DoD's AN/SSQ-53G Sonobuoy contract awarded to ERAPSCO for $39.6M, utilizing full and open competition

Contract Overview

Contract Amount: $39,656,309 ($39.7M)

Contractor: Erapsco

Awarding Agency: Department of Defense

Start Date: 2018-09-27

End Date: 2022-02-28

Contract Duration: 1,250 days

Daily Burn Rate: $31.7K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: AN/SSQ-53G (FY18) UK

Place of Performance

Location: COLUMBIA CITY, WHITLEY County, INDIANA, 46725

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $39.7 million to ERAPSCO for work described as: AN/SSQ-53G (FY18) UK Key points: 1. The contract value represents a significant investment in naval defense capabilities. 2. Full and open competition suggests a potentially competitive pricing environment. 3. The duration of the contract (over 3 years) indicates a sustained need for these systems. 4. The award to ERAPSCO highlights their role in supplying critical naval equipment. 5. The product code suggests a focus on advanced sensor technology for maritime operations. 6. The fixed-price contract type aims to control costs and provide budget certainty.

Value Assessment

Rating: good

The contract value of $39.6 million for AN/SSQ-53G sonobuoys appears reasonable given the specialized nature of the equipment and the duration of the contract. Benchmarking against similar defense procurements for advanced acoustic sensors would provide a more precise value-for-money assessment. However, the use of full and open competition generally supports competitive pricing.

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 typically fosters a competitive environment, which can lead to better pricing and innovation for the government.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it maximizes the potential for cost savings through a wider range of offers and encourages contractors to submit their best pricing.

Public Impact

The primary beneficiaries are the U.S. Navy, enhancing their anti-submarine warfare (ASW) capabilities. The contract delivers advanced sonobuoy systems essential for maritime surveillance and threat detection. Geographic impact is national, supporting naval operations globally. Workforce implications include supporting manufacturing and technical roles within the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific bidder count limits full assessment of competitive intensity.
Potential for cost overruns if fixed-price contract doesn't account for all contingencies.
Dependence on a single awardee for a critical defense component could pose supply chain risks.

Positive Signals

Awarded under full and open competition, suggesting a robust bidding process.
Fixed-price contract type provides cost certainty for the government.
Long-term contract duration indicates a stable and predictable supply of essential equipment.
The specific product (AN/SSQ-53G) is a known, advanced system, implying proven technology.

Sector Analysis

The defense sector, specifically naval systems, is characterized by high technological complexity and significant government investment. The market for sonobuoys and related acoustic sensors is specialized, with a limited number of key manufacturers. This contract fits within the broader category of electronic warfare and surveillance systems, a critical component of national defense spending.

Small Business Impact

Information regarding small business set-asides or subcontracting plans is not available for this specific award. However, prime contractors in the defense sector are often required to meet small business subcontracting goals, which can create opportunities for smaller firms within the supply chain.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Accountability measures are inherent in the fixed-price contract structure. Transparency is facilitated by the contract award notice, though detailed performance metrics may not be publicly available. Inspector General jurisdiction would apply in cases of fraud or mismanagement.

Related Government Programs

Naval Warfare Systems
Anti-Submarine Warfare (ASW) Equipment
Defense Electronics
Sensors and Detection Systems

Risk Flags

Potential for supply chain disruption if ERAPSCO faces production issues.
Need for ongoing validation of sonobuoy performance in diverse operational environments.
Risk of technological obsolescence as newer ASW technologies emerge.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $39.7 million to ERAPSCO. AN/SSQ-53G (FY18) UK

Who is the contractor on this award?

The obligated recipient is ERAPSCO.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $39.7 million.

What is the period of performance?

Start: 2018-09-27. End: 2022-02-28.

What is the historical spending trend for AN/SSQ-53G sonobuoys or similar systems by the Department of Defense?

Analyzing historical spending on AN/SSQ-53G sonobuoys or comparable systems by the Department of Defense is crucial for understanding long-term investment patterns and identifying potential cost efficiencies or escalations. While specific historical data for this exact contract is not provided, trends in naval procurement often show consistent, albeit fluctuating, investment in ASW technologies due to evolving geopolitical threats. Factors such as technological upgrades, fleet size changes, and budget allocations influence these trends. For instance, periods of heightened maritime tension or the introduction of new submarine technologies typically correlate with increased demand and spending on advanced sonobuoys. Comparing the current $39.6 million award to previous years' expenditures on similar systems can reveal whether this award represents an increase, decrease, or stable level of investment, providing context for its significance and potential future budgetary implications.

How does the awarded price compare to other recent procurements of AN/SSQ-53G sonobuoys or equivalent systems?

Benchmarking the awarded price of $39.6 million for the AN/SSQ-53G sonobuoys against similar recent procurements is essential for assessing value for money. Without access to a database of comparable contract awards, a precise comparison is difficult. However, the fact that this contract was awarded under full and open competition suggests that the pricing mechanism was designed to elicit competitive offers. If other procurements of the same or similar sonobuoys, particularly those awarded through competitive processes, show significantly different price points (adjusted for quantity, contract duration, and specific configurations), it could indicate variations in market conditions, contractor efficiency, or negotiation outcomes. A higher price compared to benchmarks might warrant further investigation into the specific technical requirements or market dynamics, while a lower price could signal effective competition and negotiation.

What are the key performance indicators (KPIs) used to evaluate the success of this sonobuoy contract?

Key performance indicators (KPIs) for a sonobuoy contract like the AN/SSQ-53G typically focus on technical performance, reliability, delivery timeliness, and cost control. Technical KPIs would include metrics such as detection range, accuracy, signal-to-noise ratio, and operational lifespan under various environmental conditions. Reliability KPIs might involve Mean Time Between Failures (MTBF) and the overall failure rate during operational deployment. Delivery KPIs would track adherence to the schedule outlined in the contract, ensuring timely availability of sonobuoys for naval operations. Cost control KPIs would monitor spending against the awarded amount, ensuring the project remains within budget. The Department of the Navy would likely have specific acceptance criteria and testing protocols to verify that the delivered sonobuoys meet all specified performance and quality standards before final payment.

What is ERAPSCO's track record with similar defense contracts, particularly in sonar and acoustic systems?

ERAPSCO (E.R.A.P.S.C.O. Inc.) has a significant track record as a supplier of sonobuoys and related systems to the U.S. military, particularly the Navy. They are known for providing various types of sonobuoys, including advanced models like the AN/SSQ-53 series, which are critical for anti-submarine warfare (ASW). Their experience often involves manufacturing, testing, and delivering these complex acoustic devices under demanding defense contracts. Assessing their track record involves reviewing past performance evaluations, on-time delivery rates, and adherence to quality standards in previous contracts. Companies like ERAPSCO typically operate within a highly regulated environment, and their continued success in securing contracts suggests a history of meeting or exceeding government requirements for critical defense equipment.

What are the potential risks associated with the sole-source nature of some sonobuoy procurements, and how does this contract's full and open competition mitigate them?

While this specific contract (AN/SSQ-53G) was awarded under full and open competition, some sonobuoy procurements can be sole-source due to proprietary technology, specialized manufacturing capabilities, or limited production lines. Sole-source procurements carry risks such as higher prices due to lack of competition, potential for complacency in quality or innovation, and supply chain vulnerabilities if the single source faces production issues. This contract's award through full and open competition directly mitigates these risks by fostering a competitive environment that encourages lower prices, higher quality, and greater innovation from multiple bidders. It also diversifies the potential supplier base, reducing reliance on a single entity and enhancing overall supply chain resilience for critical naval assets.

How does the $39.6 million contract value compare to the overall annual budget for naval surveillance and ASW systems?

The $39.6 million contract value for the AN/SSQ-53G sonobuoys represents a specific investment within the broader U.S. Navy budget allocated for surveillance and anti-submarine warfare (ASW) systems. The total annual budget for these categories can run into billions of dollars, encompassing a wide array of technologies including sonar systems, maritime patrol aircraft, unmanned underwater vehicles, and other sensor platforms. Therefore, this $39.6 million award, while substantial for a single contract, is likely a component of a larger, multi-year procurement strategy for ASW capabilities. Its significance relative to the overall budget depends on the quantity of sonobuoys procured, their unit cost, and the Navy's strategic priorities for ASW readiness in a given fiscal year.

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

Solicitation ID: N0042113R0070

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4868 EAST PARK 30 DR, COLUMBIA CITY, IN, 46725

Business Categories: Category Business, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations

Financial Breakdown

Contract Ceiling: $39,656,309

Exercised Options: $39,656,309

Current Obligation: $39,656,309

Subaward Activity

Number of Subawards: 43

Total Subaward Amount: $5,916,853

Contract Characteristics

Consolidated Contract: Yes

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0042114D0025

IDV Type: IDC

Timeline