Navy awards $257M contract for AN/SSQ-53H sonobuoys to Undersea Sensor Systems, Inc

Contract Overview

Contract Amount: $257,197,987 ($257.2M)

Contractor: Undersea Sensor Systems, Inc.

Awarding Agency: Department of Defense

Start Date: 2025-06-02

End Date: 2027-06-02

Contract Duration: 730 days

Daily Burn Rate: $352.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: SONOBUOY, AN/SSQ-53H

Place of Performance

Location: COLUMBIA CITY, WHITLEY County, INDIANA, 46725

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $257.2 million to UNDERSEA SENSOR SYSTEMS, INC. for work described as: SONOBUOY, AN/SSQ-53H Key points: 1. Contract value of $257.2 million for sonobuoys indicates significant investment in undersea warfare capabilities. 2. The award to Undersea Sensor Systems, Inc. suggests a competitive landscape for sonar technology. 3. A 730-day duration for delivery orders points to sustained demand for these critical components. 4. The firm fixed-price contract type aims to control costs and provide predictable spending. 5. This procurement supports the Navy's ongoing efforts in maritime surveillance and anti-submarine warfare. 6. The contract's focus on search, detection, navigation, guidance, and nautical systems highlights its role in operational readiness.

Value Assessment

Rating: good

The contract value of $257.2 million for sonobuoys appears to be within a reasonable range for advanced undersea sensor systems, considering the complexity and specialized nature of the technology. Benchmarking against similar procurements for sonar equipment and related systems would provide further context on value for money. The firm fixed-price structure suggests an effort to manage cost overruns, which is a positive indicator for efficient spending.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. With two bids received, the competition level suggests a moderately competitive environment. This level of competition is generally favorable for price discovery and can lead to more cost-effective outcomes for the government compared to sole-source or limited competition scenarios.

Taxpayer Impact: Full and open competition, even with two bidders, provides a baseline for fair pricing and encourages vendors to offer their best terms, ultimately benefiting taxpayers by ensuring the government is not overpaying for essential sonobuoy systems.

Public Impact

The primary beneficiaries are the U.S. Navy's operational forces, enhancing their ability to detect and track submarines and other underwater threats. The contract will deliver AN/SSQ-53H sonobuoys, a critical component for maritime patrol and anti-submarine warfare (ASW) missions. The geographic impact is national, supporting naval operations across various theaters of operation, with manufacturing likely concentrated in Indiana. Workforce implications include potential job creation and sustainment within the defense manufacturing sector, particularly in specialized electronics and sensor technology.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if Undersea Sensor Systems, Inc. becomes the sole provider of this specific sonobuoy model.
Reliance on a single contractor for a critical defense component could pose supply chain risks.
The limited number of bidders (2) might indicate a niche market or high barriers to entry, potentially limiting future competition.

Positive Signals

Awarded through full and open competition, ensuring a broad range of potential suppliers were considered.
Firm fixed-price contract type helps manage budget predictability and cost control.
The contract duration of 730 days allows for sustained supply and planning for naval operations.

Sector Analysis

This contract falls within the broader defense sector, specifically the manufacturing of undersea sensor systems. The market for sonobuoys is specialized, driven by naval requirements for anti-submarine warfare and maritime surveillance. Spending in this area is consistent with global defense budgets prioritizing advanced detection and tracking technologies. Comparable spending benchmarks would involve other procurements of advanced sonar arrays, acoustic sensors, and related defense electronics.

Small Business Impact

The data indicates that small business participation is not a primary focus of this specific award, as the prime contractor is not identified as a small business, and the 'ss' (small business set-aside) flag is false. There is no explicit information on subcontracting plans for small businesses within this award notice. Further analysis would be needed to determine if subcontracting opportunities exist and if they are being utilized to engage the small business ecosystem.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of the Navy's contracting and program management offices. Accountability measures are embedded in the firm fixed-price contract terms, requiring delivery of specified sonobuoys. Transparency is facilitated through public contract databases, though detailed performance metrics and specific oversight activities are typically internal. The Inspector General for the Department of Defense may have jurisdiction for audits and investigations.

Related Government Programs

Naval Sea Systems Command (NAVSEA) procurements
Anti-Submarine Warfare (ASW) systems
Maritime Surveillance Technology
Defense Electronics Manufacturing
Undersea Warfare Systems

Risk Flags

Limited competition (2 bidders)
Potential supply chain vulnerabilities for specialized components

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $257.2 million to UNDERSEA SENSOR SYSTEMS, INC.. SONOBUOY, AN/SSQ-53H

Who is the contractor on this award?

The obligated recipient is UNDERSEA SENSOR SYSTEMS, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $257.2 million.

What is the period of performance?

Start: 2025-06-02. End: 2027-06-02.

What is the historical spending pattern for AN/SSQ-53H sonobuoys or similar systems by the Department of the Navy?

Analyzing historical spending for AN/SSQ-53H sonobuoys requires accessing detailed contract databases over several fiscal years. Typically, the Navy procures such critical components through multi-year contracts or a series of delivery orders against indefinite-delivery/indefinite-quantity (IDIQ) vehicles. Past spending would likely show consistent investment in these systems, reflecting their enduring importance in naval operations. Fluctuations in spending could be attributed to modernization programs, changes in threat assessments, or budget allocations. Without specific historical data for this exact sonobuoy model, comparisons can be made to broader categories of sonar and undersea warfare equipment, which generally represent significant portions of the Navy's procurement budget, often in the hundreds of millions annually for major systems.

How does the unit cost of the AN/SSQ-53H sonobuoy compare to previous awards or other similar systems?

Determining the precise unit cost requires dividing the total contract value by the number of units procured, which is not provided in the summary data. However, the total award of $257.2 million over a 730-day period suggests a substantial investment per unit, indicative of advanced technology. To benchmark, one would need to compare this implied unit cost against previous Navy awards for the AN/SSQ-53H or comparable sonobuoys (e.g., AN/SSQ-125). Factors influencing unit cost include technological sophistication, manufacturing volume, and the specific contract type. If this is a new award or a follow-on contract, a comparison to prior pricing would reveal trends in cost efficiency or potential price increases due to inflation, material costs, or enhanced capabilities.

What is the track record of Undersea Sensor Systems, Inc. in delivering complex defense electronics?

Undersea Sensor Systems, Inc. (USSI) has a history of providing sonar systems and related components to the U.S. military. Their track record typically involves manufacturing and delivering acoustic sensors, sonobuoys, and other specialized underwater detection equipment. Assessing their performance would involve reviewing past contract awards, on-time delivery rates, quality control metrics, and any history of contract disputes or performance issues. Companies in this niche often possess specific expertise and certifications required for defense contracts. A thorough review of their contract history with agencies like the Department of the Navy and Department of Defense would provide insight into their reliability and capability to meet the demands of this $257 million award.

What are the primary performance risks associated with this sonobuoy contract?

Key performance risks for this sonobuoy contract include potential technical failures or performance degradation of the AN/SSQ-53H systems in demanding operational environments. Ensuring consistent quality and reliability across all delivered units is crucial, as sonobuoys are often deployed in large numbers and operate autonomously. Supply chain disruptions for critical components or raw materials could impact delivery schedules. Furthermore, the contractor's ability to meet stringent technical specifications and evolving operational requirements presents a risk. The firm fixed-price nature of the contract shifts some cost risk to the contractor, but performance failures could still lead to mission impacts for the Navy and potential contract disputes.

How does the competition level (2 bidders) impact the government's ability to secure favorable pricing?

A competition with only two bidders, while better than a sole-source award, presents a moderate level of price discovery. Ideally, a larger number of bidders would foster more intense competition, driving prices down. With only two offers, the government's negotiating position is somewhat constrained. The government must ensure that the offered prices are fair and reasonable based on available cost data and market intelligence. The contracting officers will scrutinize the proposals to ensure that the pricing reflects the value provided and is competitive within the market, even with limited options. The Navy's strategy likely involves leveraging any available historical pricing data or independent cost estimates to validate the reasonableness of the bids received.

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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: N0001925R0045

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4868 E PK 30 DR, COLUMBIA CITY, IN, 46725

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $257,197,987

Exercised Options: $257,197,987

Current Obligation: $257,197,987

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $36,765

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0001922D0018

IDV Type: IDC

Timeline