DoD's $40.3M UAS Site Hardware contract awarded to Insitu, Inc. for aircraft manufacturing

Contract Overview

Contract Amount: $40,328,983 ($40.3M)

Contractor: Insitu, Inc.

Awarding Agency: Department of Defense

Start Date: 2009-04-01

End Date: 2012-03-31

Contract Duration: 1,095 days

Daily Burn Rate: $36.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: UAS SITE HARDWARE

Place of Performance

Location: BINGEN, KLICKITAT County, WASHINGTON, 98605

State: Washington Government Spending

Plain-Language Summary

Department of Defense obligated $40.3 million to INSITU, INC. for work described as: UAS SITE HARDWARE Key points: 1. Value appears reasonable given the scope of Unmanned Aerial System (UAS) site hardware. 2. Full and open competition suggests a competitive pricing environment. 3. Contract duration of 3 years indicates a moderate-term need. 4. Fixed-price contract type shifts risk to the contractor. 5. This contract falls within the broader Defense sector's spending on aviation systems. 6. No small business set-aside was utilized, indicating a focus on prime contractor capabilities.

Value Assessment

Rating: good

The contract value of approximately $40.3 million for UAS site hardware over three years seems within a reasonable range for specialized defense equipment. Benchmarking against similar contracts for UAS ground support systems reveals comparable investment levels for comprehensive solutions. The firm fixed-price structure suggests that the contractor, Insitu, Inc., assumed the primary risk for cost overruns, which is generally favorable for the government when the scope is well-defined. Without specific per-unit cost data for the hardware components, a precise value-for-money assessment is challenging, but the overall contract size aligns with the complexity of establishing UAS operational sites.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The specific number of bidders is not provided, but this procurement method generally fosters a competitive environment, driving down prices and encouraging innovation. The open competition suggests that the Department of the Navy sought the best value from a wide range of potential suppliers for the UAS site hardware. This approach is designed to ensure that the government receives competitive pricing and high-quality solutions.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it maximizes the potential for cost savings through a robust bidding process. It ensures that multiple companies vie for the contract, leading to more competitive pricing and a wider selection of qualified vendors.

Public Impact

The Department of Defense, specifically the Department of the Navy, is the primary beneficiary, acquiring critical infrastructure for UAS operations. Services delivered include the provision of site hardware necessary for the deployment and operation of unmanned aerial systems. The geographic impact is likely concentrated at naval bases or operational areas where UAS are deployed. Workforce implications may include training for personnel to operate and maintain the new site hardware.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific details on the hardware components makes it difficult to assess if the most cost-effective solutions were procured.
The duration of the contract (3 years) might not fully capture long-term sustainment or upgrade needs for evolving UAS technology.
Without knowing the number of bidders, it's hard to definitively gauge the intensity of competition and its impact on price.

Positive Signals

Awarded under full and open competition, suggesting a broad market search and potential for competitive pricing.
Firm fixed-price contract type effectively transfers cost overrun risk to the contractor.
The contract supports critical defense capabilities in unmanned aerial systems, aligning with strategic modernization efforts.

Sector Analysis

This contract falls within the broader aerospace and defense sector, specifically focusing on Unmanned Aerial Systems (UAS) and their supporting infrastructure. The market for UAS technology and related services has seen significant growth, driven by military applications and increasing commercial interest. Spending in this area is substantial across various government agencies, with the Department of Defense being a major investor. Comparable spending benchmarks would typically involve other contracts for UAS ground control stations, sensor integration, and deployment facilities, which can range from millions to hundreds of millions of dollars depending on the scope and complexity.

Small Business Impact

This contract was not awarded as a small business set-aside, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. This suggests that the primary focus was on securing the necessary UAS site hardware from capable prime contractors, potentially larger defense firms. The absence of set-asides means that opportunities for small businesses would likely be through subcontracting relationships with the prime contractor, Insitu, Inc., rather than direct prime contract awards. The impact on the small business ecosystem depends on Insitu's subcontracting strategy.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of the Navy's contracting officers and program managers, ensuring compliance with contract terms and delivery schedules. Accountability measures are embedded within the firm fixed-price structure, incentivizing the contractor to meet performance requirements within the agreed budget. Transparency is facilitated through contract award databases and reporting mechanisms, although detailed operational specifics may be classified. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Unmanned Aerial Vehicle (UAV) Systems
Aerospace Manufacturing
Defense Aviation Equipment
Military Infrastructure
Intelligence, Surveillance, and Reconnaissance (ISR) Systems

Risk Flags

Potential for scope creep if hardware requirements are not precisely defined.
Risk of contractor financial distress if unforeseen technical challenges arise under FFP.
Dependence on prime contractor for small business subcontracting opportunities.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $40.3 million to INSITU, INC.. UAS SITE HARDWARE

Who is the contractor on this award?

The obligated recipient is INSITU, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $40.3 million.

What is the period of performance?

Start: 2009-04-01. End: 2012-03-31.

What specific types of UAS site hardware were procured under this contract?

The provided data indicates the contract is for 'UAS SITE HARDWARE' but does not specify the exact components. Typically, this could include ground control stations, communication equipment, launch and recovery systems, maintenance facilities, power generation, and data processing units necessary for the effective deployment and operation of unmanned aerial systems. The exact nature of the hardware would be detailed in the contract's statement of work, which is not publicly available in this summary. Understanding the specific hardware is crucial for assessing its technological relevance and long-term utility.

How does the $40.3 million contract value compare to other DoD spending on UAS site infrastructure?

The $40.3 million contract value for UAS site hardware represents a significant investment, but its relative scale depends on the specific scope and duration. The Department of Defense invests billions annually in its UAS programs, encompassing aircraft, sensors, training, and infrastructure. Contracts for establishing entire UAS operating bases or integrating advanced command and control systems can easily run into tens or hundreds of millions of dollars. This $40.3 million award appears to be for a substantial component of site infrastructure, likely covering multiple operational locations or a significant upgrade, and falls within the expected range for such specialized defense procurements.

What is Insitu, Inc.'s track record with Department of Defense contracts, particularly for UAS?

Insitu, Inc., a subsidiary of Boeing, has a well-established track record with the Department of Defense, particularly in the realm of unmanned aerial systems. They are known for producing the ScanEagle and Integrator UAS, which have seen extensive use by various military branches. The company has secured numerous contracts over the years for the procurement, sustainment, and modification of these systems, as well as for related training and support services. This $40.3 million contract for site hardware aligns with their core expertise in providing comprehensive UAS solutions to military customers.

What are the potential risks associated with a firm fixed-price contract for complex hardware like UAS site infrastructure?

While firm fixed-price (FFP) contracts are generally favored for shifting cost risk to the contractor, they can present risks for complex hardware procurements if the scope is not perfectly defined. If unforeseen technical challenges arise during development or integration, or if material costs escalate unexpectedly, the contractor might face financial strain, potentially impacting delivery schedules or quality. Conversely, if the scope is underestimated by the government, the contractor could realize substantial profit. For the government, the primary risk is ensuring the contractor has the capability and incentive to deliver the required performance within the fixed price, especially for evolving technologies like UAS.

How has federal spending on UAS technology evolved over the past decade?

Federal spending on UAS technology has seen a dramatic and consistent increase over the past decade. Initially focused on intelligence, surveillance, and reconnaissance (ISR) missions, UAS capabilities have expanded significantly to include strike, logistics, and electronic warfare. This growth is reflected in budget allocations across the Department of Defense, Department of Homeland Security, and other agencies. Investments have shifted from primarily acquiring platforms to also funding advanced sensors, autonomous capabilities, secure communication links, data analytics, and the necessary ground infrastructure, like that addressed by this contract.

What does the 'Aircraft Manufacturing' (NAICS 336411) classification imply for this contract?

The North American Industry Classification System (NAICS) code 336411, 'Aircraft Manufacturing,' indicates that the primary business activity related to this contract involves the production or assembly of aircraft. For a UAS site hardware contract, this classification suggests that Insitu, Inc. may be providing integrated systems that include or are directly associated with the manufacturing aspects of the unmanned aircraft themselves, or perhaps specialized ground support equipment that is considered part of the aircraft manufacturing ecosystem. It points towards a focus on the physical production and integration of hardware components.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: THE Boeing Company (UEI: 009256819)

Address: 118 E COLUMBIA RIVER WAY, BINGEN, WA, 03

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Federally Funded Research and Development Corp, HUBZone Firm, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $40,328,983

Exercised Options: $40,328,983

Current Obligation: $40,328,983

Contract Characteristics

Cost or Pricing Data: NO

Timeline