Navy's $34.8M ISR contract to Insitu, Inc. awarded without competition, raising value concerns

Contract Overview

Contract Amount: $34,860,283 ($34.9M)

Contractor: Insitu, Inc.

Awarding Agency: Department of Defense

Start Date: 2014-09-29

End Date: 2019-09-28

Contract Duration: 1,825 days

Daily Burn Rate: $19.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: ISR SEA-BASED DEPLOYMENT SUPPORT IGF::CL,CT::IGF

Place of Performance

Location: BINGEN, KLICKITAT County, WASHINGTON, 98605

State: Washington Government Spending

Plain-Language Summary

Department of Defense obligated $34.9 million to INSITU, INC. for work described as: ISR SEA-BASED DEPLOYMENT SUPPORT IGF::CL,CT::IGF Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. Duration of 5 years suggests a long-term need, but lack of competition hinders market testing. 3. Fixed-price contract type shifts risk to the contractor, but initial pricing is unbenchmarked. 4. The surveying and mapping NAICS code suggests specialized services, but the specific ISR application is key. 5. No small business set-aside indicates potential missed opportunities for smaller firms in this domain. 6. Contract value is significant, warranting scrutiny of performance and cost-effectiveness over its life.

Value Assessment

Rating: questionable

Without a competitive bidding process, it is difficult to assess if the $34.8 million awarded represents fair market value. Benchmarking against similar ISR deployment support contracts is challenging due to the specialized nature and sole-source award. The firm fixed-price structure is positive for budget certainty, but the absence of competition means the government may not have secured the most economical pricing. Further analysis of the specific services rendered and their necessity would be required to fully evaluate value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder, Insitu, Inc., was considered. The justification for this approach is not provided in the data, but it typically implies that only one source was capable of meeting the government's needs. The lack of competition means there were no other proposals to compare against, potentially leading to higher prices than if multiple companies had vied for the contract.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure. Without competing offers, the government lacked leverage to negotiate the lowest possible price, potentially resulting in less efficient use of public funds.

Public Impact

The primary beneficiaries are likely the Department of the Navy, receiving critical Intelligence, Surveillance, and Reconnaissance (ISR) deployment support. Services delivered include essential support for ISR platforms, crucial for national security operations. The geographic impact is primarily tied to naval operations, which can be global. Workforce implications may involve specialized technical personnel required for ISR system deployment and maintenance.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and value assessment.
Long contract duration (5 years) without competition raises questions about sustained cost-effectiveness.
Lack of small business participation noted.
Specific details on the 'ISR SEA-BASED DEPLOYMENT SUPPORT' are limited, making performance evaluation difficult.

Positive Signals

Firm fixed-price contract shifts performance risk to the contractor.
Contract awarded to a single, potentially specialized, provider for a specific need.
Contract duration aligns with potential long-term operational requirements.

Sector Analysis

The defense sector, particularly naval operations, relies heavily on advanced ISR capabilities. This contract falls within the broader category of defense support services, which includes specialized technical assistance for complex systems. The market for ISR technology and support is highly specialized, often dominated by a few key players. Benchmarking this contract's value is difficult without comparable sole-source awards or competitive bids for similar ISR deployment support.

Small Business Impact

The contract data indicates that this was not set aside for small businesses (ss: false, sb: false). This suggests that the primary contractor, Insitu, Inc., is likely a larger entity, or that the specific requirements of the contract were deemed unsuitable for small business participation. There is no information on subcontracting plans, leaving potential impacts on the small business ecosystem unclear.

Oversight & Accountability

Oversight mechanisms for this contract would typically fall under the Department of the Navy's contracting and program management offices. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse. Transparency is limited by the sole-source nature of the award and the lack of publicly available performance reports or detailed justifications for the procurement approach.

Related Government Programs

Intelligence, Surveillance, and Reconnaissance (ISR) Systems
Naval Aviation Support Contracts
Defense Services Procurement
Unmanned Aerial Vehicle (UAV) Support

Risk Flags

Sole-source award
Lack of competitive benchmarking
Long contract duration
Limited public information on justification and performance

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $34.9 million to INSITU, INC.. ISR SEA-BASED DEPLOYMENT SUPPORT IGF::CL,CT::IGF

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 $34.9 million.

What is the period of performance?

Start: 2014-09-29. End: 2019-09-28.

What specific ISR capabilities does Insitu, Inc. provide under this contract, and how do they align with the Navy's operational needs?

The contract title 'ISR SEA-BASED DEPLOYMENT SUPPORT IGF::CL,CT::IGF' suggests services related to the deployment and support of Intelligence, Surveillance, and Reconnaissance (ISR) platforms, likely including unmanned aerial systems (UAS) given Insitu's known product lines. These capabilities are critical for the Navy's maritime domain awareness, intelligence gathering, and operational planning in various theaters. The specific 'IGF' designation might refer to a particular program or system. Without more detailed contract line item descriptions or performance work statements, the precise nature of the support (e.g., maintenance, logistics, training, operational deployment) remains somewhat generalized. However, it is understood to be essential for maintaining the readiness and effectiveness of naval ISR assets operating from sea bases or vessels.

What is the justification for awarding this significant contract on a sole-source basis?

The provided data does not include the specific justification for the sole-source award. Typically, sole-source procurements are justified under circumstances such as: only one responsible source being available; a compelling urgency; or a national security requirement that cannot be fulfilled by other means. For a company like Insitu, known for its expertise in UAS technology, the justification might stem from unique technological capabilities, proprietary systems, or specialized knowledge essential for the Navy's ISR mission that no other contractor could readily provide. A formal Justification for Other Than Full and Open Competition (JOFOC) would normally be required and publicly documented for such awards.

How does the $34.8 million contract value compare to similar ISR support contracts, particularly those awarded competitively?

Direct comparison of the $34.8 million contract value is difficult without access to a database of similar ISR deployment support contracts, especially those awarded competitively. Sole-source awards inherently lack the price discovery mechanism inherent in competition. If this contract were competed, it is plausible that multiple bidders would offer varying price points, potentially driving the final award price lower than what was negotiated with Insitu, Inc. Benchmarking would require identifying contracts with comparable scope, duration, and service complexity, ideally awarded through full and open competition, to establish a market rate for such specialized ISR support services.

What are the potential risks associated with a 5-year firm fixed-price contract awarded without competition?

A significant risk associated with this contract is the potential for overpayment due to the lack of competition. While the firm fixed-price structure protects the government from cost overruns by the contractor, the initial price may not reflect the best value achievable in a competitive environment. Another risk is contractor lock-in; the Navy becomes dependent on Insitu, Inc. for these specific ISR support services for five years, potentially hindering the adoption of newer, more cost-effective technologies or solutions that might emerge during the contract period. Furthermore, without competitive pressure, there might be less incentive for the contractor to innovate or optimize service delivery beyond the contractually mandated minimums.

What is the historical spending pattern for ISR sea-based deployment support by the Department of the Navy?

The provided data only pertains to this single contract awarded in 2014. To understand historical spending patterns for ISR sea-based deployment support by the Department of the Navy, a broader analysis of federal procurement databases would be necessary. This would involve querying for contracts within the relevant NAICS codes (e.g., Surveying and Mapping, Aerospace Product and Parts Manufacturing, Defense-related services) and PSC codes related to ISR systems and support, specifically filtered for the Department of the Navy and sea-based operations. Such an analysis would reveal trends in contract values, award types (competitive vs. sole-source), and key contractors over time.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Surveying and Mapping (except Geophysical) Services

Product/Service Code: TECHNICAL REPRESENTATIVE SVCS. › TECHNICAL REPRESENTATIVE SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0001914R0049

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, 98605

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

Financial Breakdown

Contract Ceiling: $42,844,415

Exercised Options: $34,860,283

Current Obligation: $34,860,283

Subaward Activity

Number of Subawards: 4

Total Subaward Amount: $1,795,717

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline