DoD awards $73.5M for Aerostat Systems, highlighting a sole-source procurement for critical surveillance capabilities

Contract Overview

Contract Amount: $73,504,825 ($73.5M)

Contractor: Tcom, L.P.

Awarding Agency: Department of Defense

Start Date: 2011-09-02

End Date: 2014-09-22

Contract Duration: 1,116 days

Daily Burn Rate: $65.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 22M+ AEROSTAT SYSTEM DC P/N 4D05000G05 AND RELATED SPARES, FIELD SERVICE REPRESENTATIVES OCONUS

Place of Performance

Location: ELIZABETH CITY, PASQUOTANK County, NORTH CAROLINA, 27909

State: North Carolina Government Spending

Plain-Language Summary

Department of Defense obligated $73.5 million to TCOM, L.P. for work described as: 22M+ AEROSTAT SYSTEM DC P/N 4D05000G05 AND RELATED SPARES, FIELD SERVICE REPRESENTATIVES OCONUS Key points: 1. The contract value of $73.5 million for Aerostat Systems and spares indicates a significant investment in persistent surveillance technology. 2. The sole-source nature of this award warrants scrutiny regarding potential price inflation and limited market engagement. 3. The duration of the contract (over 3 years) suggests a long-term need for these specialized systems. 4. Field service representatives OCONUS point to the operational deployment and maintenance requirements in challenging environments. 5. The absence of small business involvement raises questions about opportunities for smaller firms in this specialized defense sector. 6. The firm-fixed-price contract type aims to transfer some cost risk to the contractor, but oversight is still crucial for sole-source awards.

Value Assessment

Rating: fair

Benchmarking the value of this $73.5 million contract is challenging due to its sole-source nature and specialized equipment. Without competitive bids, it's difficult to ascertain if the pricing reflects fair market value. However, the firm-fixed-price structure suggests an attempt to control costs. Further analysis would require comparing the per-unit cost of the Aerostat System and spares to similar, if available, systems procured competitively or through other sole-source arrangements, which is not readily available in the provided data.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, TCOM, L.P., was considered. This approach is typically justified when a unique capability is required, or when only one source can provide the necessary goods or services. The lack of competition means that the government did not benefit from a bidding process that could have driven down prices or spurred innovation from multiple suppliers. This limits the government's ability to explore alternative solutions or achieve the best possible price.

Taxpayer Impact: For taxpayers, a sole-source award means there is a higher risk of paying a premium for goods or services, as the absence of competition removes a key mechanism for price discovery and cost control.

Public Impact

The primary beneficiaries are the Department of the Navy and potentially other Department of Defense components requiring persistent aerial surveillance capabilities. The contract delivers Aerostat Systems and related spares, which are likely used for intelligence, surveillance, and reconnaissance (ISR) missions. The inclusion of 'field service representatives OCONUS' indicates that the systems are deployed and operated in overseas locations, supporting military operations. The workforce implications include the need for specialized technical personnel for the operation and maintenance of these advanced aerostat systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source procurement limits competitive pressure, potentially leading to higher costs.
Lack of transparency in the sole-source justification process could obscure potential alternatives.
Dependence on a single contractor for critical surveillance technology poses a supply chain risk.
The specific capabilities and performance metrics of the Aerostat System are not detailed, making independent value assessment difficult.

Positive Signals

Firm-fixed-price contract type helps manage cost certainty for the government.
The award addresses a specific, likely critical, operational need for persistent surveillance.
Deployment of field service representatives suggests a commitment to ensuring system operability in demanding environments.

Sector Analysis

The Aerostat Systems market falls within the broader aerospace and defense sector, specifically focusing on unmanned aerial systems (UAS) and persistent surveillance technologies. This niche requires specialized engineering and manufacturing capabilities. While specific market size data for aerostats is not readily available, the overall defense spending on ISR platforms is substantial, indicating a significant demand for such systems. This contract represents a specific procurement within that larger ecosystem, likely for border security, intelligence gathering, or force protection applications.

Small Business Impact

This contract does not appear to have involved small business set-asides, as indicated by 'sb: false'. The prime contractor, TCOM, L.P., is likely a large business. There is no information provided regarding subcontracting plans or actual subcontracting to small businesses. This suggests that opportunities for small businesses within this specific procurement were either non-existent or not mandated, potentially limiting their participation in this specialized segment of the defense industry.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's contracting and program management offices. As a definitive contract, it is subject to standard oversight mechanisms, including contract performance monitoring and financial audits. The firm-fixed-price nature shifts some risk to the contractor, but the sole-source award necessitates careful review of pricing and justification. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Intelligence, Surveillance, and Reconnaissance (ISR) Systems
Unmanned Aerial Vehicles (UAVs)
Persistent Surveillance Platforms
Department of Defense Aircraft Manufacturing Contracts

Risk Flags

Sole-source procurement requires strong justification and oversight.
Potential for cost overruns due to lack of competition.
Dependence on a single supplier for critical technology.
Operational deployment OCONUS introduces logistical and security risks.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $73.5 million to TCOM, L.P.. 22M+ AEROSTAT SYSTEM DC P/N 4D05000G05 AND RELATED SPARES, FIELD SERVICE REPRESENTATIVES OCONUS

Who is the contractor on this award?

The obligated recipient is TCOM, L.P..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $73.5 million.

What is the period of performance?

Start: 2011-09-02. End: 2014-09-22.

What is the specific operational role and performance capability of the Aerostat System procured under this contract?

The provided data indicates the procurement of 'AEROSTAT SYSTEM DC P/N 4D05000G05 AND RELATED SPARES, FIELD SERVICE REPRESENTATIVES OCONUS'. Aerostats are lighter-than-air platforms designed for persistent, long-duration surveillance missions. They typically carry sophisticated sensor payloads (e.g., radar, electro-optical/infrared cameras) to provide wide-area surveillance, intelligence gathering, and reconnaissance. Their key advantage is endurance compared to traditional aircraft. The 'DC' designation might refer to a specific model or configuration. The inclusion of field service representatives suggests the system requires specialized on-site support, likely in remote or hostile environments, to ensure operational readiness and effectiveness for missions such as border security, force protection, or intelligence gathering.

How does the $73.5 million contract value compare to other procurements of similar aerostat systems?

Direct comparison of the $73.5 million contract value for TCOM, L.P.'s Aerostat System is difficult without access to a broader database of aerostat procurements, especially those with similar configurations and capabilities. Aerostat systems can vary significantly in size, payload capacity, endurance, and operational environment, all of which impact cost. Furthermore, this contract was sole-source, which inherently limits price discovery compared to competitive bids. To provide a meaningful benchmark, one would need to identify contracts for aerostats with comparable specifications, ideally awarded competitively, and analyze their total value, duration, and unit costs. Without such comparative data, assessing whether $73.5 million represents a fair market price is speculative.

What are the specific risks associated with the sole-source nature of this $73.5 million contract?

The primary risk associated with this sole-source contract is the potential for inflated pricing due to the lack of competitive pressure. Without competing bids, TCOM, L.P. may not have had the same incentive to offer the lowest possible price. Another risk is limited innovation; a sole-source award discourages other companies from developing competing technologies or offering alternative solutions that might be more cost-effective or capable. There's also a risk of vendor lock-in, where the government becomes dependent on a single supplier for critical technology, potentially leading to higher sustainment costs and reduced bargaining power in the future. Ensuring robust oversight and negotiation is crucial to mitigate these risks.

What is the track record of TCOM, L.P. in delivering complex aerostat systems to the government?

TCOM, L.P. is a known provider of aerostat systems, having supplied them for various defense and security applications. Their track record includes deployments for border security and military intelligence missions. While specific details on past performance metrics for this particular contract (P/N 4D05000G05) are not provided, the company's continued involvement in this niche market suggests a level of established capability and client satisfaction. However, a comprehensive assessment would require reviewing past performance evaluations, any contract disputes or terminations, and the successful delivery of systems against specified requirements in previous engagements.

What are the implications of the 'field service representatives OCONUS' clause for operational readiness and long-term costs?

The inclusion of 'field service representatives OCONUS' (Outside Continental United States) signifies a commitment to ensuring the operational readiness and effectiveness of the Aerostat Systems in deployed environments. This implies that the systems require specialized, on-site technical expertise for installation, maintenance, troubleshooting, and potentially upgrades. For operational readiness, this is a positive signal, as it ensures that highly trained personnel are available to address issues promptly, minimizing downtime. However, from a cost perspective, deploying and maintaining field service representatives OCONUS can be expensive, involving salaries, travel, housing, and logistical support. These costs need to be factored into the overall value proposition of the aerostat system over its lifecycle.

How does this $73.5 million contract fit into the broader context of Department of Defense spending on surveillance and ISR capabilities?

This $73.5 million contract for Aerostat Systems represents a specific investment within the Department of Defense's (DoD) substantial budget allocated to Intelligence, Surveillance, and Reconnaissance (ISR) capabilities. The DoD consistently invests billions annually in a wide array of ISR assets, including satellites, manned aircraft, drones, and ground-based sensors. Aerostats fill a unique niche by providing persistent, relatively low-cost (compared to some other platforms) aerial surveillance over extended periods. This contract, while significant in its own right, is likely one component of a larger, multi-faceted ISR strategy aimed at providing commanders with continuous situational awareness and actionable intelligence across various operational theaters.

Industry Classification

NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing

Product/Service Code: AEROSPACE CRAFT AND STRUCTURAL COMPONENTS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 7115 THOMAS EDISON DR STE A, COLUMBIA, MD, 21046

Business Categories: Category Business, Manufacturer of Goods, Partnership or Limited Liability Partnership, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $80,219,380

Exercised Options: $73,577,999

Current Obligation: $73,504,825

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline