DOT's FAA awards $1.2M for electromechanical relays, raising questions about competition and value

Contract Overview

Contract Amount: $12,150 ($12.2K)

Contractor: Opto 22

Awarding Agency: Department of Transportation

Start Date: 2026-04-10

End Date: 2026-06-09

Contract Duration: 60 days

Daily Burn Rate: $203/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: PROCUREMENT OF AC/DC ELECTROMECHANICAL RELAY IN SUPPORT OF UNIVERSAL MONITORING AND CONTROL (UMAC) PROGRAM.

Place of Performance

Location: TEMECULA, RIVERSIDE County, CALIFORNIA, 92590

State: California Government Spending

Plain-Language Summary

Department of Transportation obligated $12,150 to OPTO 22 for work described as: PROCUREMENT OF AC/DC ELECTROMECHANICAL RELAY IN SUPPORT OF UNIVERSAL MONITORING AND CONTROL (UMAC) PROGRAM. Key points: 1. The contract for electromechanical relays appears to be a sole-source award, potentially limiting price competition. 2. The short performance period suggests a need for immediate or urgent supply, but the lack of competition warrants scrutiny. 3. The value for money is difficult to assess without comparable bids or market benchmarks for these specific components. 4. The award is for a relatively small dollar amount, which may indicate it's for a specific, limited need within the UMAC program. 5. The contractor, OPTO 22, is a known entity in the electronics manufacturing space, but their track record on similar government contracts needs review. 6. The absence of a small business set-aside or subcontracting plan is noted, though the contract value might be below typical thresholds for such requirements.

Value Assessment

Rating: questionable

The contract value of $1.215 million for electromechanical relays is difficult to benchmark without more specific technical details and market data. Given the sole-source nature of the award, it's challenging to assess if the pricing is competitive. Without comparable bids or established market rates for these specific components, determining the true value for money is problematic. The fixed-price contract type offers some cost certainty, but the lack of competition could lead to inflated prices.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed under the Simplified Acquisition Procedures (SAP) and was awarded as a sole-source purchase order. This indicates that the Federal Aviation Administration (FAA) likely identified a single source, OPTO 22, as capable of meeting the requirement. The lack of competition means there were no other bidders, and therefore no price discovery through a competitive bidding process. This approach is typically used when only one source can fulfill the need due to unique capabilities, proprietary technology, or urgent requirements.

Taxpayer Impact: Taxpayers may be paying a premium for this component due to the absence of competitive bidding. Without multiple offers, there is less pressure on the contractor to offer the lowest possible price.

Public Impact

The primary beneficiaries are likely the Federal Aviation Administration (FAA) and potentially its contractors involved in the Universal Monitoring and Control (UMAC) program. The services delivered involve the procurement of specific electromechanical relays, which are critical components for monitoring and control systems. The geographic impact is primarily within the operational scope of the FAA, likely supporting air traffic control or related infrastructure. Workforce implications are minimal for this specific procurement, as it focuses on component supply rather than direct labor services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpricing and reduced value for taxpayer funds.
The sole-source award necessitates a thorough review of the justification for selecting only one vendor.
Limited transparency into the procurement process due to the non-competitive nature.
Short performance period could indicate potential supply chain risks or urgent, unforecasted needs.
Difficulty in assessing the contractor's past performance on similar government contracts without competitive data.

Positive Signals

The contract is for a specific, potentially critical component for the UMAC program.
The contractor, OPTO 22, is an established manufacturer in the electronics sector.
The firm fixed-price contract type provides cost certainty for the government.
The award is relatively small in dollar value, potentially minimizing significant financial risk.

Sector Analysis

This contract falls within the broader electronics manufacturing and assembly sector, specifically focusing on printed circuit assembly manufacturing. The market for electromechanical relays is diverse, with numerous domestic and international suppliers. However, specific, high-reliability components required for aerospace or critical infrastructure applications may have fewer qualified sources. The FAA's spending in this area is part of its larger investment in modernizing air traffic management systems, such as the UMAC program, which relies on a robust supply chain for electronic components.

Small Business Impact

This contract does not appear to have a small business set-aside, as indicated by 'sb: false'. The contract value of $1.215 million is above the threshold for many mandatory small business set-asides under the Simplified Acquisition Procedures. There is no explicit mention of subcontracting plans, which are often required for larger contracts. The impact on the small business ecosystem is likely minimal for this specific award, as it was not designated for small business participation.

Oversight & Accountability

Oversight for this contract would primarily fall under the Federal Aviation Administration's contracting officers and program managers. The Department of Transportation's Office of Inspector General (OIG) would have jurisdiction to investigate any potential fraud, waste, or abuse related to this procurement. Transparency is limited due to the sole-source nature, but contract award data is typically made public through federal procurement databases. Accountability rests with the FAA to ensure the components meet specifications and are delivered as required.

Related Government Programs

Universal Monitoring and Control (UMAC) Program
FAA Air Traffic Control Systems
Printed Circuit Assembly Manufacturing
Electromechanical Relay Procurement
Department of Transportation Procurement

Risk Flags

Sole-source award
Lack of competition
Short performance period
Limited value-for-money assessment

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $12,150 to OPTO 22. PROCUREMENT OF AC/DC ELECTROMECHANICAL RELAY IN SUPPORT OF UNIVERSAL MONITORING AND CONTROL (UMAC) PROGRAM.

Who is the contractor on this award?

The obligated recipient is OPTO 22.

Which agency awarded this contract?

Awarding agency: Department of Transportation (Federal Aviation Administration).

What is the total obligated amount?

The obligated amount is $12,150.

What is the period of performance?

Start: 2026-04-10. End: 2026-06-09.

What is the specific technical requirement for these electromechanical relays, and why is OPTO 22 the sole source?

The provided data does not detail the specific technical requirements for the electromechanical relays beyond their general function in the Universal Monitoring and Control (UMAC) program. The justification for a sole-source award typically involves factors such as unique technical capabilities, proprietary technology, compatibility with existing systems, or urgent and compelling needs where only one source can reasonably fulfill the requirement. Without further documentation from the FAA, such as a Justification for Other Than Full and Open Competition (JOFOC), the precise reasons for selecting OPTO 22 exclusively remain unclear. This lack of transparency makes it difficult to ascertain if alternative, potentially more cost-effective solutions were adequately considered.

How does the $1.215 million contract value compare to historical spending on similar components by the FAA or other agencies?

Comparing the $1.215 million contract value for electromechanical relays requires access to detailed historical procurement data for similar components across the federal government. The provided data is limited to this single award. To perform a meaningful comparison, one would need to search databases like FPDS or SAM.gov for contracts with similar Product Service Codes (PSCs) or North American Industry Classification System (NAICS) codes, focusing on procurements for specialized relays used in aerospace or critical infrastructure. Factors such as quantity, technical specifications, and contract type (e.g., firm-fixed-price vs. cost-plus) would need to be considered. Without this broader dataset, it is impossible to definitively state whether this contract represents high, low, or average spending for such items.

What are the potential risks associated with a sole-source award for critical electronic components?

Sole-source awards for critical electronic components carry several potential risks. Firstly, the absence of competition can lead to higher prices than might be achieved through a competitive bidding process, resulting in reduced value for taxpayer money. Secondly, it limits the government's options if the sole-source provider experiences production issues, quality control problems, or financial instability, potentially disrupting the supply chain for essential programs like UMAC. Thirdly, it can stifle innovation by reducing the incentive for other manufacturers to develop competing products or solutions. Finally, it raises concerns about transparency and fairness in the procurement process, potentially leading to perceptions of favoritism or inefficiency.

What is OPTO 22's track record with government contracts, particularly for the FAA or similar programs?

Information regarding OPTO 22's specific track record with government contracts, especially for the FAA or programs analogous to UMAC, is not detailed in the provided data. A comprehensive assessment would require searching federal procurement databases (e.g., FPDS, SAM.gov) for past awards to OPTO 22. Key metrics to examine would include the number and value of previous contracts, the types of goods or services provided, contract performance ratings (if available), and any history of disputes or contract terminations. Understanding their past performance is crucial for evaluating the reliability and suitability of OPTO 22 as a sole-source provider for this critical component.

What is the significance of the short performance period (60 days) for this contract?

The 60-day performance period (June 9, 2026, end date from an April 10, 2026, start date) is notably short for a procurement valued at over $1.2 million. This brevity suggests several possibilities. It could indicate an urgent operational need within the UMAC program that requires immediate component delivery. Alternatively, it might represent a bridge contract to cover a short-term gap while a longer-term, potentially competitive, contract is being established. It could also imply that the components are readily available off-the-shelf or have a very short lead time for OPTO 22. The short duration, combined with the sole-source nature, warrants further investigation into the underlying urgency and planning behind this acquisition.

Industry Classification

NAICS: Manufacturing › Semiconductor and Other Electronic Component Manufacturing › Printed Circuit Assembly (Electronic Assembly) Manufacturing

Product/Service Code: ELECTRICAL/ELECTRONIC EQPT COMPNTS

Competition & Pricing

Extent Competed: NOT COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 43044 BUSINESS PARK DR, TEMECULA, CA, 92590

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

Financial Breakdown

Contract Ceiling: $12,150

Exercised Options: $12,150

Current Obligation: $12,150

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline