Navy Spends $21.7M on 500 Engineering Development Models, Lacking Competition
Contract Overview
Contract Amount: $21,754,744 ($21.8M)
Contractor: Erapsco
Awarding Agency: Department of Defense
Start Date: 2009-08-21
End Date: 2016-02-29
Contract Duration: 2,383 days
Daily Burn Rate: $9.1K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE
Sector: Defense
Official Description: ENGINEERING DEVELOPMENT MODEL QTY 500
Place of Performance
Location: COLUMBIA CITY, WHITLEY County, INDIANA, 46725
State: Indiana Government Spending
Plain-Language Summary
Department of Defense obligated $21.8 million to ERAPSCO for work described as: ENGINEERING DEVELOPMENT MODEL QTY 500 Key points: 1. Significant expenditure on specialized engineering models. 2. Lack of competition raises concerns about price discovery. 3. Contract type (Cost Plus Incentive Fee) can lead to cost overruns. 4. Long contract duration suggests a complex or evolving need.
Value Assessment
Rating: questionable
The total award of $21.7M for 500 units averages to $43,509 per unit. Without comparable contract data or a competitive bidding process, it is difficult to assess if this pricing is reasonable.
Cost Per Unit: $43,509
Competition Analysis
Competition Level: sole-source
The contract was not competed, indicating a sole-source or limited competition scenario. This lack of competition likely resulted in higher prices than could have been achieved through a competitive process.
Taxpayer Impact: Taxpayers may have overpaid due to the absence of competitive pressure to reduce costs.
Public Impact
Procurement of specialized engineering models for defense applications. Potential for inflated costs due to non-competitive award. Long-term contract may indicate ongoing reliance on this specific technology or supplier.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Cost-plus contract type
- Long contract duration
- High per-unit cost
Positive Signals
- Acquisition of necessary engineering development models
Sector Analysis
The Department of the Navy's spending in the Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing sector is substantial. Benchmarks for similar engineering development models are difficult to ascertain without competitive data.
Small Business Impact
There is no indication that small businesses were involved in this contract, either as prime contractors or subcontractors. Further analysis would be needed to determine potential opportunities for small business participation.
Oversight & Accountability
The non-competitive award raises questions about the oversight of the procurement process. Robust oversight is needed to ensure fair pricing and maximize taxpayer value, especially in sole-source situations.
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
- Lack of competition
- Potential for cost overruns due to contract type
- High per-unit cost without clear justification
- Long contract duration without clear performance metrics
- Limited transparency on sole-source justification
Tags
search-detection-navigation-guidance-aer, department-of-defense, in, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $21.8 million to ERAPSCO. ENGINEERING DEVELOPMENT MODEL QTY 500
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 $21.8 million.
What is the period of performance?
Start: 2009-08-21. End: 2016-02-29.
What was the justification for not competing this contract, and was a market research conducted to ensure no other vendors could provide these models?
The justification for not competing this contract is not provided in the data. Typically, sole-source awards require extensive market research to demonstrate that only one vendor can meet the requirement. Without this information, it's impossible to assess if alternatives were explored or if the government received the best possible value.
How does the per-unit cost of these engineering development models compare to industry benchmarks for similar items, considering the cost-plus incentive fee structure?
The per-unit cost of $43,509 is high, but a direct comparison is challenging without specific technical details of the models and industry benchmarks. The cost-plus incentive fee structure, while intended to incentivize performance, can also lead to higher costs if not carefully managed and if the incentive targets are not sufficiently stringent.
What is the long-term strategic value of these specific engineering development models to the Department of the Navy, and how does this justify the significant investment?
The long-term strategic value is not detailed in the provided data. These models likely support critical naval capabilities in search, detection, or navigation systems. However, the justification for the significant investment, especially without competition, would need to be clearly articulated in program documentation to ensure alignment with strategic defense objectives.
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: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: N0042108R0044
Offers Received: 1
Pricing Type: COST PLUS INCENTIVE FEE (V)
Evaluated Preference: NONE
Contractor Details
Address: 4868 EAST PARK 30 DR, COLUMBIA CITY, IN, 46725
Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership
Financial Breakdown
Contract Ceiling: $59,233,502
Exercised Options: $22,136,671
Current Obligation: $21,754,744
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2009-08-21
Current End Date: 2016-02-29
Potential End Date: 2016-02-29 00:00:00
Last Modified: 2018-07-18
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