DoD's $37.5M contract for communications equipment awarded to DRS Signal Solutions, Inc. raises value and competition questions

Contract Overview

Contract Amount: $37,496,738 ($37.5M)

Contractor: DRS Signal Solutions, Inc.

Awarding Agency: Department of Defense

Start Date: 2010-09-13

End Date: 2013-09-30

Contract Duration: 1,113 days

Daily Burn Rate: $33.7K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DRS EQUIPMENT

Place of Performance

Location: MERRIMACK, HILLSBOROUGH County, NEW HAMPSHIRE, 03054, UNITED STATES OF AMERICA

State: New Hampshire Government Spending

Plain-Language Summary

Department of Defense obligated $37.5 million to DRS SIGNAL SOLUTIONS, INC. for work described as: DRS EQUIPMENT Key points: 1. The contract's value proposition is unclear due to a lack of competitive bidding and limited performance data. 2. Awarded on a non-competitive basis, the contract may not reflect optimal market pricing. 3. The absence of a competitive process introduces potential risks related to cost control and innovation. 4. Performance context is limited, making it difficult to assess the effectiveness of the equipment procured. 5. This contract falls within the broader category of defense communications equipment, a critical but often complex sector. 6. The duration of the contract (over 3 years) suggests a significant commitment of resources.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without comparable competitive awards. The fixed price nature suggests cost certainty, but the lack of competition means the price may not have been optimized against market alternatives. Without detailed performance metrics or a clear comparison to similar systems acquired through competitive means, assessing the true value-for-money is difficult. The total award amount of $37.5 million warrants scrutiny given the non-competitive nature of the award.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. This typically occurs when only one vendor can provide the required goods or services, or in urgent situations. The lack of competition limits the government's ability to leverage market forces to achieve the best possible price and terms. It also reduces transparency in the procurement process.

Taxpayer Impact: Taxpayers may have paid a premium for this equipment due to the absence of competitive pressure. The government missed an opportunity to potentially secure better pricing and explore innovative solutions from a wider range of vendors.

Public Impact

The Department of Defense benefits from the acquisition of specialized communications equipment. The equipment procured is intended to support military operations and communication infrastructure. The geographic impact is likely concentrated within military installations or operational theaters where the equipment is deployed. Workforce implications may include training for military personnel on the new equipment and potential support roles for the contractor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Limited transparency in the sole-source award process.
Potential for vendor lock-in due to specialized equipment.
Performance data is not readily available to assess effectiveness.
Contract duration could tie up significant funds without guaranteed optimal value.

Positive Signals

Procurement of critical communications equipment for national defense.
Fixed-price contract provides some cost certainty.
Award to an established defense contractor (DRS Signal Solutions).

Sector Analysis

The defense communications equipment sector is characterized by high technological complexity, significant R&D investment, and long product lifecycles. Contracts in this area often involve specialized systems tailored to military requirements. Spending benchmarks can vary widely depending on the specific technology and quantity. This contract for 'Other Communications Equipment Manufacturing' fits within a broad segment of the defense industrial base focused on enabling command and control capabilities.

Small Business Impact

There is no indication that this contract included small business set-asides or subcontracting goals. As a sole-source award to a large prime contractor, the direct impact on the small business ecosystem is likely minimal unless DRS Signal Solutions actively engages small businesses in its supply chain. Further investigation into subcontracting plans would be needed to fully assess the impact.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and program management offices. Accountability measures would be tied to the contract's terms and conditions, including delivery schedules and technical specifications. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Communications Systems
Military Communications Equipment Procurement
Defense Signal Solutions Contracts
Other Communications Equipment Manufacturing

Risk Flags

Sole-source award
Lack of competition
Limited performance data available
Potential for above-market pricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $37.5 million to DRS SIGNAL SOLUTIONS, INC.. DRS EQUIPMENT

Who is the contractor on this award?

The obligated recipient is DRS SIGNAL SOLUTIONS, 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 $37.5 million.

What is the period of performance?

Start: 2010-09-13. End: 2013-09-30.

What specific type of communications equipment was procured under this contract, and what are its intended operational uses?

The contract is categorized under 'Other Communications Equipment Manufacturing' (NAICS code 334290). While the specific details of the equipment are not provided in the summary data, this category typically includes items such as radio and television broadcasting and wireless communications equipment, as well as parts and accessories. For the Department of the Army, such equipment could range from tactical radios and satellite communication systems to network infrastructure components essential for maintaining command and control, intelligence, and logistical communications in various operational environments. The exact nature of the equipment would be detailed in the contract's statement of work.

Why was this contract awarded on a sole-source basis instead of being competed?

Sole-source awards are generally justified when only one responsible source can satisfy the agency's needs. Common reasons include unique capabilities, proprietary technology, urgent and compelling requirements where competition is not feasible, or when a previous contract was awarded competitively and the follow-on work is only available from that specific contractor. Without the specific justification documented by the Department of the Army at the time of award, it is impossible to definitively state the reason. However, the 'NOT AVAILABLE FOR COMPETITION' status indicates that a formal competitive process was bypassed.

What is the track record of DRS Signal Solutions, Inc. in fulfilling similar Department of Defense contracts?

DRS Signal Solutions, Inc., a subsidiary of Leonardo DRS, has a significant history of contracting with the U.S. Department of Defense. They specialize in providing advanced C4ISR (Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance) systems and solutions. Their portfolio often includes tactical communication systems, electronic warfare capabilities, and network-centric solutions. While this specific contract was sole-source, DRS has likely been awarded numerous other contracts, both competitive and non-competitive, for similar or related defense technologies. A deeper analysis of their contract history would reveal their performance trends, delivery reliability, and overall success in meeting DoD requirements.

How does the $37.5 million award compare to typical spending on similar communications equipment by the Department of Defense?

Comparing this $37.5 million award requires understanding the specific type of communications equipment procured. The 'Other Communications Equipment Manufacturing' category is broad. If this contract was for a large-scale deployment of a new tactical radio system or a significant upgrade to a satellite communication network, $37.5 million might be within a reasonable range for a sole-source award, especially if it involved specialized technology or integration services. However, if it was for more standard or commercially available equipment, this amount could be considered high, particularly without competitive pricing. Benchmarking would necessitate identifying comparable systems and their acquisition costs through competitive contracts.

What are the potential risks associated with awarding a contract of this magnitude on a sole-source basis?

The primary risk of a sole-source award is the potential for inflated costs due to the lack of competitive pressure. Without competing bids, the government may not achieve the best possible price. Other risks include reduced innovation, as there's less incentive for the sole provider to offer cutting-edge solutions, and potential vendor lock-in, where the agency becomes dependent on a single supplier. Furthermore, the lack of transparency in the procurement process can raise concerns about fairness and efficiency. There's also a risk that the government might not be aware of alternative, potentially more cost-effective solutions available in the market.

What is the historical spending trend for 'Other Communications Equipment Manufacturing' by the Department of the Army?

Historical spending trends for 'Other Communications Equipment Manufacturing' (NAICS 334290) by the Department of the Army can be analyzed through federal procurement databases. This category encompasses a wide array of communication technologies. Over the years, the Army's spending in this area has likely fluctuated based on evolving military needs, technological advancements, and budget allocations. Significant investments are often made during periods of military modernization or in response to specific operational requirements. Analyzing multi-year spending data would reveal patterns, identify major contract vehicles, and highlight periods of increased or decreased investment in this sector.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Other Communications Equipment Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Leonardo SPA (UEI: 428869465)

Address: 700 QUINCE ORCHARD RD, GAITHERSBURG, MD, 20878

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $37,496,738

Exercised Options: $37,496,738

Current Obligation: $37,496,738

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W15P7T05DD213

IDV Type: IDC

Timeline