DoD's $64.9M AN/SSQ-53G Sonobuoy Contract Awarded to ERAPSCO in 2018

Contract Overview

Contract Amount: $64,901,876 ($64.9M)

Contractor: Erapsco

Awarding Agency: Department of Defense

Start Date: 2018-04-11

End Date: 2021-04-30

Contract Duration: 1,115 days

Daily Burn Rate: $58.2K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: AN/SSQ-53G (FY18) - OPN AND AN/SSQ-53G (FY18) - AUSTRALIAN COOP

Place of Performance

Location: COLUMBIA CITY, WHITLEY County, INDIANA, 46725

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $64.9 million to ERAPSCO for work described as: AN/SSQ-53G (FY18) - OPN AND AN/SSQ-53G (FY18) - AUSTRALIAN COOP Key points: 1. The contract represents a significant investment in naval warfare capabilities. 2. ERAPSCO, a known entity in defense contracting, secured this award. 3. The firm-fixed-price structure aims to control costs for the government. 4. Competition dynamics for this specific sonobuoy system are not detailed but are presumed to be robust given the 'FULL AND OPEN COMPETITION' designation. 5. The contract duration of over three years suggests a sustained need for these systems. 6. The award falls under the Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing NAICS code. 7. The absence of small business set-aside indicates a focus on large prime contractors or specialized capabilities. 8. The contract's value is substantial within its specific defense sub-sector.

Value Assessment

Rating: good

The contract value of $64.9 million for AN/SSQ-53G sonobuoys appears reasonable given the duration and the nature of defense procurement. Benchmarking against similar advanced sonar systems or specialized naval equipment would provide a more precise value-for-money assessment. The firm-fixed-price (FFP) contract type is generally favorable for the government in managing cost certainty, assuming the initial pricing was competitive. Without specific per-unit cost data or comparisons to other contracts for the same or similar sonobuoys, a definitive assessment of pricing efficiency is challenging, but the competitive award process suggests a degree of market validation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, indicating that all responsible sources were permitted to submit offers. While the specific number of bidders is not provided, this procurement method generally fosters a competitive environment, which can lead to better pricing and innovation. The 'FULL AND OPEN COMPETITION' designation suggests that the Department of the Navy sought to maximize the number of potential offerors, thereby increasing the likelihood of receiving competitive proposals and ensuring fair market value.

Taxpayer Impact: A full and open competition is beneficial for taxpayers as it is designed to drive down costs through robust bidding and encourage the best possible solutions to be presented, ultimately leading to more efficient use of public funds.

Public Impact

The primary beneficiaries are the U.S. Navy's maritime patrol and anti-submarine warfare (ASW) operations. The contract delivers advanced AN/SSQ-53G sonobuoys, critical for detecting and tracking submarines and other underwater threats. Geographic impact is global, supporting naval deployments in various theaters of operation. Workforce implications include support for specialized manufacturing and technical roles within the defense industrial base.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if production complexities are underestimated.
Dependence on a single prime contractor (ERAPSCO) for delivery could pose supply chain risks.
Technological obsolescence if newer sonobuoy technologies emerge rapidly.
Limited visibility into the specific performance metrics of the delivered sonobuoys without further data.

Positive Signals

Firm-fixed-price contract structure provides cost certainty for the government.
Full and open competition suggests a competitive award process, likely yielding fair market value.
Award to an established defense contractor (ERAPSCO) implies a degree of proven capability and reliability.
Long contract duration indicates a sustained and critical need for the equipment.

Sector Analysis

The defense sector, specifically naval systems manufacturing, is characterized by high technological sophistication and stringent quality requirements. The market for sonobuoys is a niche within the broader defense electronics industry, often dominated by a few specialized suppliers capable of meeting the rigorous performance and reliability standards set by military organizations. This contract fits within the broader category of intelligence, surveillance, and reconnaissance (ISR) systems, where advanced acoustic sensing is paramount. Comparable spending benchmarks would involve other large-value procurements for advanced sonar systems or related naval electronic warfare equipment.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the procurement was either awarded to a large prime contractor or that the nature of the required sonobuoy technology and manufacturing capabilities were best met by larger, established defense firms. Consequently, there are likely limited direct subcontracting opportunities for small businesses on this specific prime contract, unless ERAPSCO voluntarily engages them. The impact on the small business ecosystem is minimal in terms of direct set-aside awards, but it highlights the competitive landscape for advanced defense systems often favoring larger players.

Oversight & Accountability

Oversight for this contract would primarily 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 sonobuoys meeting technical requirements. Transparency is generally maintained through contract award databases and public reporting, though specific performance details may be sensitive. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract execution.

Related Government Programs

AN/SSQ-125 Sonobuoy
AN/SSQ-101 Sonobuoy
Anti-Submarine Warfare (ASW) Systems
Naval Surface Warfare
Defense Electronics Procurement
Maritime Surveillance Systems

Risk Flags

Potential for supply chain disruption
Risk of technological obsolescence
Dependence on specific contractor capabilities
Limited public data on performance metrics

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $64.9 million to ERAPSCO. AN/SSQ-53G (FY18) - OPN AND AN/SSQ-53G (FY18) - AUSTRALIAN COOP

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 $64.9 million.

What is the period of performance?

Start: 2018-04-11. End: 2021-04-30.

What is the track record of ERAPSCO in delivering similar defense systems?

ERAPSCO (Electro-Optical Systems) is a joint venture that has historically been a significant supplier of sonobuoys and related systems to the U.S. Navy and allied nations. They have been involved in various contracts for different sonobuoy types, including AN/SSQ-53 variants, demonstrating a consistent presence and capability in this specialized defense market. Their track record generally indicates experience in meeting the demanding specifications and production volumes required for naval warfare equipment. However, a detailed review of past performance, including any past performance issues or successes on similar contracts, would be necessary for a comprehensive assessment of their reliability for this specific award.

How does the value of this contract compare to other sonobuoy procurements?

The $64.9 million contract value for AN/SSQ-53G sonobuoys awarded in 2018 is substantial, reflecting the advanced nature and quantity of these critical defense assets. To benchmark effectively, one would need to compare this figure against other large-scale sonobuoy procurements by the U.S. Navy or allied forces, considering factors like the specific sonobuoy model (e.g., AN/SSQ-53 vs. newer variants), contract duration, and the number of units procured. Without access to detailed historical procurement data for comparable sonobuoys, it's challenging to definitively state if this represents a particularly high or low value. However, given the 'full and open competition' designation, it suggests the price was deemed competitive at the time of award.

What are the primary risks associated with this sonobuoy contract?

Key risks for this contract include potential technological obsolescence, as sonobuoy technology evolves rapidly to counter emerging submarine threats. There's also a risk of production delays or quality control issues, which can impact operational readiness for the Navy. Given that ERAPSCO is a joint venture, internal dynamics or changes in its parent companies could potentially affect long-term supportability. Furthermore, the reliance on specialized components could introduce supply chain vulnerabilities. Finally, the effectiveness of the sonobuoys in real-world scenarios against advanced adversaries is an inherent operational risk that cannot be fully mitigated by the contract itself.

How effective are AN/SSQ-53G sonobuoys in current naval operations?

The AN/SSQ-53G is a variant of a widely used passive acoustic sonobuoy designed for detecting and classifying submarines and other underwater acoustic targets. It is a crucial component of the U.S. Navy's Anti-Submarine Warfare (ASW) capabilities, deployed from aircraft and surface vessels. While specific performance metrics are classified, the continued procurement and deployment of this system suggest it remains effective for its intended purpose. However, its effectiveness is relative to the evolving threat landscape; newer sonobuoy technologies are continuously developed to address advancements in submarine quieting and counter-detection measures. The Navy likely employs a mix of sonobuoy types to maintain situational awareness.

What has been the historical spending trend for sonobuoys by the Department of Defense?

Historical spending on sonobuoys by the Department of Defense has been substantial and relatively consistent, reflecting their enduring importance in naval warfare. The DoD procures various types of sonobuoys, including passive, active, and specialized variants, to support global maritime surveillance and anti-submarine warfare missions. Spending fluctuates based on fleet modernization programs, geopolitical threats, and the development of new technologies. Contracts for sonobuoys are often awarded through competitive processes to a limited number of specialized defense contractors. The total annual expenditure can range from tens to hundreds of millions of dollars, depending on the specific systems being procured and the operational tempo.

What is the significance of the 'IN' state code for this contract?

The 'IN' state code indicates that the contract's performance or place of performance is associated with Indiana. This could mean that the prime contractor, ERAPSCO, has manufacturing facilities or significant operational activities related to this contract located within Indiana. It also suggests potential economic impact within that state, such as job creation or support for local supply chains. For federal spending analysis, tracking the geographic distribution of contract performance helps understand the national economic footprint of defense spending and identify regional industrial capabilities.

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: $64,901,876

Exercised Options: $64,901,876

Current Obligation: $64,901,876

Subaward Activity

Number of Subawards: 41

Total Subaward Amount: $13,348,297

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