DoD's $25.5M contract for navigational aids awarded to a single Turkish firm raises value and competition questions

Contract Overview

Contract Amount: $25,473,237 ($25.5M)

Contractor: Kuanta Insaat Taahhut Elektronik Turizm Sanayi VE Ticaret Anonim Sirketi

Awarding Agency: Department of Defense

Start Date: 2008-03-28

End Date: 2013-04-01

Contract Duration: 1,830 days

Daily Burn Rate: $13.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: GROUND BASED NAVIGATIONAL AIDS

Plain-Language Summary

Department of Defense obligated $25.5 million to KUANTA INSAAT TAAHHUT ELEKTRONIK TURIZM SANAYI VE TICARET ANONIM SIRKETI for work described as: GROUND BASED NAVIGATIONAL AIDS Key points: 1. The contract's value appears high relative to the limited competition and the nature of the goods provided. 2. Sole-source or limited competition dynamics may have suppressed price discovery, potentially leading to inflated costs. 3. The long duration of the contract (5 years) warrants scrutiny for potential cost overruns or scope creep. 4. Performance context is limited, but the product category suggests a need for robust quality control and reliability. 5. This spending falls within the broader 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector. 6. The reliance on a foreign entity for critical navigational aids could present supply chain risks.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without specific unit cost data. However, a $25.5 million award over five years for ground-based navigational aids, especially if procured through limited competition, suggests a potentially high per-unit cost. Comparing this to similar domestic procurements or industry standards for such equipment would be necessary to definitively assess value for money. The firm-fixed-price structure offers some cost certainty, but the overall price point warrants further investigation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition,' which theoretically allows any interested contractor to bid. However, the fact that only three bids were received, and the award went to a single entity (KUANTA INSAAT TAAHHUT ELEKTRONIK TURIZM SANAYI VE TICARET ANONIM SIRKETI), raises questions about the actual level of competition. It's possible that the technical specifications or other requirements limited the pool of eligible bidders, or that other potential bidders chose not to participate.

Taxpayer Impact: While full and open competition was advertised, the low number of bids suggests that taxpayers may not have benefited from the most competitive pricing possible. This could indicate that the government paid more than it might have if more firms had actively competed.

Public Impact

The primary beneficiaries are the Department of the Air Force, which receives essential ground-based navigational aids. These aids are critical for ensuring safe and efficient air operations at military installations. The geographic impact is likely concentrated at the specific Air Force bases where these navigational systems are deployed. The contract supports the manufacturing and supply chain related to specialized electronic and navigational equipment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited number of bidders despite full and open competition suggests potential barriers to entry or lack of market interest.
Award to a foreign entity for critical infrastructure raises potential supply chain and geopolitical risks.
The long contract duration could lead to price escalation or obsolescence if not managed carefully.
Lack of detailed performance metrics makes it difficult to assess the true value and effectiveness of the delivered goods.

Positive Signals

The contract was awarded under a full and open competition, indicating an attempt to maximize the bidder pool.
The firm-fixed-price contract type provides cost certainty for the government.
The procurement supports the Department of Defense's operational capabilities through essential navigational equipment.

Sector Analysis

This contract falls within the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector (NAICS 334511). This industry is characterized by specialized, high-technology products often requiring significant research and development. Spending in this sector is crucial for national defense and aviation safety. Comparable spending benchmarks would typically involve analyzing other government procurements for similar navigational systems, considering factors like technological sophistication and quantity.

Small Business Impact

There is no indication that this contract included a small business set-aside. Given the specialized nature of ground-based navigational aids and the award to a foreign corporation, it is unlikely that small businesses played a significant role as prime contractors. Subcontracting opportunities for small businesses might exist within the supply chain, but this would depend on the prime contractor's sourcing strategy.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Air Force's contracting and program management offices. Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of specified goods. Transparency is generally provided through contract databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Air Traffic Control Equipment
Radar Systems
Aviation Navigation Systems
Military Communications Equipment

Risk Flags

Limited Competition
Foreign Sourcing Risk
Potential Value Concerns

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $25.5 million to KUANTA INSAAT TAAHHUT ELEKTRONIK TURIZM SANAYI VE TICARET ANONIM SIRKETI. GROUND BASED NAVIGATIONAL AIDS

Who is the contractor on this award?

The obligated recipient is KUANTA INSAAT TAAHHUT ELEKTRONIK TURIZM SANAYI VE TICARET ANONIM SIRKETI.

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 $25.5 million.

What is the period of performance?

Start: 2008-03-28. End: 2013-04-01.

What is the specific type and technical capability of the 'GROUND BASED NAVIGATIONAL AIDS' procured under this contract?

The provided data does not specify the exact technical capabilities or types of ground-based navigational aids. However, within the NAICS code 334511 (Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing), such equipment could range from instrument landing systems (ILS), non-directional beacons (NDB), distance measuring equipment (DME), radar systems for air traffic control, or other systems critical for guiding aircraft. The specific nature of these aids would dictate their complexity, cost, and importance to Air Force operations. Further details would likely be found in the contract's statement of work or technical specifications.

How does the unit cost of these navigational aids compare to similar systems procured by the DoD or other federal agencies?

Direct unit cost comparison is not possible with the provided data, as only the total contract value ($25.5 million) and duration (1830 days/approx. 5 years) are available. To perform a meaningful comparison, one would need to know the quantity of units procured and their specific technical specifications. If, for example, 100 units were procured, the average unit cost would be approximately $255,000. Benchmarking this against similar systems, considering factors like technological advancement, manufacturer, and support services, would be crucial. The limited competition (3 bids) might suggest that a more competitive bidding process could have yielded lower unit prices.

What are the potential risks associated with procuring critical navigational equipment from a Turkish company?

Procuring critical navigational equipment from a foreign entity, such as KUANTA INSAAT TAAHHUT ELEKTRONIK TURIZM SANAYI VE TICARET ANONIM SIRKETI, introduces several potential risks. These include supply chain disruptions due to geopolitical instability, trade disputes, or logistical challenges. There could also be risks related to intellectual property protection, differing quality control standards, and potential delays in receiving spare parts or technical support. Furthermore, reliance on foreign suppliers for defense-critical infrastructure may raise national security concerns, particularly regarding maintenance, upgrades, and long-term availability.

What was the historical spending pattern for ground-based navigational aids by the Department of the Air Force prior to this contract?

The provided data only pertains to this specific contract (awarded March 2008, ending April 2013). To understand historical spending patterns, a broader analysis of federal procurement databases (like FPDS) would be necessary. This would involve searching for similar contracts awarded to the Air Force and potentially other branches of the DoD for 'ground-based navigational aids' or related equipment (e.g., using NAICS code 334511 or specific product service codes) over several preceding fiscal years. Analyzing trends in contract values, number of bidders, and awardees would reveal whether this $25.5 million contract represents a typical investment or an outlier.

Were there any performance issues or contract modifications during the life of this 5-year contract?

The provided summary data does not include details on contract performance or modifications. Typically, contract modification information (e.g., supplemental agreements, change orders) and performance ratings (if available) would be accessible through more detailed contract databases or agency records. Investigating potential modifications would require searching for contract line item changes, scope adjustments, or extensions. Performance issues could be identified through contract close-out reports or contractor performance assessment reporting (CPARS) data, if such records are publicly available.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: NO: 16/5 CETIN EMEC BULVARI, OVECLER, CANKAYA

Business Categories: Category Business, Corporate Entity Tax Exempt, Foreign-Owned and U.S.-Incorporated Business, Limited Liability Corporation, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $47,591,513

Exercised Options: $47,591,513

Current Obligation: $25,473,237

Contract Characteristics

Cost or Pricing Data: NO

Timeline