Naval Sea Systems Command awards $20.5M for radar system support, raising questions on competition and value

Contract Overview

Contract Amount: $20,514,350 ($20.5M)

Contractor: Laurel Technologies Partnership

Awarding Agency: Department of Defense

Start Date: 2003-03-31

End Date: 2008-01-31

Contract Duration: 1,767 days

Daily Burn Rate: $11.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: 200312!034047!1700!BZ004 !NAVAL SEA SYSTEMS COMMAND !N0002403C4029 !A!N! !N! !20030331!20060131!039059915!039059915!061345351!N!DRS SURVEILLANCE SUPPORT SYSTE!6200 118TH AVENUE NORTH !LARGO !FL!33773!31175!031!24!GAITHERSBURG !MONTGOMERY !MARYLAND !+000007000000!N!N!000009400000!AC61!RDTE/ELECTRONICS & COMMUNICATION EQ-BASIC RESEARCH!A7 !ELECTRONICS AND COMMUNICATION !2GNF!AN/SPS-48 AIR SEARCH RADAR !541330!E! !3! ! ! ! ! !99990909!B! ! !A! !C!N!U!1!001!N!1A!Z!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C!N! ! ! ! ! ! !0001! !

Place of Performance

Location: GAITHERSBURG, MONTGOMERY County, MARYLAND, 20879, UNITED STATES OF AMERICA

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $20.5 million to LAUREL TECHNOLOGIES PARTNERSHIP for work described as: 200312!034047!1700!BZ004 !NAVAL SEA SYSTEMS COMMAND !N0002403C4029 !A!N! !N! !20030331!20060131!039059915!039059915!061345351!N!DRS SURVEILLANCE SUPPORT SYSTE!6200 118TH AVENUE NORTH !LARGO !FL!33773!31175!031!24!GAITHERSBURG !MONTGOMERY !MARYLAND !+000007000000!N!N!000009400000!… Key points: 1. Contract awarded on a sole-source basis, limiting price discovery and potentially increasing costs. 2. Significant duration of over 4 years suggests a long-term need for specialized support. 3. The contract type (Cost Plus Fixed Fee) can incentivize cost overruns. 4. Focus on research, development, testing, and evaluation (RDTE) indicates a need for specialized engineering expertise. 5. The awardee, Laurel Technologies Partnership, is located in Florida, while the Naval Sea Systems Command is in Maryland. 6. The contract value is substantial, requiring careful oversight to ensure taxpayer funds are used efficiently.

Value Assessment

Rating: questionable

The contract value of $20.5 million for engineering services related to the AN/SPS-48 Air Search Radar system appears high given the lack of competitive bidding. Without a competitive process, it is difficult to benchmark the pricing against market rates or similar contracts. The Cost Plus Fixed Fee (CPFF) contract type, while sometimes necessary for R&D, carries inherent risks of cost escalation. Further analysis would be needed to determine if the fixed fee component adequately incentivizes efficiency and if the overall cost represents good value for the specialized engineering and support provided.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning that only one vendor, Laurel Technologies Partnership, was solicited. This approach bypasses the competitive bidding process, which typically leads to better pricing and innovation. The rationale for a sole-source award is not provided in the data, but it often stems from unique capabilities, proprietary technology, or urgent needs where only one source can fulfill the requirement. The lack of competition means taxpayers did not benefit from potential cost savings that a competitive environment could have generated.

Taxpayer Impact: A sole-source award means taxpayers may have paid a premium compared to what could have been achieved through open competition. This limits the government's ability to leverage market forces for cost efficiency.

Public Impact

The primary beneficiaries are the U.S. Navy's fleet, which relies on the AN/SPS-48 radar system for air surveillance and defense. The contract delivers essential engineering services, including research, development, testing, and evaluation, to maintain and improve the radar system's capabilities. The geographic impact is primarily within the Naval Sea Systems Command's operational sphere, likely supporting naval bases and deployed vessels. The contract supports specialized technical and engineering workforce within Laurel Technologies Partnership.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential cost savings.
Cost Plus Fixed Fee contract type can lead to cost overruns if not closely managed.
Lack of transparency regarding the justification for sole-source award.
Long contract duration (over 4 years) increases exposure to potential cost increases over time.

Positive Signals

Award addresses a critical defense capability (air search radar).
Contract focuses on R&D, suggesting investment in future capabilities.
The contractor is located in the US, supporting domestic industry.

Sector Analysis

This contract falls within the Engineering Services sector, specifically supporting defense electronics and communication equipment. The AN/SPS-48 is a significant component of naval air defense systems. The market for specialized defense engineering services is often characterized by high barriers to entry due to technical expertise requirements and security clearances. Comparable spending benchmarks would typically be found within other naval radar system sustainment or upgrade contracts, but the sole-source nature of this award makes direct comparison challenging.

Small Business Impact

The provided data does not indicate any small business set-aside provisions or subcontracting plans. As a sole-source award to Laurel Technologies Partnership, it is unlikely that small businesses were directly involved in the primary contract unless they are subcontractors to the prime. Further investigation into subcontracting would be needed to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Naval Sea Systems Command (NAVSEA) and the Defense Contract Management Agency (DCMA). The CPFF contract type necessitates rigorous financial oversight to monitor costs and ensure compliance with the fixed fee. Transparency regarding the sole-source justification and performance metrics would be crucial for accountability. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

AN/SPS-48 Radar System
Naval Air Defense Systems
Defense Electronics Engineering Services
RDTE Contracts
Sole-Source Defense Contracts

Risk Flags

Sole-source award
Cost Plus Fixed Fee contract type
Lack of competition
Potential for cost overruns

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.5 million to LAUREL TECHNOLOGIES PARTNERSHIP. 200312!034047!1700!BZ004 !NAVAL SEA SYSTEMS COMMAND !N0002403C4029 !A!N! !N! !20030331!20060131!039059915!039059915!061345351!N!DRS SURVEILLANCE SUPPORT SYSTE!6200 118TH AVENUE NORTH !LARGO !FL!33773!31175!031!24!GAITHERSBURG !MONTGOMERY !MARYLAND !+000007000000!N!N!000009400000!AC61!RDTE/ELECTRONICS & COMMUNICATION EQ-BASIC RESEARCH!A7 !ELECTRONICS AND COMMUNICATION !2GNF!AN/SPS-48 AIR SEARCH RADAR !541330!E! !3! ! ! ! ! !99990909!B! ! !A! !C!N!U!1!001!N!1A!Z!Y!Z! ! !N!C!N! ! ! !A!A!A!A!000!A!C

Who is the contractor on this award?

The obligated recipient is LAUREL TECHNOLOGIES PARTNERSHIP.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $20.5 million.

What is the period of performance?

Start: 2003-03-31. End: 2008-01-31.

What is the specific justification for awarding this contract on a sole-source basis to Laurel Technologies Partnership?

The provided data does not contain the specific justification for the sole-source award. Typically, sole-source contracts are awarded when only one responsible source is available to meet the government's needs. This could be due to unique technical capabilities, proprietary technology, urgent and compelling circumstances, or a lack of adequate competition identified during market research. Without this information, it is difficult to assess whether the sole-source determination was appropriate and if it truly represented the best value for the government. Further review of the contract file or agency documentation would be required to understand the rationale behind bypassing the competitive bidding process.

How does the Cost Plus Fixed Fee (CPFF) contract structure impact cost control for this $20.5 million award?

The Cost Plus Fixed Fee (CPFF) contract structure means the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. While the fee is fixed, the total cost to the government can vary depending on the actual costs incurred by the contractor. This structure can incentivize contractors to control costs to maximize their profit margin (as the fee is a percentage of the costs, but the fee itself is fixed). However, it also carries a risk of cost overruns if the contractor's costs are higher than anticipated, as the government is obligated to cover these costs. Effective oversight by the Naval Sea Systems Command and DCMA is crucial to monitor expenditures, ensure costs are allowable and reasonable, and manage the overall project within budget expectations.

What is the track record of Laurel Technologies Partnership in supporting naval radar systems, particularly the AN/SPS-48?

The provided data identifies Laurel Technologies Partnership as the contractor for this $20.5 million award concerning the AN/SPS-48 Air Search Radar system. However, it does not offer details on their specific track record, past performance, or experience with this particular system or similar naval radar technologies. To assess their capabilities and reliability, one would need to review their performance history on previous contracts, including customer satisfaction ratings, adherence to schedule and budget, and technical execution. Without this information, it's challenging to evaluate the contractor's suitability beyond the fact that they were selected for this sole-source award.

What are the potential risks associated with the long duration (2003-2008) of this contract for the AN/SPS-48 system?

The contract's duration, spanning from March 31, 2003, to January 31, 2008 (over four years), presents several potential risks. Firstly, technology can rapidly evolve, especially in defense electronics; by the end of the contract, the AN/SPS-48 system might be nearing obsolescence, or newer, more capable systems may have emerged, potentially diminishing the value of continued investment in the older platform. Secondly, long-term contracts, particularly CPFF, increase the government's exposure to fluctuating labor costs, material prices, and potential scope creep over an extended period. Finally, maintaining consistent oversight and ensuring the contractor remains aligned with evolving naval requirements over such a long timeframe can be challenging for the contracting agency.

How does this $20.5 million contract compare to other spending on similar naval radar system support or upgrades?

Direct comparison of this $20.5 million contract to similar spending is difficult due to its sole-source nature and the specific focus on engineering services for the AN/SPS-48 system. Competitive contracts for radar system sustainment or upgrades often yield a range of pricing based on market dynamics. Without competitive bids, it's hard to establish a precise benchmark. However, $20.5 million over approximately four years for specialized R&D and engineering support for a critical military system is not inherently excessive, but the lack of competition prevents a definitive value-for-money assessment. Similar contracts for major system upgrades or sustainment can range from millions to hundreds of millions of dollars, depending on scope, system complexity, and competition.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Engineering Services

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Leonardo SPA (UEI: 428869465)

Address: 6200 118TH AVENUE N, LARGO, FL, 33773

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

Contract Characteristics

Cost or Pricing Data: YES

Timeline