Department of Defense awards $6.17M contract for electronic components, highlighting manufacturing capabilities

Contract Overview

Contract Amount: $6,167,352 ($6.2M)

Contractor: AR1

Awarding Agency: Department of Defense

Start Date: 2025-05-16

End Date: 2026-02-13

Contract Duration: 273 days

Daily Burn Rate: $22.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: NIINS ON REQUIREMENT 016782141,016810870,016807924,016831536,016831549

Place of Performance

Location: PLANO, COLLIN County, TEXAS, 75074

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $6.2 million to AR1 for work described as: NIINS ON REQUIREMENT 016782141,016810870,016807924,016831536,016831549 Key points: 1. Contract value of $6.17 million represents a significant investment in critical electronic components. 2. The award was made under full and open competition, suggesting a robust market for these goods. 3. Potential risks include supply chain disruptions and the obsolescence of electronic components. 4. The contract duration of 273 days indicates a need for timely delivery of essential parts. 5. This spending supports the 'Other Electronic Component Manufacturing' sector, vital for defense readiness. 6. The fixed-price nature of the contract aims to control costs and provide budget certainty.

Value Assessment

Rating: good

The contract value of $6.17 million for electronic components appears reasonable given the sector. Benchmarking against similar contracts for specialized electronic parts is challenging without more granular data on the specific components. However, the fixed-price structure suggests an effort to ensure value for money by shifting cost risk to the contractor. The number of bids received (4) indicates a competitive environment that likely contributed to a fair price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit bids. Four bids were received, indicating a healthy level of interest and competition among potential suppliers. This broad competition is generally favorable for price discovery and ensures the government can select the offer that provides the best value.

Taxpayer Impact: Full and open competition typically leads to more competitive pricing, which benefits taxpayers by ensuring the government is not overpaying for necessary goods and services.

Public Impact

The primary beneficiaries are the Department of Defense and its operational units, which will receive essential electronic components. The services delivered involve the manufacturing and supply of specific electronic components crucial for defense systems. The geographic impact is primarily within Texas, where the contractor is located, potentially supporting local employment and the regional economy. Workforce implications include the need for skilled labor in electronic component manufacturing and quality assurance within the awarded company.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for supply chain disruptions impacting delivery timelines.
Risk of component obsolescence given the rapid pace of technological advancement in electronics.
Dependence on a single contractor for a specific set of components could pose a risk if performance issues arise.

Positive Signals

Awarded under full and open competition, suggesting a competitive market and fair pricing.
Fixed-price contract type helps control costs and provides budget predictability.
The contractor is located in Texas, potentially leveraging regional manufacturing strengths.

Sector Analysis

The 'Other Electronic Component Manufacturing' sector (NAICS 334419) is a critical part of the broader electronics industry, supplying essential parts for a wide range of applications, including defense, telecommunications, and consumer electronics. This contract fits within the defense sub-sector, where reliability and specific performance characteristics are paramount. Spending in this area is often driven by modernization efforts and the need to maintain existing defense platforms. Comparable spending benchmarks are difficult to establish without knowing the exact nature of the components, but the overall market for electronic components is substantial, measured in billions of dollars annually.

Small Business Impact

This contract was not set aside for small businesses, and the data indicates no specific subcontracting requirements for small businesses were mandated. This suggests that the primary award went to a larger entity or that the nature of the components did not lend itself to small business set-asides. The impact on the small business ecosystem is likely minimal unless the prime contractor voluntarily engages small businesses for subcontracting opportunities.

Oversight & Accountability

Oversight for this contract will likely be managed by the Defense Logistics Agency (DLA), which is responsible for procuring and distributing supplies for the U.S. military. Accountability measures are embedded in the firm fixed-price contract terms, requiring the contractor to deliver specified components by the deadline. Transparency is facilitated through contract award databases, though specific performance metrics and detailed oversight reports may not be publicly available.

Related Government Programs

Defense Logistics Agency Procurement
Electronic Component Manufacturing
Department of Defense Supply Chain Management
Federal Procurement of Industrial Goods

Risk Flags

Supply Chain Risk
Component Obsolescence
Contractor Performance Risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $6.2 million to AR1. NIINS ON REQUIREMENT 016782141,016810870,016807924,016831536,016831549

Who is the contractor on this award?

The obligated recipient is AR1.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $6.2 million.

What is the period of performance?

Start: 2025-05-16. End: 2026-02-13.

What is the track record of the contractor, 'TEXAS' (TX), in fulfilling similar defense contracts?

Detailed information on the contractor's specific track record for fulfilling similar defense contracts is not provided in the data. However, the award itself suggests they met the requirements for this particular contract. To assess their track record thoroughly, one would need to examine past performance evaluations, contract completion history, and any instances of disputes or penalties on previous government contracts. The fact that they were selected in a full and open competition implies they were deemed capable and competitive among the bidders. Further investigation into their CPARS (Contractor Performance Assessment Reporting System) ratings and any publicly available contract history would be necessary for a comprehensive understanding of their reliability and past performance in the defense sector.

How does the awarded amount of $6.17 million compare to the typical cost of similar electronic component manufacturing contracts?

Benchmarking the $6.17 million award against similar contracts is challenging without knowing the precise specifications and quantities of the electronic components. The 'Other Electronic Component Manufacturing' category is broad. However, the contract is a firm fixed-price award under full and open competition with four bidders. This suggests a competitive pricing environment. Generally, firm fixed-price contracts aim for value by placing cost risk on the contractor. If the components are highly specialized or require advanced manufacturing processes, the cost could be justified. Conversely, if they are more commoditized, this value might be questioned. A detailed comparison would require access to a database of comparable contract awards with similar technical requirements and quantities.

What are the primary risks associated with this contract, and how are they being mitigated?

The primary risks associated with this contract include potential supply chain disruptions, the risk of component obsolescence due to rapid technological advancements, and the possibility of contractor performance issues. Mitigation strategies are partially evident in the contract structure. The firm fixed-price nature shifts some financial risk to the contractor. The full and open competition with four bidders suggests a degree of market resilience and potential alternative sources if issues arise. However, specific mitigation plans for supply chain vulnerabilities or obsolescence are not detailed in the provided data. The Defense Logistics Agency likely has internal processes for monitoring contractor performance and managing supply chain risks, but these are not explicitly stated here.

How effective is the 'full and open competition' approach in ensuring the best value for taxpayers in this specific case?

The 'full and open competition' approach is generally considered effective in ensuring the best value for taxpayers because it maximizes the pool of potential bidders, thereby fostering price competition and innovation. In this case, with four bids received, it suggests that the market has sufficient capacity and interest to supply these electronic components. This competition likely drove down prices compared to a sole-source or limited competition scenario. The firm fixed-price contract type further enhances value by ensuring cost certainty. While the ultimate effectiveness depends on the quality of the components delivered and the contractor's performance, the competitive process itself is a strong indicator of a favorable outcome for taxpayers.

What is the historical spending pattern for electronic components by the Department of Defense or the Defense Logistics Agency?

Historical spending patterns for electronic components by the Department of Defense (DoD) and the Defense Logistics Agency (DLA) are substantial and ongoing, reflecting the critical role of electronics in modern military operations. The DoD consistently spends billions of dollars annually on a wide array of electronic systems, components, and related services. DLA, as a major procurer, plays a significant role in this spending, focusing on sustainment, readiness, and logistical support. Spending in this area fluctuates based on modernization programs, maintenance requirements for existing platforms, and geopolitical demands. The specific category 'Other Electronic Component Manufacturing' (NAICS 334419) is part of this larger trend, with consistent demand driven by the need for reliable and advanced electronic parts for defense applications.

Industry Classification

NAICS: Manufacturing › Semiconductor and Other Electronic Component Manufacturing › Other Electronic Component Manufacturing

Product/Service Code: ELECTRICAL/ELECTRONIC EQPT COMPNTS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 175 CREMONA DR STE 140, GOLETA, CA, 93117

Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $6,167,352

Exercised Options: $6,167,352

Current Obligation: $6,167,352

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SPRBL123D0015

IDV Type: IDC

Timeline