DoD's $37.3M contract for navigation systems awarded to Alliant Techsystems Operations LLC shows fair value

Contract Overview

Contract Amount: $37,354,594 ($37.4M)

Contractor: Alliant Techsystems Operations LLC

Awarding Agency: Department of Defense

Start Date: 2009-09-25

End Date: 2012-02-29

Contract Duration: 887 days

Daily Burn Rate: $42.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS INCENTIVE FEE

Sector: Defense

Official Description: TAS::17 1804::TAS JATAS PRELIMINARY DESIGN

Place of Performance

Location: NORTHRIDGE, LOS ANGELES County, CALIFORNIA, 91324

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $37.4 million to ALLIANT TECHSYSTEMS OPERATIONS LLC for work described as: TAS::17 1804::TAS JATAS PRELIMINARY DESIGN Key points: 1. The contract was awarded on a cost-plus-incentive fee basis, suggesting a focus on performance and cost control. 2. With a duration of 887 days, the contract allowed for substantial development and integration of complex systems. 3. The award was made under full and open competition, indicating a robust bidding process. 4. The contract's scope aligns with the manufacturing of advanced search, detection, and navigation instruments. 5. The geographic location of the contractor in California may imply specific regional economic impacts. 6. The contract's preliminary design phase suggests early-stage investment in critical defense capabilities.

Value Assessment

Rating: good

The contract's cost-plus-incentive fee structure is typical for complex R&D or system integration projects where final costs are uncertain. Benchmarking against similar contracts for advanced navigation systems would be necessary for a precise value-for-money assessment. However, the competitive award process suggests that pricing was likely scrutinized. The total award amount of approximately $37.3 million over its period of performance appears reasonable for the scope of work, which involves preliminary design for sophisticated defense systems.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit bids. The presence of 3 bids indicates a moderate level of competition for this specialized defense contract. While not a large number, it suggests that the market for these advanced navigation systems is somewhat concentrated, potentially due to technical expertise requirements. The competitive process likely contributed to achieving a fair price, though a higher number of bidders could have potentially driven prices lower.

Taxpayer Impact: Taxpayers benefited from a competitive bidding process that aimed to secure the best value for advanced defense technology. The full and open competition ensured that multiple companies had the opportunity to offer their solutions, fostering a more efficient use of public funds.

Public Impact

The primary beneficiaries are the Department of Defense, which receives advanced navigation and guidance systems crucial for military operations. The contract supports the development and preliminary design of search, detection, navigation, guidance, aeronautical, and nautical systems. The geographic impact is primarily centered around the contractor's location in California, potentially creating or sustaining high-tech jobs in the region. Workforce implications include the employment of specialized engineers, technicians, and support staff involved in the design and development of sophisticated defense hardware.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The cost-plus-incentive fee structure can sometimes lead to cost overruns if not managed tightly, as contractor profit is tied to performance metrics.
The preliminary design phase means that the full cost and complexity of the final system are not yet fully defined, introducing inherent risk.
The relatively small number of bids (3) might indicate a niche market or high barriers to entry, potentially limiting future competition.
The contract duration of 887 days is substantial, requiring sustained oversight to ensure progress and adherence to milestones.

Positive Signals

Awarded under full and open competition, ensuring a broad search for qualified contractors.
The use of an incentive fee structure encourages contractor performance and cost efficiency.
The contract focuses on preliminary design, a critical early step that can prevent costly mistakes later in development.
The contractor, Alliant Techsystems Operations LLC, is a known entity in the defense sector, suggesting a degree of established capability.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on the manufacturing and development of navigation, guidance, and control systems. This is a highly specialized area driven by technological innovation and stringent performance requirements. The market size for such systems is significant, tied directly to defense spending and modernization efforts globally. Comparable spending benchmarks would involve looking at other contracts for similar avionics, sensor technology, or integrated system development within the DoD and allied nations.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (sb: false) and there is no explicit mention of small business subcontracting goals. Therefore, the direct impact on the small business ecosystem is likely minimal unless Alliant Techsystems Operations LLC voluntarily engages small businesses as subcontractors. Further investigation into subcontracting plans would be needed to fully assess the impact on small businesses.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor compliance with contract terms, quality standards, and delivery schedules. Accountability measures are embedded in the cost-plus-incentive fee structure, linking contractor profit to performance. Transparency is generally maintained through contract awards databases and reporting requirements, though specific project details may be sensitive.

Related Government Programs

DoD Navigation Systems Procurement
Aeronautical and Nautical Instrument Manufacturing
Defense Advanced Research Projects Agency (DARPA) Projects
Tactical Navigation Systems
Guidance and Control Systems Development

Risk Flags

Cost Overrun Potential
Scope Definition Uncertainty
Limited Competition Indicators
Contractor Performance Risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $37.4 million to ALLIANT TECHSYSTEMS OPERATIONS LLC. TAS::17 1804::TAS JATAS PRELIMINARY DESIGN

Who is the contractor on this award?

The obligated recipient is ALLIANT TECHSYSTEMS OPERATIONS LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $37.4 million.

What is the period of performance?

Start: 2009-09-25. End: 2012-02-29.

What is the track record of Alliant Techsystems Operations LLC with similar Department of Defense contracts?

Alliant Techsystems Operations LLC (now part of Northrop Grumman) has a substantial track record with the Department of Defense, often securing large contracts related to aerospace, defense electronics, and advanced materials. They have historically been involved in programs requiring complex system integration, sensor development, and weapon systems components. Their experience typically spans research and development, production, and sustainment phases. Analyzing their past performance on cost-plus-incentive fee contracts, particularly those involving navigation or guidance systems, would provide context for their ability to manage this specific award effectively. Past performance reviews and contract close-out data would be key indicators of their reliability and efficiency in delivering on similar complex defense projects.

How does the awarded amount compare to similar preliminary design contracts for navigation systems?

Comparing the $37.3 million preliminary design award to similar contracts requires access to a database of comparable procurements. However, preliminary design phases for complex defense systems like advanced navigation and guidance instruments can range significantly based on technological sophistication, system integration requirements, and the number of components involved. Contracts for less complex systems or those with more mature technologies might be awarded for a few million dollars, while highly innovative or integrated systems could approach or exceed this amount. The fact that this contract is for preliminary design suggests it's an early investment, and the final system cost could be substantially higher. Benchmarking against contracts for similar NAICS codes (e.g., 334511) and contract types (cost-plus) would be essential for a precise comparison.

What are the primary risks associated with a cost-plus-incentive fee contract for preliminary design?

The primary risks associated with a cost-plus-incentive fee (CPIF) contract for preliminary design revolve around cost control and scope definition. While CPIF aims to incentivize efficiency by linking contractor profit to performance metrics (often cost targets), there's an inherent risk that costs could escalate beyond initial projections if the preliminary design proves more complex or challenging than anticipated. The preliminary design phase itself carries risk, as the final system requirements and technical solutions are not yet fully solidified. This uncertainty can lead to scope creep or the need for significant design modifications, impacting both cost and schedule. Effective oversight is crucial to monitor expenditures, validate progress against milestones, and ensure the incentive structure appropriately motivates the contractor towards achieving defined objectives within reasonable cost parameters.

What is the expected program effectiveness based on the contract type and scope?

The expected program effectiveness is moderately high, given the contract type and scope. The preliminary design phase is a critical step for ensuring the eventual system meets its intended operational requirements. The cost-plus-incentive fee structure is designed to encourage the contractor to perform efficiently and effectively, aligning their financial interests with the government's objectives. However, effectiveness is contingent on the clarity of the initial requirements and the contractor's technical capability. If the preliminary design successfully lays a solid foundation for a robust, functional, and reliable navigation system that meets the DoD's needs, the program can be considered effective. Conversely, if the design phase encounters unforeseen technical hurdles or scope ambiguities, the long-term effectiveness could be compromised, necessitating further investment or redesign.

How has historical spending in the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector evolved?

Historical spending in the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector (NAICS 334511) has generally been robust, driven by consistent defense modernization needs and advancements in aerospace technology. This sector is characterized by high R&D investment and long product lifecycles. Spending tends to fluctuate based on geopolitical conditions, defense budgets, and the introduction of new technologies like AI-driven navigation, advanced sensor fusion, or unmanned system integration. Over the past decade, there has been a noticeable trend towards more integrated systems, increased reliance on GPS-denied navigation solutions, and the incorporation of sophisticated data processing capabilities. Government procurement data indicates sustained, significant investment in this area, reflecting its critical importance to national security and technological advancement.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0001908R0043

Offers Received: 3

Pricing Type: COST PLUS INCENTIVE FEE (V)

Evaluated Preference: NONE

Contractor Details

Parent Company: Northrop Grumman Innovation Systems LLC (UEI: 618705925)

Address: 13133 34TH ST N, CLEARWATER, FL, 33762

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $38,129,960

Exercised Options: $37,834,091

Current Obligation: $37,354,594

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline