The Department of Defense announced $5.71 billion worth of new defense contracts Tuesday in the form of 10 separate contracts, but these contracts were not all created equal.
By far the largest contract of the day was a massive $5.3 billion indefinite-delivery/indefinite-quantity, multiple-award contract issued to a mind-boggling 914 separate recipients simultaneously. Winners included everyone from subsidiaries of brand-name defense contractors such as AAR Corp (NYSE:AIR) and SAIC (NYSE: SAI) to lesser-known, federally defined small businesses such as "Wakelight Technologies" of Honolulu and "Electromagnetic Compatibility Management Concepts" of Sterling, Va.
The contract permits each of these companies to compete for the right to fulfill task orders for the U.S. Navy's Naval Sea Systems Command, Naval Air Systems Command, Space and Naval Warfare Systems Command, Naval Supply Systems Command, Military Sealift Command, Naval Facilities Command, Strategic Systems Programs, Office of Naval Research, and also the U.S. Marine Corps.
As the Pentagon explained: "The 22 functional service areas within the scope of the contracts include: 1) research and development support, 2) engineering system engineering and process engineering support, 3) modeling, simulation, stimulation and analysis support, 4) prototyping, pre-production, model-making and fabric support, 5) system design documentation and technical data support, 6) software engineering, development, programming and network support, 7) reliability, maintainability and availability support, 8) human factors, performance and usability engineering support, 9) system safety engineering support, 10) configuration management support, 11) quality assurance support, 12) information system development, information assurance and information technology support, 13) ship inactivation and disposal support, 14) interoperability, test and evaluation, trials support, 15) measurement facilities, range and instrumentation support, 16) acquisition logistics support, 17) supply and provisioning support, 18) training support, 19) in-service engineering, fleet introduction, installation and checkout support, 20) program support, 21) functional and administrative support, and 22) public affairs and multimedia support."
All of these services are being awarded under the so-called SeaPort Enhanced (SeaPort-e) acquisition program. 2,838 contracts have already been awarded under this program. The government anticipates spending $5.3 billion -- annually -- on orders under this new contract. Each contract awarded will come with a base five-month period for performance, to be followed by potentially, a single five-year optional period.