DoD's $12.9M contract for Digital Recovery Sequencers awarded to Universal Propulsion Company Inc

Contract Overview

Contract Amount: $12,905,626 ($12.9M)

Contractor: Universal Propulsion Company Inc

Awarding Agency: Department of Defense

Start Date: 2007-09-12

End Date: 2009-06-30

Contract Duration: 657 days

Daily Burn Rate: $19.6K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: DIGITAL RECOVERY SEQUENCER

Place of Performance

Location: PHOENIX, MARICOPA County, ARIZONA, 85001

State: Arizona Government Spending

Plain-Language Summary

Department of Defense obligated $12.9 million to UNIVERSAL PROPULSION COMPANY INC for work described as: DIGITAL RECOVERY SEQUENCER Key points: 1. The contract value of $12.9 million for Digital Recovery Sequencers represents a significant investment in specialized defense equipment. 2. Competition dynamics for this contract were limited, suggesting a niche market or specific technological requirements. 3. The firm-fixed-price contract type indicates that the contractor bears the risk of cost overruns. 4. Performance is contextually framed by the duration of 657 days, suggesting a project of moderate complexity. 5. The contract falls within the Explosives Manufacturing sector, highlighting its critical role in defense readiness.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without more specific data on the 'Digital Recovery Sequencer' and its market. The awarded amount of $12.9 million over approximately two years suggests a substantial per-unit cost, likely due to specialized technology or limited production runs. Comparisons to similar niche defense equipment contracts would be necessary for a more precise value assessment. The firm-fixed-price nature, however, shifts cost risk to the contractor, which can be a positive indicator if the contractor is experienced and efficient.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that while competition was sought, certain sources were excluded, possibly due to proprietary technology, security clearances, or specific capabilities. This suggests a limited number of qualified bidders. The limited competition may have resulted in less aggressive pricing than a truly open competition, but it also ensures that the selected contractor possesses the necessary specialized expertise.

Taxpayer Impact: Taxpayers may have paid a premium due to the limited number of eligible bidders. However, the exclusion of sources might have been necessary to ensure the acquisition of highly specialized or secure technology critical for defense operations.

Public Impact

The primary beneficiaries are the Department of Defense, specifically the Department of the Navy, which will receive the Digital Recovery Sequencers. The services delivered involve the manufacturing and supply of specialized electronic or mechanical devices crucial for defense applications. The geographic impact is primarily within Arizona, where Universal Propulsion Company Inc. is located, but the ultimate operational use will be by naval forces. Workforce implications include employment opportunities at Universal Propulsion Company Inc. and potentially its subcontractors, particularly in specialized manufacturing and engineering roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition could lead to higher prices than a broader bidding process.
The specific nature of 'Digital Recovery Sequencer' is not detailed, raising questions about its exact function and necessity.
Exclusion of sources, even if justified, reduces the pool of potential innovation and cost-saving proposals.

Positive Signals

Firm-fixed-price contract type places cost control responsibility on the contractor.
Award to an established company (Universal Propulsion Company Inc.) suggests a degree of reliability in delivery.
The contract duration of over 600 days allows for structured production and quality assurance.

Sector Analysis

The defense manufacturing sector is characterized by high technological barriers to entry, stringent quality control, and often specialized, low-volume production runs. Contracts like this for components such as 'Digital Recovery Sequencers' fit within the broader category of defense electronics or specialized ordnance manufacturing. The market size for such niche components is difficult to ascertain but is driven by specific military requirements and technological advancements. Comparable spending benchmarks would typically involve other contracts for specialized electronic or mechanical systems for military applications, often with high per-unit costs due to R&D and precision engineering.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the 'ss': false flag suggests no specific small business subcontracting goals were mandated within this award. This means that opportunities for small businesses to participate in this contract are likely limited to general subcontracting opportunities that may arise from the prime contractor's needs, rather than being specifically targeted.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. Accountability measures are inherent in the firm-fixed-price contract type, which penalizes the contractor for cost overruns. Transparency is generally maintained through contract award databases, though specific technical details of the 'Digital Recovery Sequencer' may be sensitive. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Defense Electronics Manufacturing
Naval Systems Procurement
Specialized Ordnance Components
Military Equipment Manufacturing

Risk Flags

Limited competition raises concerns about potential price inflation.
Lack of detailed information on the 'Digital Recovery Sequencer' hinders full value assessment.
Exclusion of sources requires strong justification to ensure fair market access.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $12.9 million to UNIVERSAL PROPULSION COMPANY INC. DIGITAL RECOVERY SEQUENCER

Who is the contractor on this award?

The obligated recipient is UNIVERSAL PROPULSION COMPANY 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 $12.9 million.

What is the period of performance?

Start: 2007-09-12. End: 2009-06-30.

What is the specific function and technological significance of the 'Digital Recovery Sequencer'?

The precise function and technological significance of the 'Digital Recovery Sequencer' are not detailed in the provided data. However, based on the contractor (Universal Propulsion Company Inc.) and the sector (Explosives Manufacturing), it can be inferred that this device likely plays a role in the safe and controlled detonation, recovery, or deactivation of explosive ordnance or related systems. Its 'digital' nature suggests advanced control or monitoring capabilities. The contract's value and limited competition point towards a specialized, potentially proprietary technology critical for specific military operations, possibly related to mine clearance, unexploded ordnance (UXO) disposal, or advanced weapon systems where controlled sequencing is paramount for safety and effectiveness.

How does the $12.9 million contract value compare to similar defense equipment procurements?

Direct comparison of the $12.9 million contract value for 'Digital Recovery Sequencers' to similar defense equipment procurements is challenging without more granular data on the specific item and its market. However, for specialized defense electronics or ordnance components, this value is moderate. Contracts for complex systems like aircraft or ships would be orders of magnitude higher. Conversely, contracts for common supplies or basic components would be significantly lower. The value suggests a niche product with significant R&D, specialized manufacturing processes, or critical safety/performance requirements, typical of many defense-specific technologies where unit costs are elevated due to low volume and high technical specifications.

What are the potential risks associated with a 'Full and Open Competition After Exclusion of Sources' award?

The primary risk associated with 'Full and Open Competition After Exclusion of Sources' is the potential for reduced price competition. By excluding certain sources, the contracting agency limits the number of bidders, which can lead to higher prices than if all capable vendors were allowed to compete. This exclusion might be justified by unique capabilities, intellectual property, or security requirements, but it necessitates careful justification to ensure the government is not unduly disadvantaged. Another risk is that the excluded sources might possess innovative solutions or cost efficiencies that are missed. Transparency regarding the reasons for exclusion is crucial for accountability.

What is Universal Propulsion Company Inc.'s track record with similar defense contracts?

Universal Propulsion Company Inc. has a history of contracting with the U.S. government, particularly within the defense sector, as indicated by its involvement in this contract. While specific details of their past performance on similar 'Digital Recovery Sequencer' contracts are not provided, their status as a contractor suggests experience in manufacturing defense-related products. Companies specializing in propulsion and explosives often handle sensitive technologies requiring rigorous quality control and adherence to strict safety protocols. A deeper dive into their contract history, past performance reviews, and any reported issues would be necessary to fully assess their track record for this specific type of equipment.

How does the firm-fixed-price contract type impact cost control and risk for this project?

The firm-fixed-price (FFP) contract type places the primary responsibility for cost control and risk management on the contractor, Universal Propulsion Company Inc. Under an FFP agreement, the contractor is obligated to complete the work for a predetermined price, regardless of their actual costs. This incentivizes the contractor to be efficient and manage resources effectively to maximize profit. For the government, an FFP contract provides cost certainty, as the total expenditure is known upfront. However, it also means the contractor bears the risk of cost overruns; if their expenses exceed the contract price, their profit margin shrinks or they incur a loss. This structure is generally preferred for well-defined projects where technical requirements are clear and cost risks can be reasonably estimated.

What are the historical spending patterns for 'Digital Recovery Sequencers' or similar items by the Department of the Navy?

Historical spending patterns for 'Digital Recovery Sequencers' specifically are not readily available without access to detailed procurement databases. However, the Department of the Navy consistently invests in a wide array of specialized equipment for its operational needs, including electronics, ordnance, and systems related to naval warfare and readiness. Spending on niche items like this sequencer would likely fluctuate based on technological upgrades, operational requirements, and the lifecycle of existing equipment. Analyzing broader categories such as 'Ordnance, Bombs, Fuzes, and Components' or 'Electronic Components' within the Navy's budget could provide context, showing a sustained, albeit variable, expenditure on technologically advanced defense matériel.

Industry Classification

NAICS: Manufacturing › Other Chemical Product and Preparation Manufacturing › Explosives Manufacturing

Product/Service Code: AMMUNITION AND EXPLOSIVES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: RTX Corp (UEI: 001344142)

Address: 25401 N CENTRAL AVE, PHOENIX, AZ, 90

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $12,905,626

Exercised Options: $12,905,626

Current Obligation: $12,905,626

Contract Characteristics

Consolidated Contract: Yes

Cost or Pricing Data: YES

Timeline