DoD awards $54M contract for aerostats and hardware to TCOM, L.P., with no competition

Contract Overview

Contract Amount: $54,046,058 ($54.0M)

Contractor: Tcom, L.P.

Awarding Agency: Department of Defense

Start Date: 2011-05-19

End Date: 2011-12-12

Contract Duration: 207 days

Daily Burn Rate: $261.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 22M+ AEROSTATS (DC) AND ASSOCIATED HARDWARE

Place of Performance

Location: COLUMBIA, HOWARD County, MARYLAND, 21046

State: Maryland Government Spending

Plain-Language Summary

Department of Defense obligated $54.0 million to TCOM, L.P. for work described as: 22M+ AEROSTATS (DC) AND ASSOCIATED HARDWARE Key points: 1. The contract's value of $54 million for aerostats and associated hardware represents a significant investment in surveillance and communication capabilities. 2. The sole-source nature of this award raises questions about potential price inflation and the absence of market-driven cost efficiencies. 3. A single bidder suggests potential barriers to entry or a lack of readily available alternatives for this specialized equipment. 4. The firm-fixed-price contract type shifts cost risk to the contractor, but the lack of competition limits the government's ability to negotiate favorable terms. 5. The contract duration of 207 days indicates a focused, short-term requirement for the aerostat systems. 6. The award to TCOM, L.P., highlights their established position in the aerostat market, potentially due to proprietary technology or prior performance. 7. The absence of small business set-aside flags indicates this contract was not specifically targeted to support small business participation.

Value Assessment

Rating: questionable

Benchmarking the value of this $54 million contract is challenging due to its sole-source nature. Without competitive bids, it's difficult to ascertain if the price reflects fair market value or if it includes a premium due to the lack of alternatives. The firm-fixed-price structure is generally favorable for cost control, but the absence of competition limits the government's leverage in price negotiations. Further analysis would require comparing the specific capabilities and technical specifications of these aerostats to similar systems procured competitively, if available.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning TCOM, L.P. was the only vendor considered. This approach is typically justified when only one source possesses the necessary capabilities, technology, or when urgency precludes a competitive process. The lack of competition means the Department of Defense did not benefit from the price discovery and potential cost savings that typically arise from multiple bidders vying for a contract.

Taxpayer Impact: Taxpayers may have paid a higher price than necessary due to the absence of competitive pressure. The government's ability to secure the best possible value is diminished when only one option is available.

Public Impact

The Department of Defense, specifically the Department of the Navy, is the primary beneficiary, acquiring advanced aerostat systems. The services delivered include the provision of aerostats and associated hardware, likely for surveillance, reconnaissance, or communication purposes. The geographic impact is not specified but likely relates to operational deployment areas for military assets. Workforce implications could include specialized technical roles for the manufacturing, deployment, and maintenance of these aerostat systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price negotiation and potential cost savings for taxpayers.
Lack of competition may indicate limited market availability or high barriers to entry for alternative providers.
Absence of small business participation noted, potentially missing opportunities to foster small business growth in this sector.

Positive Signals

Firm-fixed-price contract type shifts cost overrun risk to the contractor.
Award to an established contractor (TCOM, L.P.) may indicate reliability and proven performance in aerostat technology.

Sector Analysis

The aerostat market, while niche, is critical for persistent surveillance and communication solutions, particularly for defense applications. This contract falls within the broader aerospace and defense manufacturing sector, specifically focusing on unmanned aerial systems and related technologies. The North American Industry Classification System (NAICS) code 336411 (Aircraft Manufacturing) aligns with this specialized area. The market size for such advanced surveillance platforms is driven by evolving national security needs and technological advancements, with spending often concentrated among government entities.

Small Business Impact

This contract was not awarded as a small business set-aside, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. The sole-source nature further limits the opportunity for small businesses to participate directly or indirectly through subcontracting unless TCOM, L.P. voluntarily engages them. This suggests that the primary focus was on acquiring the specific capabilities from the incumbent, potentially overlooking opportunities to foster small business involvement in this specialized defense technology area.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Defense's contracting and program management offices. As a sole-source award, the justification for this procurement method would be subject to review. Transparency is limited by the lack of competitive bidding. Inspector General jurisdiction would apply to any allegations of fraud, waste, or abuse related to the contract's execution and performance.

Related Government Programs

Department of Defense Procurement
Aerospace and Defense Manufacturing
Surveillance and Reconnaissance Systems
Unmanned Aerial Systems (UAS)
Naval Aviation Support Equipment

Risk Flags

Sole-source award
Lack of competition
Potential for price inflation

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $54.0 million to TCOM, L.P.. 22M+ AEROSTATS (DC) AND ASSOCIATED HARDWARE

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 $54.0 million.

What is the period of performance?

Start: 2011-05-19. End: 2011-12-12.

What is the specific operational purpose of these aerostats and associated hardware for the Department of the Navy?

The provided data does not specify the exact operational purpose of the aerostats and associated hardware. However, aerostats are commonly employed for persistent surveillance, intelligence gathering, reconnaissance (ISR), early warning systems, and communication relays due to their ability to remain airborne for extended periods at high altitudes. For the Department of the Navy, these systems could be utilized for maritime surveillance, coastal security, force protection, or supporting naval operations in various theaters. The specific mission requirements would dictate the exact configuration and capabilities of the aerostats procured under this contract.

How does the $54 million contract value compare to historical spending on similar aerostat systems by the DoD?

Without specific details on the capabilities and configurations of the aerostats procured under this $54 million contract, a direct historical spending comparison is difficult. However, aerostat systems can range significantly in cost based on size, payload, endurance, and technological sophistication. Larger, more advanced systems with sophisticated sensor packages and long endurance capabilities can indeed cost tens of millions of dollars. To provide a meaningful comparison, one would need to identify similar DoD procurements of aerostats with comparable specifications and analyze their contract values over time. The sole-source nature of this award complicates benchmarking, as competitive data is absent.

What are the primary risks associated with a sole-source award for specialized defense equipment like aerostats?

The primary risks associated with a sole-source award for specialized defense equipment like aerostats include: 1. **Higher Costs:** The absence of competition can lead to inflated prices as the contractor faces no pressure to offer the most competitive bid. 2. **Limited Innovation:** Without competitive pressure, the sole source may have less incentive to innovate or improve their offerings. 3. **Vendor Lock-in:** The government may become dependent on a single supplier, making future procurements or transitions difficult and potentially more expensive. 4. **Reduced Transparency:** The justification and pricing details of sole-source contracts are often less transparent than those resulting from competitive processes. 5. **Potential for Suboptimal Performance:** While the contractor may have unique capabilities, the lack of alternatives means the government cannot explore potentially better or more cost-effective solutions from other vendors.

What is TCOM, L.P.'s track record with the Department of Defense, particularly concerning aerostat systems?

TCOM, L.P. is a known provider of aerostat systems and has a history of contracts with the U.S. Department of Defense. While this specific data point only shows one contract, publicly available information and contract databases often reveal a pattern of awards for aerostat platforms and related services to TCOM for various military applications, including surveillance and communication. Their track record generally indicates experience in designing, manufacturing, and supporting these complex systems. However, a comprehensive assessment would require reviewing multiple contract awards, performance reviews, and any past issues or successes related to their deliveries to the DoD.

What are the implications of the firm-fixed-price contract type in the context of this sole-source award?

The firm-fixed-price (FFP) contract type means that TCOM, L.P. is obligated to perform the work for a stated price, regardless of the actual costs incurred. This shifts the cost risk from the government to the contractor. For the government, this provides budget certainty, as the final price is known upfront. However, in the context of a sole-source award, the benefit of budget certainty is somewhat diminished by the potential for the initial fixed price to be higher than it might have been under competitive conditions. While the government is protected from cost overruns, it doesn't guarantee the 'best value' price due to the lack of competitive negotiation.

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, 03

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

Financial Breakdown

Contract Ceiling: $54,046,058

Exercised Options: $54,046,058

Current Obligation: $54,046,058

Contract Characteristics

Cost or Pricing Data: NO

Timeline