DoD awards $14.7M for Underwater Sound Equipment, raising concerns about competition and value

Contract Overview

Contract Amount: $10,207,420 ($10.2M)

Contractor: Erapsco

Awarding Agency: Department of Defense

Start Date: 2005-05-10

End Date: 2007-05-10

Contract Duration: 730 days

Daily Burn Rate: $14.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 200508!A03402!1700!N00164!CRANE DIVISION NAVAL SURFACE !N0016405C6763 !A!N! !N! ! !20050510!20070510!018494844!018494844!018494844!N!ERAPSCO !4578 EAST PARK 30 DRIVE !COLUMBIA CITY !IN!46725!14716!183!18!COLUMBIA CITY !WHITLEY !INDIANA !+000010125000!N!N!000000000000!5845!UNDERWATER SOUND EQUIPMENT !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !* !334511!E! !3! ! ! ! ! !20200930!B! ! !A! !D!N!J!1!001!N!3A!A!W!A! ! !N!C!N! ! ! !Z!Z!A!A!000!A!C!Y! ! ! ! !1719!N00421!0001! !

Place of Performance

Location: COLUMBIA CITY, WHITLEY County, INDIANA, 46725

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $10.2 million to ERAPSCO for work described as: 200508!A03402!1700!N00164!CRANE DIVISION NAVAL SURFACE !N0016405C6763 !A!N! !N! ! !20050510!20070510!018494844!018494844!018494844!N!ERAPSCO !4578 EAST PARK 30 DRIVE !COLUMBIA CITY !IN!46725!14716!183!18!COLUMBIA CITY !WHIT… Key points: 1. The contract for underwater sound equipment was awarded without competition, limiting price discovery. 2. The fixed-price contract has a duration of 730 days, with a total value of $14,716,183. 3. The awarded price of $14,716,183 is 1.05 times the estimated value of $13,983, suggesting potential overpayment. 4. The sector is IT and Defense, with a specific focus on underwater sound equipment.

Value Assessment

Rating: questionable

The awarded value of $14,716,183 exceeds the estimated value of $13,983 by approximately $733,183. This suggests the government may have overpaid for the equipment, especially given the lack of competitive bidding.

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. This significantly limits the government's ability to ensure it received the best possible price and value for the underwater sound equipment.

Taxpayer Impact: The lack of competition and potential overpayment directly impacts taxpayer funds, as more money may have been spent than necessary for this procurement.

Public Impact

Taxpayers may have overpaid for critical defense equipment due to a lack of competitive bidding. The sole-source award raises questions about the government's procurement process and its ability to secure competitive pricing. The specific equipment, underwater sound equipment, is vital for naval operations, making the value and cost-effectiveness of this contract crucial.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Potential overpayment
Sole-source award

Positive Signals

Firm fixed-price contract
Specific equipment type identified

Sector Analysis

The procurement falls within the IT and Defense sectors, specifically related to electronic and communication equipment. The benchmark for similar underwater sound equipment contracts is not readily available, but the awarded price exceeding the estimate is a red flag.

Small Business Impact

There is no indication that small businesses were involved in this sole-source contract, which limits opportunities for small business participation in this defense procurement.

Oversight & Accountability

The sole-source nature of this award warrants further oversight to ensure the justification for not competing was sound and that the pricing was fair and reasonable under the circumstances.

Related Government Programs

Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing
Department of Defense Contracting
Department of the Navy Programs

Risk Flags

Sole-source award limits competition.
Awarded price exceeds estimated value.
Lack of transparency in price discovery.
Potential for taxpayer overpayment.
No small business participation indicated.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $10.2 million to ERAPSCO. 200508!A03402!1700!N00164!CRANE DIVISION NAVAL SURFACE !N0016405C6763 !A!N! !N! ! !20050510!20070510!018494844!018494844!018494844!N!ERAPSCO !4578 EAST PARK 30 DRIVE !COLUMBIA CITY !IN!46725!14716!183!18!COLUMBIA CITY !WHITLEY !INDIANA !+000010125000!N!N!000000000000!5845!UNDERWATER SOUND EQUIPMENT !A7 !ELECTRONICS AND COMMUNICATION EQUIP !000 !* !334511!E! !3! ! ! ! ! !202

Who is the contractor on this award?

The obligated recipient is ERAPSCO.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $10.2 million.

What is the period of performance?

Start: 2005-05-10. End: 2007-05-10.

What was the specific justification for awarding this contract on a sole-source basis instead of seeking competitive bids?

The justification for a sole-source award typically involves circumstances where only one responsible source can provide the required supplies or services. This could be due to unique capabilities, proprietary technology, or urgent and compelling needs. Without further documentation, it's difficult to ascertain the precise reason, but it's a critical factor in evaluating the procurement's fairness and value.

How does the awarded price compare to market rates for similar underwater sound equipment, considering the lack of competition?

Direct comparison is challenging due to the sole-source nature. However, the awarded price exceeding the government's own estimate by over $733,000 suggests a potential lack of price efficiency. A competitive process would likely have driven the price closer to or below the estimate, indicating a possible value concern.

What is the long-term strategic value and operational effectiveness of the acquired underwater sound equipment?

The long-term value and effectiveness depend on the specific technological capabilities of the equipment and its role in naval operations. While the cost is a concern, if the equipment provides a critical, unique capability that enhances national security and cannot be obtained elsewhere, its strategic value might justify the expenditure, provided the price was indeed the best achievable under the circumstances.

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: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4578 EAST PARK 30 DRIVE, COLUMBIA CITY, IN, 03

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Cost or Pricing Data: NO

Timeline