Department of the Navy awards $165.5M contract for Guided Missile and Space Vehicle Manufacturing, with a long performance period

Contract Overview

Contract Amount: $165,517,693 ($165.5M)

Contractor: Ram-System Gmbh

Awarding Agency: Department of Defense

Start Date: 2018-06-28

End Date: 2028-05-01

Contract Duration: 3,595 days

Daily Burn Rate: $46.0K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: RAM GMLS MK 49 MOD 3

Plain-Language Summary

Department of Defense obligated $165.5 million to RAM-SYSTEM GMBH for work described as: RAM GMLS MK 49 MOD 3 Key points: 1. The contract's value of $165.5 million over a 10-year period suggests a significant investment in missile systems. 2. The 'NOT AVAILABLE FOR COMPETITION' status raises questions about the justification for sole-source procurement and potential impacts on pricing. 3. The firm-fixed-price contract type generally offers cost certainty for the government, but the absence of competition may limit price negotiation. 4. The long duration of the contract (3595 days) indicates a sustained need for these specialized manufacturing capabilities. 5. The primary contractor, RAM-SYSTEM GMBH, will be responsible for delivering guided missile and space vehicle components. 6. The contract falls under the Guided Missile and Space Vehicle Manufacturing sector, a critical area for defense capabilities.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without comparable sole-source awards for similar specialized missile systems. The firm-fixed-price structure provides some cost control, but the lack of competition means there's no direct market comparison to assess if the pricing is truly competitive. The total value of $165.5 million over nearly 10 years suggests a substantial, but potentially unoptimized, expenditure due to the limited bidding process.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. The justification for this approach is not provided in the available data. Typically, sole-source awards occur when only one responsible source can provide the required supplies or services. The lack of competition limits the government's ability to explore alternative solutions or leverage market dynamics to achieve the best possible price.

Taxpayer Impact: Taxpayers may be paying a premium for this system due to the absence of competitive bidding. Without multiple offers, there is less pressure on the contractor to offer the most cost-effective solution.

Public Impact

The primary beneficiary is the Department of the Navy, which will receive critical components for guided missile and space vehicles. This contract supports the manufacturing of advanced defense systems essential for national security. The geographic impact is likely concentrated where RAM-SYSTEM GMBH operates its manufacturing facilities. The contract supports specialized jobs within the defense manufacturing sector, contributing to the skilled workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Sole-source justification needs further scrutiny to ensure necessity.
Long contract duration without competition could reduce future flexibility.
Potential for vendor lock-in due to specialized nature of the product.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Contract supports a critical defense capability.
Long-term award ensures sustained supply of essential components.

Sector Analysis

The Guided Missile and Space Vehicle Manufacturing sector is a highly specialized and critical segment of the defense industrial base. Companies operating in this area require significant technical expertise, advanced manufacturing capabilities, and stringent quality control processes. The market is often characterized by a limited number of qualified suppliers due to high barriers to entry. This contract represents a significant investment within this niche, ensuring the availability of essential components for naval defense systems.

Small Business Impact

The provided data does not indicate any small business set-aside provisions or subcontracting plans. As this is a sole-source award to RAM-SYSTEM GMBH, the direct impact on small businesses is unclear unless the prime contractor has established subcontracting relationships. Further investigation would be needed to determine if small businesses are involved in the supply chain for this contract.

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 structure, which obligates the contractor to deliver specified goods. Transparency is limited due to the sole-source nature of the award; however, contract award details are generally made public. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Guided Missile Manufacturing
Space Vehicle Manufacturing
Naval Weapon Systems
Defense Procurement
Sole-Source Contracts

Risk Flags

Sole-source award lacks competition
Potential for uncompetitive pricing
Long contract duration without competition
Limited transparency on justification

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $165.5 million to RAM-SYSTEM GMBH. RAM GMLS MK 49 MOD 3

Who is the contractor on this award?

The obligated recipient is RAM-SYSTEM GMBH.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $165.5 million.

What is the period of performance?

Start: 2018-06-28. End: 2028-05-01.

What is the specific justification for awarding this contract on a sole-source basis to RAM-SYSTEM GMBH?

The provided data indicates the contract was awarded as 'NOT AVAILABLE FOR COMPETITION,' signifying a sole-source procurement. The specific justification for this determination is not detailed in the available information. Typically, sole-source awards are made when only one responsible source can provide the required goods or services, often due to unique capabilities, proprietary technology, or urgent needs. Without further documentation from the Department of the Navy, it is impossible to ascertain the precise rationale. This lack of competition raises concerns about whether alternative solutions were explored or if the government received the best possible value. Further inquiry with the agency would be necessary to obtain the justification documentation.

How does the pricing of this contract compare to similar guided missile and space vehicle manufacturing contracts, if available?

Direct price comparison is difficult due to the sole-source nature of this award and the specialized 'Guided Missile and Space Vehicle Manufacturing' category. Publicly available data on comparable sole-source contracts for similar advanced missile systems is scarce. While the firm-fixed-price contract type offers some cost certainty, the absence of competition means there is no benchmark against which to assess the reasonableness of the pricing. To evaluate value for money, one would ideally need to compare unit costs, overhead rates, and profit margins against other government contracts for analogous systems or against industry benchmarks, which are not readily accessible for this specific procurement.

What are the potential risks associated with a sole-source award of this magnitude and duration?

The primary risk associated with a sole-source award of this magnitude ($165.5 million) and duration (nearly 10 years) is the potential for inflated costs due to a lack of competitive pressure. Without multiple bidders vying for the contract, the government may not achieve the most favorable pricing. Another significant risk is vendor lock-in; if RAM-SYSTEM GMBH is the only provider of these specialized components, the Navy may become dependent on them, limiting future flexibility and negotiation power. Furthermore, the long duration could mean that the technology or requirements evolve, and the sole-source provider may not be the most innovative or cost-effective option over the entire contract period. There's also a risk that the justification for sole-sourcing might not hold up under scrutiny, suggesting a missed opportunity for competition.

What is the historical spending pattern for 'Guided Missile and Space Vehicle Manufacturing' by the Department of the Navy?

Analyzing historical spending patterns for 'Guided Missile and Space Vehicle Manufacturing' by the Department of the Navy requires access to comprehensive federal procurement databases. While this specific contract is for $165.5 million, understanding the broader trend would involve examining annual obligations for this Product Service Code (PSC) or similar categories over several fiscal years. Such an analysis could reveal whether spending in this area is increasing, decreasing, or remaining stable, and identify major contractors and contract types. Without that broader dataset, it's difficult to place this single award within a larger historical context. However, given the nature of defense spending, it's likely that investments in missile technology are substantial and ongoing, reflecting evolving geopolitical landscapes and technological advancements.

What is the track record of RAM-SYSTEM GMBH in fulfilling government contracts, particularly in defense manufacturing?

Information regarding the track record of RAM-SYSTEM GMBH in fulfilling government contracts, especially within defense manufacturing, is not provided in the data snippet. To assess their performance, one would need to consult databases like the Federal Procurement Data System (FPDS) or the Contractor Performance Assessment Reporting System (CPARS) to review past contract awards, performance evaluations, and any history of disputes or issues. A positive track record would indicate reliability and capability, while a history of poor performance or contract terminations would raise significant concerns about their ability to execute this current $165.5 million award effectively. Given the sole-source nature, a thorough review of their past performance is crucial.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Guided Missile and Space Vehicle Manufacturing

Product/Service Code: GUIDED MISSLES

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0002418R5403

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: DAIMLERSTR. 11, OTTOBRUNN

Business Categories: Category Business, Foreign Owned, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $165,517,693

Exercised Options: $165,517,693

Current Obligation: $165,517,693

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline