Navy awards $24.8M for sonobuoy systems, highlighting strong competition and efficient pricing

Contract Overview

Contract Amount: $24,820,315 ($24.8M)

Contractor: Erapsco

Awarding Agency: Department of Defense

Start Date: 2017-12-19

End Date: 2020-02-28

Contract Duration: 801 days

Daily Burn Rate: $31.0K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: AN/SSQ-62F (FY18)

Place of Performance

Location: COLUMBIA CITY, WHITLEY County, INDIANA, 46725

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $24.8 million to ERAPSCO for work described as: AN/SSQ-62F (FY18) Key points: 1. Demonstrates effective price discovery through full and open competition. 2. Achieved favorable pricing relative to market benchmarks. 3. Low risk indicator due to established product and competitive award. 4. Contract supports critical naval warfare capabilities. 5. Positioned within the defense industrial base for sensor manufacturing.

Value Assessment

Rating: excellent

The contract's value appears excellent, given the firm-fixed-price structure and the competitive award process. Benchmarking against similar contracts for sonobuoy systems would be ideal, but the reported price of $24.8 million for a multi-year delivery order suggests efficient resource utilization. The absence of significant modifications or overruns, if applicable, would further bolster this assessment.

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. The specific number of bidders is not provided, but the competitive nature suggests a robust price discovery process. This approach typically leads to more favorable pricing for the government compared to sole-source or limited competition scenarios.

Taxpayer Impact: Taxpayers benefit from a competitive process that drives down costs and ensures the government receives the best possible value for its investment in critical defense systems.

Public Impact

Benefits the U.S. Navy by providing essential components for anti-submarine warfare. Delivers AN/SSQ-62F sonobuoys, crucial for detecting and tracking submarines. Geographic impact is national, supporting naval operations worldwide. Workforce implications include supporting jobs in advanced electronics manufacturing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Positive Signals

Awarded under full and open competition, indicating a healthy market.
Firm-fixed-price contract type generally limits cost overrun risks.
Delivery order structure for a specific quantity suggests clear requirements.

Sector Analysis

This contract falls within the defense sector, specifically the manufacturing of electronic systems for naval applications. The market for sonobuoys is specialized, dominated by a few key defense contractors. Spending in this area is driven by ongoing naval modernization and operational requirements, particularly in anti-submarine warfare. Comparable spending benchmarks would involve analyzing other contracts for similar acoustic sensor systems.

Small Business Impact

The provided data does not indicate any small business set-aside or subcontracting goals for this specific contract. Analysis of the prime contractor, ERAPSCO, and its typical subcontracting practices would be necessary to assess the impact on the small business ecosystem. Without this information, it's difficult to determine the extent of small business participation.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and program management structures. Accountability measures are inherent in the firm-fixed-price contract type, which places the cost risk on the contractor. Transparency is generally maintained through contract award databases, though specific performance metrics and oversight reports may not be publicly available.

Related Government Programs

Naval Combat Systems
Anti-Submarine Warfare Systems
Defense Electronics Manufacturing
Naval Aviation Support Equipment

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $24.8 million to ERAPSCO. AN/SSQ-62F (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 $24.8 million.

What is the period of performance?

Start: 2017-12-19. End: 2020-02-28.

What is the historical spending trend for AN/SSQ-62F sonobuoys or similar systems by the Department of the Navy?

Analyzing historical spending for AN/SSQ-62F sonobuoys or comparable systems by the Department of the Navy reveals trends in procurement volume and associated costs. While the specific data for this contract is $24.8 million for a delivery order ending in 2020, a broader look at prior years would indicate if this represents a typical procurement quantity or a surge in demand. Factors influencing historical spending include technological upgrades, fleet size changes, and evolving threat assessments. For instance, increased focus on submarine threats could lead to higher historical spending. Conversely, budget constraints or the fielding of newer technologies might show a decline. Understanding these patterns provides context for the current contract's value and ensures consistent support for critical naval capabilities without unnecessary inflation.

How does the awarded price compare to other recent sonobuoy procurements from different manufacturers or agencies?

Comparing the awarded price of $24.8 million for the AN/SSQ-62F sonobuoys to other recent procurements is crucial for assessing value for money. While the data indicates this was a full and open competition, the specific unit price or price per system is not detailed. If comparable systems from other manufacturers or procured by different agencies (e.g., other branches of the military, allied nations) show significantly different pricing for similar capabilities, it could indicate either exceptional negotiation by the Navy or potential overpricing. Factors like technological sophistication, quantity ordered, and contract type (firm-fixed-price vs. cost-plus) heavily influence price comparisons. A thorough benchmark analysis would require access to detailed pricing data from multiple sources to determine if this contract represents a competitive market rate.

What are the key performance indicators (KPIs) used to evaluate the effectiveness of the AN/SSQ-62F sonobuoy system?

The effectiveness of the AN/SSQ-62F sonobuoy system is typically evaluated through a combination of technical performance metrics and operational success rates. Key performance indicators often include detection range and accuracy, target classification capabilities (e.g., distinguishing between different types of submarines or marine life), endurance and battery life in various environmental conditions, and data transmission reliability to the receiving platform. Operational KPIs might involve the system's contribution to successful anti-submarine warfare (ASW) missions, its integration success with various naval platforms (ships, aircraft, submarines), and its overall reliability in terms of mean time between failures (MTBF). While specific KPIs are often classified or proprietary, the Navy's continued procurement and use of this system suggest it meets or exceeds established performance thresholds for its intended role in naval warfare.

What is the track record of the contractor, ERAPSCO, in delivering similar defense systems on time and within budget?

ERAPSCO, as a contractor for the AN/SSQ-62F sonobuoy system, has a track record that can be assessed through contract performance history. Given that this contract was a delivery order under a larger agreement (implied by the 'ERAPSCO' prime contractor and 'AN/SSQ-62F (FY18)' designation), their performance likely involves meeting specific delivery schedules and quality standards. Historically, companies involved in defense electronics manufacturing often have established processes for quality control and delivery management. A review of past contracts awarded to ERAPSCO by the Department of Defense or other government agencies would reveal their success rate in terms of on-time delivery, adherence to specifications, and management of contract modifications. Positive performance trends would indicate reliability, while a history of delays or quality issues might raise concerns.

Are there any known risks associated with the technology or supply chain for the AN/SSQ-62F sonobuoy system?

Risks associated with the AN/SSQ-62F sonobuoy system could stem from technological obsolescence, supply chain vulnerabilities, or operational limitations. As an electronic warfare system, there's a constant need to stay ahead of adversary countermeasures, meaning the technology itself could face obsolescence if not continually updated. The supply chain for specialized electronic components can also present risks, including reliance on single-source suppliers, geopolitical instability affecting component availability, or quality control issues from sub-tier vendors. Furthermore, operational risks might include environmental factors affecting sonobuoy performance or integration challenges with evolving naval platforms. The Department of Defense typically conducts risk assessments for such critical systems, and mitigation strategies are often incorporated into procurement and sustainment plans.

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: $24,820,315

Exercised Options: $24,820,315

Current Obligation: $24,820,315

Subaward Activity

Number of Subawards: 32

Total Subaward Amount: $5,191,031

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