DoD spent $210M on AN/SSQ-53F SONOBUOYs, with ERAPSCO as the sole awardee under a limited competition

Contract Overview

Contract Amount: $209,728,100 ($209.7M)

Contractor: Erapsco

Awarding Agency: Department of Defense

Start Date: 2011-04-08

End Date: 2015-04-01

Contract Duration: 1,454 days

Daily Burn Rate: $144.2K/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: AN/SSQ-53F SONOBUOY

Place of Performance

Location: COLUMBIA CITY, WHITLEY County, INDIANA, 46725, UNITED STATES OF AMERICA

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $209.7 million to ERAPSCO for work described as: AN/SSQ-53F SONOBUOY Key points: 1. The contract value of $210M for sonobuoys represents a significant investment in naval acoustic detection capabilities. 2. ERAPSCO's sole award suggests potential market concentration or specific technical requirements that limited broader competition. 3. The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' indicates an initial broad solicitation followed by a narrowed down process. 4. The contract duration of 1454 days (approx. 4 years) points to a long-term need for these critical defense components. 5. The firm-fixed-price contract type aims to provide cost certainty for the government, shifting cost risk to the contractor. 6. The absence of small business set-aside flags indicates this contract was not specifically targeted for small business participation.

Value Assessment

Rating: fair

Benchmarking the value of $210M for AN/SSQ-53F SONOBUOYs is challenging without specific unit cost data or comparisons to similar procurements. However, the scale of the award suggests a substantial quantity of these specialized acoustic sensors. The firm-fixed-price nature provides budget predictability, but the lack of detailed cost breakdowns makes a precise value-for-money assessment difficult. Further analysis would require comparing unit prices to historical data or other competitive awards for similar sonobuoy systems.

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 the initial solicitation was broad, the final award was made to a single entity, ERAPSCO. This suggests that after an initial phase, only one source met the stringent requirements or was deemed capable of fulfilling the contract. The limited competition could potentially lead to higher prices than a fully open, multi-bidder scenario, as the government may have had less leverage in price negotiations.

Taxpayer Impact: For taxpayers, limited competition can mean less assurance of obtaining the best possible price. While the government likely sought the best value, the absence of multiple competing bids reduces the downward pressure on costs that can occur in a more open market.

Public Impact

The primary beneficiaries are the U.S. Navy's anti-submarine warfare (ASW) operations, enhancing their ability to detect underwater threats. The services delivered include the manufacturing and supply of AN/SSQ-53F SONOBUOYs, essential for maritime surveillance and intelligence gathering. The geographic impact is primarily global, supporting naval deployments in various theaters of operation, with manufacturing likely concentrated in Indiana. Workforce implications include skilled manufacturing jobs in the defense sector, particularly in areas related to electronics and acoustic systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may result in higher unit costs compared to a more robustly competed contract.
Lack of transparency in the 'exclusion of sources' phase makes it difficult to assess if all capable vendors were considered.
Sole awardee status for ERAPSCO could indicate a lack of robust market engagement or potential barriers to entry for other manufacturers.

Positive Signals

Firm-fixed-price contract provides cost certainty for the Department of Defense.
The AN/SSQ-53F is a critical component for naval acoustic detection, ensuring operational readiness.
The contract duration suggests a stable supply chain for essential defense materiel.

Sector Analysis

The procurement falls within the defense sector, specifically focusing on electronic and navigational equipment manufacturing (NAICS 334511). The market for sonobuoys is specialized, often dominated by a few key defense contractors capable of meeting stringent military specifications. The total addressable market for such systems is tied to global naval defense spending and the operational requirements of navies worldwide. This contract represents a significant portion of spending within this niche segment.

Small Business Impact

This contract does not appear to have a small business set-aside. The nature of advanced defense electronics manufacturing often favors larger, established companies with significant R&D capabilities and production capacity. There is no explicit information regarding subcontracting plans for small businesses, which could represent missed opportunities for smaller firms to participate in the defense supply chain.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Accountability measures are embedded in the firm-fixed-price structure, requiring ERAPSCO to deliver specified goods within the agreed budget. Transparency is limited by the 'exclusion of sources' aspect of the competition. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Naval Anti-Submarine Warfare Systems
Acoustic Detection Equipment
Defense Electronics Manufacturing
Naval Surveillance Technology
Military Sonar Systems

Risk Flags

Limited Competition
Sole Awardee
Potential for Price Escalation
Supply Chain Dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $209.7 million to ERAPSCO. AN/SSQ-53F SONOBUOY

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 $209.7 million.

What is the period of performance?

Start: 2011-04-08. End: 2015-04-01.

What is the historical spending trend for AN/SSQ-53F SONOBUOYs with ERAPSCO or its predecessors?

Analyzing historical spending on AN/SSQ-53F SONOBUOYs with ERAPSCO requires access to historical contract databases. Without specific prior contract data for this exact system and vendor, it's difficult to establish a precise trend. However, the current $210M award over approximately four years suggests a consistent, significant demand for this technology. If ERAPSCO has been a long-standing supplier, this award may represent a continuation or modernization of previous supply agreements. A deeper dive into historical contract awards for sonobuoys, particularly those from the Department of the Navy, would be necessary to identify patterns in spending, award types, and competition levels over time.

How does the unit cost of the AN/SSQ-53F SONOBUOY under this contract compare to similar systems procured by other allied nations?

Direct comparison of unit costs for the AN/SSQ-53F SONOBUOY under this $210M contract to systems procured by allied nations is challenging due to proprietary pricing, differing configurations, and varying procurement scales. The AN/SSQ-53F is a specific U.S. Navy system. Allied nations may procure different models or variants of sonobuoys, or systems with comparable but not identical functionalities. Furthermore, pricing is influenced by factors such as order volume, contract type (firm-fixed-price vs. cost-plus), and the level of competition. To conduct a meaningful comparison, one would need access to detailed pricing data for equivalent systems procured by other navies, ideally through open competitive processes, which is often not publicly available.

What specific technical or performance requirements led to the exclusion of other potential sources in the competition?

The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' designation implies that while the initial solicitation was broad, subsequent evaluation identified specific technical, performance, or capability requirements that only ERAPSCO demonstrably met. These could include adherence to stringent military specifications for acoustic performance, reliability under extreme conditions, compatibility with existing naval platforms and data processing systems, or specific manufacturing processes and quality control standards. The exclusion of other sources suggests that potential competitors may have failed to meet these critical criteria, lacked the necessary certifications, or were unable to provide evidence of meeting the required performance benchmarks for the AN/SSQ-53F system.

What are the potential risks associated with relying on a single contractor, ERAPSCO, for such a critical defense component?

Relying on a single contractor like ERAPSCO for critical defense components such as the AN/SSQ-53F SONOBUOY introduces several risks. Foremost is the potential for supply chain disruption; any issue at ERAPSCO (e.g., production problems, financial instability, geopolitical events) could halt delivery. This sole-source dependency also reduces the government's leverage in price negotiations, potentially leading to higher costs over the contract's life. Furthermore, it can stifle innovation, as there is less competitive pressure for the contractor to invest in developing next-generation technologies or improving existing ones. Finally, it limits the government's options if performance issues arise, making it difficult to switch to an alternative supplier.

How does the $210M contract value align with the overall budget allocated by the Department of the Navy for acoustic detection systems?

Determining how the $210M contract value aligns with the Department of the Navy's overall budget for acoustic detection systems requires detailed budget analysis, which is typically found in the Navy's annual budget requests and appropriations reports. This specific contract represents a significant investment in a particular type of acoustic sensor (sonobuoys). Without access to the Navy's specific line-item budgets for 'acoustic detection systems' or 'anti-submarine warfare (ASW) equipment,' it's impossible to state definitively whether $210M is a large or small portion of the total allocated funds. However, given the critical nature of ASW capabilities, it is plausible that such a sum represents a substantial commitment within that budget category.

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: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N0042110R1007

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

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, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $233,348,911

Exercised Options: $209,728,100

Current Obligation: $209,728,100

Contract Characteristics

Cost or Pricing Data: NO

Timeline