Department of the Navy awarded $20.2M for AN/SSQ-101A systems, with limited competition

Contract Overview

Contract Amount: $20,231,501 ($20.2M)

Contractor: Erapsco

Awarding Agency: Department of Defense

Start Date: 2012-04-26

End Date: 2014-11-13

Contract Duration: 931 days

Daily Burn Rate: $21.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: FY12-13 AN/SSQ-101A

Place of Performance

Location: COLUMBIA CITY, WHITLEY County, INDIANA, 46725

State: Indiana Government Spending

Plain-Language Summary

Department of Defense obligated $20.2 million to ERAPSCO for work described as: FY12-13 AN/SSQ-101A Key points: 1. The contract value of $20.2M for AN/SSQ-101A systems represents a significant investment in naval technology. 2. The "NOT COMPETED" award status suggests potential limitations in market exploration and price discovery. 3. The duration of 931 days indicates a substantial project timeline, requiring careful performance monitoring. 4. The firm fixed-price contract type aims to control costs, but the lack of competition may have inflated the price. 5. The award to ERAPSCO for Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing highlights a specialized sector. 6. The contract's origin in FY12-13 suggests it may be part of a longer-term procurement strategy or modernization effort.

Value Assessment

Rating: fair

Benchmarking the value of this $20.2M contract is challenging without more detailed cost breakdowns or comparisons to similar systems procured through competitive means. The firm fixed-price structure is a positive indicator for cost control, but the lack of competition raises concerns about whether the government secured the best possible price. Without competitive bids, it's difficult to assess if the pricing is aligned with market rates or if it reflects a premium due to limited vendor options.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under a 'NOT COMPETED' status, indicating that a full and open competition was not conducted. This typically occurs when only one source is capable of meeting the requirement, or in specific circumstances like urgent needs or follow-on work. The lack of multiple bidders means that the government did not benefit from the price reductions and innovation that typically arise from a competitive bidding process.

Taxpayer Impact: Taxpayers may have paid a higher price for these systems due to the absence of competitive pressure. The government's ability to negotiate favorable terms is diminished when only one vendor is considered.

Public Impact

Naval forces benefit from the acquisition of AN/SSQ-101A systems, likely enhancing their operational capabilities in search, detection, and navigation. The services delivered are the provision of specialized electronic systems crucial for maritime operations. The geographic impact is primarily within naval installations and deployed fleets, with potential implications for shipbuilding and maintenance hubs. Workforce implications may include specialized technicians for installation, maintenance, and operation of these systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Limited transparency in the procurement process due to sole-source award.
Potential for vendor lock-in if this is a proprietary system.
Performance risks associated with a single supplier's ability to deliver on time and to specification.

Positive Signals

Firm fixed-price contract type helps to cap costs.
Award to a specialized manufacturer suggests expertise in the required technology.
The contract duration indicates a commitment to fulfilling a specific operational need.

Sector Analysis

The contract falls within the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' sector, a specialized area of defense manufacturing. This industry is characterized by high technological barriers to entry and often involves long development cycles and significant R&D investment. Comparable spending benchmarks are difficult to establish without more specific system details, but investments in advanced sensor and navigation technology for defense applications are typically substantial.

Small Business Impact

There is no indication from the provided data that this contract involved small business set-asides or subcontracting opportunities. The 'NOT COMPETED' status and the specialized nature of the equipment suggest it may have been awarded to a large, established defense contractor. Further investigation would be needed to determine if any small business participation was mandated or occurred voluntarily.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Navy's contracting and program management offices. Accountability measures would be defined by the contract terms, including delivery schedules and performance specifications. Transparency is limited by the sole-source nature of the award. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse related to the contract.

Related Government Programs

Naval Sonar Systems Procurement
Defense Electronic Systems Manufacturing
Maritime Navigation and Guidance Technology
Search and Detection Equipment Contracts

Risk Flags

Sole-source award may result in higher costs.
Lack of competition limits price discovery.
Potential for vendor lock-in.
Limited public information on system specifics and performance.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.2 million to ERAPSCO. FY12-13 AN/SSQ-101A

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 $20.2 million.

What is the period of performance?

Start: 2012-04-26. End: 2014-11-13.

What is the specific function and technological capability of the AN/SSQ-101A system?

The AN/SSQ-101A is a component within the AN/SSQ-101 family of systems, which are typically related to acoustic systems or sonar technology used for underwater detection and navigation. These systems are critical for naval operations, enabling submarines and surface vessels to detect, classify, and track underwater threats or targets. The specific capabilities would include advanced signal processing, target identification, and environmental data analysis to support mission objectives in complex acoustic environments. The "Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing" NAICS code further supports its role in sophisticated maritime sensing and guidance.

Why was this contract not competed, and what were the justifications provided?

The data indicates the contract was 'NOT COMPETED,' which implies that a justification for other than full and open competition was likely required and approved. Common reasons for sole-source awards include that only one responsible source is available to meet the agency's needs, or that the agency received proposals from only one offeror. For defense systems, this could be due to proprietary technology, unique manufacturing capabilities, or the need for compatibility with existing platforms. Without access to the specific contract file or justification documents, the precise reasons remain unknown, but it suggests a determination that competition was not feasible or practical at the time of award.

How does the $20.2 million award compare to historical spending on similar systems by the Department of the Navy?

Comparing this $20.2 million award to historical spending on similar systems requires access to a broader dataset of naval procurements for acoustic or sonar systems. However, given the specialized nature of naval technology and the typical costs associated with advanced defense electronics, this figure appears to be within a plausible range for a significant system acquisition or upgrade. Without specific details on the quantity of units procured or the system's complexity, a direct comparison is difficult. It would be beneficial to analyze trends in sonar system procurement over several fiscal years to identify if this award represents an increase, decrease, or stable level of investment in this capability.

What are the potential risks associated with a sole-source award for critical defense equipment?

Sole-source awards for critical defense equipment carry several potential risks. Firstly, the absence of competition can lead to higher prices than might be achieved through a competitive process, resulting in less value for taxpayer money. Secondly, it can reduce the incentive for the sole-source provider to innovate or improve efficiency, as they face less market pressure. Thirdly, there's a risk of vendor lock-in, where the government becomes dependent on a single supplier, potentially limiting future options or increasing costs for sustainment and upgrades. Finally, a sole-source award can sometimes indicate a lack of robust market research or planning, potentially missing opportunities for more cost-effective solutions.

What is the track record of ERAPSCO as a contractor for the Department of the Navy or other government agencies?

ERAPSCO (Electronic Resources and Procurement Services Organization) is a contracting entity that has historically served the Department of the Navy and other defense agencies. Its role often involves facilitating the procurement of various electronic and technical equipment. Analyzing ERAPSCO's broader contract history, including past performance ratings, on-time delivery records, and compliance with contract terms across multiple awards, would provide a more comprehensive understanding of their reliability and effectiveness as a government contractor. Without specific performance data for this particular contract or ERAPSCO's overall portfolio, it's difficult to definitively assess their track record.

What is the expected lifespan and obsolescence risk for the AN/SSQ-101A system?

The expected lifespan and obsolescence risk for the AN/SSQ-101A system are critical factors for long-term naval readiness and investment planning. Systems like these, particularly in the defense sector, are often designed with a projected service life of 10-20 years or more, but this is highly dependent on the specific technology and its upgradeability. Obsolescence risk is managed through planned sustainment, modernization programs, and proactive technology refresh strategies. Given the contract award date of 2012, the system is likely well into its operational life. The Department of the Navy would have strategies in place to monitor technological advancements and plan for potential upgrades or replacements to mitigate obsolescence.

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

Solicitation ID: N0042110R1054

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4868 EAST PARK 30 DR, COLUMBIA CITY, IN, 03

Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $26,234,378

Exercised Options: $20,231,501

Current Obligation: $20,231,501

Contract Characteristics

Cost or Pricing Data: YES

Timeline