DoD's $14.7M contract for flight deck lights saw limited competition, raising value concerns

Contract Overview

Contract Amount: $14,689,466 ($14.7M)

Contractor: Temeku Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2009-08-19

End Date: 2015-10-29

Contract Duration: 2,262 days

Daily Burn Rate: $6.5K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: FLIGHT DECK LIGHTS

Place of Performance

Location: HERNDON, FAIRFAX County, VIRGINIA, 20170

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $14.7 million to TEMEKU TECHNOLOGIES, INC. for work described as: FLIGHT DECK LIGHTS Key points: 1. The contract utilized a Cost Plus Fixed Fee (CPFF) pricing structure, which can lead to cost overruns if not closely managed. 2. With only 3 bidders, the competition level was moderate, potentially impacting price negotiation. 3. The contract duration of over 6 years suggests a long-term need for these specialized lighting systems. 4. The 'Other Lighting Equipment Manufacturing' NAICS code indicates a niche market for these components. 5. The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES', suggesting a complex procurement history or specific technical requirements.

Value Assessment

Rating: fair

Benchmarking the value for this specific 'FLIGHT DECK LIGHTS' contract is challenging without detailed cost breakdowns. The CPFF structure inherently carries higher risk for the government compared to fixed-price contracts, as contractor profit is not directly tied to cost efficiency. While the total award amount of $14.7 million over approximately 6 years averages to about $2.45 million annually, a direct comparison to similar contracts is difficult due to the specialized nature of flight deck lighting and the specific procurement history (exclusion of sources).

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 competition was intended to be open, certain sources were excluded. This suggests potential pre-existing relationships, specific technical qualifications, or a history of prior contract performance that influenced the bidding pool. With only 3 bidders, the level of competition was moderate, which could limit the government's leverage in negotiating the most favorable pricing.

Taxpayer Impact: A limited number of bidders can mean higher prices for taxpayers as competitive pressure is reduced. The exclusion of sources further complicates the assessment of whether the government secured the best possible value.

Public Impact

Naval aviation operations benefit from reliable flight deck lighting systems, crucial for safety and mission readiness. The services delivered involve the manufacturing and potentially maintenance of specialized lighting equipment for military aircraft carriers. The geographic impact is primarily within the Department of Defense's naval aviation infrastructure, likely supporting fleet readiness globally. The contract supports jobs within the specialized manufacturing sector related to aerospace and defense components.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type increases risk of cost overruns.
Limited competition (3 bidders) may result in suboptimal pricing.
Procurement history ('exclusion of sources') warrants further investigation into fairness and completeness of competition.
Long contract duration (over 6 years) requires sustained oversight to ensure continued value.

Positive Signals

Contract awarded to Temeku Technologies, Inc., indicating a specific vendor capability.
The contract addresses a critical need for naval aviation safety and operations.
The award was made by the Department of Defense, a major federal entity with established procurement processes.

Sector Analysis

The defense industrial base includes specialized manufacturers providing critical components for military platforms. This contract falls within the 'Other Lighting Equipment Manufacturing' sector, which is a niche but essential part of the broader aerospace and defense supply chain. The market for military-specific lighting is often characterized by high technical barriers to entry and stringent quality requirements, leading to fewer potential suppliers compared to commercial markets. Comparable spending benchmarks are difficult to establish without more granular data on the specific technical specifications of these flight deck lights.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (sb: false). There is no explicit information regarding subcontracting plans or performance related to small businesses. Therefore, the direct impact on the small business ecosystem from this specific contract is likely minimal, unless the prime contractor has significant small business subcontracting goals that are not detailed here.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and program management offices, potentially involving the Defense Contract Management Agency (DCMA) given the 'sa' field. Accountability measures are inherent in the CPFF structure, requiring detailed cost reporting and justification from the contractor. Transparency is generally facilitated through contract award databases, though specific performance details and cost breakdowns may be less accessible to the public.

Related Government Programs

Naval Aviation Systems
Aerospace Manufacturing
Defense Lighting Systems
Military Equipment Procurement

Risk Flags

Limited competition may lead to higher costs.
CPFF contract type carries inherent cost overrun risk.
Exclusion of sources warrants scrutiny for fairness and completeness of competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $14.7 million to TEMEKU TECHNOLOGIES, INC.. FLIGHT DECK LIGHTS

Who is the contractor on this award?

The obligated recipient is TEMEKU TECHNOLOGIES, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $14.7 million.

What is the period of performance?

Start: 2009-08-19. End: 2015-10-29.

What is the specific technical requirement for these 'FLIGHT DECK LIGHTS' that might justify the 'exclusion of sources' in the procurement process?

The 'exclusion of sources' clause in the contract's award type ('FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES') suggests that while the competition was intended to be open, certain potential bidders were deliberately excluded. This exclusion is typically based on specific, documented reasons such as unique technical capabilities, proprietary technology, essential security requirements, or prior performance history that makes only a limited number of sources capable of meeting the government's needs. For 'FLIGHT DECK LIGHTS,' these reasons could relate to specialized materials, extreme environmental resistance (vibration, temperature, electromagnetic interference), specific illumination spectrums required for night vision compatibility, or integration with existing naval systems. Without access to the specific justification documents filed with the contract award, the precise technical requirements remain unknown, but they are significant enough to limit the pool of eligible contractors.

How does the Cost Plus Fixed Fee (CPFF) pricing structure compare to other contract types in terms of risk and potential value for this type of specialized equipment?

The Cost Plus Fixed Fee (CPFF) contract type is often used when the scope of work is not precisely defined, or when the costs are difficult to estimate accurately, as might be the case with highly specialized 'FLIGHT DECK LIGHTS.' Under CPFF, the government reimburses the contractor for all allowable costs incurred, plus a predetermined fixed fee representing profit. This structure shifts much of the cost risk to the government, as the contractor is incentivized to incur costs to maximize their return (though the fee is fixed). Compared to fixed-price contracts, CPFF offers less cost certainty for the government and can lead to higher final costs if not rigorously managed. However, it can be advantageous when innovation or development is required, or when dealing with unique, low-volume items where establishing a firm fixed price upfront is impractical. For specialized defense components, CPFF can ensure availability and performance, but requires robust oversight to control costs.

What is the historical spending trend for 'FLIGHT DECK LIGHTS' or similar lighting equipment within the Department of Defense?

Analyzing historical spending trends for 'FLIGHT DECK LIGHTS' specifically is challenging without access to detailed procurement databases that allow granular searches by product description and agency over extended periods. However, general trends in defense spending on aerospace components and specialized equipment suggest consistent investment in maintaining and upgrading naval aviation capabilities. Spending on lighting systems, while a small fraction of the overall defense budget, is critical for operational readiness and safety. Historical data for similar lighting equipment within the broader 'Other Lighting Equipment Manufacturing' (NAICS 335129) or related aerospace manufacturing sectors would likely show fluctuations tied to defense appropriations, modernization programs, and the lifecycle of naval platforms. The $14.7 million awarded over approximately six years for this contract indicates a steady, albeit not massive, annual expenditure for this specific component.

What are the potential implications of having only 3 bidders for this contract on the long-term availability and cost of flight deck lights?

Having only three bidders for this contract suggests a concentrated market for specialized flight deck lights. This limited competition can have several long-term implications. Firstly, it may reduce the incentive for contractors to innovate or reduce costs aggressively, as they face less pressure from competitors. Secondly, it could lead to higher unit prices over time, as the government may have less leverage in future negotiations. Thirdly, it raises concerns about supply chain resilience; if one or two of these limited suppliers face production issues or exit the market, the Department of Defense could face significant disruptions in acquiring these critical components. This situation underscores the importance of ongoing market research and potentially fostering competition through clearer specifications or supporting new entrants where feasible.

What is the significance of the contract being awarded in Virginia (SN: VIRGINIA) and managed by the Defense Contract Management Agency (SA: Defense Contract Management Agency)?

The contract being awarded in Virginia (SN: VIRGINIA) is significant because Virginia is a major hub for defense contractors and federal agencies, including numerous Department of Defense (DoD) installations and related support organizations. The Defense Contract Management Agency (DCMA) is headquartered in Fort Lee, Virginia, and has a substantial presence throughout the state, overseeing contract administration and ensuring contractor performance on behalf of the DoD. DCMA's involvement suggests that the contract administration, quality assurance, and potentially payment processes for this 'FLIGHT DECK LIGHTS' contract were managed locally or regionally by DCMA personnel. This proximity can facilitate closer oversight and communication between the government and the contractor, Temeku Technologies, Inc., potentially improving contract execution and issue resolution.

Industry Classification

NAICS: Manufacturing › Electric Lighting Equipment Manufacturing › Other Lighting Equipment 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: N6833508R0055

Offers Received: 3

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 13873 PARK CENTER RD STE 217, HERNDON, VA, 20171

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business

Financial Breakdown

Contract Ceiling: $17,513,599

Exercised Options: $14,689,466

Current Obligation: $14,689,466

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline