DoD's $46.5M contract for search and navigation systems awarded to Kongsberg Defence & Aerospace AS

Contract Overview

Contract Amount: $46,500,000 ($46.5M)

Contractor: Kongsberg Defence & Aerospace AS

Awarding Agency: Department of Defense

Start Date: 2011-02-18

End Date: 2011-10-26

Contract Duration: 250 days

Daily Burn Rate: $186.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DO FOR ADDITIONAL QUANTITY OF THICK SCREEN CROWS

Plain-Language Summary

Department of Defense obligated $46.5 million to KONGSBERG DEFENCE & AEROSPACE AS for work described as: DO FOR ADDITIONAL QUANTITY OF THICK SCREEN CROWS Key points: 1. Value for money assessed against contract scope and duration. 2. Competition dynamics indicate a full and open process. 3. Risk indicators are moderate, given the specialized nature of the equipment. 4. Performance context relies on successful delivery of advanced navigation systems. 5. Sector positioning within defense manufacturing for specialized systems.

Value Assessment

Rating: fair

The contract value of $46.5 million for a 250-day duration appears reasonable for specialized defense equipment. Benchmarking against similar contracts for advanced search and navigation systems is challenging due to the niche nature of the technology. However, the firm fixed-price contract type suggests that the government has transferred most of the cost risk to the contractor, which can be a positive indicator for value if the contractor manages costs effectively.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. The presence of multiple bidders typically fosters price discovery and can lead to more competitive pricing for the government. The specific number of bidders is not provided, but the designation implies a robust competitive environment.

Taxpayer Impact: A full and open competition generally benefits taxpayers by ensuring that the government receives the best possible price through market forces, rather than being limited to a single or restricted set of suppliers.

Public Impact

The primary beneficiaries are the Department of Defense, specifically the Department of the Army, through the acquisition of critical search and navigation systems. The services delivered include the provision of advanced systems essential for military operations, potentially enhancing situational awareness and operational effectiveness. The geographic impact is primarily within the defense sector, supporting military readiness and national security objectives. Workforce implications may include specialized manufacturing and technical support roles within the defense industry.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if the firm fixed-price contract does not adequately account for unforeseen technical challenges.
Dependence on a single contractor for specialized components could create supply chain risks.
Ensuring the technology meets evolving military requirements throughout its lifecycle.

Positive Signals

The firm fixed-price contract structure incentivizes contractor efficiency and cost control.
Awarding under full and open competition suggests a competitive process that should yield fair pricing.
The specialized nature of the equipment indicates a focus on advanced technological capabilities for the military.

Sector Analysis

This contract falls within the defense manufacturing sector, specifically focusing on the production of advanced search, detection, navigation, guidance, aeronautical, and nautical systems. This is a highly specialized area within the broader industrial base, often characterized by high research and development costs, stringent quality requirements, and long product development cycles. Comparable spending benchmarks are difficult to establish without more specific details on the system's capabilities, but defense spending in this sub-sector is significant globally.

Small Business Impact

The provided data does not indicate any small business set-aside provisions for this contract. As such, the primary contractor, Kongsberg Defence & Aerospace AS, is likely a large business. There is no explicit information on subcontracting plans to small businesses, which could represent missed opportunities for the small business ecosystem to participate in this defense procurement.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program executive office within the Department of the Army. Accountability measures are inherent in the firm fixed-price contract, requiring delivery of specified goods. Transparency is generally maintained through contract award databases, though detailed performance metrics may not always be publicly disclosed. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Naval Systems
Aerospace Systems
Defense Electronics
Search and Detection Equipment
Guidance Systems

Risk Flags

Potential for cost overruns
Supply chain dependencies
Technological obsolescence risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $46.5 million to KONGSBERG DEFENCE & AEROSPACE AS. DO FOR ADDITIONAL QUANTITY OF THICK SCREEN CROWS

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 $46.5 million.

What is the period of performance?

Start: 2011-02-18. End: 2011-10-26.

What is the specific type of search and navigation system being procured, and what are its key functionalities?

The contract data indicates the procurement of systems falling under NAICS code 334511, which covers Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing. While the specific system is not detailed, it implies advanced technology critical for military operations. These systems likely enhance a platform's ability to locate targets, navigate complex environments, and guide munitions or other payloads. Key functionalities could include radar, sonar, electro-optical sensors, inertial navigation systems, GPS integration, and advanced data processing for threat identification and situational awareness. The exact capabilities would be defined in the contract's Statement of Work (SOW).

How does the $46.5 million contract value compare to historical spending on similar systems by the Department of the Army?

Direct historical spending comparisons for this specific system are not readily available from the provided data. However, the Department of the Army consistently invests billions annually in advanced technology, including navigation and sensor systems. The $46.5 million figure represents a moderate-sized procurement within the broader defense budget. To provide a precise comparison, one would need to analyze historical contracts for similar system types (e.g., advanced radar, maritime navigation suites, airborne sensor pods) awarded over the past 5-10 years, considering inflation and technological advancements. Without such detailed analysis, it's difficult to definitively state if this represents high or low spending relative to historical norms for comparable capabilities.

What are the potential risks associated with a firm fixed-price contract for advanced defense systems?

Firm fixed-price (FFP) contracts are generally preferred for their cost certainty. However, for advanced defense systems, there are inherent risks. If the contractor underestimates the complexity, material costs, or labor hours required, they may incur losses, potentially leading to quality compromises or even contract termination. Conversely, if the contractor significantly overestimates costs, taxpayers may end up paying a premium. For highly technical systems, unforeseen design challenges or integration issues can arise, which under an FFP contract, the contractor must absorb. This can incentivize cutting corners on testing or quality assurance if not rigorously overseen. The government's risk is primarily that the contractor may not be able to deliver the full capability as specified within budget, or that the price paid is higher than it would have been under a cost-reimbursable contract if efficiencies were realized.

What is Kongsberg Defence & Aerospace AS's track record with similar defense contracts?

Kongsberg Defence & Aerospace AS is a well-established Norwegian company with a significant global presence in the defense industry. They have a history of developing and supplying advanced systems, including naval strike missiles, surface systems, and aerospace capabilities. Their track record with the U.S. Department of Defense and other allied nations generally indicates a capacity for delivering complex defense technologies. Specific performance details on past contracts, including on-time delivery, adherence to specifications, and cost performance, would require a deeper dive into contract databases and performance reports. However, their continued success in securing international defense contracts suggests a generally positive performance history.

How does the duration of 250 days impact the assessment of value for money?

A contract duration of 250 days (approximately 8 months) for a $46.5 million procurement suggests a focus on rapid delivery or a specific, time-bound project phase, rather than a long-term sustainment or development effort. For specialized systems, this duration might be sufficient for manufacturing and initial testing of a defined quantity. If the scope involves complex integration or extensive field testing, this timeframe could be tight, potentially increasing the risk of delays or requiring expedited (and potentially more costly) processes. Assessing value for money requires understanding if this duration aligns with the expected production rate and complexity of the systems being delivered. A shorter duration for complex items could indicate higher per-unit costs or rushed production, while a longer duration might suggest lower urgency or a more phased approach.

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

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: $46,500,000

Exercised Options: $46,500,000

Current Obligation: $46,500,000

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W15QKN07D0018

IDV Type: IDC

Timeline