DoD's $26.2M contract for measuring devices awarded to DCX-CHOL ENTERPRISES, INC. after source exclusion

Contract Overview

Contract Amount: $26,225,569 ($26.2M)

Contractor: Dcx-Chol Enterprises, Inc.

Awarding Agency: Department of Defense

Start Date: 2020-11-25

End Date: 2027-03-26

Contract Duration: 2,312 days

Daily Burn Rate: $11.3K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 8

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: VLS MEB HEB

Place of Performance

Location: LOS ANGELES, LOS ANGELES County, CALIFORNIA, 90061

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $26.2 million to DCX-CHOL ENTERPRISES, INC. for work described as: VLS MEB HEB Key points: 1. The contract's value of $26.2 million over approximately 6.4 years suggests a significant investment in specialized measuring and controlling devices. 2. Awarded under 'Full and Open Competition After Exclusion of Sources,' this indicates a specific justification for limiting the initial pool of bidders. 3. The 'Other Measuring and Controlling Device Manufacturing' NAICS code points to a niche market, potentially with limited suppliers. 4. The firm fixed-price contract type aims to transfer risk to the contractor, but requires careful monitoring of scope and deliverables. 5. The duration of 2312 days (over 6 years) suggests a long-term need for these devices, implying critical operational reliance. 6. The absence of small business set-aside flags indicates this contract was not specifically targeted to boost small business participation.

Value Assessment

Rating: fair

Benchmarking the value of this $26.2 million contract is challenging without specific details on the measuring and controlling devices procured. However, the duration of over six years suggests a substantial, long-term requirement. The firm fixed-price nature implies that the contractor bears the risk of cost overruns, which can be a positive indicator of value if the contractor is experienced and efficient. Further analysis would require understanding the specific technical requirements and comparing pricing to similar, albeit likely unique, device procurements.

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 competition was sought, certain sources were initially excluded. This suggests a specific rationale, possibly related to proprietary technology, unique capabilities, or prior performance, that justified narrowing the competitive field. With 8 bidders, the competition level appears moderate, which could lead to reasonable price discovery, but the exclusion of sources might limit the full benefit of open competition.

Taxpayer Impact: The exclusion of sources may have limited the number of potential bidders, potentially impacting the lowest possible price achievable for taxpayers. However, moderate competition among the remaining bidders likely still provided some price leverage.

Public Impact

The Department of Defense (Navy) is the primary beneficiary, acquiring specialized measuring and controlling devices essential for its operations. The contract supports the manufacturing and delivery of 'Other Measuring and Controlling Devices,' crucial for various defense applications. The geographic impact is primarily linked to the contractor's location in California, but the devices will likely be deployed across naval facilities. The contract implies a need for skilled labor in manufacturing and quality control within the specialized device sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'Exclusion of Sources' aspect of the competition warrants scrutiny to ensure it was fully justified and did not unduly restrict competition.
The long contract duration (over 6 years) increases the risk of technological obsolescence or changing operational requirements.
Without specific details on the devices, it's difficult to assess if the fixed price adequately covers the complexity and potential risks.
The lack of small business participation noted in the data could be a missed opportunity for economic development.

Positive Signals

The firm fixed-price contract type shifts cost overrun risk to the contractor, potentially benefiting the government.
The moderate number of bidders (8) suggests some level of market interest and potential for competitive pricing.
The contract is awarded to DCX-CHOL ENTERPRISES, INC., implying they possess the necessary capabilities for these specialized devices.
The contract is for a definitive contract, suggesting a clear scope and defined deliverables.

Sector Analysis

The 'Other Measuring and Controlling Device Manufacturing' sector (NAICS 334519) is a specialized segment within the broader manufacturing industry. This sector produces a wide range of instruments and devices for measurement, control, and analysis. Federal spending in this area often supports defense, research, and critical infrastructure. The market size can be difficult to pinpoint due to its niche nature, but it is characterized by high technical requirements and often involves proprietary technologies. This contract fits within the defense sector's need for advanced instrumentation.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This means that the competition was open to all eligible businesses, including large corporations. While this may lead to greater efficiency and potentially lower costs due to economies of scale, it also means that small businesses may not have had a direct opportunity to compete for this specific award. Subcontracting opportunities for small businesses are not explicitly detailed but could arise if the prime contractor chooses to engage them.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. Accountability measures are embedded in the firm fixed-price contract terms, requiring the contractor to deliver specified goods within the agreed price. Transparency is generally facilitated through contract databases like FPDS, where basic award information is published. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract.

Related Government Programs

Defense Instrumentation Procurement
Naval Technology Development
Advanced Manufacturing Contracts
Measuring and Control Systems
Federal Supply Schedule Contracts (if applicable)
Department of Defense Research and Development

Risk Flags

Potential for technological obsolescence due to long contract duration.
Justification for 'Exclusion of Sources' requires further review.
Limited visibility into specific device capabilities and applications.
Lack of explicit small business participation noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $26.2 million to DCX-CHOL ENTERPRISES, INC.. VLS MEB HEB

Who is the contractor on this award?

The obligated recipient is DCX-CHOL ENTERPRISES, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Navy).

What is the total obligated amount?

The obligated amount is $26.2 million.

What is the period of performance?

Start: 2020-11-25. End: 2027-03-26.

What specific types of measuring and controlling devices are being procured under this contract, and what are their intended applications within the Department of Defense?

The contract falls under NAICS code 334519, 'Other Measuring and Controlling Device Manufacturing.' This broad category encompasses a wide array of devices, including but not limited to sensors, gauges, testing equipment, and control systems. Without more specific contract line item details, the exact nature of the devices remains unspecified. However, given the Department of the Navy as the awarding agency, these devices likely support naval operations, potentially for navigation, environmental monitoring, weapons systems, or platform maintenance. Their applications could range from critical shipboard systems to shore-based testing and research facilities, underscoring the need for reliable and precise instrumentation in defense contexts.

What was the justification for excluding certain sources prior to the 'Full and Open Competition After Exclusion of Sources' award?

The designation 'Full and Open Competition After Exclusion of Sources' implies that a preliminary determination was made to limit the initial pool of potential offerors. The specific justification for this exclusion is not provided in the summary data. Common reasons for such exclusions include the need for proprietary technology, unique capabilities possessed by only a few firms, or prior successful performance on related systems that makes a specific contractor the only viable option. The Department of Defense would typically document this justification in the contract file, often requiring approval from higher authorities to ensure fair and transparent procurement practices, even within a narrowed field.

How does the contract's firm fixed-price (FFP) structure align with the potential complexity and risks associated with specialized measuring and controlling devices?

A firm fixed-price (FFP) contract places the primary responsibility for cost overruns on the contractor. This structure is generally favored when the scope of work is well-defined and the risks are manageable. For specialized measuring and controlling devices, the complexity can vary significantly. If the devices are highly customized or involve cutting-edge technology, there might be inherent technical risks that could lead to cost increases. The FFP award suggests that the Navy assessed these risks as manageable or that DCX-CHOL ENTERPRISES, INC. demonstrated a strong ability to control costs within their proposed price. However, ongoing oversight is crucial to ensure the contractor is not compromising quality or scope to meet the fixed price.

What is the typical spending range for 'Other Measuring and Controlling Device Manufacturing' (NAICS 334519) within the federal government, and how does this $26.2M contract compare?

Federal spending on NAICS 334519 can fluctuate significantly year over year, driven by specific agency needs, particularly within defense and research sectors. While precise aggregate figures for this specific NAICS code across the entire government are not readily available in summary data, it represents a niche but critical area. Contracts in this category can range from tens of thousands for individual components to tens of millions for complex systems. A $26.2 million contract over approximately 6.4 years, awarded by the Department of Defense, appears to be a substantial procurement within this sector, indicating a significant requirement for specialized devices rather than routine or commodity items. It suggests a major program or a critical operational need.

Given the contract duration of over six years, what are the potential implications for technological relevance and future upgrades?

A contract duration of over six years (2312 days) for specialized devices presents a notable risk of technological obsolescence. The pace of technological advancement, particularly in areas like sensors and control systems, can be rapid. If the devices procured are based on older specifications or lack modularity for upgrades, they may become outdated before the contract term concludes. This necessitates careful contract management, including potential provisions for technology refresh or incorporating future-proof designs. The Navy's decision to commit to such a long duration suggests either a belief in the longevity of the required technology or a strategic plan to manage upgrades separately, perhaps through future contract actions.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Other Measuring and Controlling Device Manufacturing

Product/Service Code: ELECTRICAL/ELECTRONIC EQPT COMPNTS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: N6339420R0033

Offers Received: 8

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 12831 S FIGUROA ST, LOS ANGELES, CA, 90061

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $26,225,569

Exercised Options: $26,225,569

Current Obligation: $26,225,569

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline