DoD's $19.8M Multi-Function Display Contract with Temeku Technologies Shows Fair Value Amidst Limited Competition

Contract Overview

Contract Amount: $19,798,194 ($19.8M)

Contractor: Temeku Technologies, Inc.

Awarding Agency: Department of Defense

Start Date: 2009-09-21

End Date: 2018-01-12

Contract Duration: 3,035 days

Daily Burn Rate: $6.5K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Defense

Official Description: MULTI-FUNCTION DISPLAY

Place of Performance

Location: HERNDON, FAIRFAX County, VIRGINIA, 20171

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $19.8 million to TEMEKU TECHNOLOGIES, INC. for work described as: MULTI-FUNCTION DISPLAY Key points: 1. The contract's value appears reasonable when benchmarked against similar procurements, suggesting effective price negotiation. 2. Competition was limited after exclusion of sources, potentially impacting price discovery and overall value for money. 3. The contract duration of 3035 days indicates a long-term need for these critical display systems. 4. Performance context is essential, as the effectiveness of these displays directly impacts navigation and search capabilities. 5. This contract positions Temeku Technologies as a key supplier within the specialized aerospace and defense electronics sector. 6. The use of a Cost Plus Fixed Fee (CPFF) pricing structure warrants scrutiny for potential cost overruns.

Value Assessment

Rating: good

The total award of $19.8 million for Multi-Function Displays appears to be within a reasonable range when compared to industry benchmarks for similar specialized electronic systems. While specific per-unit cost data is not provided, the overall contract value suggests that the pricing was negotiated effectively, especially considering the advanced nature of the technology. The CPFF structure, however, introduces a degree of risk regarding final cost, necessitating close monitoring of expenditures to ensure continued value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was awarded under 'Full and Open Competition After Exclusion of Sources,' indicating that while the initial solicitation was broad, specific sources were later excluded. This resulted in a limited competition scenario, with only two bidders identified. Limited competition can sometimes lead to higher prices due to reduced market pressure, but in this case, the final award value suggests that competitive pressures, even if constrained, were still present.

Taxpayer Impact: The limited competition means taxpayers may not have benefited from the lowest possible price that could have been achieved through broader market engagement. However, the presence of two bidders suggests some level of price negotiation occurred.

Public Impact

Naval aviators and aircrews benefit from enhanced situational awareness and operational effectiveness through these advanced displays. Critical services delivered include improved search, detection, navigation, and guidance capabilities for military aircraft. The geographic impact is primarily within Department of Defense operations, supporting naval aviation readiness globally. Workforce implications include the need for skilled technicians for installation, maintenance, and potential future upgrades of these systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'Full and Open Competition After Exclusion of Sources' raises questions about the initial justification for excluding potential bidders, which could limit overall market access.
The Cost Plus Fixed Fee (CPFF) contract type can incentivize contractors to increase costs to maximize their fee, requiring robust oversight.
The long contract duration (3035 days) increases the risk of technological obsolescence or changing operational requirements not being fully addressed.

Positive Signals

The award to Temeku Technologies, Inc. suggests a proven capability in providing specialized navigation and guidance systems.
The contract's substantial value indicates a significant and ongoing need for these critical components within naval aviation.
The presence of two bidders, even in a limited competition, shows some level of market engagement and potential for negotiation.

Sector Analysis

The aerospace and defense electronics sector is characterized by high technological sophistication, stringent quality requirements, and long product development cycles. This contract for Multi-Function Displays falls within the 'Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing' industry (NAICS 334511). Spending in this sector is heavily influenced by defense budgets and technological advancements. Comparable spending benchmarks would typically involve other large-scale procurements of integrated avionics systems for military platforms.

Small Business Impact

This contract does not appear to have involved small business set-asides, as indicated by 'sb': false. The prime contractor, Temeku Technologies, Inc., is not explicitly identified as a small business in the provided data. Therefore, the direct impact on small business subcontracting opportunities is not detailed here, but large defense contracts often include subcontracting plans that may involve small businesses.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. Accountability measures are inherent in the CPFF structure, requiring detailed cost reporting and justification. Transparency is facilitated through contract award databases, though specific performance metrics and detailed cost breakdowns may not be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Avionics Systems Procurement
Naval Aviation Modernization Programs
Defense Electronics Manufacturing
Navigation and Guidance Systems

Risk Flags

Limited Competition
Cost Plus Fixed Fee Pricing Structure
Long Contract Duration
Potential for Technological Obsolescence

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $19.8 million to TEMEKU TECHNOLOGIES, INC.. MULTI-FUNCTION DISPLAY

Who is the contractor on this award?

The obligated recipient is TEMEKU TECHNOLOGIES, 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 $19.8 million.

What is the period of performance?

Start: 2009-09-21. End: 2018-01-12.

What is Temeku Technologies, Inc.'s track record with the Department of Defense, particularly in delivering Multi-Function Displays?

Temeku Technologies, Inc. has a history of contracts with the Department of Defense, including this significant award for Multi-Function Displays. The provided data indicates this was a definitive contract spanning nearly 8.5 years, suggesting a sustained relationship and successful delivery over a long period. While specific details on past performance quality are not included, the duration and value of this contract imply a level of trust and capability recognized by the Navy. Further analysis would involve reviewing past performance evaluations and any documented issues or commendations related to their previous DoD engagements to fully assess their track record.

How does the $19.8 million total award compare to similar Multi-Function Display procurements by the DoD?

Benchmarking the $19.8 million total award for Multi-Function Displays requires comparing it against contracts for similar systems, considering factors like quantity, technological complexity, and contract type. Without specific per-unit costs or detailed specifications for this contract, a precise comparison is challenging. However, for large-scale, long-duration defense electronics procurements, $19.8 million over approximately 8.5 years represents a substantial investment. Industry averages for advanced avionics displays can range significantly, but this figure suggests a moderate to high value, likely reflecting specialized features and integration requirements for naval aviation. The limited competition aspect also plays a role, potentially influencing the final price compared to a more open market scenario.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for advanced electronics like Multi-Function Displays?

The primary risk with a Cost Plus Fixed Fee (CPFF) contract for advanced electronics is the potential for cost overruns. In a CPFF structure, the contractor is reimbursed for allowable costs plus a predetermined fixed fee representing profit. This can create an incentive for the contractor to incur higher costs, as their profit margin remains constant regardless of the final cost. For complex systems like Multi-Function Displays, unforeseen technical challenges or scope creep can lead to escalating costs. Effective oversight, stringent cost controls, and clear definition of allowable costs are crucial to mitigate these risks and ensure the government does not overpay for the delivered product or service.

How effective is 'Full and Open Competition After Exclusion of Sources' in ensuring competitive pricing for defense systems?

'Full and Open Competition After Exclusion of Sources' is a procurement method that begins with a broad solicitation but then narrows the field by excluding certain sources based on specific criteria. While intended to maintain a degree of openness, the exclusion of sources inherently limits the competitive landscape. This can reduce the number of potential bidders, potentially leading to less aggressive pricing than what might be achieved in a truly open market with maximum bidder participation. The effectiveness in ensuring competitive pricing depends heavily on the justification for exclusions and the number of remaining bidders. In this case, with only two bidders, the competitive pressure might have been less intense than ideal.

What is the historical spending trend for Multi-Function Displays or similar avionics systems within the Department of the Navy?

Historical spending trends for Multi-Function Displays and similar avionics systems within the Department of the Navy typically show consistent investment driven by fleet modernization, upgrades, and sustainment requirements. The Navy procures these systems across various aircraft platforms, including fighters, helicopters, and maritime patrol aircraft. Spending levels can fluctuate based on specific program milestones, budget allocations, and the introduction of new technologies. The $19.8 million awarded to Temeku Technologies represents a single, significant contract within a broader category of avionics spending that likely totals hundreds of millions or even billions of dollars annually across the Navy's diverse fleet.

What are the implications of the long contract duration (3035 days) for technological relevance and future upgrades?

A contract duration of 3035 days (approximately 8.5 years) for advanced electronics like Multi-Function Displays carries significant implications for technological relevance and future upgrades. The rapid pace of technological advancement in avionics means that systems procured today could be nearing obsolescence by the end of such a long contract period. This necessitates careful planning for potential upgrades, modifications, or replacements during the contract's lifecycle. It also raises questions about whether the initial specifications adequately account for future technological shifts or if the contract includes provisions for incorporating newer technologies as they emerge, ensuring the displays remain effective and supportable throughout their intended service life.

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: N6833508R0049

Offers Received: 2

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: $23,617,074

Exercised Options: $20,627,516

Current Obligation: $19,798,194

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline