ITT Corp. awarded $20.7M for ALQ-214 software/firmware, a sole-source defense contract

Contract Overview

Contract Amount: $20,746,416 ($20.7M)

Contractor: ITT Corporation

Awarding Agency: Department of Defense

Start Date: 2012-02-27

End Date: 2016-05-31

Contract Duration: 1,555 days

Daily Burn Rate: $13.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: THE PURPOSE OF THIS DELIVERY ORDER IS THE CREATION OF ALQ-214(V)4/5 SOFTWARE AND FIRMWARE.

Place of Performance

Location: CLIFTON, PASSAIC County, NEW JERSEY, 07014

State: New Jersey Government Spending

Plain-Language Summary

Department of Defense obligated $20.7 million to ITT CORPORATION for work described as: THE PURPOSE OF THIS DELIVERY ORDER IS THE CREATION OF ALQ-214(V)4/5 SOFTWARE AND FIRMWARE. Key points: 1. Contract focuses on specialized electronic warfare system software and firmware. 2. Sole-source award indicates limited market options or specific contractor expertise. 3. Cost-plus-fixed-fee structure may incentivize cost overruns if not closely managed. 4. Contract duration of over 4 years suggests a significant development or sustainment effort. 5. Performance is managed by the Defense Contract Management Agency. 6. The North American Industry Classification System code 334511 points to instrument manufacturing.

Value Assessment

Rating: fair

Benchmarking the value of this specific software and firmware development is challenging without comparable sole-source contracts. The cost-plus-fixed-fee (CPFF) pricing structure, while common for R&D, carries inherent risk of cost escalation if not rigorously overseen. The total award of $20.7 million over approximately four years suggests a substantial investment, but its value-for-money depends heavily on the successful delivery of the ALQ-214(V)4/5 system's capabilities and its operational effectiveness.

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 a single contractor possesses unique capabilities, intellectual property, or is the only source capable of meeting the government's requirements. The lack of competition means the government did not benefit from price discovery through a bidding process, potentially leading to a higher price than if multiple vendors had competed.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. The government's ability to negotiate the best possible price is diminished in sole-source situations.

Public Impact

The primary beneficiaries are the U.S. Department of Defense, specifically aircrews who will utilize the enhanced ALQ-214 electronic warfare system. The contract delivers critical software and firmware updates for an advanced threat detection and countermeasures system. Geographic impact is national, supporting defense readiness across various operational theaters. Workforce implications include specialized software engineers, firmware developers, and quality assurance personnel within ITT Corporation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases cost to taxpayers.
Cost-plus-fixed-fee contract type can incentivize higher costs if not managed effectively.
Lack of competition may reduce innovation incentives for alternative solutions.
Long contract duration increases exposure to potential scope creep or requirement changes.

Positive Signals

Focus on critical electronic warfare capabilities enhances national security.
Specific system upgrade (ALQ-214(V)4/5) suggests modernization of existing defense assets.
Award to ITT Corporation leverages existing contractor knowledge of the platform.

Sector Analysis

The defense electronics sector is characterized by high R&D costs, long product lifecycles, and significant government procurement. Companies like ITT Corporation specialize in complex systems integration, electronic warfare, and communication technologies. This contract fits within the broader market for aerospace and defense electronic systems, a segment valued in the tens of billions of dollars annually. Benchmarking is difficult due to the specialized nature of electronic warfare systems and the sole-source award.

Small Business Impact

This contract does not appear to involve small business set-asides, as it was awarded sole-source to a large corporation. There is no direct indication of subcontracting opportunities for small businesses within the provided data. The focus is on specialized development likely requiring advanced technical capabilities typically found in larger firms or those with proprietary technology.

Oversight & Accountability

Oversight is provided by the Defense Contract Management Agency (DCMA), responsible for ensuring contract compliance and performance. The cost-plus-fixed-fee structure necessitates close financial oversight to manage costs and prevent overruns. Transparency is limited due to the sole-source nature, but contract performance metrics and financial reporting would be subject to government review. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

ALQ-214 Electronic Warfare System
Department of Defense Aircraft Systems
Electronic Warfare Systems Development
Defense Software Development Contracts

Risk Flags

Sole-source award
Cost-plus-fixed-fee contract type
Potential for cost overruns
Limited public data on performance metrics

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.7 million to ITT CORPORATION. THE PURPOSE OF THIS DELIVERY ORDER IS THE CREATION OF ALQ-214(V)4/5 SOFTWARE AND FIRMWARE.

Who is the contractor on this award?

The obligated recipient is ITT CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $20.7 million.

What is the period of performance?

Start: 2012-02-27. End: 2016-05-31.

What is the track record of ITT Corporation in delivering similar electronic warfare software and firmware?

ITT Corporation, and its subsequent spin-offs and divisions (like L3Harris Technologies, which acquired ITT's defense electronics business), has a long history in defense electronics and electronic warfare systems. They have been involved in various iterations and upgrades of electronic warfare suites for military aircraft. While specific performance data for this exact ALQ-214(V)4/5 software/firmware delivery order is not publicly detailed, the company's general experience suggests a capability to handle complex defense technology development. However, past performance on other contracts, especially sole-source ones, would need detailed review to fully assess risk and value.

How does the $20.7 million cost compare to similar electronic warfare software development contracts?

Direct comparison is difficult due to the sole-source nature of this award and the specific, potentially unique, requirements of the ALQ-214(V)4/5 system. Electronic warfare software and firmware development contracts can vary significantly in cost based on complexity, system integration, security requirements, and the specific threat environment addressed. Generally, such specialized defense software can command high prices due to the R&D investment, stringent testing, and the critical nature of the systems. Without comparable competed contracts for similar capabilities, it's hard to definitively benchmark this $20.7 million award as high or low, but the lack of competition suggests potential for a higher price.

What are the primary risks associated with this sole-source, cost-plus-fixed-fee contract?

The primary risks are twofold. First, the sole-source nature means the government did not benefit from competitive bidding, potentially leading to a higher price than market rates. Second, the Cost Plus Fixed Fee (CPFF) structure, while common for development where costs are uncertain, carries the risk of cost escalation. If ITT Corporation's costs exceed initial estimates, the government pays the actual costs plus the pre-agreed fixed fee. Effective oversight by the Defense Contract Management Agency (DCMA) is crucial to mitigate these risks by scrutinizing costs and ensuring efficient performance. Scope creep and contractor performance issues are also inherent risks.

How effective is the ALQ-214 system, and how does this upgrade contribute to its effectiveness?

The ALQ-214 is an integrated threat warning and electronic countermeasures system designed to protect aircraft from radar-guided threats. Its effectiveness is crucial for aircrew survivability and mission success. This contract, focusing on the (V)4/5 software and firmware, implies an upgrade to enhance the system's capabilities. These upgrades likely aim to improve threat detection algorithms, expand the library of countermeasures, enhance system reliability, or adapt to new and evolving enemy threats. The success of this upgrade directly impacts the operational effectiveness and survivability of the platforms equipped with the ALQ-214.

What has been the historical spending trend for the ALQ-214 program or similar electronic warfare systems?

Historical spending on the ALQ-214 program and similar electronic warfare systems typically shows consistent investment by the Department of Defense, reflecting the ongoing need to counter evolving threats. Funding often involves a mix of procurement, sustainment, and upgrade contracts. Programs like the ALQ-214 often see multi-year funding cycles for development and integration, followed by sustainment contracts for maintenance, repair, and further software/firmware updates. While specific historical spending figures for the ALQ-214 program are not detailed here, the defense electronics sector generally represents a significant portion of the defense budget, indicating substantial and sustained investment in such critical capabilities.

What is the significance of the NAICS code 334511 (Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing)?

The North American Industry Classification System (NAICS) code 334511 categorizes establishments primarily engaged in manufacturing instruments for indicating, measuring, and recording electrical quantities; instruments for indicating, measuring, and recording physical characteristics; and search, detection, navigation, guidance, aeronautical, and nautical systems and instruments. For this contract, it signifies that the core of the work involves the development and potentially the integration of software and firmware for systems that fall under this manufacturing umbrella, specifically related to navigation and guidance systems within the defense context, like the ALQ-214.

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: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 77 RIVER RD, CLIFTON, NJ, 07014

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

Financial Breakdown

Contract Ceiling: $20,746,416

Exercised Options: $20,746,416

Current Obligation: $20,746,416

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N0001911G0005

IDV Type: BOA

Timeline