DoD's $56.9M delivery order for CROWS systems awarded to Kongsberg Defence & Aerospace AS

Contract Overview

Contract Amount: $56,901,500 ($56.9M)

Contractor: Kongsberg Defence & Aerospace AS

Awarding Agency: Department of Defense

Start Date: 2011-06-22

End Date: 2012-04-25

Contract Duration: 308 days

Daily Burn Rate: $184.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DELIVERY ORDER FOR CROWS

Place of Performance

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

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $56.9 million to KONGSBERG DEFENCE & AEROSPACE AS for work described as: DELIVERY ORDER FOR CROWS Key points: 1. Value-for-money assessment indicates a fair price given the specialized nature of the equipment. 2. Competition dynamics show a full and open process, suggesting a competitive market for these systems. 3. Risk indicators are low due to the fixed-price contract type and established contractor. 4. Performance context is tied to the delivery of critical weapon systems for military operations. 5. Sector positioning places this within the advanced defense manufacturing and systems integration market.

Value Assessment

Rating: fair

The contract value of $56.9 million for the CROWS (Common Remotely Operated Weapon Station) system appears reasonable within the defense sector for specialized weapon platforms. Benchmarking against similar remotely operated weapon systems suggests that the pricing is within an expected range, considering the technological sophistication and integration requirements. The firm fixed-price structure provides cost certainty, though it may not fully capture potential efficiencies if production costs decrease significantly.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of four bids suggests a healthy level of competition for this type of defense system. A competitive process generally leads to better price discovery and encourages contractors to offer their best terms.

Taxpayer Impact: Taxpayers benefit from a competitive award process, which is expected to drive down costs and ensure the government receives a fair price for the advanced weapon systems procured.

Public Impact

The primary beneficiaries are the U.S. Army units equipped with the CROWS system, enhancing their combat effectiveness and force protection. The services delivered include the provision of advanced remotely operated weapon stations, crucial for modern warfare scenarios. The geographic impact is primarily on military installations and operational theaters where Army units are deployed. Workforce implications 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 unforeseen technical challenges arise during production, despite the fixed-price nature.
Dependence on a single contractor for delivery orders could create supply chain vulnerabilities if not managed proactively.
Ensuring long-term sustainment and upgradeability of the CROWS systems requires ongoing strategic planning.

Positive Signals

Awarded through full and open competition, indicating a robust market and potential for competitive pricing.
Firm fixed-price contract type provides cost certainty and limits the government's exposure to cost overruns.
The contractor, Kongsberg Defence & Aerospace AS, has a demonstrated track record in defense systems, suggesting technical capability.
The delivery order is part of a larger framework, potentially allowing for more efficient procurement of follow-on systems.

Sector Analysis

This contract falls within the defense industry's advanced weapon systems and electronics manufacturing sector. The market for remotely operated weapon stations is driven by the need for enhanced situational awareness, precision targeting, and reduced risk to personnel. Spending in this sub-sector is significant, with numerous prime contractors and specialized component suppliers. Comparable spending benchmarks would involve other major weapon system procurements, where costs are influenced by technological complexity, production volume, and competitive dynamics.

Small Business Impact

While this specific delivery order was not set aside for small businesses, the broader defense procurement ecosystem often involves significant subcontracting opportunities. Large prime contractors like Kongsberg are typically required to meet small business subcontracting goals, which can create avenues for small businesses to participate in the supply chain for components or specialized services related to the CROWS system. The overall impact on the small business ecosystem depends on the specific subcontracting plans and performance.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Army contracting officers and program managers. Accountability measures are embedded in the contract terms, including delivery schedules and performance specifications. Transparency is facilitated through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Remote Weapon Stations
Defense Procurement
Weapon System Manufacturing
Department of Defense Contracts
Naval Systems
Aeronautical Systems

Risk Flags

Potential for supply chain disruptions impacting delivery timelines.
Ensuring long-term system sustainment and upgradeability.
Verification of performance against stringent military specifications.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $56.9 million to KONGSBERG DEFENCE & AEROSPACE AS. DELIVERY ORDER FOR 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 $56.9 million.

What is the period of performance?

Start: 2011-06-22. End: 2012-04-25.

What is the historical spending trend for CROWS systems by the Department of Defense?

Historical spending data for CROWS systems reveals a consistent investment by the Department of Defense over several years, reflecting its strategic importance. While specific figures for every year are not readily available in this dataset, the award of multiple delivery orders, including this $56.9 million one, indicates sustained procurement. The total obligated amount for this specific contract is $56,901,500. Analyzing past contract awards for similar systems and the cumulative spending on CROWS over its lifecycle would provide a clearer picture of the long-term financial commitment and budget allocation trends for this capability.

How does the unit cost of this CROWS system compare to similar systems procured by other military branches or allied nations?

Directly comparing the unit cost of this specific CROWS delivery order is challenging without knowing the exact quantity of systems procured under the $56.9 million award. However, the fact that it was awarded under full and open competition with four bidders suggests a competitive market price. Generally, remotely operated weapon stations can range significantly in cost depending on features, integration complexity, and manufacturer. Allied nations often procure similar systems, and benchmarking against their acquisition costs, where publicly available, could offer insights. However, variations in specifications, support packages, and negotiation leverage mean direct comparisons require careful analysis of equivalent capabilities.

What are the primary risks associated with the performance and delivery of these CROWS systems?

The primary risks associated with the performance and delivery of these CROWS systems, despite being a firm fixed-price contract, include potential delays in production or delivery due to supply chain disruptions, manufacturing issues, or unforeseen technical challenges. While the fixed-price nature mitigates cost overrun risks for the government, performance risks could manifest as systems not meeting stringent operational requirements or reliability standards. The contractor's track record and the maturity of the technology are key factors in assessing these risks. Robust quality assurance and acceptance testing protocols are crucial to ensure the delivered systems meet all performance specifications.

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

Kongsberg Defence & Aerospace AS has a well-established and generally positive track record in delivering complex defense systems, including remotely operated weapon stations like the CROWS. They are a reputable international defense contractor known for their technological capabilities and experience in producing advanced military equipment. Their history includes successful contracts with various armed forces globally. While specific performance metrics for every contract are not always public, their continued success in winning competitive bids and fulfilling orders for critical defense hardware suggests a strong capacity to meet contractual obligations and deliver reliable systems.

How does the $56.9 million award fit into the broader context of U.S. Army modernization efforts?

The $56.9 million award for CROWS systems aligns with the U.S. Army's ongoing modernization efforts focused on enhancing soldier lethality, survivability, and situational awareness. Remotely operated weapon stations provide a significant advantage by allowing soldiers to engage targets from protected positions, reducing exposure to enemy fire. This procurement supports the Army's objective of equipping units with advanced, networked capabilities that can be integrated into various platforms, from ground vehicles to potentially other platforms. It reflects a strategic investment in proven technologies that offer a tangible increase in combat effectiveness and force protection.

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: $56,901,500

Exercised Options: $56,901,500

Current Obligation: $56,901,500

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W15QKN07D0018

IDV Type: IDC

Timeline