DoD's $85.8M contract for radar and navigational facilities awarded to ITT Industries, Inc. shows potential value concerns

Contract Overview

Contract Amount: $85,838,153 ($85.8M)

Contractor: Exelis Systems Corporation

Awarding Agency: Department of Defense

Start Date: 2003-09-16

End Date: 2009-12-22

Contract Duration: 2,289 days

Daily Burn Rate: $37.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200312!000308!5700!AC42 !ACC CONS/CC !F4465003C0009 !A!N! !Y! !20030916!20040930!052819732!052819732!001216845!N!ITT INDUSTRIES, INC , SYSTEMS !4410 E FOUNTAIN BLVD !COLORADO SPRIN !CO!80916!* !* !CO!* !* !COLOMBIA !+000000655611!N!N!000000000000!M123!OPERATION/RADAR & NAVIGATIONAL FACILITIES !A7 !ELECTRONICS AND COMMUNICATION !3000!NOT DISCERNABLE OR CLASSIFIED !517910!E! !3! ! ! ! ! !99990909!B! ! !A! !A!N!M!2!005!B! !Z!N!Z! ! !N!M!N! ! ! ! ! !A!A!000!A!B!N! ! ! !Y! ! !0001! !

Plain-Language Summary

Department of Defense obligated $85.8 million to EXELIS SYSTEMS CORPORATION for work described as: 200312!000308!5700!AC42 !ACC CONS/CC !F4465003C0009 !A!N! !Y! !20030916!20040930!052819732!052819732!001216845!N!ITT INDUSTRIES, INC , SYSTEMS !4410 E FOUNTAIN BLVD !COLORADO SPRIN !CO!80916!* !* !CO!* !* !COLOMBIA !+000000655611!N!N!000000000000!M123!OPERATION/RADAR & NAVIGATION… Key points: 1. The contract's duration of nearly 6 years and the final award amount suggest a need for closer value-for-money analysis. 2. While awarded under full and open competition, the limited number of bids received warrants scrutiny of market dynamics. 3. The absence of specific performance metrics and the 'not discernible or classified' description raise potential risk indicators. 4. Benchmarking this contract against similar procurements for radar and navigational systems is crucial for assessing its value. 5. The contract falls within the broader 'Electronics and Communication' sector, but its specific application in radar systems is key. 6. The significant duration and value of this contract may indicate a substantial investment in critical defense infrastructure.

Value Assessment

Rating: fair

The total award amount of $85.8 million over approximately 6 years for radar and navigational facilities suggests a significant investment. Without detailed performance data or comparison points, it is difficult to definitively assess value for money. However, the contract's duration and the nature of the equipment procured imply a substantial operational requirement. Further analysis would involve comparing the per-unit cost of the systems or services provided against industry benchmarks and similar government procurements to determine if the pricing was competitive and represented good value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. However, the data indicates only 5 bids were received. While full and open competition is generally preferred for maximizing price discovery and ensuring fair market access, a lower-than-expected number of bidders could suggest market concentration or potential barriers to entry for other firms. This level of competition is adequate but not robust, and further investigation into why more bidders did not participate could be warranted.

Taxpayer Impact: A competitive award process, even with a moderate number of bidders, is generally favorable for taxpayers as it encourages competitive pricing. However, the specific number of bids received here suggests that while some competition existed, it may not have been as intense as possible, potentially impacting the final price achieved.

Public Impact

The primary beneficiaries are likely components of the Department of Defense requiring advanced radar and navigational capabilities for operational readiness. The contract delivers essential systems and potentially services related to radar and navigational facilities, crucial for military operations. The geographic impact is likely global, supporting military installations and operations worldwide where such systems are deployed. Workforce implications could include specialized technical roles for installation, maintenance, and operation of the radar and navigational systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific performance metrics makes it difficult to assess the effectiveness and efficiency of the delivered systems.
The 'not discernible or classified' description for the service/product type raises concerns about transparency and potential scope creep.
The long contract duration (nearly 6 years) increases the risk of technological obsolescence or changing operational needs.
Limited number of bidders (5) in a full and open competition might indicate a concentrated market or barriers to entry.

Positive Signals

Awarded under full and open competition, which theoretically promotes fair market access and competitive pricing.
The contract addresses critical defense needs related to radar and navigational facilities, indicating strategic importance.
The contractor, ITT Industries, Inc., is a known entity in defense contracting, suggesting some level of established capability.

Sector Analysis

This contract falls within the broader 'Electronics and Communication' sector, specifically focusing on radar and navigational facilities. This is a critical sub-sector within defense procurement, involving complex technologies and significant R&D investment. The market for such systems is often characterized by a few large, specialized contractors. Comparable spending benchmarks would involve analyzing other contracts for similar radar systems, air traffic control equipment, or navigation aids within the Department of Defense and other federal agencies to gauge cost-effectiveness.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions or subcontracting goals for this contract. The prime contractor, ITT Industries, Inc., is a large corporation. Therefore, the direct impact on small businesses through this specific award is likely minimal unless they are part of the supply chain. Further investigation into subcontracting plans would be needed to assess the broader impact on the small business ecosystem.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve the Department of Defense's contracting officers, program managers, and potentially the Inspector General's office. Accountability measures would be tied to the contract's performance clauses and delivery schedules. Transparency is assessed by the availability of contract details; in this case, the 'not discernible or classified' description limits transparency regarding the specific nature of the services or products. The Inspector General could investigate issues related to fraud, waste, or abuse.

Related Government Programs

Defense Radar Systems Procurement
Navigational Aids and Systems
Electronic Warfare Systems
Air Traffic Control Systems
Command, Control, and Communications Systems

Risk Flags

Potential for cost overruns due to long contract duration.
Risk of technological obsolescence.
Ambiguity in service/product description limits transparency.
Limited number of bidders may indicate market concentration.
Need for detailed performance metrics to assess value.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $85.8 million to EXELIS SYSTEMS CORPORATION. 200312!000308!5700!AC42 !ACC CONS/CC !F4465003C0009 !A!N! !Y! !20030916!20040930!052819732!052819732!001216845!N!ITT INDUSTRIES, INC , SYSTEMS !4410 E FOUNTAIN BLVD !COLORADO SPRIN !CO!80916!* !* !CO!* !* !COLOMBIA !+000000655611!N!N!000000000000!M123!OPERATION/RADAR & NAVIGATIONAL FACILITIES !A7 !ELECTRONICS AND COMMUNICATION !3000!NOT DISCERNABLE OR CLASSIFIED !517910!E! !3! ! ! ! ! !99990909!B! ! !A! !A!N!M!2!005!B! !Z!N!Z! ! !N!M!N! ! ! ! ! !A!A!000!A!B!N! ! ! !Y! ! !0001! !

Who is the contractor on this award?

The obligated recipient is EXELIS SYSTEMS CORPORATION.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $85.8 million.

What is the period of performance?

Start: 2003-09-16. End: 2009-12-22.

What was the specific nature of the radar and navigational facilities procured under this contract?

The contract description states 'OPERATION/RADAR & NAVIGATIONAL FACILITIES' and lists the Product Service Code (PSC) as '517910' (Radar and Navigation Equipment). However, the 'nd' (Nature of Service) field is 'Other Telecommunications', and the 'na' (North American Industry Classification System) code is '517910'. The 'Description' field is further qualified with 'NOT DISCERNABLE OR CLASSIFIED'. This lack of specificity makes it challenging to determine the exact type of radar systems (e.g., surveillance, targeting, weather) or navigational aids (e.g., GPS augmentation, beacon systems) procured. This ambiguity could relate to the sensitive nature of military technology or a broad categorization for administrative purposes. Without further declassification or detail, understanding the precise technological capabilities acquired is not possible from the provided data.

How does the $85.8 million award amount compare to similar radar and navigational facility contracts awarded by the DoD?

Benchmarking this $85.8 million contract requires comparing it to similar procurements for radar and navigational systems within the Department of Defense. Given the contract's duration of nearly six years (from September 2003 to December 2009, with an end date of 2004-09-30 but a modification extending to 2009-12-22), the average annual spend was approximately $14.3 million. To assess value, one would look for contracts with similar scope, technological complexity, and quantity of systems. For instance, contracts for advanced surveillance radar systems or integrated navigation suites could range from tens to hundreds of millions of dollars. Without specific details on the systems procured, a precise comparison is difficult. However, if this contract was for relatively standard or mature technologies, the total amount over its extended period might warrant scrutiny for cost-effectiveness compared to potentially shorter-duration or more technologically advanced procurements.

What are the key performance indicators (KPIs) or metrics used to evaluate the success of this contract?

The provided data does not explicitly list Key Performance Indicators (KPIs) or specific metrics used to evaluate the success of this contract. Contracts of this nature typically include clauses related to delivery schedules, system reliability, operational availability, accuracy, and maintenance requirements. The 'Description' field being 'NOT DISCERNABLE OR CLASSIFIED' further obscures any performance details. In the absence of explicit KPIs in the data, evaluation would rely on standard contract administration processes, including acceptance testing, post-delivery performance monitoring, and adherence to technical specifications. The long duration and significant value suggest that ongoing performance monitoring by the Air Force would be critical, but the specific metrics remain undisclosed in this dataset.

What is the track record of ITT Industries, Inc. in fulfilling similar defense contracts, particularly for radar and navigation systems?

ITT Industries, Inc. (now part of L3Harris Technologies after various acquisitions and divestitures) has a long history as a major defense contractor involved in a wide array of electronic systems, including radar, communications, and navigation technologies. Historically, the company has been a significant supplier of such equipment to the U.S. military. While specific performance details for individual contracts are not always publicly available, ITT's sustained presence in the defense sector suggests a general capability to deliver complex systems. However, like any large contractor, past performance can vary across different programs and time periods. A comprehensive assessment would require reviewing specific past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS) for ITT on comparable contracts, which are not included in this dataset.

Were there any significant contract modifications or change orders that altered the scope or cost of this contract over its lifecycle?

The data indicates a modification that extended the contract's completion date from September 30, 2004, to December 22, 2009, a significant extension of over five years. While the data does not detail the nature or cost implications of this modification, such extensions often accompany changes in scope, technical requirements, or funding adjustments. A contract originally planned for roughly one year (September 2003 to September 2004) being extended to over six years suggests substantial evolution in the program's needs or execution. Analyzing the modification details (if available in a more comprehensive database) would be crucial to understand if the scope expanded, if new technologies were incorporated, or if pricing adjustments were made, all of which impact the overall value and risk assessment.

What is the estimated market size for radar and navigational equipment within the federal government, and how does this contract fit within that market?

The market for radar and navigational equipment within the federal government, particularly the Department of Defense, is substantial, encompassing a wide range of applications from strategic surveillance and missile defense to tactical aviation and maritime operations. While precise figures for the 'radar and navigational facilities' sub-segment are difficult to isolate without detailed market research reports, the overall federal spending on electronic and communication equipment runs into the tens of billions of dollars annually. This $85.8 million contract, awarded over an extended period, represents a significant but not exceptionally large procurement within this broader market. It likely addresses a specific operational need for a particular type of radar or navigation system, fitting into the larger ecosystem of defense technology acquisition. Its size suggests it could be for a specific base, a fleet of aircraft, or a specialized ground system.

Industry Classification

NAICS: Information › Other Telecommunications › Other Telecommunications

Product/Service Code: OPERATION OF GOVT OWNED FACILITY › OPERATE GOVT OWNED BUILDINGS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Parent Company: Exelis Inc. (UEI: 969316046)

Address: 4410 E FOUNTAIN BLVD, COLORADO SPRIN, CO, 80916

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $68,190,909

Exercised Options: $68,190,909

Current Obligation: $85,838,153

Contract Characteristics

Cost or Pricing Data: NO

Timeline