DoD's $10.9M handheld computer contract awarded to Intermec Technologies Corporation in 2007

Contract Overview

Contract Amount: $10,995,545 ($11.0M)

Contractor: Intermec Technologies Corporation

Awarding Agency: Department of Defense

Start Date: 2007-09-14

End Date: 2008-12-01

Contract Duration: 444 days

Daily Burn Rate: $24.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: PDCT-E SUPER-RUGGED WM5.0 HANDHELD

Place of Performance

Location: EVERETT, SNOHOMISH County, WASHINGTON, 98201

State: Washington Government Spending

Plain-Language Summary

Department of Defense obligated $11.0 million to INTERMEC TECHNOLOGIES CORPORATION for work described as: PDCT-E SUPER-RUGGED WM5.0 HANDHELD Key points: 1. Contract awarded under full and open competition, suggesting a competitive bidding process. 2. The contract utilized a firm fixed-price structure, which typically shifts cost risk to the contractor. 3. Awarded in 2007, the contract duration was approximately 1.5 years, indicating a relatively short-term need. 4. The North American Industry Classification System (NAICS) code 334111 points to the manufacturing of electronic computers. 5. The contract was awarded as a delivery order (DO), suggesting it was part of a larger indefinite-delivery contract vehicle. 6. The contract was not set aside for small businesses, nor did it involve small business subcontracting.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without more detailed cost breakdowns or comparisons to similar ruggedized handheld devices from the same period. The firm fixed-price nature suggests the price was agreed upon upfront. However, the raw award amount of $10.9 million for 3 units (based on the 'br' field likely representing units) results in a very high per-unit cost, which warrants further investigation into the specific ruggedization and features required.

Cost Per Unit: Approximately $3.65 million per unit, which appears exceptionally high for handheld computers and requires justification based on extreme ruggedization or specialized capabilities.

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. With 3 bids received, the competition level appears moderate. A higher number of bidders generally leads to more competitive pricing, but the specific nature of ruggedized, specialized equipment might limit the pool of qualified vendors.

Taxpayer Impact: A competitive process, even with a limited number of bidders, is generally favorable for taxpayers as it encourages vendors to offer their best pricing to secure the contract.

Public Impact

The Department of Defense benefits from the acquisition of specialized handheld computing devices for operational use. These devices likely support military personnel in various field operations, data collection, and command and control. The geographic impact is likely global, as the Department of Defense operates worldwide. The contract supports the manufacturing sector, specifically electronic computer manufacturing, contributing to the industry's output.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

High per-unit cost raises questions about the necessity of the price point for the specified technology.
Limited competition (3 bidders) may have influenced the final price, potentially reducing cost savings for the government.
The contract's age (awarded in 2007) means current market prices and technological capabilities are significantly different, making direct comparisons difficult.

Positive Signals

Awarded under full and open competition, which is a positive indicator for achieving a fair market price.
Firm fixed-price contract structure shifts cost overrun risk to the contractor.
The contract was awarded to a specific vendor, Intermec Technologies Corporation, indicating a selection based on their offering.

Sector Analysis

The contract falls within the Information Technology (IT) sector, specifically the manufacturing of electronic computers. The market for ruggedized computing devices is a specialized niche within the broader IT industry, catering to environments where standard commercial-grade equipment would fail. Spending in this area is driven by defense, public safety, and industrial applications requiring durability and reliability. Comparable spending benchmarks would involve other government procurements of similar rugged devices or large-scale enterprise deployments.

Small Business Impact

This contract was not set aside for small businesses, and the data indicates no small business subcontracting was involved (sb: false). This means the primary contract was competed broadly, and any participation by small businesses would have been incidental or through the prime contractor's own supply chain decisions, rather than a mandated requirement.

Oversight & Accountability

Oversight for this contract would have been managed by the Department of the Army contracting officers and program managers. Accountability measures would include adherence to the firm fixed-price terms, delivery schedules, and technical specifications. Transparency is generally facilitated through contract award databases like FPDS, which provide basic details of the procurement. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Tactical Data Systems
Ruggedized Mobile Computing
Defense IT Procurement
Electronic Manufacturing Services

Risk Flags

High Per-Unit Cost
Limited Competition
Potential for Technological Obsolescence

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.0 million to INTERMEC TECHNOLOGIES CORPORATION. PDCT-E SUPER-RUGGED WM5.0 HANDHELD

Who is the contractor on this award?

The obligated recipient is INTERMEC TECHNOLOGIES CORPORATION.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $11.0 million.

What is the period of performance?

Start: 2007-09-14. End: 2008-12-01.

What specific features or ruggedization requirements justified the high per-unit cost of these handheld computers?

The provided data does not detail the specific ruggedization requirements or advanced features that contributed to the per-unit cost of approximately $3.65 million. Typically, such high costs for handheld devices would be associated with extreme environmental resistance (e.g., MIL-STD-810G compliance for shock, vibration, temperature extremes, water immersion), advanced integrated sensors (e.g., GPS, specialized scanners), long battery life, enhanced security features, and potentially specialized software or communication modules tailored for military operations. Without a detailed statement of work or technical specifications, it is difficult to ascertain the precise drivers of this cost. Further analysis would require access to the contract's SOW and potentially comparative data on similar military-grade devices procured around the same time.

How does the firm fixed-price (FFP) contract type mitigate risk for the government in this procurement?

A Firm Fixed-Price (FFP) contract type is advantageous for the government as it establishes a ceiling price that is not subject to adjustment based on the contractor's cost experience. This means that Intermec Technologies Corporation bore the primary responsibility for managing its costs and would not be able to claim additional funds if their expenses exceeded their estimates. This structure incentivizes the contractor to control costs efficiently and complete the work within the agreed-upon budget. For the government, it provides cost certainty and predictability, making budgeting and financial planning more straightforward. The risk of cost overruns is effectively transferred to the contractor.

What was the historical spending trend for similar handheld devices by the Department of Defense prior to this award?

The provided data does not include historical spending trends for similar handheld devices by the Department of Defense prior to this award. To assess historical spending patterns, one would need to query contract databases for procurements of ruggedized handheld computers or similar mobile computing devices by the DoD over several fiscal years. Analyzing this data would reveal whether the $10.9 million award represented an increase, decrease, or stable level of investment in such technology. It would also help identify trends in pricing, quantities, and types of devices procured, providing context for the significance of this particular contract.

Given the contract was awarded in 2007, what is the technological obsolescence risk associated with these devices today?

The technological obsolescence risk for devices procured in 2007 is extremely high. Consumer and commercial technology cycles typically advance rapidly, with significant improvements in processing power, battery efficiency, display technology, and connectivity occurring every 18-36 months. For specialized military hardware, while designed for durability, the underlying computing components are still subject to obsolescence. Software support may also be discontinued, and spare parts could become difficult to source. This necessitates a strategy for refresh or replacement, and the initial investment may have a shorter effective lifespan than anticipated if not managed proactively.

How did the number of bidders (3) impact the potential for competitive pricing compared to a scenario with more bidders?

With only three bidders responding to the 'full and open competition,' the level of competition was moderate. While 'full and open' implies a broad solicitation, the specialized nature of ruggedized military hardware likely limited the number of qualified vendors. A higher number of bidders (e.g., 5 or more) generally intensifies price competition, as vendors are more motivated to offer lower prices to secure the contract against a larger field of rivals. With only three bidders, there is a greater possibility that the winning bid may not represent the absolute lowest price achievable in a more crowded market. However, the specific capabilities and unique selling propositions of each bidder also play a role, and it's possible that these three represented the primary viable options.

Industry Classification

NAICS: Manufacturing › Computer and Peripheral Equipment Manufacturing › Electronic Computer Manufacturing

Product/Service Code: INFORMATION TECHNOLOGY EQUIPMENT (INCLD FIRMWARE) SOFTWARE,SUPPLIES& SUPPORT EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W91QUZ04R0005

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Unova, Inc (UEI: 799246558)

Address: 6001 36TH AVE W, EVERETT, WA, 02

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $10,995,545

Exercised Options: $10,995,545

Current Obligation: $10,995,545

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W91QUZ04D0009

IDV Type: IDC

Timeline