Thales Defense & Security Inc. awarded $15.3M for engineering services, with no competition

Contract Overview

Contract Amount: $15,287,666 ($15.3M)

Contractor: Thales Defense & Security Inc

Awarding Agency: Department of Defense

Start Date: 2007-10-31

End Date: 2012-06-30

Contract Duration: 1,704 days

Daily Burn Rate: $9.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ENGINEERING SERVICES - I/W

Place of Performance

Location: CLARKSBURG, MONTGOMERY County, MARYLAND, 20871

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $15.3 million to THALES DEFENSE & SECURITY INC for work described as: ENGINEERING SERVICES - I/W Key points: 1. Contract awarded on a sole-source basis, raising questions about price discovery and potential overpayment. 2. Long contract duration of over 4 years suggests a need for ongoing services, but lacks competitive pressure. 3. The firm fixed-price contract type shifts risk to the contractor, but the lack of competition limits upside for the government. 4. Services are categorized under Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing, indicating a specialized technical need. 5. The contract was awarded by U.S. Special Operations Command, suggesting a sensitive or critical application. 6. No small business set-aside was applied, and no subcontracting information is readily available.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the lack of competitive bids and specific service details. The $15.3 million award over approximately 4.5 years averages around $3.4 million annually. Without comparable sole-source contracts or market data for similar specialized engineering services for special operations, it's difficult to definitively assess if this represents good value for money. The absence of competition means there was no mechanism to drive down costs through bidding.

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 possesses the necessary unique capabilities, or in urgent situations. The lack of competition means that the government did not benefit from the price discovery mechanisms inherent in a competitive bidding process, potentially leading to higher costs than if multiple vendors had vied for the contract.

Taxpayer Impact: Taxpayers may have paid a premium for these engineering services due to the absence of competitive pressure. Without competing offers, the government lacked leverage to negotiate the lowest possible price.

Public Impact

The primary beneficiaries are likely U.S. Special Operations Command personnel who receive specialized engineering support. The services delivered are related to wireless communications equipment manufacturing, crucial for operational effectiveness. The geographic impact is primarily within the scope of U.S. Special Operations Command's global operations. Workforce implications include the employment of specialized engineers and technicians by Thales Defense & Security Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition.
Long contract duration without clear performance metrics for re-evaluation.
Lack of transparency regarding the justification for sole-source procurement.
Potential for cost overruns if not closely managed due to lack of competitive pressure.

Positive Signals

Firm fixed-price contract shifts cost risk to the contractor.
Awarded to a known entity in the defense sector.
Services likely critical for specialized military operations.

Sector Analysis

This contract falls within the Defense sector, specifically related to specialized wireless communications equipment. The market for such services is often characterized by high barriers to entry due to security clearances, proprietary technology, and specialized expertise. Spending in this niche is driven by national security requirements and technological advancements in military communications. Comparable spending benchmarks are difficult to establish without more specific details on the engineering services provided.

Small Business Impact

There is no indication that this contract included a small business set-aside. Given the specialized nature of the services and the sole-source award, it is unlikely that subcontracting opportunities for small businesses were a primary consideration in the contract's structure. Further analysis would be needed to determine if any subcontracting plans were mandated or voluntarily pursued by the prime contractor.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the U.S. Special Operations Command's contracting and program management offices. Accountability measures would be defined by the contract's terms and conditions, including performance standards and payment schedules. Transparency regarding the justification for the sole-source award and the specific services rendered is limited without further public disclosure.

Related Government Programs

Defense Communications Systems
Special Operations Forces Equipment Procurement
Wireless Technology Development
Military Engineering Services

Risk Flags

Sole-source award
Lack of competition
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $15.3 million to THALES DEFENSE & SECURITY INC. ENGINEERING SERVICES - I/W

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 (U.S. Special Operations Command).

What is the total obligated amount?

The obligated amount is $15.3 million.

What is the period of performance?

Start: 2007-10-31. End: 2012-06-30.

What specific engineering services were provided under this contract?

The data indicates 'ENGINEERING SERVICES - I/W' and classifies the North American Industry Classification System (NAICS) code as 334220, which pertains to 'Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing.' This suggests the services involved the design, development, integration, or sustainment of specialized wireless communication systems and related equipment tailored for the unique operational requirements of U.S. Special Operations Command. Without more granular details, the exact nature of the engineering tasks—whether it involved hardware design, software development, system integration, testing, or technical support—remains unspecified in the provided data.

What is the justification for the sole-source award to Thales Defense & Security Inc.?

The provided data explicitly states the contract was 'NOT COMPETED,' indicating a sole-source award. Justifications for sole-source procurements typically include factors such as unique technical capabilities possessed by only one vendor, urgent and compelling needs where competition is impractical, or specific national security requirements. For Thales Defense & Security Inc., it is plausible that they possessed proprietary technology, specialized expertise, or existing system integration knowledge critical to U.S. Special Operations Command's mission that no other vendor could readily replicate. A formal justification document, usually required for sole-source awards, would contain the detailed rationale.

How does the $15.3 million contract value compare to similar specialized engineering services for defense applications?

Directly comparing the $15.3 million value is difficult without knowing the precise scope and duration of the engineering services. However, considering the contract spanned approximately 4.5 years (from Oct 2007 to June 2012), the annual average expenditure was roughly $3.4 million. This figure falls within a range that can be seen for specialized engineering and technical support contracts within the defense sector, particularly those involving sensitive or advanced technologies for entities like SOCOM. The lack of competition, however, prevents a definitive assessment of whether this represented a competitive market price or a premium paid due to the sole-source nature.

What are the potential risks associated with a sole-source contract of this magnitude and duration?

The primary risk with a sole-source contract of this magnitude ($15.3M over ~4.5 years) is the potential for inflated costs due to the absence of competitive pressure. The government lacks the leverage that multiple bids provide to negotiate the best possible price. Additionally, there's a risk of vendor lock-in, where the government becomes dependent on a single provider, potentially limiting future flexibility or innovation. Without robust oversight and clear performance metrics, there's also a risk that the contractor may not deliver optimal value or that the scope could creep without adequate controls, especially given the long duration.

What is the historical spending pattern for engineering services by U.S. Special Operations Command in this category?

The provided data only details this single $15.3 million contract awarded in 2007. To understand historical spending patterns, one would need to analyze broader contract data for U.S. Special Operations Command (USSOCOM) related to engineering services, particularly those falling under NAICS code 334220 or similar categories for communications equipment manufacturing and support. This would involve querying federal procurement databases (like FPDS or USASpending.gov) for contracts awarded by USSOCOM over multiple fiscal years. Without this broader dataset, it's impossible to establish a trend or benchmark this specific contract against past spending.

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: NOT COMPETED

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

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: $15,287,666

Exercised Options: $15,287,666

Current Obligation: $15,287,666

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: H9222207D0012

IDV Type: IDC

Timeline