DoD awards $23.5M for MK 88 MOD 4 GUN MOUNT, a sole-source procurement

Contract Overview

Contract Amount: $23,463,149 ($23.5M)

Contractor: Msi-Defence Systems US, LLC

Awarding Agency: Department of Defense

Start Date: 2023-09-28

End Date: 2025-05-09

Contract Duration: 589 days

Daily Burn Rate: $39.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MK 88 MOD 4 GUN MOUNT

Place of Performance

Location: ROCK HILL, YORK County, SOUTH CAROLINA, 29730

State: South Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $23.5 million to MSI-DEFENCE SYSTEMS US, LLC for work described as: MK 88 MOD 4 GUN MOUNT Key points: 1. The contract value represents a significant investment in specialized ordnance. 2. Sole-source procurement raises questions about potential price inflation and limited market engagement. 3. The fixed-price contract structure shifts some performance risk to the contractor. 4. This award falls within the broader category of small arms and ordnance manufacturing. 5. The duration of the contract suggests a sustained need for these specific mounts.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and specialized product. Without competitive bids, it's difficult to ascertain if the $23.5 million represents a fair market price. The fixed-price structure offers some cost certainty, but the lack of competition prevents a direct comparison to similar recent procurements. Further analysis would require access to historical pricing data for this specific item or comparable mounts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, MSI-DEFENCE SYSTEMS US, LLC, was solicited. This approach bypasses the standard competitive bidding process, which typically involves multiple companies vying for the contract. While sole-source awards can be justified in specific circumstances (e.g., unique capabilities, urgent needs), they limit price discovery and potentially lead to higher costs for the government.

Taxpayer Impact: Sole-source awards mean taxpayers may not benefit from the cost savings typically achieved through competitive bidding, potentially leading to a higher overall expenditure for this procurement.

Public Impact

The primary beneficiary is the Department of the Navy, which will receive the MK 88 MOD 4 GUN MOUNTS. These mounts are critical components for naval operations, likely supporting defensive or offensive weapon systems. The contract is being performed in South Carolina, potentially creating or sustaining jobs in the region's defense manufacturing sector. The award supports the defense industrial base, specifically in the area of ordnance manufacturing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in inflated pricing.
Sole-source award limits transparency in price justification.
Potential for vendor lock-in due to specialized nature of the product.

Positive Signals

Fixed-price contract provides cost certainty for the government.
Contract supports a specific, likely critical, defense capability.
Awarding to a known entity may leverage existing expertise.

Sector Analysis

The contract falls within the defense sector, specifically the manufacturing of ordnance and related accessories. This sub-sector is characterized by high barriers to entry, specialized technical expertise, and often long-standing relationships between government agencies and contractors. The market size for such specialized components is typically driven by defense budgets and strategic priorities. Comparable spending benchmarks would likely be found within other naval armament procurements.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. The prime contractor, MSI-DEFENCE SYSTEMS US, LLC, is likely a larger entity. This sole-source award does not appear to directly benefit the small business ecosystem within this specific procurement, though the prime contractor may engage small businesses in its broader supply chain.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and financial management systems. Given it's a definitive contract, standard oversight mechanisms for contract performance, invoicing, and delivery would apply. Transparency is limited due to the sole-source nature. The Inspector General's office within the DoD would have jurisdiction to investigate any potential fraud, waste, or abuse related to this procurement.

Related Government Programs

Naval Ordnance Procurement
Defense Manufacturing Contracts
Sole-Source Defense Acquisitions
Small Arms and Ordnance Manufacturing

Risk Flags

Sole-source procurement
Lack of competition
Potential for price escalation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $23.5 million to MSI-DEFENCE SYSTEMS US, LLC. MK 88 MOD 4 GUN MOUNT

Who is the contractor on this award?

The obligated recipient is MSI-DEFENCE SYSTEMS US, 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 $23.5 million.

What is the period of performance?

Start: 2023-09-28. End: 2025-05-09.

What is the specific operational purpose of the MK 88 MOD 4 GUN MOUNT?

The MK 88 MOD 4 GUN MOUNT is a specialized piece of equipment used in naval applications. While the exact specifications are often classified or proprietary, gun mounts are typically designed to support and orient various types of weaponry, such as cannons or machine guns, on naval vessels. The 'MOD 4' designation suggests it is a fourth iteration or modification of a previous design, implying improvements or adaptations based on operational feedback or technological advancements. Its primary function is to ensure the stable and accurate deployment of the weapon system it supports, contributing to the vessel's combat effectiveness or defensive capabilities.

Why was this contract awarded on a sole-source basis instead of through full and open competition?

Sole-source awards are typically justified when only one responsible source is capable of providing the required supplies or services. This can occur due to unique technical capabilities, proprietary technology, urgent and compelling needs where competition is not feasible, or when a specific system requires parts or support only available from the original manufacturer. For the MK 88 MOD 4 GUN MOUNT, it is plausible that MSI-DEFENCE SYSTEMS US, LLC possesses exclusive rights, patents, or specialized manufacturing processes essential for its production. Without further documentation from the agency justifying the sole-source determination, it remains difficult to definitively state the exact reason, but it implies a lack of viable alternatives in the market.

How does the firm fixed-price contract type impact the government's financial risk?

A Firm Fixed Price (FFP) contract is generally favorable to the government in terms of financial risk. Under an FFP agreement, the contractor agrees to a set price for the work or product, regardless of the actual costs incurred. This means the contractor assumes the primary responsibility for any cost overruns. The government's financial obligation is fixed at the outset, providing budget certainty. However, this also means the government may not benefit if the contractor's actual costs are significantly lower than anticipated. The contractor's profit margin is built into the fixed price, and they are incentivized to manage their costs efficiently to maximize profit.

What is the historical spending trend for MK 88 MOD 4 GUN MOUNTS or similar items by the Department of Defense?

Analyzing historical spending trends for highly specific items like the MK 88 MOD 4 GUN MOUNT can be challenging without direct access to detailed procurement databases. However, general trends in defense spending indicate consistent investment in naval ordnance and weapon systems. The Department of Defense frequently procures gun mounts, turrets, and related hardware to maintain and modernize its fleet. Spending in this category is influenced by shipbuilding schedules, modernization programs, and geopolitical security requirements. Given this is a sole-source award for a specific modification, it suggests a targeted need rather than a broad, recurring requirement that might show up as large, consistent annual spending across multiple vendors.

What are the potential risks associated with relying on a single contractor for critical defense components?

Relying on a single contractor for critical defense components, as is the case with this sole-source award, presents several risks. Firstly, it can lead to a lack of competitive pressure, potentially resulting in higher prices over time and reduced incentives for innovation. Secondly, it creates a dependency on that specific contractor; any disruption to their operations—due to financial instability, production issues, geopolitical factors, or even natural disasters—could directly impact the government's ability to acquire necessary components. This dependency can also lead to vendor lock-in, making it difficult and costly to switch to alternative suppliers in the future, even if desired.

Industry Classification

NAICS: Manufacturing › Other Fabricated Metal Product Manufacturing › Small Arms, Ordnance, and Ordnance Accessories Manufacturing

Product/Service Code: WEAPONS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: N0017423R0001

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1298 GALLERIA BOULEVARD, ROCK HILL, SC, 29730

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $23,463,149

Exercised Options: $23,463,149

Current Obligation: $23,463,149

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline