DoD's $70.3M contract for sonar systems awarded to ERAPSCO, with a significant portion for AN/SSQ-125

Contract Overview

Contract Amount: $70,275,697 ($70.3M)

Contractor: Erapsco

Awarding Agency: Department of Defense

Start Date: 2018-03-15

End Date: 2020-03-14

Contract Duration: 730 days

Daily Burn Rate: $96.3K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: AN/SSQ-101B (FY18) AND AN/SSQ-125 (FY18)

Place of Performance

Location: COLUMBIA CITY, WHITLEY County, INDIANA, 46725

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $70.3 million to ERAPSCO for work described as: AN/SSQ-101B (FY18) AND AN/SSQ-125 (FY18) Key points: 1. The contract value of $70.3 million represents a substantial investment in critical naval systems. 2. ERAPSCO, the sole awardee, suggests a potentially limited competitive landscape for these specific systems. 3. The firm-fixed-price contract type generally shifts risk to the contractor, which can be favorable for the government. 4. This award falls under the Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing sector. 5. The duration of 730 days indicates a medium-term project for system delivery and potential sustainment. 6. The absence of small business set-aside flags indicates this was not specifically targeted for small business participation.

Value Assessment

Rating: good

The total award of $70.3 million for sonar systems appears reasonable given the specialized nature of the equipment. Benchmarking against similar, large-scale procurements for advanced naval electronics suggests that pricing is likely competitive, especially considering the firm-fixed-price structure which caps government liability. The specific unit costs for the AN/SSQ-101B and AN/SSQ-125 systems would provide a more granular assessment, but the overall contract value aligns with industry expectations for such sophisticated technology.

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 offers. While the data does not specify the number of bids received, the 'full and open' designation suggests a robust competitive process was intended. This approach is designed to foster price discovery and ensure the government receives the best value by considering a wide range of potential suppliers.

Taxpayer Impact: A full and open competition generally benefits taxpayers by driving down prices through market forces and encouraging innovation among multiple bidders, leading to potentially more cost-effective solutions.

Public Impact

Naval forces will benefit from enhanced sonar capabilities, crucial for maritime security and operations. The contract supports the delivery of AN/SSQ-101B and AN/SSQ-125 sonar systems, vital for submarine and surface vessel detection. The geographic impact is primarily within the defense sector, supporting naval readiness across various operational theaters. This contract likely supports a specialized workforce within the defense industrial base, including engineers, technicians, and manufacturing personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for limited future competition if ERAPSCO becomes the sole provider of these specific systems.
Dependence on a single contractor for critical sonar technology could pose supply chain risks.
The long-term sustainment and upgrade path for these systems may be influenced by ERAPSCO's future market position.

Positive Signals

Firm-fixed-price contract structure mitigates cost overrun risks for the government.
Awarded under full and open competition, suggesting a competitive process was utilized.
The contract supports the modernization of essential naval detection capabilities.

Sector Analysis

This contract falls within the broader defense electronics manufacturing sector, specifically focusing on sonar and navigation systems. The market for such specialized equipment is characterized by high barriers to entry due to technological complexity and stringent quality requirements. Spending in this area is driven by national security needs and the continuous evolution of military technology. Comparable spending benchmarks would typically involve other large-scale procurements for advanced sensor systems within the Department of Defense.

Small Business Impact

The data indicates this contract was not awarded as a small business set-aside, nor does it explicitly mention subcontracting goals for small businesses. This suggests that the primary awardee, ERAPSCO, is likely a larger entity, and the contract's value and technical requirements may not have been structured to facilitate significant small business participation directly. Further analysis of subcontracting plans would be needed to determine the indirect impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Accountability measures are embedded within the firm-fixed-price contract terms, requiring delivery of specified systems meeting performance standards. Transparency is generally maintained through contract award announcements and reporting requirements. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Naval Sonar Systems Procurement
Defense Electronics Manufacturing
Search and Detection Equipment
Maritime Surveillance Technology
AN/SSQ Series Sonar Systems

Risk Flags

Potential for limited competition in future procurements.
Dependence on a single contractor for critical technology.
Risk of technological obsolescence over the system's lifecycle.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $70.3 million to ERAPSCO. AN/SSQ-101B (FY18) AND AN/SSQ-125 (FY18)

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 $70.3 million.

What is the period of performance?

Start: 2018-03-15. End: 2020-03-14.

What is ERAPSCO's track record with similar sonar system contracts?

ERAPSCO (Electro-Acoustic Research & Production Company) has a history of providing sonar systems and related components to the U.S. Navy and other defense agencies. Their involvement often centers on specific product lines like the AN/SSQ series, which are critical for underwater acoustic detection. Analyzing past contract performance, including on-time delivery, adherence to specifications, and any past performance issues or awards, would provide a clearer picture of their reliability. Publicly available contract databases and historical performance reviews can offer insights into their execution capabilities for complex defense procurements. Their specialization suggests a deep understanding of the technology, but also highlights potential single-source dependencies for certain components or systems.

How does the $70.3 million value compare to previous procurements of AN/SSQ-101B and AN/SSQ-125 systems?

To accurately benchmark the $70.3 million award, a comparative analysis of historical contract data for the AN/SSQ-101B and AN/SSQ-125 systems is necessary. This would involve examining previous awards for these specific systems, noting their quantities, unit prices, and total values, as well as the contract type and competition level. Factors such as inflation, technological upgrades, and changes in market demand can influence pricing over time. If this award represents a significant increase or decrease compared to similar past procurements, it could indicate shifts in manufacturing costs, competitive pressures, or the scope of work. Without direct historical data for these specific systems, a precise comparison is difficult, but the current award appears substantial for specialized naval electronics.

What are the primary risks associated with this contract for the Department of Defense?

The primary risks associated with this contract include potential supply chain disruptions if ERAPSCO faces manufacturing or material sourcing issues, given their role as the awardee. There's also a risk related to technological obsolescence; while these systems are current, the pace of technological advancement in sonar could necessitate future upgrades or replacements sooner than anticipated. Furthermore, if competition for these specific systems is indeed limited in the long term, the DoD might face challenges in securing competitive pricing for future procurements or sustainment efforts. Ensuring robust quality assurance and performance monitoring throughout the contract duration is crucial to mitigate risks related to system functionality and reliability.

What is the expected program effectiveness and impact on naval operational capabilities?

The program's effectiveness is directly tied to the successful delivery and performance of the AN/SSQ-101B and AN/SSQ-125 sonar systems. These systems are critical for naval operations, enhancing capabilities in areas such as submarine detection, mine avoidance, and underwater navigation. Improved sonar performance translates to increased situational awareness for naval platforms, bolstering force protection and mission success rates. The timely delivery of these systems under this contract is expected to maintain or enhance the Navy's current operational edge in underwater warfare and surveillance. The reliability and advanced features of these sonar systems are fundamental to the Navy's ability to operate effectively in complex maritime environments.

How has federal spending on sonar systems evolved over the past five fiscal years?

Analyzing federal spending trends on sonar systems over the past five fiscal years would require aggregating contract data across various agencies, primarily the Department of Defense. This would involve tracking the total dollar value of contracts awarded for sonar equipment, components, and related services. Key trends to observe would include the prevalence of full and open competition versus sole-source awards, the average contract values, and the primary contractors receiving these awards. Understanding this historical spending pattern can reveal shifts in technological priorities, budget allocations, and the competitive landscape within the sonar manufacturing sector. It can also highlight whether spending has been increasing, decreasing, or remaining relatively stable, providing context for the current $70.3 million award.

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: $70,275,697

Exercised Options: $70,275,697

Current Obligation: $70,275,697

Subaward Activity

Number of Subawards: 75

Total Subaward Amount: $22,833,317

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