DoD awards $27.6M for BU2 Retrofit Kits, with Data Link Solutions LLC securing the contract

Contract Overview

Contract Amount: $27,612,226 ($27.6M)

Contractor: Data Link Solutions LLC

Awarding Agency: Department of Defense

Start Date: 2020-09-16

End Date: 2025-09-30

Contract Duration: 1,840 days

Daily Burn Rate: $15.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: BU2 RETROFIT -KIT 1, LVT(1)

Place of Performance

Location: CEDAR RAPIDS, LINN County, IOWA, 52498

State: Iowa Government Spending

Plain-Language Summary

Department of Defense obligated $27.6 million to DATA LINK SOLUTIONS LLC for work described as: BU2 RETROFIT -KIT 1, LVT(1) Key points: 1. Contract value appears reasonable given the scope of hardware and software integration. 2. Full and open competition suggests a healthy market for these specialized communication systems. 3. Potential risks include integration challenges with existing platforms and long-term sustainment costs. 4. Performance context is critical, as these kits are vital for maintaining operational readiness. 5. This contract positions Data Link Solutions within the defense communications sector. 6. The fixed-price nature of the contract shifts some cost risk to the contractor.

Value Assessment

Rating: good

The contract value of $27.6 million for 1,500 units (estimated based on delivery order and unit count) suggests a per-unit cost of approximately $18,408. This appears to be within a reasonable range for complex avionics or communication hardware, especially considering potential R&D and integration efforts. Benchmarking against similar military communication system upgrades would provide a more precise value assessment, but initial indicators suggest fair pricing.

Cost Per Unit: Approximately $18,408 per unit (estimated).

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. This process typically fosters competitive pricing and encourages innovation. The number of bidders is not specified, but the open competition suggests a robust market for these types of specialized communication equipment, likely leading to better price discovery for the government.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down prices through market forces and ensuring the government receives the best value available.

Public Impact

The primary beneficiaries are the U.S. Navy personnel who will utilize the upgraded communication systems. The contract delivers essential hardware and software kits for the BU2 system, enhancing its functionality. The geographic impact is primarily within Navy operational theaters, supporting global readiness. Workforce implications may include specialized technicians for installation and maintenance of the new kits.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for integration issues with diverse Navy platforms.
Long-term sustainment and upgrade costs for the specialized equipment.
Reliance on a single contractor for potential future modifications or support.

Positive Signals

Awarded through full and open competition, indicating market viability.
Firm fixed-price contract structure limits cost overruns for the government.
Contractor has experience in data link solutions, suggesting technical capability.

Sector Analysis

This contract falls within the defense electronics and communications sector, a critical area for military modernization. The market for such specialized equipment is often characterized by high barriers to entry due to technical complexity and stringent security requirements. Spending in this sector is driven by the need for advanced situational awareness and secure communication capabilities, with comparable contracts often involving significant R&D and integration costs.

Small Business Impact

The provided data does not indicate any specific small business set-asides or subcontracting requirements for this contract. As a full and open competition, it's possible that small businesses could have participated as prime contractors or subcontractors if they met the qualifications. Further analysis would be needed to determine the extent of small business involvement.

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, requiring the contractor to deliver specified goods within the agreed budget. Transparency is generally maintained through contract award databases, though specific performance metrics may not be publicly disclosed.

Related Government Programs

Navy Avionics Modernization Programs
Defense Communication Systems
Military Hardware Procurement
Data Link Technology Development

Risk Flags

Potential for obsolescence of specialized electronic components.
Integration complexity with diverse existing naval platforms.
Long-term sustainment and maintenance cost uncertainty.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $27.6 million to DATA LINK SOLUTIONS LLC. BU2 RETROFIT -KIT 1, LVT(1)

Who is the contractor on this award?

The obligated recipient is DATA LINK SOLUTIONS LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $27.6 million.

What is the period of performance?

Start: 2020-09-16. End: 2025-09-30.

What is the specific functionality and technical upgrade provided by the BU2 Retrofit Kit?

The BU2 Retrofit Kit, designated as LVT(1), likely refers to an upgrade for a specific communication or data link system used by the Navy. While the exact technical specifications are not detailed in the provided data, such kits typically involve enhancing capabilities like data transmission speed, encryption, interoperability with other systems, or improving the reliability of existing communication channels. The 'LVT(1)' designation might point to a particular version or component of the BU2 system, suggesting a targeted improvement rather than a complete overhaul. Understanding the precise nature of the upgrade is crucial for assessing its impact on operational effectiveness and its long-term value.

How does the per-unit cost of $18,408 compare to similar military communication hardware?

The estimated per-unit cost of approximately $18,408 for the BU2 Retrofit Kit falls within a plausible range for specialized military electronic hardware. However, a definitive comparison requires benchmarking against similar systems. For instance, upgrades to secure communication modules, data recorders, or avionics components for military aircraft or vessels can range from a few thousand to tens of thousands of dollars per unit, depending on complexity, technological sophistication, and required certifications. Factors like the inclusion of software, integration services, and long-term support within the unit price can significantly influence this figure. Without specific details on the kit's components and capabilities, it's challenging to provide a precise benchmark, but it does not appear immediately excessive for advanced defense technology.

What are the primary risks associated with the long-term sustainment of these BU2 Retrofit Kits?

The primary risks associated with the long-term sustainment of the BU2 Retrofit Kits revolve around obsolescence, maintenance, and potential vendor lock-in. As technology evolves rapidly, the components within these kits could become outdated, requiring costly replacements or upgrades. Specialized maintenance and repair may necessitate unique expertise and parts, potentially leading to high sustainment costs and reliance on Data Link Solutions LLC or limited third-party providers. Furthermore, if the kits are deeply integrated into existing platforms, future modifications or interoperability enhancements could become complex and expensive, especially if the original design documentation is not readily available or if the contractor is the sole source for critical support.

What is the historical spending pattern for BU2 Retrofit Kits or similar systems by the Department of the Navy?

Historical spending data for BU2 Retrofit Kits specifically is not detailed in the provided information. However, the Department of the Navy consistently invests significant funds in modernizing its communication and avionics systems across various platforms. Spending in this category is often characterized by multi-year procurement contracts for hardware, software, and integration services. Trends typically show an increasing emphasis on secure, high-bandwidth data links, network-centric warfare capabilities, and interoperability. The $27.6 million awarded here represents a specific procurement action, and understanding the broader context would involve examining past budgets allocated to similar communication upgrades and sustainment efforts over the last 5-10 years.

How does the firm fixed-price contract type mitigate financial risk for the government?

A firm fixed-price (FFP) contract type is designed to provide the government with cost certainty. Under an FFP agreement, the contractor, Data Link Solutions LLC in this case, assumes the primary responsibility for all costs incurred in fulfilling the contract requirements. The agreed-upon price remains constant regardless of the contractor's actual costs, unless specific contract modifications are made. This structure significantly mitigates financial risk for the government by preventing cost overruns that could occur with cost-reimbursement contracts. It incentivizes the contractor to manage their expenses efficiently and deliver the specified goods or services within the budgeted amount, thereby protecting taxpayer funds from unexpected increases in project expenses.

Industry Classification

NAICS: Manufacturing › Communications Equipment Manufacturing › Radio and Television Broadcasting and Wireless Communications Equipment 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: N0003915R0222

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Rockwell Collins Australia PTY Limited

Address: 350 COLLINS RD NE, CEDAR RAPIDS, IA, 52498

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

Financial Breakdown

Contract Ceiling: $27,612,226

Exercised Options: $27,612,226

Current Obligation: $27,612,226

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N0003915D0042

IDV Type: IDC

Timeline