Navy awards $164M contract for radio sets to Thales Defense & Security Inc

Contract Overview

Contract Amount: $16,412,000 ($16.4M)

Contractor: Thales Defense & Security Inc

Awarding Agency: Department of Defense

Start Date: 2009-04-10

End Date: 2010-04-10

Contract Duration: 365 days

Daily Burn Rate: $45.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: RADIO SET

Place of Performance

Location: CLARKSBURG, MONTGOMERY County, MARYLAND, 20871

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $16.4 million to THALES DEFENSE & SECURITY INC for work described as: RADIO SET Key points: 1. Contract value represents a significant investment in communication equipment. 2. Competition dynamics suggest a potentially competitive bidding process for this award. 3. Fixed-price contract type may offer cost certainty for the government. 4. Contract duration of one year indicates a need for immediate or short-term supply. 5. Award to a large business raises questions about small business participation. 6. Geographic focus on Maryland suggests regional economic impact.

Value Assessment

Rating: fair

The contract value of $164.12 million for radio sets appears substantial. Without specific details on the quantity and technical specifications of the radio sets, a direct value-for-money assessment is challenging. Benchmarking against similar contracts for comparable communication equipment would be necessary to determine if the pricing is competitive. The firm fixed-price nature of the contract provides some cost control, but the overall value proposition depends heavily on the performance and longevity of the delivered equipment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of two bids suggests a moderate level of competition for this specific requirement. While two bidders are better than one, a higher number of bids typically leads to more robust price discovery and potentially lower prices for the government. The specific details of the bidding process and the evaluation criteria would provide further insight into the effectiveness of the competition.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it aims to secure the best value through a wide range of offers. However, with only two bids, there is a risk that the government may not have achieved the most competitive pricing possible.

Public Impact

The Department of the Navy benefits from the acquisition of essential radio communication equipment. This contract supports the operational readiness and communication capabilities of naval forces. The primary beneficiaries are military personnel who will utilize the radio sets. The contract's geographic impact is concentrated in Maryland, where the contractor is based. The award may have implications for the workforce within the defense manufacturing sector in Maryland.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of small business set-aside may limit opportunities for smaller enterprises.
Concentration of award to a single large business could reduce market diversity.

Positive Signals

Award under full and open competition ensures a broad search for qualified vendors.
Firm fixed-price contract provides cost certainty for the government.

Sector Analysis

This contract falls within the broader telecommunications and defense electronics sector. The market for military communication equipment is characterized by high technological requirements, stringent quality standards, and significant government procurement. Companies like Thales Defense & Security Inc. operate in a space where innovation and reliability are paramount. Comparable spending benchmarks would involve analyzing other Department of Defense contracts for similar radio systems or communication hardware, considering factors like quantity, technical specifications, and contract duration.

Small Business Impact

The contract was not set aside for small businesses, and the award went to a large business. This suggests that small businesses were either not capable of meeting the stringent requirements or were not actively pursued for subcontracting opportunities. Further investigation into subcontracting plans would be needed to determine the extent of small business involvement, if any. The lack of a specific small business focus in this award might indicate a missed opportunity to foster growth within the small business defense contracting ecosystem.

Oversight & Accountability

The Department of the Navy is responsible for overseeing this contract. Oversight mechanisms would typically include contract administration, performance monitoring, and quality assurance to ensure the delivered radio sets meet specifications. Accountability measures are inherent in the firm fixed-price structure, which holds the contractor responsible for delivering within the agreed-upon cost. Transparency is generally facilitated through contract award databases, though detailed performance metrics may not always be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Tactical Radio Systems
Military Communications Equipment
Department of Defense Procurement
Naval Communication Systems

Risk Flags

Potential for cost overruns if contractor underestimates expenses.
Risk of quality compromises if contractor seeks to maximize profit under FFP.
Dependence on a single large contractor may limit future competition.
Need for robust government oversight to ensure performance specifications are met.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $16.4 million to THALES DEFENSE & SECURITY INC. RADIO SET

Who is the contractor on this award?

The obligated recipient is THALES DEFENSE & SECURITY INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $16.4 million.

What is the period of performance?

Start: 2009-04-10. End: 2010-04-10.

What is the specific type and technical capability of the radio sets procured under this contract?

The provided data indicates the contract is for 'RADIO SET' (NAICS 334220 - Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing). However, the specific technical capabilities, frequency bands, encryption standards, or intended use (e.g., tactical, strategic, shipboard) of these radio sets are not detailed in the summary data. To fully understand the procurement, one would need to consult the contract's Statement of Work (SOW) or technical specifications. This information is crucial for assessing the value and appropriateness of the $164.12 million award, as different capabilities command vastly different price points and serve distinct operational needs within the Department of the Navy.

How does the awarded price compare to market rates for similar radio communication equipment?

Benchmarking the $164.12 million award against market rates requires detailed information on the quantity and specifications of the radio sets. Without this, a direct comparison is difficult. However, given the significant value, it is likely these are advanced, ruggedized communication systems designed for military use, which typically command higher prices than commercial equivalents due to specialized features, durability, and security requirements. A thorough analysis would involve identifying comparable military contracts or commercial off-the-shelf (COTS) systems with similar functionalities and comparing unit costs, factoring in any customization or integration services.

What is the track record of Thales Defense & Security Inc. in delivering similar communication systems to the government?

Thales Defense & Security Inc. is a known entity in the defense sector, often involved in providing advanced communication, radar, and electronic warfare systems. Their track record with the government, particularly the Department of Defense, would likely include numerous contracts for various electronic equipment. Assessing their performance on this specific contract requires reviewing past delivery performance, quality control metrics, and any history of contract disputes or overruns on similar procurements. A positive track record suggests a lower risk of performance issues, while a history of challenges might indicate potential risks for this award.

What are the potential risks associated with a firm fixed-price contract for this type of equipment?

While firm fixed-price (FFP) contracts offer cost certainty, they can introduce risks for both the government and the contractor, especially for complex or technologically evolving equipment like advanced radio sets. For the government, the primary risk is that the contractor may cut corners on quality or performance to maintain profitability if costs escalate unexpectedly. Conversely, the contractor bears the risk of cost overruns due to unforeseen technical challenges, material price increases, or scope creep. In this case, with a $164.12 million award, ensuring robust quality assurance and acceptance testing by the Navy is critical to mitigate risks associated with the FFP structure.

How has historical spending on radio sets by the Department of the Navy trended over the past five years?

Analyzing historical spending trends for radio sets by the Department of the Navy over the past five years would provide context for the $164.12 million award. This would involve examining annual obligations for similar equipment categories (e.g., tactical radios, secure communication devices) to identify patterns of investment, fluctuations in demand, or shifts in technology priorities. A consistent or increasing spending trend might indicate sustained operational needs, while a decrease could suggest evolving requirements or a shift towards different communication solutions. Understanding these trends helps assess whether this contract represents a typical investment or a significant deviation.

What is the significance of the contract being awarded in Maryland?

The contract's award to Thales Defense & Security Inc., based in Maryland, signifies a direct economic impact on that state. This includes potential job creation or retention within the defense manufacturing and technology sectors, as well as contributions to the local economy through supplier networks and employee spending. Maryland has a significant defense industry presence, and contracts like this reinforce its position as a hub for defense contracting. The geographic concentration also implies that oversight and logistical support might be managed from regional Navy facilities.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N6600107R0054

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Thales (UEI: 275250553)

Address: 22605 GATEWAY CENTER DR, CLARKSBURG, MD, 06

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $16,412,000

Exercised Options: $16,412,000

Current Obligation: $16,412,000

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N6600107D0107

IDV Type: IDC

Timeline