Special Operations Command awards $13.5M contract for DVEPS units without camera, raising questions on value and competition

Contract Overview

Contract Amount: $13,546,904 ($13.5M)

Contractor: Sierra Nevada Company, LLC

Awarding Agency: Department of Defense

Start Date: 2023-07-01

End Date: 2026-06-30

Contract Duration: 1,095 days

Daily Burn Rate: $12.4K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: DVEPS UNIT W/OUT CAMERA (ARMY)

Place of Performance

Location: SPARKS, WASHOE County, NEVADA, 89434

State: Nevada Government Spending

Plain-Language Summary

Department of Defense obligated $13.5 million to SIERRA NEVADA COMPANY, LLC for work described as: DVEPS UNIT W/OUT CAMERA (ARMY) Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. The duration of 1095 days suggests a long-term need for these specialized units. 3. Lack of competition raises concerns about whether the government secured the best possible price. 4. The absence of a camera component in the DVEPS unit warrants further investigation into its specific function and necessity. 5. Performance metrics and delivery timelines will be critical to assess value realization. 6. The contract's value, while significant, needs to be benchmarked against similar procurements for similar equipment.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and the specific description 'DVEPS UNIT W/OUT CAMERA'. Without comparable bids or market data for this exact configuration, it's difficult to definitively assess if the $13.5 million price represents fair market value. The fixed-price contract type offers some cost certainty, but the lack of competition means the government may not have benefited from competitive pricing pressures. Further analysis would require understanding the unit's technical specifications and its role within Special Operations Command's mission.

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 among multiple vendors. This approach is typically used when only one vendor possesses the necessary capabilities, technology, or is the sole authorized source for a required item. The lack of competition means that potential cost savings that could arise from a competitive bidding process were not realized. This limits the government's ability to explore alternative solutions or negotiate more favorable terms.

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

Public Impact

Special Operations Command personnel will benefit from the delivery of these DVEPS units. The units are intended to support specific operational requirements within SOCOM. The geographic impact is likely concentrated within areas of SOCOM operations. Workforce implications are tied to the integration and use of this equipment by military personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential cost savings for taxpayers.
Lack of transparency in the justification for sole-source procurement.
The specific function and necessity of a 'DVEPS UNIT W/OUT CAMERA' requires further clarification to ensure value for money.
Potential for vendor lock-in due to the sole-source nature of the award.

Positive Signals

Contract awarded to a known entity, Sierra Nevada Company, LLC, potentially indicating a trusted supplier.
Fixed-price contract type provides cost certainty for the government.
The contract duration of three years suggests a planned and sustained operational need.

Sector Analysis

The procurement falls under the 'All Other Professional, Scientific, and Technical Services' NAICS code (541990). This broad category encompasses a wide range of services not elsewhere classified, often including specialized technical support, research, and development services. The market for such services is diverse, with many firms offering niche expertise. However, for highly specialized equipment like the DVEPS unit, the market may be more concentrated. The contract value of $13.5 million is moderate within the context of federal IT and technical services spending, but its significance is amplified by the sole-source award.

Small Business Impact

Information regarding small business participation, including set-asides or subcontracting plans, was not provided in the data. As this was a sole-source award, it is less likely to have included specific small business set-aside provisions unless the sole source itself was a small business, which is not indicated. Further investigation into the contractor's subcontracting practices would be needed to assess any impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the U.S. Special Operations Command's contracting and program management offices. As a Department of Defense contract, it is also subject to oversight by the Department of Defense Inspector General. Transparency regarding the justification for the sole-source award and the performance metrics will be key to assessing accountability. The fixed-price nature of the contract provides some level of financial accountability, but effective oversight will depend on rigorous monitoring of delivery and performance.

Related Government Programs

Special Operations Equipment Procurement
Defense Technology Development
Unmanned Systems Support
Specialized Technical Services

Risk Flags

Sole-source award
Lack of competition
Unclear unit functionality ('w/out camera')

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $13.5 million to SIERRA NEVADA COMPANY, LLC. DVEPS UNIT W/OUT CAMERA (ARMY)

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 (U.S. Special Operations Command).

What is the total obligated amount?

The obligated amount is $13.5 million.

What is the period of performance?

Start: 2023-07-01. End: 2026-06-30.

What is the specific function and operational necessity of the 'DVEPS UNIT W/OUT CAMERA'?

The provided data does not specify the exact function or operational necessity of the 'DVEPS UNIT W/OUT CAMERA'. DVEPS typically refers to Drone Visual Perception Systems, which are often used for navigation, surveillance, or data collection. The explicit mention of 'W/OUT CAMERA' suggests a specialized application where visual input from an integrated camera is either not required, or a separate camera system is utilized. This could pertain to units focused on non-visual sensing (e.g., thermal, acoustic), data processing, communication relays, or specific deployment scenarios where a camera would be a liability or redundant. Understanding this detail is crucial for assessing the value and appropriateness of the $13.5 million expenditure.

What is Sierra Nevada Company, LLC's track record with similar sole-source contracts for specialized equipment?

Sierra Nevada Company, LLC (SNC) has a significant history of contracting with the U.S. military, including Special Operations Command, often in areas related to aerospace, defense electronics, and specialized systems. While specific details on their sole-source contract history for 'DVEPS UNIT W/OUT CAMERA' are not provided, SNC is known for developing and integrating complex systems. Their track record generally indicates a capability to deliver sophisticated defense technologies. However, the absence of competition in this specific award means that their past performance, while relevant, does not substitute for a competitive evaluation to ensure the best value was obtained for this particular procurement.

How does the $13.5 million contract value compare to similar procurements for DVEPS or related systems?

Direct comparison of the $13.5 million contract value for a 'DVEPS UNIT W/OUT CAMERA' is difficult without more specific technical details and market intelligence. As this was a sole-source award, there are no competing bids to establish a benchmark. Generally, specialized defense systems can vary widely in cost based on technology, quantity, and integration complexity. If DVEPS units are typically equipped with cameras and cost significantly less, this $13.5 million award for a camera-less version might indicate a highly specialized, non-standard requirement or potentially an inflated price due to the lack of competition. Benchmarking would require identifying contracts for similar functionalities or components within the defense sector.

What are the primary risks associated with awarding a $13.5 million contract on a sole-source basis?

The primary risks associated with awarding a $13.5 million contract on a sole-source basis include: 1. **Higher Costs:** Without competition, the government may pay a premium compared to what could be achieved through a competitive bidding process. 2. **Limited Innovation:** The government misses out on potential innovative solutions or alternative approaches that other vendors might offer. 3. **Vendor Lock-in:** The agency can become dependent on a single supplier, potentially leading to difficulties in future procurements or maintenance. 4. **Reduced Transparency:** Sole-source justifications can sometimes obscure the true necessity or value of the procurement, making oversight more challenging. 5. **Potential for Poor Performance:** While not guaranteed, the lack of competitive pressure might, in some cases, reduce the incentive for the sole-source provider to excel in performance or customer service.

What historical spending patterns exist for DVEPS units or similar technologies within the Department of Defense?

Historical spending patterns for DVEPS units or similar technologies within the Department of Defense are not detailed in the provided data. However, the DoD consistently invests heavily in advanced surveillance, reconnaissance, and unmanned systems. Spending in these areas often involves significant R&D and procurement costs due to the cutting-edge nature of the technology. Contracts for such systems can range from millions to billions of dollars, depending on the scale and sophistication. Analyzing past spending on comparable systems, particularly those procured by Special Operations Command, would provide context for the $13.5 million award, especially if similar sole-source awards have been made previously for specialized, non-standard equipment.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Other Professional, Scientific, and Technical Services › All Other Professional, Scientific, and Technical Services

Product/Service Code: AEROSPACE CRAFT COMPONENTS AND ACCESSORIES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: H9224118R0008

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Sierra Nevada Corporation

Address: 444 SALOMON CIR, SPARKS, NV, 89434

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

Financial Breakdown

Contract Ceiling: $13,546,904

Exercised Options: $13,546,904

Current Obligation: $13,546,904

Subaward Activity

Number of Subawards: 10

Total Subaward Amount: $10,241,521

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: H9224119D0009

IDV Type: IDC

Timeline