DoD awards $24.8M contract for GPS jamming tech, raising questions about competition and value

Contract Overview

Contract Amount: $24,796,534 ($24.8M)

Contractor: Scientific Applications & Research Associates, Inc.

Awarding Agency: Department of Defense

Start Date: 2024-05-22

End Date: 2026-11-22

Contract Duration: 914 days

Daily Burn Rate: $27.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: HOME ON GPS JAM (HOGJ)

Place of Performance

Location: CYPRESS, ORANGE County, CALIFORNIA, 90630

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $24.8 million to SCIENTIFIC APPLICATIONS & RESEARCH ASSOCIATES, INC. for work described as: HOME ON GPS JAM (HOGJ) Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. The contract's value is significant within the niche market of GPS jamming technology. 3. Performance period extends over two years, indicating a need for sustained development or sustainment. 4. The specific application of the technology is not detailed, making it difficult to assess its criticality. 5. Lack of competition suggests potential risks related to contractor performance and innovation. 6. The cost-plus-fixed-fee structure may incentivize cost overruns if not closely monitored.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its specialized nature and sole-source award. The cost-plus-fixed-fee (CPFF) pricing structure, while common for R&D, can lead to higher overall costs if the contractor's expenses are not rigorously scrutinized. Without competitive bids, it's difficult to ascertain if the fixed fee adequately compensates the contractor for the effort or if it represents an excessive profit margin. The contract's value of approximately $24.8 million over 914 days suggests a substantial investment in this technology.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Scientific Applications & Research Associates, Inc., was solicited. This approach bypasses the standard competitive bidding process, which typically involves multiple companies vying for the contract. While sole-source awards can be justified for unique capabilities or urgent needs, they inherently limit price discovery and can reduce the government's leverage in negotiating favorable terms. The absence of competition means taxpayers do not benefit from the cost savings that often arise from a robust bidding environment.

Taxpayer Impact: The lack of competition means taxpayers may not be receiving the best possible price for this technology. Without competing offers, there is a reduced incentive for the contractor to minimize costs, potentially leading to higher overall expenditure for the government.

Public Impact

The Department of the Air Force is the primary beneficiary, acquiring advanced GPS jamming capabilities. This technology is likely intended for military applications, potentially enhancing electronic warfare or counter-measure systems. The contract supports specialized research and development within the defense sector. Work is expected to be performed in California, contributing to the local high-tech workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing and innovation.
Cost-plus-fixed-fee structure requires diligent oversight to prevent cost overruns.
Lack of public detail on the technology's specific use hinders independent value assessment.

Positive Signals

Contract awarded to a known entity in the defense technology sector.
The contract addresses a specific technological need within the Department of Defense.
The fixed fee component provides some cost certainty compared to pure cost-plus contracts.

Sector Analysis

The contract falls within the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector, a specialized area within the broader aerospace and defense industry. This sector is characterized by high R&D investment, stringent performance requirements, and often, significant government procurement. The market size for such niche technologies is difficult to quantify but is driven by evolving military and national security needs. Comparable spending benchmarks are scarce due to the proprietary nature of much of this technology.

Small Business Impact

This contract does not appear to involve a small business set-aside, as the awardee is Scientific Applications & Research Associates, Inc., which is likely a mid-to-large-sized business. There is no explicit mention of subcontracting requirements for small businesses. Therefore, this specific award is unlikely to directly benefit the small business ecosystem through set-asides or mandated subcontracting goals.

Oversight & Accountability

Oversight for this contract will primarily reside with the Department of the Air Force contracting officers and program managers. The cost-plus-fixed-fee structure necessitates robust financial oversight to ensure costs are reasonable and allocable. Transparency is limited due to the sole-source nature and the sensitive, specialized technology involved. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

GPS Technology Development
Electronic Warfare Systems
Navigation and Guidance Systems
Defense Research and Development
Aeronautical and Nautical Instruments

Risk Flags

Sole-source award
Cost-plus contract type
Lack of detailed public information on technology application

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.8 million to SCIENTIFIC APPLICATIONS & RESEARCH ASSOCIATES, INC.. HOME ON GPS JAM (HOGJ)

Who is the contractor on this award?

The obligated recipient is SCIENTIFIC APPLICATIONS & RESEARCH ASSOCIATES, INC..

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 $24.8 million.

What is the period of performance?

Start: 2024-05-22. End: 2026-11-22.

What is the specific operational purpose of the HOME ON GPS JAM (HOGJ) technology being developed under this contract?

The provided data does not specify the exact operational purpose of the HOME ON GPS JAM (HOGJ) technology. The North American Industry Classification System (NAICS) code 334511, 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing,' indicates it relates to systems for these functions. Given the 'jamming' aspect, it likely pertains to electronic warfare capabilities, potentially for disrupting or countering enemy GPS signals, or for testing the resilience of friendly GPS systems. Without further classification details or public statements from the Department of Defense, the precise application remains undisclosed, which is common for sensitive defense technologies.

How does the $24.8 million contract value compare to similar contracts for GPS jamming or electronic warfare technology?

Directly comparing the $24.8 million contract value for HOME ON GPS JAM (HOGJ) to similar contracts is challenging due to the specialized and often classified nature of electronic warfare (EW) and GPS countermeasure technologies. Publicly available data on such niche procurements is limited. However, contracts for EW systems can range from a few million dollars for component development to hundreds of millions for integrated systems. The value of this contract suggests a significant investment in a specific capability, likely for research, development, or sustainment of a particular technology rather than a large-scale production run. The sole-source award also means there's no direct competitive benchmark to assess if this price is advantageous.

What are the primary risks associated with a sole-source award for advanced defense technology like GPS jamming?

The primary risks associated with a sole-source award for advanced defense technology like GPS jamming include: 1. **Higher Costs:** Without competition, the contractor has less incentive to offer the lowest possible price, potentially leading to inflated costs for the government. 2. **Reduced Innovation:** The lack of competitive pressure can stifle innovation, as the contractor may not feel compelled to explore more efficient or advanced solutions. 3. **Limited Oversight Effectiveness:** While oversight mechanisms exist, the absence of competing technical proposals makes it harder to independently validate the contractor's approach and cost justifications. 4. **Potential for Vendor Lock-in:** The government may become overly reliant on a single vendor, making future transitions or upgrades more difficult and expensive. 5. **Quality Concerns:** Although not guaranteed, reduced competition can sometimes correlate with a lower emphasis on quality if the vendor perceives less risk of losing future business.

What is the track record of Scientific Applications & Research Associates, Inc. (SARA) in developing similar defense technologies?

Scientific Applications & Research Associates, Inc. (SARA) has a documented history of developing and manufacturing advanced technologies for the Department of Defense and other government agencies. Their expertise often lies in areas such as radar systems, electronic warfare, signal processing, and specialized sensors. While specific details on their involvement with GPS jamming technology prior to this contract are not publicly detailed in the provided data, their general profile suggests they possess the technical capabilities required for such a project. A deeper dive into SARA's contract history, past performance reviews, and specific project portfolios would be necessary to fully assess their track record relevant to this particular HOGJ contract.

How does the Cost Plus Fixed Fee (CPFF) contract type influence the government's financial exposure and the contractor's incentives?

The Cost Plus Fixed Fee (CPFF) contract type is commonly used for research and development efforts where the scope of work is not fully defined at the outset. Under CPFF, the government agrees to pay the contractor's actual allowable costs plus a predetermined fixed fee, which represents the contractor's profit. This structure provides the government with some cost certainty regarding the profit margin (the fixed fee), unlike pure cost-plus contracts where profit can fluctuate. However, the government bears the risk of cost overruns, as all allowable costs are reimbursed. The contractor is incentivized to control costs to ensure the fixed fee remains profitable, but the primary incentive is completing the defined scope of work rather than minimizing costs to the absolute lowest level, as the fee is fixed regardless of the final cost.

What are the potential implications of this contract for future spending on GPS countermeasures and electronic warfare?

This contract for HOME ON GPS JAM (HOGJ) suggests a continued or emerging requirement within the Department of Defense for advanced capabilities in GPS jamming and potentially broader electronic warfare (EW). If the technology developed proves effective and critical, it could lead to follow-on contracts for production, integration into larger systems, or further development. This could signal an increasing trend in defense spending towards EW capabilities, driven by the perceived threat of adversaries' EW capabilities and the reliance of modern military operations on GPS-dependent systems. Conversely, if the technology is experimental or faces significant challenges, it might lead to a reassessment of future investments in this specific area.

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: AMMUNITION AND EXPLOSIVES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: FA821324R3005

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 6300 GATEWAY DR, CYPRESS, CA, 90630

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

Financial Breakdown

Contract Ceiling: $27,000,004

Exercised Options: $27,000,004

Current Obligation: $24,796,534

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline