DoD's $11.1M contract for Israeli systems architecture study awarded to a single bidder

Contract Overview

Contract Amount: $11,109,811 ($11.1M)

Contractor: Wales - Weapon Systems Engineering & Logistics Ltd.

Awarding Agency: Department of Defense

Start Date: 2007-11-01

End Date: 2012-10-31

Contract Duration: 1,826 days

Daily Burn Rate: $6.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ISRAELI SYSTEMS ARCHITECTURE & INTEGRATION STUDY PROGRAM

Plain-Language Summary

Department of Defense obligated $11.1 million to WALES - WEAPON SYSTEMS ENGINEERING & LOGISTICS LTD. for work described as: ISRAELI SYSTEMS ARCHITECTURE & INTEGRATION STUDY PROGRAM Key points: 1. The contract's value of $11.1 million for engineering services raises questions about cost-effectiveness given the lack of competition. 2. Sole-source awards can limit price discovery and potentially lead to higher costs for taxpayers. 3. The duration of the contract (over 5 years) suggests a significant, long-term need for these specialized engineering services. 4. The Missile Defense Agency's reliance on a single contractor for this study may indicate a lack of readily available alternatives or specialized expertise. 5. The absence of small business participation suggests this contract was not structured to encourage broader market engagement.

Value Assessment

Rating: questionable

Benchmarking the value of this $11.1 million contract is challenging due to its sole-source nature and the specific technical focus on Israeli defense systems architecture. Without competitive bids, it's difficult to ascertain if the price reflects fair market value or if alternative solutions could have been procured at a lower cost. The fixed-price structure offers some cost certainty, but the lack of competition prevents a robust comparison to similar studies or services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, WALES - WEAPON SYSTEMS ENGINEERING & LOGISTICS LTD., was solicited. This approach bypasses the standard competitive bidding process, which typically involves multiple companies vying for the contract. The lack of competition means there was no direct price comparison or market pressure to drive down costs, potentially impacting the final price paid by the government.

Taxpayer Impact: Sole-source awards limit opportunities for other businesses to compete for government contracts and can result in higher prices for taxpayers compared to competitively bid contracts.

Public Impact

The primary beneficiary is the Department of Defense, specifically the Missile Defense Agency, which receives specialized engineering and integration study services. The services delivered are crucial for understanding and potentially integrating foreign defense systems architecture, contributing to national security objectives. The geographic impact is primarily within the defense sector, with potential implications for international defense cooperation and technology transfer. Workforce implications are likely concentrated among highly specialized engineers and technical experts within the awarded contractor's organization.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially increasing costs.
Lack of transparency in the selection process due to no competition.
Potential for vendor lock-in if specialized knowledge is developed solely by one firm.

Positive Signals

Contract awarded to a specialized firm, potentially ensuring deep expertise.
Fixed-price contract provides some cost predictability.
Focus on critical defense systems integration is aligned with agency mission.

Sector Analysis

This contract falls within the Engineering Services sector (NAICS 541330), a broad category encompassing various specialized engineering disciplines. The market for defense systems engineering and integration studies is highly specialized, often involving complex technological assessments and geopolitical considerations. The Missile Defense Agency's spending in this area reflects the significant investment required to maintain and advance missile defense capabilities, often necessitating unique expertise that may not be widely available.

Small Business Impact

This contract does not appear to have involved any small business set-aside provisions, nor is there an indication of subcontracting opportunities for small businesses. The sole-source nature of the award further limits the potential for small business participation, as the primary contract was awarded directly to a single entity without a competitive process designed to include or encourage smaller firms.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's established procurement regulations and the Missile Defense Agency's internal review processes. As a definitive contract, it is subject to standard contract administration and performance monitoring. However, the sole-source nature might reduce the level of scrutiny typically applied during a competitive bid evaluation. Transparency is limited due to the lack of public competition details.

Related Government Programs

Missile Defense Systems
Foreign Military Sales
Defense Technology Integration
Engineering Consulting Services

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $11.1 million to WALES - WEAPON SYSTEMS ENGINEERING & LOGISTICS LTD.. ISRAELI SYSTEMS ARCHITECTURE & INTEGRATION STUDY PROGRAM

Who is the contractor on this award?

The obligated recipient is WALES - WEAPON SYSTEMS ENGINEERING & LOGISTICS LTD..

Which agency awarded this contract?

Awarding agency: Department of Defense (Missile Defense Agency).

What is the total obligated amount?

The obligated amount is $11.1 million.

What is the period of performance?

Start: 2007-11-01. End: 2012-10-31.

What is the specific expertise of WALES - WEAPON SYSTEMS ENGINEERING & LOGISTICS LTD. that justified a sole-source award for this critical defense study?

The justification for a sole-source award typically rests on the unique capabilities, specialized knowledge, or proprietary technology possessed by the contractor that cannot be replicated by other firms. For WALES - WEAPON SYSTEMS ENGINEERING & LOGISTICS LTD., this likely pertains to deep, specific expertise in Israeli defense systems architecture and integration, potentially developed through prior work, unique partnerships, or proprietary research. Without a competitive process, the government relies on the contractor's demonstrated qualifications and the agency's internal assessment that no other source can meet the requirement. Further details would require access to the Justification and Approval (J&A) document that supported this sole-source determination, which often outlines the specific technical or programmatic reasons for bypassing competition.

How does the $11.1 million cost compare to similar defense systems architecture studies, if comparable data is available?

Directly comparing the $11.1 million cost of this sole-source contract to similar defense systems architecture studies is challenging due to the inherent limitations of sole-source awards and the specialized nature of the work. Competitive procurements allow for benchmarking against multiple bids and market rates. In this case, without competitive bids, it's difficult to ascertain if $11.1 million represents a fair market price or if it's inflated due to the lack of competition. The duration of the contract (over five years) suggests a substantial scope of work, which would naturally lead to a higher total cost. However, without access to detailed cost breakdowns or comparable studies that were competitively bid, a precise value-for-money assessment is not feasible.

What are the potential risks associated with awarding a multi-year, high-value contract on a sole-source basis for defense systems integration?

Awarding a multi-year, high-value contract on a sole-source basis for defense systems integration carries several potential risks. Firstly, the lack of competition can lead to higher costs for the government, as there is no market pressure to ensure the most competitive pricing. Secondly, it can foster vendor lock-in, where the government becomes overly reliant on a single provider, making it difficult and costly to switch contractors in the future, even if performance issues arise. Thirdly, sole-source awards can limit innovation, as alternative approaches or technologies from other potential bidders are not explored. Finally, there's a reduced level of transparency and accountability compared to competitive processes, potentially masking inefficiencies or suboptimal performance.

What specific Israeli defense systems architecture elements is this contract intended to study and potentially integrate?

The contract details specify a study program for 'ISRAELI SYSTEMS ARCHITECTURE & INTEGRATION'. While the exact Israeli defense systems are not explicitly listed in the provided data, the context strongly suggests a focus on missile defense technologies and related command, control, communications, computers, and intelligence (C4I) systems. Israel is a key partner in missile defense development, and the Missile Defense Agency (MDA) would be interested in understanding the architecture of these systems to assess interoperability, potential integration with U.S. systems, and to leverage advancements in the field. The study likely involves analyzing the design, components, operational concepts, and integration pathways of these complex systems.

What is the historical spending pattern of the Missile Defense Agency on similar engineering and integration studies, particularly those involving foreign partners?

Historical spending patterns for the Missile Defense Agency (MDA) on engineering and integration studies, especially those involving foreign partners like Israel, are substantial and reflect the complexity and criticality of missile defense. While specific figures for 'Israeli Systems Architecture & Integration Study Programs' are not detailed here, the MDA consistently allocates significant portions of its budget to research, development, testing, and evaluation (RDT&E) of missile defense capabilities. This includes studies focused on understanding, adapting, and integrating technologies from allies. Such contracts, often sole-sourced due to specialized knowledge or existing partnerships, are crucial for ensuring interoperability and leveraging international advancements in a rapidly evolving threat landscape. The $11.1 million for this particular study is indicative of the investment required for such specialized analyses.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: SPECIAL STUDIES/ANALYSIS, NOT R&D › SPECIAL STUDIES - NOT R and D

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: 11 TUVAL ST., RAMAT GAN

Business Categories: Category Business, Not Designated a Small Business, Woman Owned Business

Financial Breakdown

Contract Ceiling: $11,109,811

Exercised Options: $11,109,811

Current Obligation: $11,109,811

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline