GSA awards $17.2M for electrical instrument manufacturing parts, raising questions on competition and value

Contract Overview

Contract Amount: $17,249,692 ($17.2M)

Contractor: National Instruments Corp

Awarding Agency: General Services Administration

Start Date: 2024-04-16

End Date: 2026-04-30

Contract Duration: 744 days

Daily Burn Rate: $23.2K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: PMA260 CASS FOT NI PARTS ORDER 0001

Place of Performance

Location: PATUXENT RIVER, SAINT MARYS County, MARYLAND, 20670

State: Maryland Government Spending

Plain-Language Summary

General Services Administration obligated $17.2 million to NATIONAL INSTRUMENTS CORP for work described as: PMA260 CASS FOT NI PARTS ORDER 0001 Key points: 1. Contract awarded via sole-source justification, limiting price discovery and potentially increasing costs. 2. High per-unit cost benchmark suggests potential for overpayment compared to market rates. 3. Lack of competition raises concerns about contractor performance incentives and innovation. 4. Contract duration of over two years may not align with rapidly evolving technology needs. 5. Sole-source award limits opportunities for small businesses to participate in this segment. 6. Oversight of sole-source awards is critical to ensure fair pricing and necessity.

Value Assessment

Rating: questionable

The contract's value is difficult to assess without competitive benchmarks. However, the per-unit cost appears high when compared to similar instruments or components available on the open market. The firm-fixed-price structure provides some cost certainty, but the lack of competition means the government may not be achieving the best possible value for its investment. Further analysis of the specific components and their market prices is needed to definitively determine value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one contractor was solicited. The justification for this approach is not detailed in the provided data. Typically, sole-source awards occur when only one responsible source can provide the required supplies or services. This lack of competition limits the government's ability to leverage market forces to obtain the most favorable pricing and terms.

Taxpayer Impact: Sole-source awards mean taxpayers do not benefit from competitive bidding, which could lead to higher prices than if multiple vendors had competed.

Public Impact

The primary beneficiary is the contractor, National Instruments Corp, for providing essential parts. Services delivered include the manufacturing of parts for electrical measuring and testing instruments. The contract is geographically focused on Maryland (MD), indicating a specific operational need. Workforce implications are likely within the specialized manufacturing and technical support sectors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing and performance.
Lack of transparency in the sole-source justification hinders full value assessment.
Potential for higher costs due to absence of competitive bidding.
Contract duration may exceed the pace of technological advancements in instrumentation.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Award to an established entity may ensure reliable supply of critical parts.
Specific NAICS code indicates a focus on a specialized manufacturing sector.

Sector Analysis

This contract falls within the Instrument Manufacturing for Measuring and Testing Electricity and Electrical Signals sector (NAICS 334515). This is a specialized segment of the manufacturing industry focused on producing sophisticated electronic testing equipment. The market is characterized by high technical barriers to entry and often involves proprietary technologies. Comparable spending in this sector can vary widely depending on the specific type of instrument and its complexity.

Small Business Impact

The sole-source nature of this award means there was no opportunity for small businesses to compete directly for the prime contract. Furthermore, the data indicates no small business set-aside (sb: false). Subcontracting opportunities for small businesses are not specified but would depend on the prime contractor's procurement practices and the availability of small businesses capable of supplying the necessary components or services.

Oversight & Accountability

Oversight for this contract would primarily fall under the General Services Administration (GSA) and its Federal Acquisition Service (FAS). As a sole-source award, enhanced scrutiny from contracting officers and potentially agency oversight bodies is expected to ensure the justification is sound and the pricing is fair. Transparency is limited due to the non-competitive nature, and specific Inspector General (IG) jurisdiction would depend on GSA's internal policies and any specific fraud or waste concerns that may arise.

Related Government Programs

Federal Acquisition Service Contracts
National Defense Contracts
Electronics Manufacturing Contracts
Test and Measurement Equipment Procurement

Risk Flags

Sole Source Justification
Potential for Overpricing
Limited Competition
Lack of Transparency

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $17.2 million to NATIONAL INSTRUMENTS CORP. PMA260 CASS FOT NI PARTS ORDER 0001

Who is the contractor on this award?

The obligated recipient is NATIONAL INSTRUMENTS CORP.

Which agency awarded this contract?

Awarding agency: General Services Administration (Federal Acquisition Service).

What is the total obligated amount?

The obligated amount is $17.2 million.

What is the period of performance?

Start: 2024-04-16. End: 2026-04-30.

What is the specific justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was awarded as 'NOT COMPETED' and classified as 'sole-source'. While the specific justification is not detailed, common reasons for sole-source awards include that only one responsible source is available, or that a compelling urgency exists, or that the award is made pursuant to an economic stimulus program. Without further documentation from the General Services Administration (GSA), it is impossible to ascertain the precise rationale. This lack of transparency is a concern, as it prevents a thorough evaluation of whether competitive procedures were indeed inappropriate or if market research was adequately performed to identify potential alternative sources.

How does the contract value of $17.2 million compare to similar procurements for electrical instrument parts?

Direct comparison of the total contract value ($17.2 million) to similar procurements is challenging without knowing the specific components being procured and their quantities. However, the contract's duration of approximately 744 days (from April 2024 to April 2026) suggests a significant volume or high-value items. The fact that it's a sole-source award to National Instruments Corp, a known provider in this space, implies a reliance on their specific product lines. Benchmarking against other GSA schedules or competitively awarded contracts for similar instrument parts would be necessary to assess if this value represents a fair market price. The absence of competitive bidding inherently makes value assessment more difficult.

What are the potential risks associated with a sole-source award for critical instrument parts?

The primary risks associated with a sole-source award for critical instrument parts include inflated pricing due to the lack of competition, potential for complacency from the contractor regarding quality and delivery timelines, and a reduced incentive for innovation. Taxpayers may bear a higher cost than necessary. Furthermore, reliance on a single source can create supply chain vulnerabilities if the contractor experiences production issues or financial instability. The government also misses out on opportunities to foster competition and potentially discover more cost-effective or technologically advanced solutions from a wider range of suppliers, including small businesses.

What is the track record of National Instruments Corp in fulfilling federal contracts, particularly sole-source awards?

National Instruments Corp (NI) is a well-established company known for its automated test and measurement systems. While specific details on their track record with sole-source awards are not provided in this data snippet, NI has a history of receiving federal contracts. A comprehensive review would involve examining past performance evaluations (e.g., CPARS), contract completion history, and any documented issues or successes in fulfilling similar sole-source requirements for government agencies. Understanding their performance on previous sole-source contracts would provide insight into their reliability and pricing practices in non-competitive situations.

How does the firm-fixed-price contract type mitigate or exacerbate risks in this sole-source scenario?

The firm-fixed-price (FFP) contract type is generally preferred by the government as it shifts the risk of cost overruns to the contractor. In this sole-source scenario, FFP provides a degree of cost certainty for the government, meaning the price is set and unlikely to increase unless contract modifications are issued. However, because there was no competition, the initial 'fixed' price may already be higher than it would be in a competitive environment. While FFP protects against cost escalation, it does not guarantee that the initial price represents the best value achievable. The risk is that the government is locked into a potentially inflated price for the duration of the contract.

What is the significance of the NAICS code 334515 (Instrument Manufacturing for Measuring and Testing Electricity and Electrical Signals)?

NAICS code 334515 identifies establishments primarily engaged in manufacturing instruments for measuring, testing, and controlling the quality of electricity and electrical signals. This includes a wide range of products such as oscilloscopes, signal generators, multimeters, and power meters. For this contract, it signifies that the parts being procured are essential components for such sophisticated electronic testing equipment. This specialization suggests a need for high precision, advanced materials, and potentially proprietary designs, which can contribute to the complexity and cost of the parts, and may also influence the availability of alternative suppliers.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Instrument Manufacturing for Measuring and Testing Electricity and Electrical Signals

Product/Service Code: INSTRUMENTS AND LABORATORY EQPT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 47QSWC24R0002

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Emerson Electric CO

Address: 11500 N MO PAC EXPY, AUSTIN, TX, 78759

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $17,249,692

Exercised Options: $17,249,692

Current Obligation: $17,249,692

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 47QSWC24D0001

IDV Type: IDC

Timeline