record and capacity. A review of federal procurement data would reveal the total value of contracts awarded to the company, the types of goods and services provided, and the agencies they have served. This analysis would help determine if the company has a consistent history of successful contract performance, particularly in R&D for weapon systems. Significant past awards could indicate expertise and reliability, while a history of issues or a lack of relevant experience might raise concerns about their ability to execute this specific LCAM development contract effectively. Understanding their past performance provides a baseline for assessing the risk associated with this current award.

How does the Cost Plus Fixed Fee (CPFF) structure compare to other contract types for R&D in this sector?

The Cost Plus Fixed Fee (CPFF) contract type is common for research and development efforts where the scope of work is not fully defined at the outset, making it difficult to establish a firm fixed price. In CPFF contracts, the government reimburses the contractor for allowable costs incurred and pays a predetermined fixed fee representing profit. Compared to Firm-Fixed-Price (FFP) contracts, CPFF offers more flexibility for evolving R&D projects but carries a higher risk of cost overruns for the government if costs are not meticulously managed. Other R&D contract types include Cost Plus Incentive Fee (CPIF), which adjusts the fee based on performance, and Cost No Fee (CNF), where the contractor receives no fee if cost targets are missed. For R&D, CPFF strikes a balance between flexibility and contractor incentive, but requires robust oversight to ensure cost control and value.

What are the key performance indicators (KPIs) typically used to measure the success of a munition development R&D contract?

Measuring the success of a munition development R&D contract typically involves a combination of technical, cost, and schedule performance indicators. Key technical KPIs often include achieving specific performance parameters such as range, accuracy, lethality, reliability, and target engagement capabilities. For a 'low-cost' munition, cost-effectiveness in production and operational use is also a critical KPI. Schedule adherence, meeting key development milestones, and timely delivery of prototypes or test articles are vital schedule indicators. Cost control, staying within the budgeted R&D expenditure, is a crucial financial KPI, especially under CPFF contracts. Furthermore, factors like system integration ease, maintainability, and safety compliance are often evaluated. The ultimate success is often determined by the system's successful transition to production and its effectiveness in operational testing and deployment.

What is the potential impact of technological advancements on the long-term viability of this LCAM weapon system?

The long-term viability of any weapon system, including this Low-Cost Air-Drop Munition (LCAM), is significantly influenced by the pace of technological advancements. The defense sector is characterized by rapid innovation, meaning that a system developed today could face obsolescence relatively quickly. For this LCAM, potential technological shifts could include advancements in guidance systems, warhead technology, countermeasure resistance, or even the emergence of entirely new delivery platforms. If the R&D process for this LCAM does not incorporate modularity or adaptability, it may struggle to keep pace with evolving threats and countermeasures. The 'low-cost' aspect might also be challenged if incorporating newer technologies significantly drives up production or operational costs. Continuous R&D and potential upgrade pathways are essential to ensure the LCAM remains relevant and effective throughout its intended service life.

Are there any specific risks associated with developing 'low-cost' munitions compared to high-end systems?

Developing 'low-cost' munitions presents a unique set of risks compared to high-end, technologically advanced systems. A primary risk is the potential compromise on performance or reliability to achieve the lower cost target. This could manifest as reduced accuracy, shorter range, less sophisticated guidance, or lower survivability in contested environments. There's also a risk that the definition of 'low-cost' might be underestimated, leading to cost overruns during development or production. Furthermore, achieving low cost often requires using less exotic materials or simpler designs, which might limit future upgradeability or adaptability to new threats. The supply chain for lower-cost components might also be less robust or subject to greater disruption. Balancing the cost reduction imperative with the need for effective and reliable performance is a critical challenge that requires careful management throughout the R&D and production phases.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)

Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0001419SB001

Offers Received: 99

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rockwell Collins Australia PTY Limited

Address: 100 PANTON RD, VERGENNES, VT, 05491

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $28,840,967

Exercised Options: $28,840,967

Current Obligation: $28,837,618

Actual Outlays: $3,150,778

Subaward Activity

Number of Subawards: 10

Total Subaward Amount: $5,296,645

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline