DoD's $10M contract for Navigation Systems to SEACORP, LLC faces potential risks despite full and open competition
Contract Overview
Contract Amount: $9,998,343 ($10.0M)
Contractor: Seacorp, LLC
Awarding Agency: Department of Defense
Start Date: 2024-05-01
End Date: 2026-04-30
Contract Duration: 729 days
Daily Burn Rate: $13.7K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 2
Pricing Type: COST PLUS FIXED FEE
Sector: IT
Official Description: COMMON INFRASTRUCTURE SERVICES (CIS)
Place of Performance
Location: MIDDLETOWN, NEWPORT County, RHODE ISLAND, 02842
Plain-Language Summary
Department of Defense obligated $10.0 million to SEACORP, LLC for work described as: COMMON INFRASTRUCTURE SERVICES (CIS) Key points: 1. The contract value of $9.99M for navigation systems is moderate. 2. SEACORP, LLC is the sole awardee, raising questions about sustained competition. 3. The Cost Plus Fixed Fee (CPFF) structure introduces potential cost overruns. 4. The sector is IT/Defense, a high-spending area with complex requirements.
Value Assessment
Rating: fair
The contract is a Cost Plus Fixed Fee (CPFF) type, which can lead to higher costs compared to fixed-price contracts if not managed closely. Benchmarking against similar navigation system contracts is difficult without more detailed cost breakdowns.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES,' indicating an initial broad competition that was later narrowed. This method can sometimes limit the pool of potential bidders and impact price discovery.
Taxpayer Impact: While competition was intended, the specific exclusion of sources may have limited the most competitive pricing. The CPFF structure also adds risk to taxpayer investment.
Public Impact
Ensures critical navigation and guidance systems for the Navy remain operational. Supports advanced technology in maritime and aeronautical systems. Potential for cost overruns due to CPFF contract type could impact budget.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee (CPFF) contract type
- Potential for limited competition despite initial 'full and open' designation
- Lack of detailed cost breakdown for benchmarking
Positive Signals
- Awarded under full and open competition
- Supports critical defense infrastructure
Sector Analysis
This contract falls within the IT/Defense sector, specifically manufacturing instruments for navigation and guidance. Spending in this area is substantial, driven by technological advancements and national security needs.
Small Business Impact
The data indicates the awardee is SEACORP, LLC, and there is no explicit mention of small business participation. Further investigation is needed to determine if small businesses were involved as subcontractors.
Oversight & Accountability
The contract's CPFF structure necessitates robust oversight from the Department of the Navy to control costs and ensure performance. Monitoring the 'exclusion of sources' aspect is also crucial for accountability.
Related Government Programs
- Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
- Department of Defense Contracting
- Department of the Navy Programs
Risk Flags
- Cost Plus Fixed Fee (CPFF) contract type can lead to cost overruns.
- Limited competition due to 'exclusion of sources' may impact price.
- Lack of small business participation noted.
- Specific details on cost breakdown and benchmarking are unavailable.
Tags
search-detection-navigation-guidance-aer, department-of-defense, ri, definitive-contract, 1m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $10.0 million to SEACORP, LLC. COMMON INFRASTRUCTURE SERVICES (CIS)
Who is the contractor on this award?
The obligated recipient is SEACORP, LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Navy).
What is the total obligated amount?
The obligated amount is $10.0 million.
What is the period of performance?
Start: 2024-05-01. End: 2026-04-30.
What specific factors led to the exclusion of certain sources after the initial 'full and open' competition, and how did this impact the final price?
The exclusion of sources after an initial 'full and open' competition typically occurs due to specific technical requirements, security clearances, or unique capabilities that only a limited number of vendors possess. This narrowing of the field can reduce competitive pressure, potentially leading to higher prices than if all eligible sources had participated. Understanding the exact reasons for exclusion is key to assessing if the final price reflects fair market value.
What are the primary cost drivers in this CPFF contract, and what mechanisms are in place to mitigate potential cost overruns?
Primary cost drivers likely include labor (engineering, technical staff), materials, and overhead associated with developing and manufacturing complex navigation systems. Mitigation mechanisms for CPFF contracts usually involve stringent government oversight, detailed cost reporting requirements, performance metrics tied to fee, and negotiation of realistic target costs and fixed fees. Regular audits and reviews are essential to control expenditures.
How does the performance of SEACORP, LLC on similar contracts inform the risk assessment for this award?
Assessing SEACORP, LLC's past performance on similar contracts is crucial for understanding their reliability, quality of work, and cost control capabilities. A history of successful, on-time, and within-budget delivery suggests lower risk. Conversely, past issues with performance, cost overruns, or quality problems would elevate the risk profile for this current contract, necessitating closer monitoring and potentially more stringent contractual controls.
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: FIRE CONTROL EQPT.
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: N0002423R6201
Offers Received: 2
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 62 JOHNNY CAKE HILL RD, MIDDLETOWN, RI, 02842
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Manufacturer of Goods, Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $72,249,505
Exercised Options: $18,546,716
Current Obligation: $9,998,343
Subaward Activity
Number of Subawards: 3
Total Subaward Amount: $707,682
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2024-05-01
Current End Date: 2026-04-30
Potential End Date: 2026-04-30 00:00:00
Last Modified: 2025-12-16
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