DoD awards $83M for CH-47F modification, upgrade program for UAE aircraft

Contract Overview

Contract Amount: $83,158,663 ($83.2M)

Contractor: Science and Engineering Services, LLC

Awarding Agency: Department of Defense

Start Date: 2020-08-04

End Date: 2026-12-31

Contract Duration: 2,340 days

Daily Burn Rate: $35.5K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: EFFORT REQUIRED FOR INSTALLATION, VALIDATION/ VERIFICATION, AND MAINTENANCE OF THE CH-47F/ICH-47F MODIFICATION AND UPGRADE PROGRAM TO INCLUDE 17 UAE AIRCRAFT.

Place of Performance

Location: HUNTSVILLE, MADISON County, ALABAMA, 35824

State: Alabama Government Spending

Plain-Language Summary

Department of Defense obligated $83.2 million to SCIENCE AND ENGINEERING SERVICES, LLC for work described as: EFFORT REQUIRED FOR INSTALLATION, VALIDATION/ VERIFICATION, AND MAINTENANCE OF THE CH-47F/ICH-47F MODIFICATION AND UPGRADE PROGRAM TO INCLUDE 17 UAE AIRCRAFT. Key points: 1. Contract focuses on installation, validation, and maintenance for a critical aircraft upgrade. 2. The effort is part of a broader Foreign Military Sales (FMS) program. 3. Competition was full and open after exclusion of sources, suggesting a deliberate procurement strategy. 4. The contract duration spans over six years, indicating a long-term commitment. 5. The pricing structure is Cost Plus Fixed Fee, which can shift risk to the government. 6. The contractor, Science and Engineering Services, LLC, is tasked with a complex technical undertaking.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance metrics or comparable FMS upgrade contracts. The Cost Plus Fixed Fee (CPFF) structure means the government bears the risk of cost overruns, though a fixed fee provides some predictability. The total award amount of $83.16 million for a six-year effort involving modification and upgrade of 17 aircraft suggests a significant investment per aircraft. Further analysis would require understanding the scope of modifications and comparing the per-aircraft cost to similar international upgrade programs.

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.' This indicates that while the competition was intended to be broad, specific sources may have been excluded based on pre-defined criteria or requirements. The number of bidders is not specified, but the 'full and open' designation suggests a competitive process was initiated. The exclusion of sources warrants further investigation to understand the rationale and its potential impact on the breadth of competition.

Taxpayer Impact: While the competition was intended to be broad, the exclusion of certain sources could potentially limit price discovery and may not have yielded the most competitive pricing for taxpayers.

Public Impact

The primary beneficiaries are the United Arab Emirates Air Force, receiving upgraded CH-47F helicopters. The services delivered include installation, validation, verification, and maintenance of aircraft modifications. The geographic impact is primarily within the United Arab Emirates, where the aircraft will operate. The contract supports specialized technical roles in aircraft modification and maintenance.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can lead to cost overruns if not managed tightly.
Exclusion of sources in a 'full and open' competition raises questions about the extent of market engagement.
The long duration of the contract requires sustained government oversight to ensure performance and value.
Foreign Military Sales (FMS) contracts can involve complex intergovernmental agreements and unique requirements.

Positive Signals

The contract is for a critical upgrade program for a key allied nation's air assets.
Full and open competition, even with exclusions, aims to leverage market capabilities.
The contractor has been awarded a significant contract, indicating a level of trust and capability.
The focus on modification and upgrade suggests an effort to enhance operational readiness and lifespan of aircraft.

Sector Analysis

This contract falls within the broader aerospace and defense manufacturing sector, specifically focusing on aircraft modification and upgrade services. The global market for military aircraft upgrades is substantial, driven by the need to extend the service life of existing fleets and incorporate new technologies. Comparable spending benchmarks would involve analyzing other FMS contracts for helicopter upgrades or major modification programs for similar aircraft types, considering factors like the number of aircraft, complexity of upgrades, and specific avionics or structural enhancements.

Small Business Impact

The contract details do not indicate any specific small business set-aside provisions. Given the nature of aircraft modification and upgrade programs, which often require highly specialized facilities and expertise, it is common for prime contracts to be awarded to large defense contractors. Subcontracting opportunities for small businesses may exist, but these are not explicitly detailed in the provided data. The overall impact on the small business ecosystem would depend on the extent to which Science and Engineering Services, LLC engages small businesses in its supply chain.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of the Army, likely through contracting officers and program management offices responsible for Foreign Military Sales. Accountability measures would be embedded in the contract's terms and conditions, including performance standards, delivery schedules, and payment milestones. Transparency is generally maintained through contract awards databases, but specific details on performance and cost management are often internal. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

CH-47 Chinook Helicopter Program
Foreign Military Sales (FMS) Aircraft Programs
Aviation Systems Modernization
Defense Contract Management Agency (DCMA) Oversight

Risk Flags

Cost Plus Fixed Fee contract type requires diligent oversight to manage costs.
Exclusion of sources in competition may limit optimal price discovery.
Long contract duration increases risk of technological obsolescence and requires sustained oversight.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $83.2 million to SCIENCE AND ENGINEERING SERVICES, LLC. EFFORT REQUIRED FOR INSTALLATION, VALIDATION/ VERIFICATION, AND MAINTENANCE OF THE CH-47F/ICH-47F MODIFICATION AND UPGRADE PROGRAM TO INCLUDE 17 UAE AIRCRAFT.

Who is the contractor on this award?

The obligated recipient is SCIENCE AND ENGINEERING SERVICES, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $83.2 million.

What is the period of performance?

Start: 2020-08-04. End: 2026-12-31.

What is the specific scope of the 'modification and upgrade' for the CH-47F/ICH-47F aircraft?

The provided data indicates the effort involves 'installation, validation/verification, and maintenance' for the CH-47F/ICH-47F modification and upgrade program. However, the precise technical details of these modifications are not specified. This could encompass a range of enhancements, such as avionics upgrades, structural reinforcements, engine improvements, or integration of new mission equipment. Understanding the specific nature of the upgrades is crucial for assessing the contract's value and the contractor's performance. Without this detail, it's difficult to benchmark the cost against industry standards for similar upgrade packages.

How does the Cost Plus Fixed Fee (CPFF) pricing structure impact risk and value for the government in this contract?

The CPFF structure means that the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. This structure shifts the primary cost risk to the government, as the total cost of the contract can exceed initial estimates if costs escalate. While the fixed fee provides some cost certainty regarding profit, it does not cap the total contract expenditure. For the government, effective oversight is critical to ensure that costs are reasonable and allowable. The value proposition hinges on the contractor's ability to deliver the required modifications efficiently within the estimated cost base, as the government bears the burden of any cost overruns.

What are the implications of 'Full and Open Competition After Exclusion of Sources' for this contract?

This procurement method suggests that the initial solicitation was intended for all responsible sources ('full and open'). However, specific sources were subsequently excluded. The rationale for exclusion is not provided but could be due to factors like specialized capabilities, security clearances, or prior performance issues. While aiming for broad competition, the exclusion of sources might limit the pool of potential bidders and potentially affect the level of price competition achieved. It implies a deliberate selection process occurred after the initial broad solicitation, warranting a review of the justification for exclusions to ensure fairness and optimal market engagement.

What is the track record of Science and Engineering Services, LLC in performing similar aircraft modification and upgrade contracts?

Information on Science and Engineering Services, LLC's specific track record for CH-47F/ICH-47F modifications or similar large-scale military aircraft upgrade programs is not detailed in the provided data. A comprehensive assessment would require reviewing their past performance on government contracts, including client satisfaction, adherence to schedule and budget, and technical execution. Their ability to successfully manage complex projects, particularly those involving international partners and advanced technology integration, is a key indicator of their capability to deliver on this $83 million award.

How does the $83.16 million award compare to historical spending on CH-47F sustainment or upgrade programs?

Direct comparison of this $83.16 million award to historical spending requires access to detailed historical contract data for CH-47F sustainment and upgrade programs, both domestically and for international partners. This figure represents a significant investment for the modification and upgrade of 17 aircraft over a 6-year period. Analyzing past contracts for similar scope (e.g., number of aircraft, type of upgrades) would provide context. Without such comparative data, it's difficult to definitively state whether this award represents a favorable or unfavorable cost relative to historical trends or market rates for similar services.

What are the potential risks associated with the long contract duration (2020-2026) for this upgrade program?

The extended duration of this contract (2340 days, approximately 6.4 years) presents several potential risks. Technological obsolescence is a concern, as advancements in aviation technology could occur during the contract period, potentially diminishing the value of the upgrades by the end of the program. Programmatic risks include potential shifts in strategic priorities for the UAE or the US, which could lead to changes in scope or funding. Furthermore, maintaining consistent oversight and contractor performance over such a long period requires sustained government resources and attention to prevent performance degradation or cost creep. Managing scope changes effectively will be crucial.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 248 DUNLOP BLVD, HUNTSVILLE, AL, 35824

Business Categories: Asian Pacific American Owned Business, Category Business, Limited Liability Corporation, Minority Owned Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $83,158,663

Exercised Options: $83,158,663

Current Obligation: $83,158,663

Subaward Activity

Number of Subawards: 11

Total Subaward Amount: $3,805,352

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W58RGZ19D0045

IDV Type: IDC

Timeline