DoD's $37M contract for navigation systems awarded to Data Link Solutions LLC without competition

Contract Overview

Contract Amount: $37,179,731 ($37.2M)

Contractor: Data Link Solutions LLC

Awarding Agency: Department of Defense

Start Date: 2006-12-29

End Date: 2010-10-29

Contract Duration: 1,400 days

Daily Burn Rate: $26.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: RECEIVER- TRANSMITTER

Place of Performance

Location: CEDAR RAPIDS, LINN County, IOWA, 52498

State: Iowa Government Spending

Plain-Language Summary

Department of Defense obligated $37.2 million to DATA LINK SOLUTIONS LLC for work described as: RECEIVER- TRANSMITTER Key points: 1. The contract's value of $37.2 million over four years suggests a significant investment in critical navigation systems. 2. Awarded on a sole-source basis, the lack of competition raises questions about potential overpricing and limited market engagement. 3. The contract's duration and fixed-price nature indicate a predictable cost structure, but without competition, value for money is harder to ascertain. 4. Performance context is limited as this was a sole-source award, making direct comparisons to other navigation system providers challenging. 5. The sector for navigation systems is highly specialized, often dominated by a few key players, which may explain the sole-source award. 6. Risk indicators are elevated due to the absence of competitive bidding, which typically drives down costs and encourages innovation.

Value Assessment

Rating: questionable

Benchmarking the value of this $37.2 million contract is difficult without competitive data. As a sole-source award, there's no direct comparison to market rates derived from bidding. The fixed-price nature provides cost certainty for the government, but the absence of competition means the government may not have secured the best possible price. Without a competitive process, it's hard to definitively assess if the pricing is fair or if taxpayers received optimal value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, Data Link Solutions LLC, was considered. This typically occurs when a specific capability is only available from a single source or in urgent situations. The lack of competition means there were no other companies vying for this contract, which limits the government's ability to explore alternative solutions or negotiate based on multiple offers.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to drive down prices. It also limits opportunities for other businesses to compete for government contracts.

Public Impact

The primary beneficiaries are the Department of Defense, which receives essential navigation systems for its operations. The contract delivers critical components for search, detection, navigation, guidance, and related systems, enhancing military capabilities. The geographic impact is likely national, supporting defense operations across various theaters. Workforce implications may include specialized engineering and manufacturing roles within Data Link Solutions LLC and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Sole-source awards can reduce transparency in pricing.
Limited opportunities for other firms to participate in this contract.

Positive Signals

Awarded to a single, presumably capable, contractor for specialized systems.
Fixed-price contract provides cost predictability.
Long-term award suggests a sustained need for these systems.

Sector Analysis

The market for aeronautical and nautical system and instrument manufacturing (NAICS 334511) is highly specialized, often characterized by a few dominant firms possessing unique technological capabilities. Contracts in this sector are critical for national defense and aerospace industries. Spending benchmarks can vary widely based on the specific technology and scale of production, but significant government investment is common due to the strategic importance of these systems.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, there is no explicit mention of subcontracting goals for small businesses. This suggests that opportunities for small businesses to participate in this specific contract may be limited, potentially impacting the small business ecosystem within this specialized defense sector.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and procurement regulations. The Defense Contract Management Agency (DCMA) is listed as the 'sa' (servicing agency), indicating their role in contract administration and oversight. Inspector General (IG) jurisdiction would apply to investigations of fraud, waste, or abuse related to the contract. Transparency is limited by the sole-source nature of the award.

Related Government Programs

Defense Navigation Systems
Aeronautical Instrument Manufacturing
Nautical System Manufacturing
Military Guidance Systems
DoD Procurement

Risk Flags

Sole-source award lacks competition
Potential for non-competitive pricing
Limited transparency on value for money

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $37.2 million to DATA LINK SOLUTIONS LLC. RECEIVER- TRANSMITTER

Who is the contractor on this award?

The obligated recipient is DATA LINK SOLUTIONS LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $37.2 million.

What is the period of performance?

Start: 2006-12-29. End: 2010-10-29.

What is the track record of Data Link Solutions LLC in delivering similar navigation systems to the DoD?

Information regarding the specific track record of Data Link Solutions LLC in delivering similar navigation systems to the DoD is not directly provided in the data. However, the fact that they were awarded a sole-source contract suggests they possess unique capabilities or are the incumbent provider for these systems. Further investigation would be needed to review past performance evaluations, delivery history, and any quality or timeliness issues associated with their previous contracts with the DoD or other government agencies. Understanding their history is crucial for assessing the reliability of this sole-source award.

How does the awarded price compare to industry benchmarks for similar navigation systems, given it was a sole-source contract?

Direct comparison of the awarded price to industry benchmarks is challenging due to the sole-source nature of this contract. Without competitive bids, there is no market-driven price discovery. To assess value, one would need to research publicly available data on similar navigation systems procured through competitive means, analyze the cost components of the system, and consult industry cost estimation experts. The absence of competition inherently limits the ability to confirm if the price secured represents the best value for taxpayers.

What are the primary risks associated with awarding a contract of this magnitude on a sole-source basis?

The primary risks associated with a sole-source award of this magnitude ($37.2 million) include potential overpricing due to the lack of competitive pressure, reduced incentive for the contractor to innovate or improve efficiency, and a lack of transparency in the pricing structure. There's also a risk that the government might not be aware of or able to access superior alternative solutions that could have emerged from a competitive process. Furthermore, it limits opportunities for other qualified businesses to compete for and win government contracts, potentially stifling broader industry development.

What is the expected effectiveness and performance of the navigation systems to be delivered under this contract?

The provided data does not detail the specific expected effectiveness or performance metrics for the navigation systems. However, the contract is for 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing,' indicating a critical role in military operations. The 'IA' (Information Assurance) designation suggests that cybersecurity and data integrity are key considerations. Effectiveness will ultimately be measured against the DoD's operational requirements and the system's reliability in its intended environment, which would be detailed in the contract's statement of work and performance standards.

How has historical spending on similar navigation systems by the DoD trended over the past decade?

Historical spending on similar navigation systems by the DoD over the past decade is not detailed in the provided data. To analyze this trend, one would need to access historical contract databases (like FPDS or SAM.gov) and filter for contracts related to navigation, guidance, and related systems within the Defense sector. Examining spending patterns would reveal whether investments in this area have increased, decreased, or remained stable, and identify major contractors and contract types prevalent in the market over time.

Are there any specific technological advancements or dependencies that justify the sole-source nature of this award?

The data does not explicitly state the technological advancements or dependencies that justify this sole-source award. However, in specialized fields like defense navigation systems, sole-source awards are often predicated on factors such as proprietary technology, unique manufacturing processes, essential integration with existing platforms, or the contractor being the sole certified provider. It's possible that Data Link Solutions LLC holds patents, unique certifications, or has developed systems that are deeply integrated with current DoD platforms, making a competitive replacement infeasible or prohibitively expensive in the short term.

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: COMM/DETECT/COHERENT RADIATION

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 350 COLLINSROAD NE, CEDAR RAPIDS, IA, 02

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

Financial Breakdown

Contract Ceiling: $37,179,731

Exercised Options: $37,179,731

Current Obligation: $37,179,731

Contract Characteristics

Cost or Pricing Data: NO

Timeline