Air Force awards $3.5M contract for radio and wireless communications equipment manufacturing to Continental Electronics Corp

Contract Overview

Contract Amount: $3,484,782 ($3.5M)

Contractor: Continental Electronics Corp

Awarding Agency: Department of Defense

Start Date: 2025-01-23

End Date: 2026-07-22

Contract Duration: 545 days

Daily Burn Rate: $6.4K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: PROJECT 481 (P-481) SUPPORT AND SERVICES

Place of Performance

Location: DALLAS, DALLAS County, TEXAS, 75227

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $3.5 million to CONTINENTAL ELECTRONICS CORP for work described as: PROJECT 481 (P-481) SUPPORT AND SERVICES Key points: 1. Contract awarded on a sole-source basis, raising questions about potential price efficiencies. 2. The contract duration of 545 days suggests a need for ongoing support or specialized manufacturing. 3. Limited competition may lead to higher costs for taxpayers compared to an open market. 4. The specific nature of the equipment manufactured is not detailed, impacting performance assessment. 5. Geographic concentration in Texas for this contract warrants attention for broader economic impact. 6. The cost-plus-fixed-fee structure requires careful monitoring to ensure cost containment.

Value Assessment

Rating: fair

The contract value of approximately $3.5 million for a 545-day period is difficult to benchmark without more specific details on the goods or services provided. The cost-plus-fixed-fee (CPFF) pricing structure, while common for complex projects, can sometimes lead to cost overruns if not managed tightly. Without comparable sole-source awards or detailed cost breakdowns, assessing the true value for money is challenging. The absence of competition inherently limits the ability to compare pricing against market alternatives.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor possesses the necessary capabilities, technology, or is the sole provider of a required item. The lack of competition means there were no other bidders to compare against, potentially limiting price discovery and negotiation leverage for the government.

Taxpayer Impact: Sole-source awards can result in higher prices for taxpayers as there is no competitive pressure to drive down costs. This necessitates robust government oversight to ensure fair pricing.

Public Impact

The Department of the Air Force is the primary beneficiary, receiving specialized radio and wireless communications equipment. This contract supports the manufacturing sector, specifically within the wireless communications equipment industry. The contract's performance is geographically concentrated in Texas, potentially impacting the local economy and workforce. The specific end-users and operational impact of the manufactured equipment are not detailed, limiting public understanding of its benefits.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs for taxpayers.
Cost-plus-fixed-fee contract requires diligent oversight to prevent cost escalation.
Lack of detailed scope of work makes it difficult to assess performance and value.
Limited information on the specific equipment manufactured hinders understanding of its strategic importance.

Positive Signals

Award to an established entity, Continental Electronics Corp., may indicate reliability and expertise.
Contract duration suggests a sustained need for the specialized equipment or services.
Geographic location in Texas could stimulate local economic activity and employment.

Sector Analysis

The contract falls within the Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing sector (NAICS 334220). This sector is critical for national security and civilian infrastructure, encompassing the production of a wide range of communication devices. The market size for such specialized equipment can vary significantly based on technological advancements and defense requirements. Benchmarking this contract's value is challenging without knowing the specific type of equipment, but it represents a small portion of the overall defense spending in the communications technology domain.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. Therefore, this award is unlikely to have a direct positive impact on the small business ecosystem. The focus appears to be on a specific, potentially specialized, capability held by the prime contractor.

Oversight & Accountability

Oversight for this contract will be managed by the Department of the Air Force. As a sole-source award with a Cost Plus Fixed Fee structure, rigorous oversight is crucial to monitor costs, ensure adherence to the contract scope, and verify the value delivered. Transparency regarding the specific deliverables and cost breakdowns will be key to accountability. The Inspector General's office may have jurisdiction depending on the nature of any potential issues.

Related Government Programs

Department of Defense Communications Equipment Procurement
Air Force Radio and Wireless Technology Modernization
Defense Manufacturing and Production Contracts
Wireless Communications Infrastructure Development

Risk Flags

Sole-source award
Cost-plus-fixed-fee contract type
Lack of detailed scope of work
Limited public information on equipment specifics

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $3.5 million to CONTINENTAL ELECTRONICS CORP. PROJECT 481 (P-481) SUPPORT AND SERVICES

Who is the contractor on this award?

The obligated recipient is CONTINENTAL ELECTRONICS CORP.

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 $3.5 million.

What is the period of performance?

Start: 2025-01-23. End: 2026-07-22.

What is the specific type of radio and wireless communications equipment being manufactured under this contract, and what is its intended use?

The provided data does not specify the exact type of radio and wireless communications equipment. The NAICS code 334220 covers a broad range of products, including radio and television broadcast and wireless communication equipment. Without this detail, it is impossible to ascertain the equipment's specific function, technological sophistication, or its critical role within Air Force operations. This lack of specificity hinders a thorough assessment of the contract's necessity, the contractor's capability beyond general manufacturing, and the overall value proposition for the government.

How does the $3.5 million contract value compare to similar sole-source awards for comparable equipment or services?

Benchmarking this $3.5 million sole-source contract is challenging due to the lack of specific equipment details and the nature of the award. Sole-source contracts inherently limit direct price comparisons. To assess value, one would need to identify comparable sole-source awards made by the Department of Defense or other agencies for similar types of specialized wireless communication equipment, considering factors like quantity, technical specifications, and contract duration. Without access to such comparative data, it's difficult to definitively state whether this contract represents a fair price or if potential cost efficiencies were missed due to the absence of competition.

What are the specific risks associated with a sole-source, cost-plus-fixed-fee contract for manufacturing specialized equipment?

A sole-source award eliminates competitive pressure, potentially leading to higher prices and reduced incentive for the contractor to optimize costs. The cost-plus-fixed-fee (CPFF) structure, while providing flexibility, carries risks of cost overruns if the contractor's costs exceed estimates, as the government bears the majority of the cost risk. The fixed fee provides the contractor with a guaranteed profit margin, which might not be directly tied to cost efficiency. Key risks include potential for scope creep, inadequate cost controls by the contractor, and difficulty in verifying the necessity and reasonableness of incurred costs, necessitating stringent government oversight.

What is Continental Electronics Corp.'s track record with the Department of the Air Force and for similar types of contracts?

Information regarding Continental Electronics Corp.'s specific track record with the Department of the Air Force for manufacturing radio and wireless communications equipment is not detailed in the provided data. A comprehensive assessment would require reviewing past performance evaluations, contract history, and any reported issues or successes on previous Air Force or Department of Defense contracts. Understanding their experience with CPFF contracts and sole-source procurements would also be crucial in evaluating their capability and reliability for this specific award.

What is the historical spending pattern for radio and wireless communications equipment manufacturing by the Department of the Air Force, and how does this contract fit within that pattern?

The provided data does not offer historical spending patterns for this specific category of equipment by the Air Force. To analyze this, one would need to examine multi-year spending trends for NAICS code 334220 or similar classifications within the Air Force's budget. This would help determine if this $3.5 million award is an outlier, a continuation of a regular procurement cycle, or part of a larger modernization effort. Understanding the historical context is vital for assessing the strategic significance and financial planning related to this contract.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing

Product/Service Code: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: FA855520R0011

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 4212 S BUCKNER BLVD, DALLAS, TX, 75227

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

Financial Breakdown

Contract Ceiling: $3,823,663

Exercised Options: $3,823,663

Current Obligation: $3,484,782

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA855521D0001

IDV Type: IDC

Timeline