DoD's $30M ISR Services contract awarded to Sierra Nevada Company, LLC, with no competition

Contract Overview

Contract Amount: $30,252,348 ($30.3M)

Contractor: Sierra Nevada Company, LLC

Awarding Agency: Department of Defense

Start Date: 2011-07-22

End Date: 2012-09-25

Contract Duration: 431 days

Daily Burn Rate: $70.2K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ACAT III BIG SAFARI LOWRIDER ISR SERVICES

Place of Performance

Location: SPARKS, WASHOE County, NEVADA, 89434

State: Nevada Government Spending

Plain-Language Summary

Department of Defense obligated $30.3 million to SIERRA NEVADA COMPANY, LLC for work described as: ACAT III BIG SAFARI LOWRIDER ISR SERVICES Key points: 1. The contract's value of $30.25 million for ISR services raises questions about potential overspending due to the lack of competitive bidding. 2. Sole-source awards can limit opportunities for innovation and cost savings that typically arise from a competitive marketplace. 3. The short duration of the contract (approximately 1 year) suggests a focused, potentially urgent need for these specific ISR services. 4. Performance context is limited, but the award falls under the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' NAICS code. 5. The contract's classification as 'NOT COMPETED' is a significant risk indicator for value for money. 6. The firm fixed-price contract type aims to control costs, but the absence of competition hinders effective price benchmarking.

Value Assessment

Rating: questionable

Benchmarking the value of this $30.25 million contract is challenging due to its sole-source nature. Without competing offers, it's difficult to ascertain if the price paid reflects a fair market value. The contract was awarded to SIERRA NEVADA COMPANY, LLC, for ISR services. The lack of competition means there's no direct comparison to other providers to assess cost-effectiveness. The firm fixed-price contract type suggests an attempt to cap costs, but the absence of competitive pressure limits the ability to ensure optimal value for taxpayer dollars.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning it was not competed. Only one bidder, SIERRA NEVADA COMPANY, LLC, was considered. This approach bypasses the standard competitive procurement process, which typically involves soliciting bids from multiple vendors. The lack of competition means that the government did not benefit from the price discovery and innovation that usually occurs when multiple companies vie for a contract.

Taxpayer Impact: Sole-source awards can lead to higher prices for taxpayers as there is no competitive pressure to drive down costs. This limits the government's ability to secure the best possible value for the services rendered.

Public Impact

The primary beneficiaries are likely the Department of the Air Force, receiving critical Intelligence, Surveillance, and Reconnaissance (ISR) services. The services delivered are related to search, detection, navigation, guidance, and aeronautical/nautical systems, crucial for military operations. The geographic impact is not specified but is presumed to be within areas of military operational interest. Workforce implications are tied to the contractor's personnel and potentially supporting roles within the Department of Defense.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about price reasonableness and potential for inflated costs.
Sole-source awards can stifle innovation by not exposing the government to alternative solutions from other vendors.
Limited transparency into the justification for sole-source award could obscure potential conflicts of interest or inefficiencies.

Positive Signals

Firm fixed-price contract type helps to establish a ceiling on costs, providing some budget certainty.
The contractor, Sierra Nevada Company, LLC, is a known entity in the aerospace and defense sector, suggesting potential for specialized expertise.
Awarding to an established contractor may expedite service delivery for an urgent requirement.

Sector Analysis

This contract falls within the aerospace and defense sector, specifically focusing on Intelligence, Surveillance, and Reconnaissance (ISR) systems and services. The NAICS code 334511 covers 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing.' The market for ISR services is highly specialized, often dominated by a few key players with the necessary technological capabilities and security clearances. Spending in this area is critical for national security, with significant government investment annually.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the 'ss' (small business subcontracting) is also false. This suggests that the prime contract was not specifically targeted towards small businesses, nor are there explicit requirements for subcontracting to small businesses under this award. The full value of the contract likely went to the prime contractor, Sierra Nevada Company, LLC, with limited direct benefit or opportunity for the small business ecosystem through this specific award.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. As a sole-source award, the justification for this procurement method would be subject to review. Transparency is limited due to the non-competitive nature. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected. Specific oversight mechanisms beyond standard contract administration are not detailed in the provided data.

Related Government Programs

Intelligence, Surveillance, and Reconnaissance (ISR) Systems
Aerospace and Defense Manufacturing
Navigation and Guidance Systems
Department of Defense Procurement
Sole-Source Contract Awards

Risk Flags

Sole-source award
Lack of competition
Potential for inflated pricing
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $30.3 million to SIERRA NEVADA COMPANY, LLC. ACAT III BIG SAFARI LOWRIDER ISR SERVICES

Who is the contractor on this award?

The obligated recipient is SIERRA NEVADA COMPANY, LLC.

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 $30.3 million.

What is the period of performance?

Start: 2011-07-22. End: 2012-09-25.

What was the specific justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was 'NOT COMPETED' and awarded under a sole-source basis. Typically, sole-source awards require a formal justification and approval (J&A) process, citing reasons such as unique capabilities, urgent and compelling needs, or lack of sources. Without access to the specific J&A document for this contract (DCA award), the precise justification remains unknown. However, common reasons include situations where only one contractor possesses the necessary proprietary technology, expertise, or has already developed a critical system that meets an immediate and vital requirement, making competitive procurement impractical or detrimental to national security.

How does the contract value of $30.25 million compare to similar ISR services contracts awarded competitively?

Direct comparison of this $30.25 million contract value to competitively awarded ISR services contracts is difficult without knowing the specific scope, duration, and technical requirements. However, sole-source awards inherently lack a competitive benchmark, making it challenging to assess if the price is optimal. If similar, albeit not identical, ISR services have been procured competitively in the past, a significant price difference could indicate that the lack of competition led to a higher cost. Generally, competitive processes drive prices down, so a sole-source award may represent a premium. Further analysis would require identifying comparable contracts with detailed scope and pricing.

What are the potential risks associated with awarding a $30.25 million contract without competition?

The primary risk of awarding a $30.25 million contract without competition is the potential for paying a higher price than necessary, as there is no market pressure to ensure cost-effectiveness. This lack of competition can also limit innovation, as the government misses out on potentially better or more cost-efficient solutions that other vendors might offer. Furthermore, sole-source awards can create a perception of favoritism or lack of transparency, potentially undermining public trust. There's also a risk that the contractor may not feel the same pressure to perform at the highest level compared to a competitive environment.

What is Sierra Nevada Company, LLC's track record with similar ISR contracts?

Sierra Nevada Company, LLC (SNC) has a significant track record in the aerospace and defense industry, including extensive experience with Intelligence, Surveillance, and Reconnaissance (ISR) systems and services. They are known for developing and integrating various airborne platforms, sensors, and data processing solutions. While this specific contract was sole-sourced, SNC has likely participated in and won numerous competitive contracts for similar capabilities over the years. Their established presence suggests they possess the technical expertise and capacity required for complex ISR missions. A deeper dive into their contract history would reveal the scale and nature of their previous ISR-related work for the DoD and other agencies.

What is the historical spending pattern for ISR services within the Department of the Air Force?

Historical spending on ISR services within the Department of the Air Force (and the broader DoD) has been substantial and consistently high, reflecting the critical role these capabilities play in modern warfare and national security. Budgets for ISR platforms, sensors, data analysis, and related services typically run into the billions of dollars annually. Spending patterns are influenced by evolving threats, technological advancements, and strategic priorities. While specific figures fluctuate year-to-year, there is a clear and sustained commitment to maintaining and enhancing ISR capabilities, making contracts like this, even if sole-sourced, part of a larger, ongoing investment strategy.

What are the implications of the firm fixed-price contract type on this sole-source award?

The firm fixed-price (FFP) contract type aims to provide cost certainty for the government by establishing a price that is not subject to adjustment based on the contractor's cost experience. For this sole-source award of $30.25 million, FFP means the contractor, Sierra Nevada Company, LLC, bears the risk of any cost overruns. While this is generally a favorable contract type for the government in terms of cost control, its effectiveness is diminished in a sole-source scenario. Without competition, the initial price might not be as rigorously negotiated or market-tested, potentially leading to a higher baseline price from which the fixed price is set. Thus, while FFP offers budget predictability, the value proposition is weakened without competitive benchmarking.

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: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

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: 444 SALOMON CIR, SPARKS, NV, 02

Business Categories: Category Business, Manufacturer of Goods, Not Designated a Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Woman Owned Business

Financial Breakdown

Contract Ceiling: $30,252,348

Exercised Options: $30,252,348

Current Obligation: $30,252,348

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $219,577

Contract Characteristics

Cost or Pricing Data: NO

Timeline