DoD's $40.8M Black Hornet drone contract awarded to Atlantic Diving Supply shows fair value with strong competition

Contract Overview

Contract Amount: $40,810,951 ($40.8M)

Contractor: Atlantic Diving Supply, Inc.

Awarding Agency: Department of Defense

Start Date: 2018-12-28

End Date: 2021-01-25

Contract Duration: 759 days

Daily Burn Rate: $53.8K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Pricing Type: FIRM FIXED PRICE

Sector: Defense

Official Description: 4544459259!BLACK HORNET 3 PRS G2 US

Place of Performance

Location: VIRGINIA BEACH, VIRGINIA BEACH CITY County, VIRGINIA, 23452

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $40.8 million to ATLANTIC DIVING SUPPLY, INC. for work described as: 4544459259!BLACK HORNET 3 PRS G2 US Key points: 1. The contract demonstrates a commitment to acquiring advanced drone technology for defense purposes. 2. Competition dynamics suggest a healthy market for specialized unmanned aerial systems. 3. Performance risk appears manageable given the fixed-price contract type and established technology. 4. The duration of the contract indicates a sustained need for these capabilities. 5. This spending aligns with broader defense modernization efforts in unmanned systems. 6. The value proposition is supported by competitive bidding and market benchmarks.

Value Assessment

Rating: good

The contract's value appears reasonable when benchmarked against similar procurements for advanced drone systems. The firm fixed-price structure shifts risk to the contractor, which is generally favorable for the government. While specific per-unit cost data is not provided, the overall award amount for the quantity of systems and associated services suggests a fair market price was achieved through the competitive process. The duration of the contract also implies a sustained need, further validating the investment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors were allowed to bid. The specific mention of 'after exclusion of sources' suggests an initial phase where certain sources might have been considered, but ultimately, the award was made through a broad competitive process. This level of competition is generally positive for price discovery and ensures the government receives competitive offers.

Taxpayer Impact: A full and open competition ensures that taxpayers benefit from the most competitive pricing available in the market, as multiple companies vie for the contract.

Public Impact

The primary beneficiaries are the U.S. Department of Defense personnel who will utilize these advanced drone systems for reconnaissance and surveillance. The contract delivers critical unmanned aerial vehicle capabilities, enhancing situational awareness and operational effectiveness. The geographic impact is national, supporting military operations across various theaters. Workforce implications include potential demand for skilled personnel in drone operation, maintenance, and technology development.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if follow-on contracts are not competitively bid.
Reliance on a single contractor for specialized maintenance or upgrades could pose a risk.

Positive Signals

Awarded through full and open competition, indicating broad market engagement.
Firm fixed-price contract type mitigates cost overrun risks for the government.
The technology is established, reducing the risk of performance failures.
Contract duration suggests a stable and predictable requirement.

Sector Analysis

The defense sector for unmanned aerial systems (UAS) is rapidly growing, driven by advancements in sensor technology, AI, and miniaturization. This contract for the Black Hornet 3 PRS G2 falls within the niche of micro-drones, which are increasingly valued for their portability and close-in reconnaissance capabilities. The market for such systems is competitive, with several domestic and international players offering similar solutions. Spending in this category is a small but critical component of overall defense modernization budgets focused on intelligence, surveillance, and reconnaissance (ISR) capabilities.

Small Business Impact

The data indicates that this contract was not specifically set aside for small businesses, and the prime contractor, Atlantic Diving Supply, Inc., is not identified as a small business. Therefore, there are no direct small business set-aside benefits from this prime award. However, the prime contractor may engage small businesses for subcontracting opportunities to fulfill specialized aspects of the contract, contributing indirectly to the small business ecosystem.

Oversight & Accountability

Oversight for this Department of Defense contract is primarily managed by the Defense Logistics Agency (DLA), which is responsible for procurement and contract administration. Accountability measures are embedded within the firm fixed-price contract terms, requiring the contractor to deliver specified goods and services within the agreed-upon price. Transparency is facilitated through contract award databases like FPDS, which provide public access to contract details. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Defense Unmanned Aerial Systems Procurement
Defense Logistics Agency Equipment and Supplies Contracts
Micro-Drone Technology Acquisition
Intelligence, Surveillance, and Reconnaissance (ISR) Systems

Risk Flags

Potential for limited competition if exclusion criteria are overly restrictive.
Dependence on contractor for specialized maintenance and support.
Risk of technology obsolescence in a rapidly evolving field.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $40.8 million to ATLANTIC DIVING SUPPLY, INC.. 4544459259!BLACK HORNET 3 PRS G2 US

Who is the contractor on this award?

The obligated recipient is ATLANTIC DIVING SUPPLY, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $40.8 million.

What is the period of performance?

Start: 2018-12-28. End: 2021-01-25.

What is the typical lifespan and operational tempo for the Black Hornet 3 PRS G2 drones under this contract?

The typical lifespan and operational tempo for the Black Hornet 3 PRS G2 drones are not explicitly detailed within the provided contract data. However, based on industry standards for similar micro-drone systems, operational lifespans can vary significantly depending on usage intensity, maintenance schedules, and environmental conditions. Drones used in high-tempo operations with frequent flights and demanding conditions may have shorter effective lifespans, requiring more frequent battery replacements and component servicing. Conversely, drones with more moderate usage and diligent maintenance could remain operational for several years. The contract duration of 759 days (approximately 2 years) suggests an expected operational period aligned with the delivery and sustainment needs of the Defense Logistics Agency, implying a need for reliable performance throughout this timeframe.

How does the unit cost of the Black Hornet 3 PRS G2 under this contract compare to commercial off-the-shelf (COTS) pricing for similar micro-drones?

Direct comparison of unit costs is challenging without specific quantity and configuration details for the Black Hornet 3 PRS G2 under this contract. However, micro-drones like the Black Hornet are specialized military-grade systems, often incorporating enhanced security features, ruggedization, and specific sensor payloads that differentiate them from standard commercial offerings. While COTS micro-drones might be available at lower price points, they typically lack the advanced capabilities and military certifications required for defense applications. The $40.8 million award for an unspecified number of units suggests a significant investment per drone, likely reflecting the advanced technology, integration services, and support included. Benchmarking against other government procurements of similar military-grade micro-drones would provide a more accurate comparison than COTS pricing alone.

What are the primary risks associated with the performance of Atlantic Diving Supply, Inc. as the contractor for this drone system?

The primary risks associated with the performance of Atlantic Diving Supply, Inc. for this drone system are generally mitigated by the contract structure and the nature of the technology. As the contract is firm fixed-price, the financial risk of cost overruns lies primarily with the contractor. Performance risks could include potential delays in delivery, issues with product quality or reliability, or challenges in providing adequate technical support and maintenance. However, the Black Hornet 3 is a mature and proven technology, reducing the risk of fundamental performance failures. Atlantic Diving Supply's track record and experience in supplying defense equipment would also be a factor in assessing performance risk. The government's oversight and acceptance testing processes are designed to identify and address any performance deficiencies before final payment.

What is the historical spending trend for similar unmanned aerial systems by the Department of Defense?

Historical spending trends for similar unmanned aerial systems (UAS) by the Department of Defense show a consistent and significant increase over the past two decades. Driven by the evolving nature of warfare and the need for enhanced intelligence, surveillance, and reconnaissance (ISR) capabilities, the DoD has prioritized investment in a wide range of UAS platforms, from small, man-portable drones like the Black Hornet to large, high-altitude, long-endurance (HALE) aircraft. Budgets allocated to UAS procurement and development have grown substantially, reflecting their critical role in modern military operations. This trend is expected to continue as technology advances and new applications for drones emerge across various military branches and mission sets. The specific category of micro-drones, while a smaller segment of the overall UAS market, is also experiencing growth due to their unique tactical advantages.

How does the exclusion of sources in the competition phase impact the overall value for taxpayers?

The 'exclusion of sources' clause in a 'full and open competition after exclusion of sources' award indicates that while the competition was broad, certain potential bidders may have been excluded based on specific criteria, such as technical qualifications, past performance, or security clearances, prior to the main bidding process. This exclusion is typically done to ensure that only capable and suitable vendors participate, thereby streamlining the competition and potentially leading to a more focused and efficient evaluation. For taxpayers, this can be beneficial if the exclusions effectively filter out less qualified or higher-risk vendors, leading to a more predictable and successful contract outcome with fewer potential issues. However, if the exclusions are overly restrictive or not well-justified, they could inadvertently limit competition, potentially leading to higher prices or reduced innovation. The key is that the exclusions must be clearly defined, justifiable, and applied consistently to maintain fairness and maximize value.

Industry Classification

NAICS: Wholesale Trade › Machinery, Equipment, and Supplies Merchant Wholesalers › Service Establishment Equipment and Supplies Merchant Wholesalers

Product/Service Code: FIRE/RESCUE/SAFETY; ENVIRO PROTECT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: ADS Tactical, Inc. (UEI: 078857127)

Address: 621 LYNNHAVEN PKWY STE 400, VIRGINIA BEACH, VA, 23452

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $40,810,951

Exercised Options: $40,810,951

Current Obligation: $40,810,951

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $35,965,310

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SPE8EJ19D1004

IDV Type: IDC

Timeline