DoD awards $34.6M for MK88 MOD4 Gun Mounts to MSI-DEFENCE SYSTEMS US, LLC under sole-source contract

Contract Overview

Contract Amount: $34,586,649 ($34.6M)

Contractor: Msi-Defence Systems US, LLC

Awarding Agency: Department of Defense

Start Date: 2025-09-30

End Date: 2026-12-30

Contract Duration: 456 days

Daily Burn Rate: $75.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: MK88 MOD4 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 $34.6 million to MSI-DEFENCE SYSTEMS US, LLC for work described as: MK88 MOD4 GUN MOUNT Key points: 1. Contract awarded on a sole-source basis, raising questions about potential price overruns and limited market engagement. 2. The firm-fixed-price contract structure aims to control costs, but the lack of competition may hinder optimal value. 3. Performance period extends over two years, suggesting a need for ongoing supply and potential for future contract modifications. 4. The award is for Small Arms, Ordnance, and Ordnance Accessories Manufacturing, a specialized defense sector. 5. Geographic focus on South Carolina for contract performance. 6. No indication of small business subcontracting, potentially limiting broader economic impact.

Value Assessment

Rating: questionable

Benchmarking the value of this $34.6 million contract is challenging due to its sole-source nature. Without competitive bids, it's difficult to ascertain if MSI-DEFENCE SYSTEMS US, LLC's pricing reflects fair market value. The fixed-price structure provides some cost certainty, but the absence of competition means taxpayers may not be benefiting from the most economical pricing achievable through a robust bidding process. Further analysis would require access to historical pricing for similar systems or internal cost data from the contractor.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one bidder was solicited. This approach bypasses the standard competitive procurement process, which typically involves multiple vendors vying for the contract. The lack of competition limits the government's ability to leverage market forces to achieve the best possible price and terms. It suggests that either only one vendor possesses the required capabilities, or the circumstances did not allow for a full and open competition.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to drive down prices. This limits the government's purchasing power and potentially diverts funds that could be used for other critical needs.

Public Impact

The primary beneficiary is the Department of the Navy, ensuring the supply of essential gun mounts for naval operations. The contract supports the production and delivery of MK88 MOD4 Gun Mounts, critical components for naval platforms. Performance is centered in South Carolina, potentially creating or sustaining jobs within the state's defense manufacturing sector. The award contributes to the readiness and operational capability of the U.S. Navy's fleet.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potentially increases costs for taxpayers.
Lack of competition may indicate a concentrated market or insufficient outreach for potential bidders.
Absence of small business set-aside or subcontracting requirements could limit broader economic participation.
Contract duration of 456 days (approx. 1.25 years) is relatively short, raising questions about long-term strategic sourcing.
Specific details on the 'MOD4' upgrade are not provided, making it difficult to assess the value of the specific item being procured.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Award to a known entity (MSI-DEFENCE SYSTEMS US, LLC) suggests a potentially established relationship or specialized capability.
Contract supports a critical defense need for the Department of the Navy.
Performance location in South Carolina aligns with domestic manufacturing objectives.

Sector Analysis

The defense manufacturing sector, particularly for ordnance and weapon systems, is characterized by high barriers to entry, specialized technical expertise, and significant government oversight. Contracts like this are crucial for maintaining the technological edge and operational readiness of military forces. The market for such specialized components is often limited to a few key players, which can sometimes lead to sole-source or limited-competition procurements. Benchmarking against similar gun mount procurements is difficult without more specific technical details and competitive data.

Small Business Impact

This contract does not appear to include a small business set-aside, nor is there explicit mention of subcontracting requirements for small businesses. This means that the primary contractor, MSI-DEFENCE SYSTEMS US, LLC, is not mandated to engage small businesses for a portion of the work. Consequently, the direct economic benefit to the small business ecosystem from this specific award may be limited, unless the prime contractor voluntarily incorporates small businesses into its supply chain.

Oversight & Accountability

Oversight for this contract will primarily 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 the specified goods within the agreed-upon price. Transparency is limited due to the sole-source nature of the award, as the justification for not competing is not publicly detailed. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Naval Ordnance Procurement
Small Arms Manufacturing
Defense Weapon Systems
Ordnance Accessories
Sole-Source Defense Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for price escalation
Limited small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $34.6 million to MSI-DEFENCE SYSTEMS US, LLC. MK88 MOD4 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 $34.6 million.

What is the period of performance?

Start: 2025-09-30. End: 2026-12-30.

What is the specific technical capability or justification that led to this contract being sole-sourced?

The provided data does not specify the technical justification for the sole-source award. Typically, sole-sourcing is employed when only one responsible source can provide the required supplies or services, such as when the item is unique, proprietary, or requires specialized expertise not available from multiple vendors. For the MK88 MOD4 Gun Mount, this could relate to unique design, existing integration with specific naval platforms, or a limited number of manufacturers possessing the necessary certifications and production capabilities. A full justification would likely be documented within the contract's procurement file.

How does the $34.6 million award compare to historical spending on similar gun mounts or ordnance systems?

Direct comparison of the $34.6 million award to historical spending on 'similar' gun mounts is difficult without more specific technical details about the MK88 MOD4 and its intended application. The term 'gun mount' can encompass a wide range of systems, from small caliber to large caliber, and their complexity and cost vary significantly. Furthermore, the 'MOD4' designation suggests a specific iteration or upgrade, which may have unique cost drivers. Without access to detailed historical procurement data for comparable systems, or information on the quantity of units being procured under this contract, a precise benchmark is not feasible.

What are the key performance indicators (KPIs) or milestones associated with this contract, and how will performance be measured?

The provided data does not detail the specific Key Performance Indicators (KPIs) or milestones for this contract. However, as a firm-fixed-price contract for manufactured goods, performance measurement would typically focus on adherence to the delivery schedule, quality of the delivered MK88 MOD4 Gun Mounts (meeting technical specifications and standards), and compliance with contractual terms. The Department of the Navy would likely have inspection and acceptance procedures in place to verify the quality and quantity of the delivered items before final payment is made. Contract clauses would outline remedies for non-performance or defective products.

What is the track record of MSI-DEFENCE SYSTEMS US, LLC in delivering similar defense contracts, particularly to the Department of the Navy?

Information regarding the specific track record of MSI-DEFENCE SYSTEMS US, LLC in delivering similar defense contracts, especially to the Department of the Navy, is not provided in the data. A comprehensive assessment would require reviewing past performance evaluations, contract history, and any reported issues or successes with previous government awards. Companies in the defense sector often have a history of supplying specific types of equipment, and their reliability can be gauged through sources like the Federal Procurement Data System (FPDS) or contractor performance databases, which are not accessible here.

What is the potential risk associated with relying on a single supplier for this critical defense component?

Relying on a single supplier for critical defense components like the MK88 MOD4 Gun Mount presents several risks. Firstly, it creates a dependency that can be exploited by the supplier, potentially leading to price increases or unfavorable terms in future negotiations. Secondly, it limits the government's flexibility if the supplier experiences production issues, financial instability, or goes out of business, which could disrupt supply chains and impact military readiness. Thirdly, the lack of competition stifles innovation and potentially prevents the adoption of more advanced or cost-effective solutions that might emerge from a competitive market.

Are there any plans for future competition or transition to a competitive contract for this type of gun mount?

The provided data does not indicate any immediate plans for future competition or transition to a competitive contract for the MK88 MOD4 Gun Mount. The current award is a definitive contract with an end date of December 30, 2026. Whether the Department of the Navy intends to compete this requirement in the future will likely depend on market conditions, the availability of alternative suppliers, and strategic decisions regarding the long-term sustainment and modernization of naval platforms. A competitive strategy might be considered if the market evolves or if the current sole-source justification is no longer valid.

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: N0017425R0051

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1298 GALLERIA BLVD, 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, Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $34,586,649

Exercised Options: $34,586,649

Current Obligation: $34,586,649

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline