DoD awards $13.5M for Tunner Loader Support to DRS Sustainment Systems, Inc. with no competition

Contract Overview

Contract Amount: $13,463,787 ($13.5M)

Contractor: DRS Sustainment Systems, Inc

Awarding Agency: Department of Defense

Start Date: 2024-11-22

End Date: 2029-11-21

Contract Duration: 1,825 days

Daily Burn Rate: $7.4K/day

Competition Type: NOT COMPETED

Pricing Type: FIXED PRICE INCENTIVE

Sector: Defense

Official Description: TUNNER LOADER SUPPORT

Place of Performance

Location: BRIDGETON, SAINT LOUIS County, MISSOURI, 63044

State: Missouri Government Spending

Plain-Language Summary

Department of Defense obligated $13.5 million to DRS SUSTAINMENT SYSTEMS, INC for work described as: TUNNER LOADER SUPPORT Key points: 1. Contract awarded to a single vendor suggests potential for higher costs and limited innovation. 2. Lack of competition raises concerns about price reasonableness and value for taxpayer dollars. 3. The fixed-price incentive contract type may incentivize cost control but requires careful monitoring. 4. Long contract duration of five years could lock in pricing, potentially missing market shifts. 5. The industrial truck and stacker machinery sector is mature, making competition more expected. 6. Performance risk appears moderate given the nature of sustainment support.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the lack of competitive bids. Without comparison to other offers, it's difficult to ascertain if the $13.5 million price represents a fair market value. The fixed-price incentive structure aims to control costs, but the absence of competition means the government cannot leverage multiple bids to drive down the price. This award warrants scrutiny to ensure the government is not overpaying for the sustainment services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning no other vendors were solicited or considered. This significantly limits price discovery and the government's ability to negotiate the best possible terms. The lack of a competitive process raises questions about whether alternative solutions or more cost-effective options were overlooked. Transparency in the justification for this sole-source award is crucial.

Taxpayer Impact: Sole-source awards mean taxpayers may not be receiving the most competitive pricing available in the market, potentially leading to higher overall expenditure for essential services.

Public Impact

The Department of Defense benefits from continued operational readiness of its Tunner loaders. DRS Sustainment Systems, Inc. will provide critical support services, ensuring equipment functionality. The contract's geographic impact is primarily within the continental United States where DoD assets are deployed. Workforce implications include continued employment for technicians and support staff at DRS Sustainment Systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated pricing.
Sole-source award limits opportunities for other capable vendors.
Long-term contract may not adapt to future technological advancements.
Fixed-price incentive requires careful oversight to ensure contractor efficiency.

Positive Signals

DRS Sustainment Systems, Inc. is an established provider of defense sustainment.
The contract type aims to align contractor and government interests on cost.
The award ensures continued availability of critical equipment support.

Sector Analysis

This contract falls within the industrial machinery manufacturing and support sector, specifically focusing on heavy equipment sustainment. The market for specialized defense equipment support is often characterized by a limited number of highly qualified contractors. While the overall industrial truck and stacker machinery market is broad, niche defense sustainment contracts like this one tend to have fewer competitive opportunities, sometimes leading to sole-source or limited competition awards.

Small Business Impact

There is no indication of a small business set-aside for this contract, nor are there explicit subcontracting requirements mentioned. The award to DRS Sustainment Systems, Inc., a large business, suggests that small businesses are unlikely to be direct beneficiaries of this prime contract. Opportunities for small businesses would likely be through subcontracting, if DRS chooses to engage them.

Oversight & Accountability

Oversight for this contract will likely be managed by the Defense Contract Management Agency (DCMA), responsible for ensuring contractor performance and compliance. The fixed-price incentive structure necessitates diligent monitoring of costs and performance metrics to ensure the government receives value. Transparency regarding the justification for the sole-source award and ongoing performance reports will be key accountability measures.

Related Government Programs

Defense Logistics Agency (DLA) Equipment Support
Army Sustainment Command
Marine Corps Logistics Command

Risk Flags

Sole-source award
Potential for price inflation
Limited market visibility

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $13.5 million to DRS SUSTAINMENT SYSTEMS, INC. TUNNER LOADER SUPPORT

Who is the contractor on this award?

The obligated recipient is DRS SUSTAINMENT SYSTEMS, INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $13.5 million.

What is the period of performance?

Start: 2024-11-22. End: 2029-11-21.

What is the historical spending pattern for Tunner Loader support by the Department of Defense?

Analyzing historical spending for Tunner Loader support is crucial for understanding the long-term investment in this equipment. Without specific historical data for this exact contract vehicle, we can infer trends from similar sustainment contracts. Typically, sustainment costs can represent a significant portion of a platform's total lifecycle cost. Fluctuations in spending may be driven by operational tempo, equipment age, and modernization efforts. A detailed review of past solicitations and awards for Tunner Loader support, or comparable ground support equipment, would reveal if this $13.5 million award represents an increase, decrease, or stable level of investment compared to previous periods. Understanding these patterns helps assess the current award's financial context and potential future budgetary needs.

What specific sustainment services are included under this contract?

The contract specifies 'TUNNER LOADER SUPPORT,' which broadly encompasses maintenance, repair, and operational readiness services for Tunner loaders. This likely includes scheduled preventative maintenance, unscheduled repairs, parts replacement, technical support, and potentially depot-level maintenance. The exact scope of services would be detailed in the contract's Statement of Work (SOW). These services are critical for ensuring the availability and reliability of ground support equipment essential for military operations, particularly in logistics and cargo handling. The duration of the contract (five years) suggests a comprehensive, long-term support arrangement rather than ad-hoc repairs.

What is the track record of DRS Sustainment Systems, Inc. with similar DoD contracts?

DRS Sustainment Systems, Inc. has a significant track record supporting the Department of Defense with various sustainment and logistics services. They are known for providing maintenance, repair, and overhaul (MRO) for a range of military equipment, including ground support equipment, vehicles, and aircraft components. Their experience often involves complex systems requiring specialized technical expertise and adherence to stringent military standards. While specific performance metrics for past contracts are not detailed here, their continued awards suggest a generally satisfactory performance history with the DoD. However, a deeper dive into past performance reviews and any past performance issues would provide a more complete picture of their reliability for this specific Tunner Loader support contract.

How does the fixed-price incentive (FPI) contract type function in this context?

A Fixed-Price Incentive (FPI) contract is designed to share the risks and rewards of cost performance between the government and the contractor. In this case, there's an established target cost and target profit. If the contractor completes the work for less than the target cost, both the government and contractor share in the savings according to a pre-negotiated formula. Conversely, if costs exceed the target, both parties share in the overrun, up to a negotiated ceiling price. This structure incentivizes the contractor to control costs while ensuring the government doesn't face unlimited cost increases. Effective administration requires close monitoring of the contractor's cost accounting and performance against the target.

What are the potential risks associated with a sole-source award for sustainment services?

The primary risk of a sole-source award for sustainment services is the potential for inflated pricing due to the lack of competition. Without competing bids, the government loses the leverage to negotiate the best possible price. This can lead to higher costs for taxpayers over the contract's duration. Additionally, sole-source awards can stifle innovation, as there's less pressure on the incumbent contractor to improve services or adopt more cost-effective methods. There's also a risk that the contractor may become complacent, knowing they are the only option. Ensuring robust oversight and performance management becomes even more critical in sole-source situations to mitigate these risks.

Industry Classification

NAICS: Manufacturing › Other General Purpose Machinery Manufacturing › Industrial Truck, Tractor, Trailer, and Stacker Machinery Manufacturing

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIXED PRICE INCENTIVE (L)

Evaluated Preference: NONE

Contractor Details

Parent Company: Leonardo SPA

Address: 4201 INNOVATION WAY, BRIDGETON, MO, 63044

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: $13,463,787

Exercised Options: $13,463,787

Current Obligation: $13,463,787

Subaward Activity

Number of Subawards: 7

Total Subaward Amount: $383,747

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: FA853425D0001

IDV Type: IDC

Timeline