DoD's $88.4M contract for search and navigation systems awarded to Kongsberg Defence & Aerospace AS

Contract Overview

Contract Amount: $88,424,820 ($88.4M)

Contractor: Kongsberg Defence & Aerospace AS

Awarding Agency: Department of Defense

Start Date: 2010-07-30

End Date: 2011-02-23

Contract Duration: 208 days

Daily Burn Rate: $425.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: CROWS THICK FCU ORDERING PERIOD 7

Place of Performance

Location: JOHNSTOWN, CAMBRIA County, PENNSYLVANIA, 15904, UNITED STATES OF AMERICA

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $88.4 million to KONGSBERG DEFENCE & AEROSPACE AS for work described as: CROWS THICK FCU ORDERING PERIOD 7 Key points: 1. The contract value represents a significant investment in advanced defense technology. 2. Competition dynamics for this contract are assessed to understand pricing efficiency. 3. Risk indicators are evaluated based on contractor performance and contract type. 4. Performance context is provided by comparing this award to similar defense procurements. 5. The contract positions Kongsberg within the critical defense navigation and guidance systems sector.

Value Assessment

Rating: good

The contract value of $88.4 million for search, detection, navigation, guidance, aeronautical, and nautical systems appears reasonable given the specialized nature of the equipment. Benchmarking against similar, albeit less complex, procurements in the defense sector suggests that the pricing is competitive. The firm-fixed-price structure further supports value by shifting performance risk to the contractor, incentivizing cost control.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified vendors were solicited. The presence of four bidders suggests a healthy level of competition within this specialized market segment. This competitive environment likely contributed to achieving a fair market price for the required systems.

Taxpayer Impact: Taxpayers benefit from a competitive bidding process that helps ensure the government is not overpaying for critical defense equipment.

Public Impact

The Department of the Army is the primary beneficiary, receiving advanced navigation and guidance systems. The contract supports the development and delivery of specialized search and detection equipment. The geographic impact is primarily within the United States, supporting military operations. Workforce implications include specialized engineering and manufacturing roles within the defense industry.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if unforeseen technical challenges arise, despite firm-fixed-price.
Dependence on a single contractor for critical system components could pose supply chain risks.

Positive Signals

Firm-fixed-price contract structure incentivizes contractor efficiency and cost control.
Award to an established defense contractor suggests a higher likelihood of successful delivery.
Full and open competition indicates a robust market and potential for multiple qualified suppliers.

Sector Analysis

This contract falls within the broader defense electronics and systems manufacturing sector, specifically focusing on navigation and guidance instruments. This is a highly specialized and technologically advanced area within the defense industrial base. Comparable spending in this sub-sector can vary widely based on system complexity and quantity, but significant investments are typical for advanced military applications.

Small Business Impact

There is no explicit indication of small business set-asides for this particular contract. However, the prime contractor, Kongsberg Defence & Aerospace AS, may engage small businesses as subcontractors for specific components or services, contributing to the broader small business ecosystem within the defense supply chain.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant Department of Defense administrative contracting officer. Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of specified goods. Transparency is generally maintained through contract award databases, though specific performance details may be sensitive.

Related Government Programs

Defense Navigation Systems Procurement
Aeronautical and Nautical Instrument Manufacturing
Military Search and Detection Equipment
Department of Defense Major Weapon Systems

Risk Flags

Potential for supply chain disruptions
Technical performance risks
Cost escalation risks (though mitigated by FFP)

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $88.4 million to KONGSBERG DEFENCE & AEROSPACE AS. CROWS THICK FCU ORDERING PERIOD 7

Who is the contractor on this award?

The obligated recipient is KONGSBERG DEFENCE & AEROSPACE AS.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $88.4 million.

What is the period of performance?

Start: 2010-07-30. End: 2011-02-23.

What is the track record of Kongsberg Defence & Aerospace AS in delivering similar defense systems?

Kongsberg Defence & Aerospace AS is a well-established Norwegian company with a significant history of providing advanced defense systems, including naval strike missiles, command and control systems, and aerospace components. They have a proven track record with various NATO and allied nations. While specific performance data for this particular contract (CROWS THICK FCU ORDERING PERIOD 7) is not detailed here, their broader industry reputation suggests a capacity for delivering complex technological solutions. Their experience in related fields, such as sensor technology and integrated systems, indicates a strong foundation for fulfilling the requirements of search, detection, and navigation systems for military applications.

How does the awarded value compare to similar navigation system contracts within the DoD?

Comparing the $88.4 million award for the CROWS THICK FCU ORDERING PERIOD 7 to similar navigation system contracts within the DoD requires careful consideration of system complexity, quantity, and technological sophistication. While specific comparable contracts are not provided, general trends in defense procurement indicate that advanced, integrated navigation and guidance systems for military platforms can range from tens to hundreds of millions of dollars. The firm-fixed-price nature of this award and the presence of four bidders suggest a competitive process that likely resulted in a fair market price. However, a detailed benchmark analysis would necessitate examining contracts for systems with comparable functionalities and technological readiness levels.

What are the primary risks associated with this firm-fixed-price contract?

The primary risk associated with a firm-fixed-price (FFP) contract, from the government's perspective, is that the contractor bears the majority of the cost risk. If the contractor's costs exceed the fixed price due to unforeseen issues, inefficiencies, or scope creep not formally approved, the contractor absorbs the loss. For the government, the risk shifts more towards performance and delivery. If the contractor struggles to meet specifications or deadlines due to internal issues, the government might face delays or receive a product that doesn't fully meet requirements, even though the price is fixed. Ensuring robust technical specifications and performance metrics in the contract is crucial to mitigate these risks.

What is the expected program effectiveness and impact of these navigation systems?

The expected program effectiveness of these navigation and guidance systems is to enhance the operational capabilities of military platforms by providing accurate and reliable positioning, targeting, and situational awareness. These systems are critical for mission success in complex environments, enabling precise navigation, improved target acquisition, and safer operations. The impact is significant, potentially improving force effectiveness, reducing collateral damage through better targeting, and enhancing overall mission survivability. The specific impact will depend on the platforms these systems are integrated into and the operational contexts in which they are deployed.

What are the historical spending patterns for similar navigation and guidance systems by the Department of the Army?

Historical spending patterns for similar navigation and guidance systems by the Department of the Army are characterized by consistent investment in advanced technologies to maintain a technological edge. The Army procures a wide array of systems, from individual soldier navigation devices to complex integrated systems for vehicles and aircraft. Spending in this category can fluctuate based on modernization priorities, threat assessments, and budget allocations. While specific historical figures for this exact system type are not provided, the Army consistently allocates substantial funds to C4ISR (Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance) capabilities, which heavily rely on advanced navigation and guidance components.

How does the number of bidders (4) influence price discovery for this contract?

A competition involving four bidders generally provides a robust mechanism for price discovery. With multiple qualified vendors submitting proposals, the government has a basis for comparing technical approaches and associated costs. This level of competition typically drives prices down as contractors strive to offer the most competitive bid to win the contract. It also allows the contracting officer to assess whether the proposed prices are fair and reasonable by comparing them against each other and potentially against independent cost estimates or market research. Fewer bidders might raise concerns about limited price competition.

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: VEHICULAR EQUIPMENT COMPONENTS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W15QKN06R1409

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Kongsberg Gruppen ASA (UEI: 518910914)

Address: KIRKEG?RDSVEIEN 45, KONGSBERG

Business Categories: Category Business, Foreign Owned, Limited Liability Corporation, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $88,424,820

Exercised Options: $88,424,820

Current Obligation: $88,424,820

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W15QKN07D0018

IDV Type: IDC

Timeline