DoD's $33.6M contract for payload kits awarded to IMSAR LLC, a sole-source R&D effort

Contract Overview

Contract Amount: $33,642,272 ($33.6M)

Contractor: Imsar LLC

Awarding Agency: Department of Defense

Start Date: 2020-09-28

End Date: 2023-12-31

Contract Duration: 1,189 days

Daily Burn Rate: $28.3K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: R&D

Official Description: PAYLOAD KIT P/N: NSP5-0001-P2-41

Place of Performance

Location: SPRINGVILLE, UTAH County, UTAH, 84663

State: Utah Government Spending

Plain-Language Summary

Department of Defense obligated $33.6 million to IMSAR LLC for work described as: PAYLOAD KIT P/N: NSP5-0001-P2-41 Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. Research and Development focus suggests potential for innovation but also inherent risks. 3. Firm Fixed Price contract type provides cost certainty for the government. 4. Long performance period of nearly 4 years indicates a substantial, ongoing requirement. 5. The contract is a delivery order, suggesting it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract. 6. Geographic concentration in Utah may indicate a specific operational need or contractor location.

Value Assessment

Rating: questionable

Benchmarking the value of this specific payload kit is challenging without detailed technical specifications and market comparables. The sole-source nature of the award means there was no direct price competition to establish a competitive market rate. However, the total value of $33.6 million over nearly four years for a specialized R&D item suggests a significant investment. Further analysis would require understanding the criticality of the payload and alternative solutions.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. This typically occurs when only one responsible source is available or when a compelling justification for other-than-full-and-open competition exists. The lack of competition limits the government's ability to explore a wider range of solutions and potentially achieve lower prices through bidding.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to drive down prices. It also limits opportunities for other capable businesses to secure government contracts.

Public Impact

The Department of Defense benefits from specialized payload kits for its operations. The contract supports research and development activities, potentially leading to advancements in defense technology. The geographic impact is concentrated in Utah, where the contractor is located. Workforce implications include employment for specialized engineers and technicians at IMSAR LLC.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases costs for taxpayers.
Lack of transparency in the justification for sole-source award.
R&D contracts inherently carry risk of technical failure or obsolescence.
Limited visibility into the specific capabilities and applications of the payload kit.

Positive Signals

Firm Fixed Price contract provides cost certainty.
Long-term award suggests a sustained need and potential for stable program support.
Specialized nature of the R&D may indicate a critical capability for the DoD.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on physical, engineering, and life sciences. The market for specialized defense payload kits is niche, often dominated by a few key contractors with specific technological expertise. Spending in this area is driven by evolving military requirements and the need for technological superiority. Comparable spending benchmarks would depend on the specific type of payload and its intended application within defense systems.

Small Business Impact

This contract was not awarded to a small business, nor does it appear to have a specific small business set-aside. There is no explicit information regarding subcontracting plans for small businesses. The sole-source nature of the award further reduces the likelihood of small business participation through subcontracting unless specifically mandated by the prime contractor.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of the Navy's contracting and program management offices. As a delivery order under a larger IDIQ, oversight may be distributed. Transparency is limited due to the sole-source award. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse related to the contract.

Related Government Programs

Department of Defense Research and Development Programs
Naval Air Systems Command Contracts
Payload and Sensor Development Contracts
Advanced Technology Development Contracts

Risk Flags

Sole-source award may indicate lack of competition, potentially leading to higher costs.
R&D contracts carry inherent technical and programmatic risks.
Limited public information on the specific payload kit and its application.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $33.6 million to IMSAR LLC. PAYLOAD KIT P/N: NSP5-0001-P2-41

Who is the contractor on this award?

The obligated recipient is IMSAR LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $33.6 million.

What is the period of performance?

Start: 2020-09-28. End: 2023-12-31.

What is the specific nature and intended use of the "PAYLOAD KIT P/N: NSP5-0001-P2-41"?

The provided data does not specify the exact nature or intended use of the "PAYLOAD KIT P/N: NSP5-0001-P2-41." However, given the contract's classification under NAICS code 541715 (Research and Development in the Physical, Engineering, and Life Sciences) and its award by the Department of the Navy, it is highly probable that this payload kit is a specialized component for a defense system, such as an aircraft, drone, or surveillance platform. Its purpose could range from sensor integration, data collection, electronic warfare, or other mission-critical functions requiring advanced technological development.

What is the justification for awarding this contract on a sole-source basis?

The justification for this sole-source award is not detailed in the provided data. Typically, sole-source awards are made when only one responsible source is capable of providing the required goods or services, or when there is a compelling urgency, or when the acquisition is for a specific type of research and development where only one source is known to possess the necessary expertise. For this contract, it is likely that IMSAR LLC possesses unique technology, intellectual property, or specialized capabilities essential for the development or production of this specific payload kit, making competition impractical or not in the government's best interest.

How does the $33.6 million contract value compare to similar R&D contracts for payload systems?

Directly comparing the $33.6 million value to similar R&D contracts for payload systems is difficult without knowing the specific technological complexity, scale, and intended application of this payload kit. However, R&D contracts for advanced defense technologies can range significantly, from a few million to hundreds of millions of dollars, depending on the scope and duration. The value of this contract, spread over nearly four years, suggests a substantial and complex development effort. Without access to proprietary market data or detailed technical specifications, a precise benchmark is not feasible, but the amount indicates a significant investment in specialized R&D.

What are the potential risks associated with this sole-source R&D contract?

This sole-source R&D contract carries several potential risks. Firstly, the sole-source nature means the government did not benefit from competitive bidding, which could have resulted in a higher price than if multiple vendors had competed. Secondly, R&D projects inherently involve technical risks; the technology may not perform as expected, could become obsolete, or development could face unforeseen challenges. Thirdly, there's a risk of contractor performance issues, although the firm fixed-price contract type shifts some cost risk to the contractor. Finally, without competition, there's less market pressure to drive innovation and efficiency.

What is IMSAR LLC's track record with the Department of Defense or similar agencies?

The provided data indicates IMSAR LLC is the contractor for this $33.6 million contract with the Department of the Navy. To assess their track record, one would need to examine their past performance on other government contracts, particularly those with the DoD or other defense agencies. Key aspects to review would include on-time delivery, adherence to budget, quality of work, and any history of contract disputes or performance issues. A positive track record would suggest a lower risk for this current contract, while a history of problems would raise concerns about IMSAR's ability to successfully execute this R&D effort.

What is the historical spending trend for similar payload kits or R&D efforts by the Department of the Navy?

The provided data does not include historical spending trends for similar payload kits or R&D efforts by the Department of the Navy. To analyze this, one would need access to historical contract databases and procurement records. Such an analysis would involve identifying previous contracts for comparable payload systems, examining their values, durations, and award types (competitive vs. sole-source). Understanding historical spending patterns can help contextualize the current $33.6 million award, identify potential cost escalations, and assess whether this contract represents a significant shift in procurement strategy or investment level for such technologies.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)

Product/Service Code: RESEARCH AND DEVELOPMENT › C – National Defense R&D Services

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 940 SOUTH 2000 WEST #140, SPRINGVILLE, UT, 84663

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

Financial Breakdown

Contract Ceiling: $43,950,318

Exercised Options: $34,054,915

Current Obligation: $33,642,272

Actual Outlays: $193,322

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: N6833518G0015

IDV Type: BOA

Timeline