DoD awards $48.25M for fleet-wide FS-LIDS and M-LIDS sustainment to SRC Inc

Contract Overview

Contract Amount: $48,254,004 ($48.3M)

Contractor: SRC Inc

Awarding Agency: Department of Defense

Start Date: 2023-07-19

End Date: 2024-07-27

Contract Duration: 374 days

Daily Burn Rate: $129.0K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: THIS TO DEFINES THE EFFORT TO BE PERFORMED BY THE CONTRACTOR IN PROVIDING SUSTAINMENT, CONTRACTOR LOGISTICS SUPPORT (CLS), AND PROGRAMMATIC ACTIVITIES IN SUPPORT OF FLEET- WIDE FS-LIDS AND M-LIDS.

Place of Performance

Location: SYRACUSE, ONONDAGA County, NEW YORK, 13212

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $48.3 million to SRC INC for work described as: THIS TO DEFINES THE EFFORT TO BE PERFORMED BY THE CONTRACTOR IN PROVIDING SUSTAINMENT, CONTRACTOR LOGISTICS SUPPORT (CLS), AND PROGRAMMATIC ACTIVITIES IN SUPPORT OF FLEET- WIDE FS-LIDS AND M-LIDS. Key points: 1. Contract focuses on sustainment, logistics, and programmatic activities for critical fleet systems. 2. Sole-source award raises questions about competition and potential price discovery. 3. Contract duration of 374 days suggests a need for ongoing support. 4. Cost-plus-fixed-fee structure may incentivize cost overruns. 5. The specific systems (FS-LIDS and M-LIDS) are vital for naval operations. 6. Geographic location in New York may impact local economic benefits. 7. The NAICS code 334511 points to a specialized manufacturing sector.

Value Assessment

Rating: fair

The contract value of $48.25 million for a 374-day period appears substantial for sustainment and logistics support. Without comparable contract data for similar fleet-wide systems, a precise value-for-money assessment is challenging. The cost-plus-fixed-fee (CPFF) pricing structure, while common for complex or evolving requirements, carries inherent risks of cost escalation if not closely managed. Benchmarking against industry standards for system sustainment and logistics support would be necessary for a more definitive evaluation of pricing reasonableness.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, indicating that competition was not sought. This approach is typically justified when only one responsible source can provide the required supplies or services. The lack of competition means that potential alternative solutions or more competitive pricing from other vendors were not explored. This limits the government's ability to leverage market forces to achieve the best possible value.

Taxpayer Impact: For taxpayers, a sole-source award means the absence of competitive pressure that could drive down costs. This increases the risk of paying a premium for the goods or services received, as the government does not benefit from the price reductions typically seen in a competitive bidding process.

Public Impact

The primary beneficiaries are the U.S. Navy fleet units relying on FS-LIDS and M-LIDS systems for operational readiness. Services delivered include sustainment, contractor logistics support, and programmatic activities. The geographic impact is likely concentrated around naval bases and operational areas where these systems are deployed. Workforce implications may include specialized technical roles for sustainment and logistics personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential cost savings.
Cost-plus-fixed-fee structure can lead to cost overruns if not managed effectively.
Lack of transparency in the justification for sole-source procurement.
Potential for vendor lock-in due to specialized nature of sustainment.

Positive Signals

Contract ensures continued operational readiness of critical fleet systems.
SRC Inc. likely possesses specialized knowledge for these specific systems.
Sustainment and logistics support are crucial for maintaining system effectiveness.
Clear definition of effort for sustainment, CLS, and programmatic activities.

Sector Analysis

The contract falls within the defense industrial base, specifically supporting naval systems manufacturing and sustainment. The NAICS code 334511 (Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing) indicates a highly specialized sector. Spending in this area is critical for maintaining military technological superiority and operational capability. Comparable spending benchmarks would typically involve other sustainment contracts for complex defense systems, where costs can be significant due to the advanced technology and rigorous performance requirements.

Small Business Impact

This contract does not appear to include a small business set-aside, as indicated by 'sb': false. The prime contractor, SRC Inc., is likely a large business. There is no explicit mention of subcontracting plans for small businesses within the provided data. Therefore, the direct impact on the small business ecosystem from this specific award is likely minimal, unless SRC Inc. voluntarily engages small businesses for subcontracting opportunities.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Army's contracting and program management offices. As a sole-source award, the justification and negotiation process would be subject to review. Transparency regarding the specific metrics for sustainment and logistics performance, as well as cost controls within the CPFF structure, would be key areas for oversight. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Naval Systems Sustainment Programs
Defense Logistics Support Contracts
Fleet Readiness Programs
Aerospace and Defense Manufacturing
Command, Control, Communications, Computers, and Intelligence (C4I) Systems

Risk Flags

Sole-source award
Cost-plus-fixed-fee pricing structure
Lack of competitive bidding
Potential for cost escalation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $48.3 million to SRC INC. THIS TO DEFINES THE EFFORT TO BE PERFORMED BY THE CONTRACTOR IN PROVIDING SUSTAINMENT, CONTRACTOR LOGISTICS SUPPORT (CLS), AND PROGRAMMATIC ACTIVITIES IN SUPPORT OF FLEET- WIDE FS-LIDS AND M-LIDS.

Who is the contractor on this award?

The obligated recipient is SRC INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $48.3 million.

What is the period of performance?

Start: 2023-07-19. End: 2024-07-27.

What is SRC Inc.'s track record with similar sole-source sustainment contracts for naval systems?

SRC Inc. has a history of performing complex defense-related work, including systems integration, sensor development, and electronic warfare capabilities. While specific details on their sole-source sustainment contracts for naval systems are not provided in this data snippet, their established presence in the defense sector suggests they possess relevant expertise. A deeper dive into their contract history with the Department of Defense and other agencies would reveal the extent and success of their prior sustainment efforts, including performance metrics, customer satisfaction, and any past issues related to sole-source awards. Understanding their performance on similar contracts is crucial for assessing the reliability of their support for the FS-LIDS and M-LIDS systems.

How does the $48.25 million contract value compare to industry benchmarks for similar system sustainment?

Benchmarking the $48.25 million contract value requires detailed comparison with similar sustainment contracts for complex naval systems. Factors such as the specific technology involved (FS-LIDS and M-LIDS), the scope of services (sustainment, logistics, programmatic activities), and the contract duration (374 days) are critical. Without access to a database of comparable contracts, it's difficult to provide a precise benchmark. However, sustainment of advanced defense systems is typically costly due to the specialized technical expertise, spare parts management, and potential for unforeseen maintenance needs. The cost-plus-fixed-fee structure also adds a layer of complexity to direct value comparison, as it allows for costs to fluctuate.

What are the primary risks associated with a sole-source, cost-plus-fixed-fee contract for system sustainment?

The primary risks associated with this contract structure are twofold. Firstly, the sole-source nature eliminates competitive pressure, potentially leading to higher prices than might be achieved in a competitive environment. The government lacks the benefit of multiple bids to ensure optimal value. Secondly, the cost-plus-fixed-fee (CPFF) structure, while providing flexibility, can incentivize the contractor to incur higher costs, as their fee is a fixed amount regardless of the total cost incurred. This necessitates robust government oversight to monitor expenditures and ensure efficiency. Without stringent cost controls and performance monitoring, there is a risk of cost overruns and reduced value for taxpayer money.

What is the expected impact of this contract on the operational readiness of the Navy's fleet?

This contract is directly aimed at ensuring the operational readiness of the Navy's fleet by providing essential sustainment, contractor logistics support (CLS), and programmatic activities for the FS-LIDS and M-LIDS systems. These systems are critical components for naval operations, likely related to sensing, detection, or navigation. By securing ongoing support, the contract helps to minimize downtime, ensure systems are functioning optimally, and address any emerging technical issues promptly. The successful execution of this contract is therefore expected to contribute significantly to the overall effectiveness and availability of naval assets equipped with these systems.

How has spending on FS-LIDS and M-LIDS sustainment evolved over previous years?

The provided data only pertains to a single delivery order valued at $48.25 million with an end date in 2024. It does not offer historical spending patterns for FS-LIDS and M-LIDS sustainment. To understand the evolution of spending, one would need to analyze previous contracts, delivery orders, and task orders related to these specific systems over multiple fiscal years. This would involve searching contract databases for historical awards to SRC Inc. or other contractors performing similar sustainment functions. Such an analysis would reveal trends in contract values, durations, and the overall investment in maintaining these critical fleet systems.

What specific programmatic activities are included under this contract?

The contract specifies 'programmatic activities' alongside sustainment and contractor logistics support (CLS). While the exact nature of these activities is not detailed in the provided snippet, they typically encompass a range of tasks essential for the lifecycle management of defense systems. This could include aspects like configuration management, technical data management, obsolescence management, reliability and maintainability improvements, system upgrades, training support, and potentially research and development related to system enhancements or future iterations. These activities are crucial for ensuring the long-term viability and effectiveness of the FS-LIDS and M-LIDS systems.

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: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 7502 ROUND POND RD, NORTH SYRACUSE, NY, 13212

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

Financial Breakdown

Contract Ceiling: $51,392,689

Exercised Options: $48,254,004

Current Obligation: $48,254,004

Subaward Activity

Number of Subawards: 9

Total Subaward Amount: $643,992

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: W31P4Q20D0032

IDV Type: IDC

Timeline