DoD awards $43.6M contract for FSR Support Services to SRC Inc., utilizing a sole-source approach

Contract Overview

Contract Amount: $43,626,077 ($43.6M)

Contractor: SRC Inc

Awarding Agency: Department of Defense

Start Date: 2025-04-01

End Date: 2026-02-28

Contract Duration: 333 days

Daily Burn Rate: $131.0K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: FSR SUPPORT SERVICES

Place of Performance

Location: SYRACUSE, ONONDAGA County, NEW YORK, 13212

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $43.6 million to SRC INC for work described as: FSR SUPPORT SERVICES Key points: 1. Contract awarded to SRC Inc. for FSR Support Services, indicating a specialized need or existing relationship. 2. The contract's cost-plus-fixed-fee structure requires careful monitoring of indirect costs to ensure value. 3. Sole-source award suggests potential limitations in market competition or unique contractor capabilities. 4. The duration of 333 days points to a focused, short-term requirement for these support services. 5. The contract falls under the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' NAICS code, highlighting its technical focus. 6. Awarded by the Department of the Army, this contract supports critical defense operations.

Value Assessment

Rating: questionable

Benchmarking the value of this $43.6 million contract is challenging without comparable sole-source awards or detailed cost breakdowns. The cost-plus-fixed-fee (CPFF) pricing structure, while common for R&D or uncertain scope work, can lead to higher overall costs if not managed diligently. Without competition, it's difficult to ascertain if the fixed fee adequately compensates the contractor for the effort or if it represents a premium. Further analysis of the contractor's historical performance and pricing on similar sole-source contracts would be necessary to provide a more definitive value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one contractor, SRC Inc., was solicited. This approach is typically used when a unique capability is required, or when it's impractical or uneconomical to solicit bids from multiple sources. The lack of competition means that price discovery through market forces was bypassed, potentially leading to higher costs for the government compared to a competed contract. The justification for this sole-source award would need to be thoroughly reviewed to understand the specific circumstances.

Taxpayer Impact: Taxpayers may face higher costs due to the absence of competitive bidding, as the government did not benefit from price reductions typically driven by multiple offers.

Public Impact

The primary beneficiaries are the Department of Defense and specifically the Department of the Army, receiving essential FSR support services. The services delivered are critical for maintaining and enhancing the operational readiness of defense systems. The contract is geographically located in New York (NY), suggesting a concentration of defense operations or contractor presence in that state. While specific workforce implications are not detailed, the contract likely supports specialized technical personnel within SRC Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing.
Cost-plus-fixed-fee structure necessitates robust oversight to control indirect costs.
Lack of transparency in the justification for sole-sourcing could obscure potential alternatives.

Positive Signals

Award to an established contractor (SRC Inc.) may indicate specialized expertise.
Contract supports critical defense functions, aligning with national security objectives.

Sector Analysis

This contract falls within the broader aerospace and defense sector, specifically related to the manufacturing and support of navigation and guidance systems. The NAICS code 334511 covers establishments primarily engaged in manufacturing instruments for measuring, displaying, and controlling industrial process variables; aircraft and spacecraft propulsion, flight, and guidance systems; and navigational and guidance systems and instruments. Spending in this sub-sector is often driven by defense procurement needs, research and development, and technological advancements.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, there is no explicit mention of subcontracting goals for small businesses. This suggests that the primary focus of this award was on the capabilities of the prime contractor, SRC Inc., and that opportunities for small business participation may be limited unless SRC Inc. voluntarily includes them in its subcontracting efforts.

Oversight & Accountability

Oversight for this contract will be managed by the Department of the Army. As a cost-plus-fixed-fee contract, rigorous financial oversight is crucial to monitor expenditures and ensure that costs are reasonable and allocable. Transparency regarding the justification for the sole-source award and the contractor's performance metrics will be key accountability measures. The specific Inspector General jurisdiction would typically align with the awarding agency, in this case, the Department of Defense.

Related Government Programs

Defense Logistics Agency (DLA) Support Contracts
Naval Air Systems Command (NAVAIR) Procurement
Air Force Materiel Command (AFMC) Services
Army Combat Capabilities Development Command (DEVCOM) Contracts

Risk Flags

Sole-source award justification requires review.
Cost-plus-fixed-fee contract necessitates robust cost oversight.
Lack of small business subcontracting goals.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $43.6 million to SRC INC. FSR SUPPORT SERVICES

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 $43.6 million.

What is the period of performance?

Start: 2025-04-01. End: 2026-02-28.

What is SRC Inc.'s track record with the Department of Defense on similar sole-source contracts?

SRC Inc. has a history of contracting with the Department of Defense, often in specialized areas related to defense research, development, and advanced technology solutions. While specific details on prior sole-source contracts for FSR Support Services are not provided in this data snippet, their general profile suggests experience in complex defense-related projects. To assess their track record thoroughly, one would need to examine their past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), the types of services previously rendered under sole-source awards, and the overall value and duration of those contracts. A review of their financial stability and any past disputes or contract modifications would also be pertinent.

How does the pricing structure (Cost Plus Fixed Fee) compare to other FSR support contracts awarded by the Army?

The Cost Plus Fixed Fee (CPFF) pricing structure is common for contracts where the scope of work is not precisely defined or involves research and development, making it difficult to establish a firm fixed price upfront. For FSR Support Services, if the nature of the support involves evolving requirements or complex technical challenges, CPFF can be appropriate. However, compared to fixed-price contracts, CPFF generally carries a higher risk of cost overruns for the government, as the contractor is reimbursed for allowable costs plus a fixed fee. Benchmarking requires comparing the fixed fee percentage and the total estimated cost against similar CPFF contracts for comparable services. Without access to a database of similar Army FSR support contracts with detailed cost breakdowns, a direct comparison is difficult, but the CPFF structure inherently suggests a higher potential cost than a competitively bid fixed-price contract.

What are the specific risks associated with a sole-source award for these FSR support services?

The primary risk associated with a sole-source award is the lack of competition, which can lead to inflated pricing and reduced incentive for the contractor to innovate or optimize performance. The government may end up paying more than it would in a competitive environment. Another risk is the potential for vendor lock-in, where the government becomes overly reliant on a single provider, making it difficult to switch or negotiate favorable terms in the future. Furthermore, without the scrutiny of multiple bidders, there's a risk that the government may not be aware of potentially better or more cost-effective solutions available in the market. The justification for the sole-source award must be robust to mitigate these risks.

What is the expected program effectiveness or outcome of these FSR support services?

The effectiveness of these FSR (Forward Support Representative) support services is expected to directly contribute to the operational readiness and sustainment of Department of the Army systems. FSRs typically provide on-site technical assistance, maintenance, troubleshooting, and logistical support for complex equipment. Therefore, the successful delivery of these services should translate into reduced downtime for critical assets, improved system performance, and enhanced warfighter capabilities. The specific outcomes would be tied to the performance metrics and deliverables outlined in the contract, such as response times for technical issues, successful repair rates, and availability of support personnel. The CPFF structure implies that the government is paying for the effort to achieve these outcomes.

How does the $43.6 million spending compare to historical FSR support spending by the Department of the Army?

Without historical spending data specifically for 'FSR Support Services' under the Department of the Army, a direct comparison is not feasible. However, $43.6 million represents a significant investment. To contextualize this, one would need to analyze broader categories of technical support, maintenance, and logistics services procured by the Army. If FSR support is a critical component of maintaining high-value weapon systems or complex operational platforms, this level of spending might be consistent with industry norms for specialized, long-term support. Conversely, if FSR services are typically procured through more competitive, fixed-price contracts, this sole-source award at this value warrants closer scrutiny regarding its necessity and cost-effectiveness relative to historical patterns.

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: $46,362,242

Exercised Options: $43,626,077

Current Obligation: $43,626,077

Actual Outlays: $12,746,710

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $110,000

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