DoD Awards $55.1M for Sonobuoys to ERAPSCO, Lacking Competition

Contract Overview

Contract Amount: $55,104,120 ($55.1M)

Contractor: Erapsco

Awarding Agency: Department of Defense

Start Date: 2022-04-30

End Date: 2025-01-30

Contract Duration: 1,006 days

Daily Burn Rate: $54.8K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: FY22 ORDER FOR AN/SSQ-101B SONOBUOYS UNDER CONTRACT N0001919D0032.

Place of Performance

Location: COLUMBIA CITY, WHITLEY County, INDIANA, 46725

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $55.1 million to ERAPSCO for work described as: FY22 ORDER FOR AN/SSQ-101B SONOBUOYS UNDER CONTRACT N0001919D0032. Key points: 1. Significant award for sonobuoys, a critical naval defense component. 2. Sole-source award to ERAPSCO raises concerns about price discovery. 3. Long-term contract (2022-2025) suggests ongoing need for these systems. 4. Manufacturing sector (NAICS 334511) is heavily reliant on defense contracts.

Value Assessment

Rating: questionable

The contract value of $55.1M for sonobuoys is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to potential market rates for similar systems.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was not competed, indicating a sole-source award to ERAPSCO. This lack of competition limits price discovery and may lead to higher costs for taxpayers.

Taxpayer Impact: Taxpayer funds are being expended without the benefit of competitive pricing, potentially resulting in overpayment for these critical defense components.

Public Impact

Naval readiness may be impacted if pricing is not optimized. Potential for increased defense spending due to lack of competition. Dependence on a single supplier could create supply chain vulnerabilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Sole-source award
Potential for inflated pricing

Positive Signals

Critical defense procurement
Long-term contract ensures supply

Sector Analysis

This award falls within the defense manufacturing sector, specifically instruments for search, detection, and navigation. Defense spending in this area is often characterized by high R&D costs and specialized production, but competition is usually sought to control costs.

Small Business Impact

The data does not indicate whether small businesses were involved in this contract, either as prime contractors or subcontractors. Further investigation would be needed to assess small business participation.

Oversight & Accountability

The Department of the Navy awarded this contract. Oversight would focus on ensuring the necessity of the sole-source award and the reasonableness of the price negotiated, especially given the lack of competitive pressure.

Related Government Programs

Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Sole-source award
Lack of competition
Potential for overpricing
Limited transparency in price discovery

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $55.1 million to ERAPSCO. FY22 ORDER FOR AN/SSQ-101B SONOBUOYS UNDER CONTRACT N0001919D0032.

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 $55.1 million.

What is the period of performance?

Start: 2022-04-30. End: 2025-01-30.

What is the justification for awarding this contract on a sole-source basis instead of seeking competitive bids?

The justification for a sole-source award typically involves factors such as unique capabilities, urgent need, or lack of available alternatives. Without further documentation, it's unclear why competition was bypassed for these sonobuoys. This decision warrants scrutiny to ensure it serves the government's best interest and doesn't simply reflect convenience or a pre-existing relationship.

What are the potential risks associated with a sole-source procurement of critical defense equipment like sonobuoys?

Sole-source procurements carry risks of inflated pricing due to the absence of competitive pressure, potentially leading to inefficient use of taxpayer funds. There's also a risk of reduced innovation and a lack of incentive for the sole provider to improve quality or efficiency. Furthermore, reliance on a single supplier can create supply chain vulnerabilities if that supplier faces production issues or geopolitical challenges.

How does the lack of competition impact the long-term value and effectiveness of this sonobuoy procurement for the Department of Defense?

The lack of competition directly impacts long-term value by potentially increasing the overall cost of acquiring sonobuoys over the contract's duration. Without competitive benchmarking, it's harder to ensure the government is receiving the best possible technology and pricing. This could lead to reduced budget allocation for other critical needs or a lower quantity of sonobuoys acquired for the same investment, potentially affecting operational effectiveness.

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: $55,104,120

Exercised Options: $55,104,120

Current Obligation: $55,104,120

Subaward Activity

Number of Subawards: 42

Total Subaward Amount: $21,744,707

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