Department of Defense awards $89.3M for AN/SSQ-53G sonobuoys, with limited competition

Contract Overview

Contract Amount: $89,273,720 ($89.3M)

Contractor: Erapsco

Awarding Agency: Department of Defense

Start Date: 2022-09-27

End Date: 2025-04-30

Contract Duration: 946 days

Daily Burn Rate: $94.4K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: AN/SSQ-53G (FY22) UK

Place of Performance

Location: COLUMBIA CITY, WHITLEY County, INDIANA, 46725

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $89.3 million to ERAPSCO for work described as: AN/SSQ-53G (FY22) UK Key points: 1. The contract value of $89.3 million represents a significant investment in naval defense capabilities. 2. The procurement of AN/SSQ-53G sonobuoys is critical for anti-submarine warfare operations. 3. The fixed-price contract type suggests a defined cost structure, potentially limiting cost overruns. 4. The award to ERAPSCO indicates a reliance on established suppliers for specialized defense equipment. 5. The contract duration of nearly two years points to ongoing operational needs. 6. The absence of small business set-asides suggests the primary contractor is not a small business, and subcontracting opportunities may be limited.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance metrics or detailed cost breakdowns. The reported obligated amount of $89.3 million for AN/SSQ-53G sonobuoys over a period of approximately two years suggests a substantial unit cost. While the firm fixed-price structure provides cost certainty, it's difficult to assess if this represents optimal value for money without comparative pricing data from other similar procurements or market analysis of sonobuoy production costs. The contract's value is significant within its niche, but its efficiency is not readily apparent from the provided data.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under a limited competition framework, specifically through the ERAPSCO (Electronic Rectifier and Power Supply Company) contract vehicle. While ERAPSCO is a consortium that aims to streamline procurement, the specific details of how this particular delivery order was competed within that vehicle are not fully elaborated. It is implied that ERAPSCO itself may have undergone a competitive process, but the number of bidders for this specific AN/SSQ-53G requirement under ERAPSCO is not detailed, suggesting a potentially narrow field of competition for this specific item.

Taxpayer Impact: Limited competition can sometimes lead to higher prices for taxpayers compared to a full and open competition, as it may reduce the incentive for suppliers to offer their most competitive bids. This can result in less favorable price discovery for the government.

Public Impact

The primary beneficiaries are the U.S. Navy's anti-submarine warfare (ASW) units, enhancing their operational capabilities. The contract delivers essential AN/SSQ-53G sonobuoys, which are crucial for detecting and tracking submarines. The geographic impact is primarily within naval operations globally, supporting fleet readiness. The contract supports the workforce within the defense manufacturing sector, particularly those involved in the production of sonar equipment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may result in higher costs for taxpayers.
Lack of transparency in the specific competition within the ERAPSCO vehicle.
Reliance on a single supplier or limited pool of suppliers could pose supply chain risks.

Positive Signals

Firm fixed-price contract provides cost certainty.
Procurement through an established contract vehicle (ERAPSCO) may streamline delivery.
Award to a known entity (ERAPSCO) suggests a degree of reliability in supply.

Sector Analysis

The defense industry, specifically the segment focused on naval systems and electronic warfare, is characterized by high barriers to entry due to specialized technology, stringent quality requirements, and long development cycles. The market for sonobuoys is relatively concentrated, with a few key manufacturers dominating global supply. This contract for AN/SSQ-53G sonobuoys fits within the broader category of undersea warfare systems, a critical component of naval power projection and defense. Comparable spending benchmarks would involve analyzing other procurements of similar sonar equipment or ASW systems by various navies.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (sb: false). The prime contractor, ERAPSCO, is likely a larger entity or a consortium of larger entities, given the scale of the award. This suggests that subcontracting opportunities for small businesses may be limited unless specifically mandated or pursued by the prime contractor. The overall impact on the small business ecosystem for this specific procurement appears minimal based on the provided information.

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 firm fixed-price contract type, which holds the contractor responsible for delivering the specified goods within the agreed-upon price. Transparency is facilitated through contract databases like FPDS, where basic award information is published. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract.

Related Government Programs

AN/SSQ Sonobuoy Series
Anti-Submarine Warfare Systems
Naval Electronic Systems
Defense Procurement
ERAPSCO Contracts

Risk Flags

Limited Competition
Potential for Higher Costs
Supply Chain Concentration

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $89.3 million to ERAPSCO. AN/SSQ-53G (FY22) 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 $89.3 million.

What is the period of performance?

Start: 2022-09-27. End: 2025-04-30.

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

Analyzing historical spending on AN/SSQ-53G sonobuoys requires access to detailed procurement data over multiple fiscal years. Without specific historical data points for this exact sonobuoy model, it's difficult to establish a precise trend. However, given the ongoing nature of anti-submarine warfare (ASW) and the continuous need for advanced detection capabilities, it is reasonable to infer that the Department of Defense has consistently invested in sonobuoys. The AN/SSQ series represents a family of systems, and spending on these types of assets typically fluctuates based on fleet readiness requirements, technological upgrades, and the perceived threat landscape. A sustained level of investment is generally expected for critical ASW components like sonobuoys, with potential increases during periods of heightened geopolitical tension or significant advancements in submarine technology.

How does the unit cost of the AN/SSQ-53G sonobuoys in this contract compare to previous awards or similar systems?

Direct comparison of the unit cost for the AN/SSQ-53G sonobuoys in this $89.3 million contract is challenging without knowing the exact quantity procured. The contract value represents the total obligated amount, not necessarily the full value of all units delivered over its duration. To calculate a unit cost, we would need the number of sonobuoys purchased. Furthermore, comparing this to previous awards requires access to historical contract data specifying quantities and prices for the same or comparable sonobuoy models. Factors such as inflation, technological upgrades, and changes in manufacturing processes can significantly influence unit costs over time. Without these specific data points, a precise benchmark against prior awards or similar systems cannot be definitively established from the provided summary.

What are the specific performance requirements and quality standards for the AN/SSQ-53G sonobuoys under this contract?

The provided contract data does not detail the specific performance requirements or quality standards for the AN/SSQ-53G sonobuoys. Typically, such specifications are outlined in the Statement of Work (SOW) or Performance Work Statement (PWS) attached to the contract. For military-grade sonobuoys like the AN/SSQ-53G, these requirements would likely include parameters related to acoustic detection range, signal processing capabilities, operational depth, battery life, environmental resistance (temperature, pressure, salinity), and data transmission reliability. Quality standards would adhere to military specifications (Mil-Spec) and rigorous testing protocols to ensure mission effectiveness and interoperability with naval platforms. Compliance with these standards is usually verified through government acceptance testing and inspections.

What is ERAPSCO's role and track record in supplying naval systems to the Department of Defense?

ERAPSCO (Electronic Rectifier and Power Supply Company) is a joint venture that has historically served as a contracting vehicle for the Department of the Navy, aiming to streamline the procurement of various electronic and power supply systems. Its track record involves facilitating the acquisition of a range of components and systems for naval applications. As a contracting entity, ERAPSCO itself may not be the primary manufacturer but rather a facilitator that aggregates capabilities from various manufacturers or holds master contracts. Its role is to provide a more efficient procurement pathway for the Navy, often through competitively awarded agreements that allow for subsequent task orders or delivery orders. The Department of Defense has utilized ERAPSCO for numerous procurements over the years, indicating a level of trust in its ability to manage and deliver necessary naval equipment.

What are the potential risks associated with relying on limited competition for critical defense components like sonobuoys?

Relying on limited competition for critical defense components like sonobuoys presents several potential risks. Firstly, it can lead to reduced price competition, potentially resulting in higher costs for the government and taxpayers compared to a fully open market. Secondly, it may stifle innovation, as suppliers in a less competitive environment may have less incentive to invest in research and development or to improve their offerings. Thirdly, it can create supply chain vulnerabilities; if the limited number of suppliers face production issues, quality control problems, or go out of business, the military's ability to procure these essential items could be severely impacted. Lastly, limited competition can sometimes lead to a lack of transparency in the procurement process, making it harder to ensure best value is being achieved.

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: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0001919R0001

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, Manufacturer of Goods, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $89,273,720

Exercised Options: $89,273,720

Current Obligation: $89,273,720

Subaward Activity

Number of Subawards: 76

Total Subaward Amount: $24,303,861

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: N0001919D0032

IDV Type: IDC

Timeline